10-K/A 1 a3k10123107.htm GATEWAY II 3RD AMENDED 10K MARCH 31, 2007 a3k10123107.htm



                                                                  UNITED STATES
                                                       SECURITIES AND EXCHANGE COMMISSION
                                                                 WASHINGTON, DC  20549


                                               THIRD AMENDED FORM 10-K/A-3
                                                       (Amendment No. 3)


[X]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
       
For the fiscal year ended March 31, 2007

OR

[  ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15[d] OF THE SECURITIES EXCHANGE ACT OF 1934
    
          For the transition period from__________ to __________

                 Commission File Number:   0-19022

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

Florida
  
65-0142704
(State or other jurisdiction of incorporation or organization)
  
(IRS Employer No.)
     
880 Carillon Parkway
  
St. Petersburg,   Florida    33716
(Address of principal executive offices)
  
(Zip Code)

Registrant’s Telephone Number, Including Area Code:
  
(727) 567-1000
 
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

 
   
Number of Units
Title of Each Class
  
March 31, 2007
Beneficial Assignee Certificates
  
2,533
General Partner Interest
  
   2
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
                                                             YES              NO   X   

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
                                                             YES              NO   X   

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 not 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   

 
 
 


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.  (Check one):

                              Large accelerated filer     Accelerated filer     Non-accelerated filer   X  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).             Yes   [  ]        No   [X]

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrants most recently completed second fiscal quarter.

There is no market for the Registrants Limited Partnership interests.


DOCUMENTS INCORPORATED BY REFERENCE

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




 
 
 


EXPLANATORY NOTE

This Third Amended Annual Report on Form 10-K/A-3 corrects the following disclosures that Gateway had reported on its original filing and subsequent amendments for the year ended March 31, 2007.

Report of Independent Registered Public Accounting Firm  The referenced report has been updated to include reference to each series of the Company.

Note 5 – Investments in Project Partnerships – The Company included separate summarized financial information for Yorkshire Retirement Village and Zapata Housing in Series 5 and Autumn Village II in Series 6.  Gateways investment balance in these project partnerships exceed 10%, but is less than 20%, of the total assets of the respective series that the project partnerships are owned.

Except as described above, no other changes have been made to the first or second amended Form 10-K/A, and this Form 10-K/A-3 does not amend, update, or change the financial statements or any other items or disclosures in the first or second amended Form 10-K/A. Except for the changes stated above, this Form 10-K/A-3 does not reflect events occurring after the filing of the Form 10-K, Form 10-K/A-1 or Form 10-K/A-2 or modify or update those disclosures, including any exhibits to the Form 10-K, Form 10/K-1 or Form 10/K-2 affected by subsequent events.  Accordingly, this Form 10-K/A-3 should be read in conjunction with our filings made with the Securities and Exchange Commission subsequent to the filing of the original Form 10-K, including any amendments to those filings.

 
 
 


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., (collectively the “General Partners”) 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 Gateway 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, 2007, 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, 2007.  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.

   Gateway initially held investments in 148 Project Partnerships.  As more fully discussed in Item 7 herein, Gateway is presently in the process of disposing of its interests in Project Partnerships which have reached the end of their fifteen year tax credit compliance period.  As of March 31, 2007, Gateway held investments in 136 Project Partnerships, 12 Project Partnerships have been sold as of March 31, 2007.  As described in Note 8 herein, one additional Project Partnership has been sold subsequent to the fiscal year-end of March 31, 2007.  Project Partnership investments by Series as of March 31, 2007 are as follows:  22 Project Partnerships for Series 2, 17 Project Partnerships for Series 3, 25 Project Partnerships for Series 4, 35 Project Partnerships for Series 5 and 37 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, 2007, the capital received for 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, contained in the Registration Statement, File No. 33-31821 (“Prospectus”) 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, under the caption "Investment Objectives and Policies" which is incorporated herein by reference.

   Gateway’s goal is 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, 2007 the investor capital contributions were successfully invested in Project Partnerships, which met the investment criteria. The Tax Credits have been delivered to Gateway and the fifteen year tax credit compliance period is now over for 129 of the 148 Project Partnership investments originally made.  Gateway is now disposing of its remaining interests in Project Partnerships as they reach the end of their 15 year Tax Credit compliance period.  Gateway’s objective is to sell Gateway’s interest in such properties for fair market value and ultimately, to liquidate the Project Partnerships and in turn ultimately liquidate Gateway.

   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.

   Of the original 148 Project Partnership investments, 129 have reached the end of their Tax Credit compliance period as of December 31, 2006 and those Project Partnerships that have yet to reach the end of their Tax Credit compliance period will do so no later than December 31, 2008.  As of March 31, 2007, twelve of the Project Partnership investments have been sold and, in accordance with the Gateway partnership agreement, the entire net proceeds received from these sales are payable to the Assignee Limited Partners of those series of Gateway.  On a cumulative basis as of March 31, 2007, $99,600 representing $18.25 per Assignee Limited Partner unit in Series 3, $157,126 representing $18.23 per Assignee Limited Partner unit in Series 5 and $224,074 representing $22.17 per Assignee Limited Partner unit in Series 6 have been distributed to the Assignee Limited Partners of the respective series. An additional $357,095 representing $65.45 per Assignee Limited Partner unit in Series 3 and $146,944 representing $21.25 per Assignee Limited Partner unit in Series 4 have been distributed in May, 2007.

Item 1A.  Risk Factors

   Gateway, as a limited partner in the Project Partnerships, is subject to risks inherent in the ownership of property which are beyond its control, such as fluctuations in occupancy rates and operating expenses, variations in rental schedules, proper maintenance and continued eligibility of Tax Credits.  If the cost of operating a property exceeds the rental income earned thereon, Gateway may deem it in its best interest to voluntarily provide funds in order to protect its investment.  No such contributions have been made during fiscal year 2007.

   Investors eventually may be allocated profits for tax purposes which exceed any cash Gateway distributes to them.  Under these circumstances, unless an investor has passive losses or credits to reduce such tax liability, the investor will have to pay federal income tax without a corresponding cash distribution from Gateway.  Similarly, in the event of a sale or foreclosure of an apartment complex, an investor may be allocated taxable income, resulting in tax liability, in excess of any cash distributed to the investor as a result of such event.

   There is no assurance that investors will receive any cash distributions from the sale or refinancing of a Project Partnership.  The price at which a Project Partnership is sold may not be large enough to pay the mortgage and other expenses which must be paid at such time.

Item 1B.  Unresolved Staff Comments

   None.

 
 
 


Item 2.  Properties:

   Gateway owns a majority interest in properties through its limited partnership investments in Project Partnerships.  The largest single net investment as of March 31, 2007 in a Project Partnership for each respective Series is:  Series 2, 3 and 4 is 0% of both the series and Gateway’s total assets as there are no Investment in Project Partnership balances in any of those series, Series 5 is 19.5% of the Series’ total assets and 3.3% of Gateway’s total assets, and Series 6 is 18.2% of the Series’ total assets and 5.2% of Gateway’s total assets (refer to Note 5 in Part 1, Item 8 of this report (the Investment in Project Partnerships Footnote) for further information regarding the Project Partnerships).  The following table provides certain summary information regarding the Project Partnerships in which Gateway had an interest as of December 31, 2006:
 
 
SERIES 2
 
PARTNERSHIP
-----------
 
 
LOCATION OF
PROPERTY
-----------
 
 
# OF
UNIT
-----
 
 
DATE  
ACQUIRED
--------
 
 
PROPERTY
COST  
-----------
 
 
OCCUPANCY
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
34
48
30
21
29
21
44
49
24
16
----
724
====
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
808,632
854,562
859,698
1,466,107
1,568,513
1,304,457
1,233,935
1,076,098
1,517,589
1,245,870
3,496,824
781,460
1,057,871
1,794,542
1,082,192
700,935
955,814
1,401,416
1,782,517
1,781,614
1,377,518
542,054
-----------
$28,690,218
=========
100%
38%
88%
97%
88%
85%
96%
94%
100%
89%
94%
100%
97%
85%
97%
100%
97%
95%
98%
98%
96%
100%
 
    
             
 
The aggregate average effective rental income per unit for the year-ended December 31, 2006 is $4,125 per year ($344 per month)
             
SERIES 3
 
PARTNERSHIP
-----------
 
LOCATION OF
PROPERTY
-----------
 
# OF
UNIT
----
 
DATE
ACQUIRED
--------
 
PROPERTY
COST
----------
 
OCCUPANCY
RATE
-----
  
Poteau II
Sallisaw
Nowata Properties
Waldron Properties
Roland II
Stilwell
Hornellsville
Sunchase II
CE McKinley II
Weston Apartments
Countrywood Apts.
Wildwood Apts.
Hancock
Hopkins
Elkhart Apts.
Heritage Villas
Logansport Seniors
Poteau, OK
Sallisaw, OK
Oolagah, OK
Waldron, AR
Roland, OK
Stilwell, OK
Arkport, NY
Watertown, SD
Rising Sun, MD
Weston, AL
Centreville, AL
Pineville, LA
Hawesville, KY
Madisonville, KY
Elkhart, TX
Helena, GA
Logansport, LA
52
52
32
24
52
48
24
41
16
10
40
28
12
24
54
25
32
----
566
8/90
8/90
8/90
9/90
10/90
10/90
9/90
9/90
9/90
11/90
11/90
11/90
12/90
12/90
1/91
3/91
3/91
1,789,148
1,744,103
1,148,484
860,273
1,804,010
1,597,701
1,170,316
1,480,119
848,662
347,577
1,621,545
1,106,688
440,425
927,256
1,690,509
824,759
1,384,751
----------
$20,786,326
89%
96%
69%
96%
83%
98%
88%
100%
100%
100%
98%
96%
100%
100%
87%
96%
94%
   
====
  
===========
  
 
The average effective rental income per unit for the year-ended December 31, 2006 is $3,876 per year ($323 per month).

 
 
 

Item 2.  Properties (continued):

SERIES 4
 
 
PARTNERSHIP
-----------
 
LOCATION OF
PROPERTY
-----------
 
# OF
UNIT
----
 
DATE  
ACQUIRED
--------
 
PROPERTY
COST  
--------
 
OCCUPANCY
RATE
------
Seneca Apartments
Eudora Senior
Westville
Wellsville Senior
Stilwell II
Spring Hill Sr.
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
Jonesville Manor
Norton Green
Timpson Seniors
Piedmont
S.F. Arkansas City
Seneca, MO
Eudora, KS
Westville, OK
Wellsville, KS
Stilwell, OK
Spring Hill, KS
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
Jonesville, VA
Norton, VA
Timpson, TX
Barnesville, GA
Arkansas City, KS
24
36
36
24
52
24
48
32
34
24
24
24
32
32
24
48
24
21
25
25
40
40
28
36
12
----
769
2/91
3/91
3/91
3/91
3/91
3/91
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
8/91
8/91
8/91
821,129
1,290,143
1,101,686
810,970
1,657,974
1,036,369
2,263,014
1,532,159
1,725,462
1,079,682
939,018
990,026
1,042,263
1,047,032
802,089
1,444,252
976,883
886,309
1,429,003
1,122,986
1,784,429
1,828,850
815,916
1,289,047
412,028
----------
$30,128,719
100%
92%
97%
88%
92%
100%
94%
97%
100%
33%
96%
100%
97%
97%
92%
98%
100%
100%
100%
96%
98%
100%
86%
97%
92%
  
   
====
  
==========
    
The average effective rental income per unit for the year-ended December 31, 2006 is $4,023 per year ($335 per month).
 
SERIES 5
 
PARTNERSHIP
-----------
 
LOCATION OF
PROPERTY
-----------
 
# OF
UNIT
----
 
DATEE
ACQUIREDD
--------
 
PROPERTY
COST
--------
 
OCCUPANCY
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
32
24
27
46
31
25
60
40
24
24
24
24
24
24
36
24
24
40
60
20
24
24
44
12
24
-----
1,080
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
1,691,514
1,760,233
866,259
1,088,664
886,334
901,648
1,602,433
1,128,784
907,712
2,657,927
1,632,414
889,941
840,596
871,530
957,710
776,725
823,643
1,449,378
759,136
578,333
1,243,118
1,741,669
817,378
996,605
1,018,712
1,347,586
433,980
900,996
-----------
$39,690,754
87%
100%
83%
56%
92%
95%
97%
100%
100%
92%
100%
88%
96%
100%
90%
96%
85%
100%
92%
96%
96%
100%
83%
75%
100%
100%
92%
100%
100%
80%
96%
100%
98%
83%
96%
  
   
=====
  
============
    
The average effective rental income per unit for the year-ended December 31, 2006 is $4,025 per year ($335 per month).

 
 
 

Item 2.  Properties (continued):

SERIES 6
 
 
PARTNERSHIP
-----------
 
LOCATION OF
PROPERTY
-----------
 
# OF
UNIT
-----
 
DATE
ACQUIRED
--------
 
PROPERTY
COST
--------
 
OCCUPANCY
RATE
-----
Spruce
Shannon
Carthage
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
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
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
25
40
-----
1,048
11/91
11/91
1/92
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
1,181,526
704,794
775,095
1,328,623
1,378,516
1,676,842
709,881
1,053,059
676,931
1,718,676
1,045,646
1,034,586
908,494
436,882
1,238,475
1,532,968
1,678,210
1,414,978
1,022,561
961,926
1,331,731
1,167,799
1,235,098
982,688
959,509
1,190,156
1,499,593
1,656,135
1,526,912
3,107,763
1,039,790
1,319,786
561,008
1,387,035
616,082
931,989
1,474,973
-----------
$44,466,716
67%
88%
92%
100%
100%
100%
88%
97%
92%
100%
92%
97%
100%
83%
97%
98%
100%
100%
96%
96%
92%
92%
95%
96%
96%
100%
100%
88%
93%
84%
100%
93%
100%
100%
88%
96%
98%
  
   
=====
  
===========
      

The average effective rental income per unit for the year-ended December 31, 2006 is $4,409 per year ($367 per month).

 
 
 

Item 2.  Properties (continued):

A summary of the book value of the fixed assets of the properties at December 31, 2006, 2005 and 2004 is as follows:
                 12/31/06
 
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
176,254
26,493,385
1,008,399
0
-----------
28,690,218
14,509,817
-----------
$ 14,180,401
$    684,171
60,548
18,752,377
1,289,230
0
-----------
20,786,326
12,941,903
-----------
$  7,844,423
$  1,022,612
189,887
27,284,781
1,631,439
0
-----------
30,128,719
14,557,123
-----------
$ 15,571,596
 
============
============
============

 
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
160,551
36,218,888
1,859,764
0
-----------
39,690,754
19,192,129
-----------
$ 20,498,625
$  1,709,391
569,385
39,614,448
2,573,492
0
-----------
44,466,716
19,596,977
-----------
$ 24,869,739
$  5,879,905
1,156,625
148,363,879
8,362,324
0
-----------
163,762,733
80,797,949
-----------
$ 82,964,784
 
============
============
============

                 12/31/05
 
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
153,721
26,439,200
975,046
38,604
-----------
28,618,751
13,623,386
-----------
$ 14,995,365
$    985,546
131,281
25,661,272
1,593,479
0
-----------
28,371,578
16,335,525
-----------
$ 12,036,053
$  1,188,112
222,427
31,384,891
1,814,832
0
-----------
34,610,262
15,441,345
-----------
$ 19,168,917
 
===========
===========
===========

 
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
36,202,243
1,814,555
0
-----------
39,627,850
17,923,547
-----------
$ 21,704,303
$  1,709,391
556,191
39,024,120
2,414,255
0
-----------
43,703,957
18,360,632
-----------
$ 25,343,325
$  6,346,780
1,223,121
158,711,726
8,612,167
38,604
-----------
174,932,398
81,684,435
-----------
$ 93,247,963
 
===========
===========
============

     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
 
===========
===========
============

 
 
 

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, 2007, 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.

(b)  Approximate Number of Equity Security Holders:

Title of Class  
Number of Holders
 
  
as of March 31, 2007
Beneficial Assignee Certificates
  
2,533
General Partner Interest
  
   2

Item 6.  Selected Financial Data


FOR THE YEARS ENDED MARCH 31,:
SERIES 2
2007
----
2006
----
2005
----
2004
----
2003
----
Total Revenues
$   15,209 
$   7,263 
$  13,938 
$  12,820 
$  12,665 
Net Loss
  (119,127)
 (156,399)
  (97,520)
  (92,200)
  (85,230)
 
Equity in (Losses)
of Project
Partnerships
 
 
 
0 
 
 
 
(32,092)
 
 
 
(10,911)
 
 
 
(8,484)
 
 
 
(17,624)
Total Assets
257,364 
316,805 
394,306 
445,532 
523,794 
 
Investments In Project Partnerships
 
0 
 
0 
 
34,391 
 
47,597 
 
58,381 
Per BAC: (A)
Tax Credits
Portfolio
 Income
Passive Loss
 
.02 
 
6.65 
(125.58)
 
.14 
 
4.74 
(129.62)
 
.14 
 
4.18 
(142.06)
 
.14 
 
5.18 
(157.55)
 
2.79 
 
7.31 
(146.95)
Net Loss
(19.22)
(25.23)
(15.73)
(14.88)
(13.75)
           

FOR THE YEARS ENDED MARCH 31,:
SERIES 3
2007
----
2006
----
2005
----
2004
----
2003
----
Total Revenues
$  20,439 
$  22,861 
$  18,781 
$  22,801 
$  21,167 
Net Income (Loss)
305,962 
(108,278)
(77,647)
(77,243)
(82,729)
 
Equity in Income (Losses) of
Project
Partnerships
 
 
 
490 
 
 
 
0 
 
 
 
0 
 
 
 
(5,137)
 
 
 
(25,505)
Total Assets
598,431 
294,987 
329,653 
344,724 
405,777 
 
Investments In Project Partnerships
 
0 
 
0 
 
0 
 
0 
 
6,633 
Per BAC: (A)
Tax Credits
Portfolio
 Income
Passive Loss
 
0 
 
11.09 
(118.50)
 
0 
 
6.85 
(137.15)
 
0 
 
5.78 
(147.47)
 
.17 
 
6.54 
(159.39)
 
1.38 
 
7.92 
(137.28)
Net Income (Loss)
46.84 
(19.65)
(14.09)
(14.02)
(15.01)
           

 
 
 

Item 6.  Selected Financial Data

FOR THE YEARS ENDED MARCH 31,:
SERIES 4
2007
----
2006
----
2005
----
2004
----
2003
----
Total Revenues
$  20,091 
$  18,473 
$  16,181 
$  27,960 
$  14,116 
Net Loss
(79,276)
(138,304)
(102,967)
(98,159)
(160,313)
 
Equity in Income
(Losses) of Project
Partnerships
 
 
 
0 
 
 
 
0 
 
 
 
0 
 
 
 
(8,763)
 
 
 
(77,657)
Total Assets
469,913 
396,889 
445,208 
472,775 
536,633 
 
Investments In Project Partnerships
 
0 
 
0 
 
0 
 
0 
 
12,279 
Per BAC: (A)
Tax Credits
Portfolio
 Income
Passive Loss
 
0 
 
9.68 
(149.08)
 
1.22 
 
5.99 
(150.52)
 
.21 
 
5.11 
(140.52)
 
1.22 
 
4.16 
(134.34)
 
2.98 
 
8.48 
(147.73)
Net Loss
(20.70)
(19.80)
(14.74)
(14.05)
(22.95)
           

FOR THE YEARS ENDED MARCH 31,:
SERIES 5
2007
----
2006
----
2005
----
2004
----
2003
----
Total Revenues
$  26,812 
$  22,819 
$  27,663 
$  16,981 
$  20,909 
Net Income(Loss)
(194,685)
(208,790)
15,153 
(265,039)
(261,993)
 
Equity in Losses of
Project
Partnerships
 
 
 
(5,528)
 
 
 
(22,512)
 
 
 
(21,348)
 
 
 
(133,705)
 
 
 
(159,492)
Total Assets
402,832 
508,067 
773,331 
827,194 
1,073,840 
 
Investments In Project Partnerships
 
125,403 
 
151,630 
 
202,405 
 
229,630 
 
376,275 
Per BAC: (A)
Tax Credits
Portfolio
 Income
Passive Loss
 
0 
 
5.89 
(118.24)
 
0 
 
5.79 
(112.76)
 
2.33 
 
5.39 
(151.09)
 
8.66 
 
4.81 
(148.50)
 
54.70 
 
6.71 
(136.53)
Net Income(Loss)
(22.37)
(23.99)
(6.71)
(30.45)
(30.10)
           

FOR THE YEARS ENDED MARCH 31,:
SERIES 6
2007
----
2006
----
2005
----
2004
----
2003
---
Total Revenues
$  29,678 
$  26,354 
$  32,039 
$  21,129 
$  16,919 
Net Loss
(332,668)
(342,258)
(198,709)
(294,767)
(334,594)
 
Equity in Losses of
Project Partnerships
 
 
(7,156)
 
 
(25,699)
 
 
(65,236)
 
 
(148,498)
 
 
(209,950)
Total Assets
683,149 
914,235 
1,374,037 
1,467,978 
1,731,924 
 
Investments In Project Partnerships
 
208,779 
 
372,285 
 
781,147 
 
858,488 
 
1,024,672 
Per BAC: (A)
Tax Credits
Portfolio
 Income
Passive Loss
 
0 
 
9.85 
(99.04)
 
0 
 
7.33 
(96.72)
 
3.81 
 
5.34 
(99.58)
 
15.16 
 
5.41 
(109.10)
 
129.74 
 
7.48 
(115.70)
Net Loss
(32.59)
(42.09)
(19.47)
(28.88)
(32.78)
           
 
(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

   This item should be read in conjunction with the financial statements and other items contained elsewhere in this report.

   The Managing General Partner monitors developments in the area of legal and regulatory compliance.  For example, the Sarbanes-Oxley Act of 2002 (the “Act”) mandates or suggests additional compliance measures with regard to governance, disclosure, audit and other areas and certain provisions of the Act will require implementation by Gateway in subsequent years.  In light of these additional requirements, Gateway has and expects to continue to incur increased expenses related to compliance with the Act.

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.

   Gateway – All Series - The following discusses the overall results of operations, liquidity and capital resources for Gateway as a whole.  A summary of the activity within each specific Series of Gateway then follows.

   Distribution income arises from any cash distributions received from Project Partnerships which have a zero investment balance for financial reporting purposes.  Distribution income increased 15% in fiscal year 2007 to $112,229, an increase of $14,459 from the fiscal year 2006 distribution income of $97,770, which represented a $10,832 or 10% decrease as compared to distribution income of $108,602 in fiscal year 2005.

   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 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 investors' return of their original capital contribution).

   Total expenses of Gateway were $1,082,466 for the fiscal year ended March 31, 2007, a decrease of $196,394 as compared to the fiscal year 2006 total expenses of $1,278,860, which represented a $578,029 increase in total expenses over the fiscal year 2005 amount of $700,831.  Impairment expense represents a significant component of total expenses in fiscal year 2007 and 2006.  Impairment expense is a non-cash element of expense that arises whenever events or changes in circumstances indicate that the recorded carrying value of a respective Investment in Project Partnership may not be recoverable.  During fiscal year 2007, impairment expense was recorded in the aggregate amount of $103,003.  In fiscal year 2006, the impairment expense recorded was $343,241.  Net of this impairment expense, expenses of Gateway increased $43,844, or 5% in fiscal year 2007 versus fiscal year 2006. The increase in fiscal year 2007 results from increases in the expense of the General Partner in administering the business of Gateway as well as increases in the cost of third-parties who provide services such as audit services to Gateway.  The fiscal year 2006 expense represented a $234,788, or 34% increase over the fiscal year 2005 amount of $700,831.

   The sources of funds to pay the expenses of Gateway are cash and cash equivalents and short-term investments which are comprised of U.S. Treasury Security Strips ("Zero Coupon Treasuries") and U.S. Treasury Notes along with the interest earnings thereon, which were purchased with funds set aside for this purpose, and cash distributed to the Series from the operations of the Project Partnerships.  Due to the rent limitations applicable to the Project Partnerships projects as a result of their qualifying for Low-Income Housing Tax Credits, Gateway does not expect there to be a significant increase in future rental income of the Project Partnerships.  Therefore, cash distributions from the operations of the Project Partnerships are not expected to increase.  Management believes these 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.

   For the year ended March 31, 2007 the Project Partnerships reported losses of $12,194 which represents a $68,109 decrease as compared to the Losses from Project Partnerships for the year ended March 31, 2006 of $80,303.  For the fiscal year ended March 31, 2005, the Project Partnerships reported a loss of $97,495.  Typically, it is customary in the low-income housing tax credit industry to experience losses for financial and tax reporting purposes because of the non-cash expenses of depreciation and amortization.  Since Gateway invests as a limited partner in Project Partnerships, and is therefore not obligated to fund losses or make additional capital contributions, Gateway does not recognize losses from individual Project Partnerships to the extent that these losses would reduce the investment balance below zero.  Therefore, as the Project Partnership investments mature and the Investments in Project Partnership balances decrease over time, the Losses from Project Partnerships recorded by Gateway decrease.

 
 
 

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

   In fiscal year 2007, the Gain on Sale of Project Partnerships amounted to $475,364, an increase from the fiscal year 2006 Gain on Sale of Project Partnerships amount of $224,074 which was an increase over the fiscal year 2005 Gain on Sale of Project Partnerships of $157,126.  In addition in fiscal year 2007, $128,050 of Gain on Sale of Project Partnerships was deferred for revenue recognition purposes and is reflected on the Balance Sheet as of March 31, 2007.  This Deferred Gain will be recognized on the statement of operations in fiscal year 2008 when the proceeds are received.  As more fully discussed herein, ten Project Partnership investments were sold or disposed of in fiscal year 2007 as compared to fiscal year 2006 and fiscal year 2005 when one Project Partnership investment was sold in each year.  The amount of the gain or loss on a sale of a Project Partnership and the year in which it is recognized on the statement of operations is dependent upon the specifics related to each sale or disposition transaction.  Refer to the discussion of each Project Partnership sold in the exit strategy section that follows.

   In total, Gateway reported a loss of $419,794 from operations for the year ended March 31, 2007.  Cash and Cash Equivalents decreased by $401,872 but Investments in Securities increased by $444,723.  Of the Cash and Cash Equivalents on hand as of March 31, 2007, $376,063 is payable to certain series’ Assignees arising from the sale of Project Partnerships during fiscal year 2007, which are for distribution to those certain Assignees in fiscal 2008.  After consideration of these sales proceeds, cash and cash equivalents and Investments in Securities decreased $333,212 as compared to the prior year-end balances.

The financial performance of each respective Series is summarized as follows:

   Series 2 - Gateway closed this series on September 14, 1990 after receiving $6,136,000 from 375 Assignees.  As of March 31, 2007, the series had invested $4,524,678 in 22 Project Partnerships located in 10 states containing 724 apartment units.  Average occupancy of the Project Partnerships was 93% as of December 31, 2006.

   Equity in Losses of Project Partnerships decreased $32,092 to $0 for the year ended March 31, 2007, the fiscal year 2006 losses represented an increase of $21,181 from the fiscal year 2005 loss amount of $10,911.  As presented in Note 5, Gateway’s share of net loss decreased from $679,662 for the year ended March 31, 2005 to $637,400 for the year ended March 31, 2006 and to $527,581 for the year ended March 31,2007.  Suspended Losses were $668,751 for the year ended March 31, 2005, $605,308 for the year ended March 31, 2006 and $527,581 for the year ended March 31, 2007.  If not suspended, these losses would have reduced 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 $869,716, $875,459, and $886,432 for the years ended December 31, 2004, 2005, and 2006 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 until the year of disposition.  Overall, management believes the Project Partnerships are operating as expected and have generated Tax Credits that met projections.

   At March 31, 2007, the Series had $129,724 of short-term investments (Cash and Cash Equivalents).  In addition, the Series had $127,640 in U. S. Treasury Notes with a maturity value of $127,000 at June 30, 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 $119,127 for the year ending March 31, 2007.  However, after adjusting for the changes in operating assets and liabilities, net cash used in operating activities was $77,279.  Cash used in investing activities totaled $43,526, consisting of $15,209 in cash distributions from the Project Partnerships and $66,276 from matured Zero Coupon Treasuries, offset by $125,011 used to purchase U.S. Treasury Notes in July 2006.

   Series 3 - Gateway closed this series on December 13, 1990 after receiving $5,456,000 from 398 Assignees.  As of March 31, 2007 the series had invested $2,866,874 in 17 Project Partnerships located in 12 states containing 566 apartment units.  Average occupancy of the Project Partnerships was 92% as of December 31, 2006.

   Equity in Income of Project Partnerships was $490 for the year ended March 31, 2007, an increase from $0 for each of fiscal year 2006 and 2005.  As presented in Note 5, Gateway’s share of net loss decreased from $727,644 for the year ended March 31, 2005 to $595,587 for the year ended March 31, 2006 and to $334,438 for the year ended March 31, 2007.  Suspended Losses decreased from $727,644 for the year ended March 31, 2005 to $595,587 for the year ended March 31, 2006 and to $333,948 for the year ended March 31, 2007.  If not suspended, these losses would have reduced the investment in Project Partnerships below zero.  (These Project Partnerships reported depreciation and amortization of $973,367, $965,926 and $731,144 for the years ended December 31, 2004, 2005 and 2006, respectively.)  Overall, management believes these Project Partnerships are operating as expected and have generated Tax Credits which met projections.

 
 
 

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

   At March 31, 2007, the Series had $426,791 of short-term investments (Cash and Cash Equivalents).  In addition, the Series had $127,640 in U.S. Treasury Notes with a maturity value of $127,000 at June 30, 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 $305,962 for the year ended March 31, 2007.  However, after adjusting the changes in operating assets and liabilities, net cash used in operating activities was $77,016.  Cash provided by investing activities totaled $367,344, consisting of $20,439 in cash distributions from the Project Partnerships, $412,964 from the sale of 5 Project (Proceeds totaling $44,000 from the sale of 1 Project Partnership were received after year-end.), and $58,952 from matured Zero Coupon Treasuries, offset by $125,011 used to purchase U.S. Treasury Notes in July 2006.  Cash used in financing activities (distributions to Limited Partners) totaled $99,572.

   Series 4 - Gateway closed this series on May 31, 1991 after receiving $6,915,000 from 465 Assignees.  As of March 31, 2007, the series had invested $4,273,215 in 25 Project Partnerships located in 16 states containing 769 apartment units.  Average occupancy of the Project Partnerships was 94% at December 31, 2006.

   Equity in Losses of Project Partnerships was $0 for the year ended March 31, 2007, no change from each of fiscal year 2006 and 2005.  As presented in Note 5, Gateway’s share of net loss decreased from $806,547 for the year ended March 31, 2005 to $684,436 for the year ended March 31, 2006 and to $592,559 for the year ended March 31, 2007.  Suspended Losses decreased from $806,547 for the year ended March 31, 2005 to $684,436 for the year ended March 31, 2006 and to $592,559 for the year ended March 31, 2007.  If not suspended, these losses would have reduced the investment in Project Partnerships below zero.  (These Project Partnerships reported depreciation and amortization of $1,045,249, $1,044,298 and $921,420 for the years ended December 31, 2004, 2005 and 2006, respectively.)  Overall, management believes these Project Partnerships are operating as expected and have generated Tax Credits which met projections.

   At March 31, 2007, the Series had $206,516 of short-term investments (Cash and Cash Equivalents).  In addition, the Series had $178,897 in U.S. Treasury Notes with a maturity value of $178,000 at June 30, 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 loss of $79,276 from operations for the year ended March 31, 2007.  However, after adjusting for the changes in operating assets and liabilities, net cash used in operating activities was $97,692.  Cash used in investing activities totaled $17,996, consisting of $20,091 in cash distributions from the Project Partnerships, $62,440 from the sale of 2 Project Partnerships (Proceeds totaling $84,500 from the sale of 2 Project Partnership were received after year-end.), and $74,685 from matured Zero Coupon Treasuries, offset by $175,212 used to purchase U.S. Treasury Notes in July 2006.

   Series 5 - Gateway closed this series on October 11, 1991 after receiving $8,616,000 from 535 Assignees.  As of March 31, 2007, the series had invested $6,010,273 in 35 Project Partnerships located in 12 states containing 1,080 apartment units.  Average occupancy of the Project Partnerships was 94% as of December 31, 2006.

   Equity in Losses of Project Partnerships decreased $16,984 to $5,528 in fiscal year 2007, as compared to $22,512 in fiscal year 2006.  The fiscal year 2006 amount was a $1,164 increase from the fiscal year 2005 losses of $21,348.  As presented in Note 5, Gateway’s share of net loss decreased from $772,904 for the year ended March 31, 2005 to $724,141 for the year ended March 31, 2006 and then increased to $738,149 for the year ended March 31, 2007.  Suspended losses decreased from $746,794 for the year ended March 31, 2005 to $701,629 for the year ended March 31, 2006 and then increased to $732,621 for the year ended March 31, 2007.  If not suspended, these losses would have reduced the investment in Project Partnerships below zero.  (These Project Partnerships reported depreciation and amortization of $1,247,246, $1,203,506 and $1,220,039 for the years ended December 31, 2004, 2005 and 2006, respectively.)  Gateway reviews its investments in Project Partnerships to determine if there has been any permanent impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable.  There were no impairment expenses in fiscal years 2007, 2006, and 2005.  Overall, management believes these Project Partnerships are operating as expected and have generated Tax Credits which met projections.

   At March 31, 2007, the Series had $175,920 of short-term investments (Cash and Cash Equivalents).  In addition, the Series had $101,509 in U.S. Treasury Notes with a maturity value of $101,000 at June 30, 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 $194,685 for the year ended March 31, 2007.  However, after adjusting for Equity in Losses of Project Partnerships of $5,528 and the changes in operating assets and liabilities, net cash used in

 
 
 

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

operating activities was $112,262.  Cash provided by investing activities totaled $25,743 consisting of $32,075 in cash distributions from the Project Partnerships and $93,086 from matured Zero Coupon Treasuries, offset by $99,418 used to purchase U.S. Treasury Notes in July 2006.

   Series 6 - Gateway closed this series on March 11, 1992 after receiving $10,105,000 from 625 Assignees.  As of March 31, 2007, the series had invested $7,250,034 in 37 Project Partnerships located in 19 states containing 1,048 apartment units.  Average occupancy of the Project Partnerships was 95% as of December 31, 2006.

   Equity in Losses of Project Partnerships decreased $18,543 to $7,156 in fiscal year 2007 as compared to losses of $25,699 for fiscal year 2006.  The fiscal year 2006 losses were a $39,537 decrease from a loss amount of $65,236 recorded in fiscal year 2005. As presented in Note 5, Gateway’s share of net loss decreased from $673,713 for the year ended March 31, 2005 to $590,957 for the year ended March 31, 2006 and to $569,570 for the year ended March 31, 2007.  Suspended losses decreased from $608,477 for the year ended March 31, 2005 to $565,258 for the year ended March 31, 2006 and to $562,414 for the year ended March 31, 2007.  If not suspended, these losses would have reduced the investment in Project Partnerships below zero. (These Project Partnerships reported depreciation and amortization of $1,367,028, $1,293,203 and $1,303,827 for the years ended December 31, 2004, 2005 and 2006, respectively.) Gateway reviews its investments in Project Partnerships to determine if there has been any permanent impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable.  For the fiscal years ended March 31, 2007 and 2006, impairment expenses of $103,003 and $343,241 were recognized.  There was no impairment expense in fiscal year 2005.  Overall, management believes these Project Partnerships are operating as expected and have generated Tax Credits which met projections.

   At March 31, 2007, the Series had $193,964 of short-term investments (Cash and Cash Equivalents).  In addition, the Series had $280,406 in U.S. Treasury Notes with a maturity value of $279,000 at June 30, 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 $332,668 for the year ended March 31, 2007.  However, after adjusting for Equity in Losses of Project Partnerships of $7,156 and the changes in operating assets and liabilities, net cash used in operating activities was $116,082.  Cash used in investing activities totaled $153,534  consisting of $38,096 in cash distributions from the Project Partnerships and $83,000 from matured Zero Coupon Treasuries, offset by $274,630 used to purchase U.S. Treasury Notes in July 2006.

Exit Strategy

   The IRS compliance period for low-income housing Tax Credit properties is generally 15 years from occupancy following construction or rehabilitation completion.  Gateway is currently in the process of disposing of its investments in Project Partnerships which have reached the end of their fifteen year Tax Credit compliance period.  Gateway’s objective is to sell Gateway’s interest in such assets for fair market value and ultimately, to liquidate the Project Partnerships.  Generally, the market for Project Partnerships is limited.  Some of the factors which negatively impact the marketability of these projects include (1) requirements by government agencies or the project’s debt holder to continue to maintain the property in the low-income housing program, and (2) the mortgage balance of the property is very near the initial balance as a result of the heavily subsidized debt of the Project Partnerships and lengthy (usually 50 year) amortization periods.

   As of March 31, 2007, Gateway holds a limited partner interest in 136 Project Partnerships which own and operate government assisted multi-family housing complexes.  Project investments by Series are as follows:  22 Project Partnerships for Series 2, 17 Project Partnerships for Series 3, 25 Project Partnerships for Series 4, 35 Project Partnerships for Series 5, and 37 Project Partnerships for Series 6.  Many of the Project Partnerships have reached the end of their Tax Credit compliance period.  As of March 31, 2007, twelve of the Project Partnerships have been sold (6 in Series 3, 4 in Series 4, 1 in Series 5, and 1 in Series 6) and, in accordance with the Gateway partnership agreement, the entire net proceeds received from these sales either have been or will be distributed to the Assignees of the respective Series.  Gateway at one time held investments in 148 Project Partnerships (22 in Series 2, 23 in Series 3, 29 in Series 4, 36 in Series 5, and 38 in Series 6).  The transaction summaries for the Project Partnerships sold during the past three fiscal years are summarized below:

Fiscal Year 2007 Disposition Activity:

Series 3

   In March 2007, Gateway sold its Project Partnership investment in Belmont Senior Apartments.  In accordance with FASB No. 66 (“FASB No. 66”) “Accounting for Sales of Real Estate,” although the sale of this Project Partnership was consummated on or prior to March 31, 2007, the estimated gain on the sale of this investment of $43,850 is being deferred on the Balance Sheet of Gateway as of March 31, 2007 and not recognized in the Statement of

 
 
 

Operations until the period that the proceeds are received.  The entire balance of the net proceeds due from this sale were subsequently received and distributed to the Series 3 Assignees in the amount of $8.04 per beneficial assignee certificate during the first quarter of fiscal year 2008.

   In January 2007, Gateway sold its Project Partnership investment in Southwood Apartments.  Gateway received $42,652 in net proceeds ($7.82 per beneficial assignee certificate) for the sale of this Project Partnership.  The net proceeds are a component of the Distribution Payable on the Balance Sheet as of March 31, 2007 and Gateway recorded a gain in the amount of the net proceeds which is included as a component of the Gain on Sale of Project Partnerships on the Statement of Operations.  Subsequent to the March 31, 2007 year-end, the net proceeds from this sale transaction were distributed to the Series 3 Assignees.

   In January 2007, Gateway sold its Project Partnership investment in Plaza Senior Village Apartments.  Gateway received $82,145 in net proceeds ($15.06 per beneficial assignee certificate) for the sale of this Project Partnership.  The net proceeds are a component of the Distribution Payable on the Balance Sheet as of March 31, 2007 and Gateway recorded a gain in the amount of the net proceeds which is included as a component of the Gain on Sale of Project Partnerships on the Statement of Operations.  Subsequent to the March 31, 2007 year-end, the net proceeds from this sale transaction were distributed to the Series 3 Assignees.

   In January 2007, Gateway sold its Project Partnership investment in Brubaker Square Apartments.  Gateway received $115,009 in net proceeds ($21.08 per beneficial assignee certificate) for the sale of this Project Partnership.  The net proceeds are a component of the Distribution Payable on the Balance Sheet as of March 31, 2007 and Gateway recorded a gain in the amount of the net proceeds which is included as a component of the Gain on Sale of Project Partnerships on the Statement of Operations.  Subsequent to the March 31, 2007 year-end, the net proceeds from this sale transaction were distributed to the Series 3 Assignees.

   In January 2007, Gateway sold its Project Partnership investment in Villa Allegra Apartments.  Gateway received $73,408 in net proceeds ($13.45 per beneficial assignee certificate) for the sale of this Project Partnership.  The net proceeds are a component of the Distribution Payable on the Balance Sheet as of March 31, 2007 and Gateway recorded a gain in the amount of the net proceeds which is included as a component of the Gain on Sale of Project Partnerships on the Statement of Operations.  Subsequent to the March 31, 2007 year-end, the net proceeds from this sale transaction were distributed to the Series 3 Assignees.

   In November 2006, Gateway sold its Project Partnership investment in Birchwood Apartments. Gateway received $99,410 in net proceeds ($18.25 per beneficial assignee certificate) for the sale of the Project Partnership.  Gateway recorded a gain in the amount of the net proceeds which is included as a component of the Gain on Sale of Project Partnerships on the Statement of Operations.  The net proceeds from this sale transaction were distributed to the Series 3 Assignees in December 2006.

Series 4

   In March 2007, Gateway sold its Project Partnership investment in Edmonton Senior Apartments.  In accordance with FASB No. 66, although the sale of this Project Partnership was consummated on or prior to March 31, 2007, the estimated gain on the sale of this investment of $38,350 is being deferred on the Balance Sheet of Gateway as of March 31, 2007 and not recognized in the Statement of Operations until the period that the proceeds are received.  The entire balance of the net proceeds due from this sale were subsequently received and distributed in the amount of $5.55 per beneficial assignee certificate to the Series 4 Assignees during the first quarter of fiscal year 2008.

   In March 2007, Gateway sold its Project Partnership investment in Owingsville Senior Apartments.  In accordance with FASB No. 66, although the sale of this Project Partnership was consummated on or prior to March 31, 2007, the estimated gain on the sale of this investment of $45,850 is being deferred on the Balance Sheet of Gateway as of March 31, 2007 and not recognized in the Statement of Operations until the period that the proceeds are received.  The entire balance of the net proceeds due from this sale were subsequently received and distributed in the amount of $6.63 per beneficial assignee certificate to the Series 4 Assignees during the first quarter of fiscal year 2008.

   In January 2007, Gateway sold its Project Partnership investment in Alsace Village Apartments.  Gateway received $23,370 in net proceeds ($3.38 per beneficial assignee certificate) for the sale of this Project Partnership.  The net proceeds are a component of the Distribution Payable on the Balance Sheet as of March 31, 2007 and Gateway recorded a gain in the amount of the net proceeds which is included as a component of the Gain on Sale of Project Partnerships on the Statement of Operations.  Subsequent to the March 31, 2007 year-end, the net proceeds from this sale transaction were distributed to the Series 4 Assignees.

   In January 2007, Gateway sold its Project Partnership investment in Greenbriar Apartments. Gateway received $39,370 in net proceeds ($5.69 per beneficial assignee certificate) for the sale of this Project Partnership.  The net proceeds are a component of the Distribution Payable on the Balance Sheet as of March 31, 2007 and Gateway recorded a gain in the amount of the net proceeds which is included as a component of the Gain on Sale of Project Partnerships on the Statement of Operations.  Subsequent to the March 31, 2007 year-end, the net proceeds from this sale transaction were distributed to the Series 4 Assignees.

 
 
 

Fiscal Year 2006 Disposition Activity:

Series 6

   In August 2005, Gateway sold its Project Partnership investment in Mountain Crest Apartments.  Gateway received $224,074 in net proceeds ($22.17 per beneficial assignee certificate) for the sale of this Project Partnership.  Gateway recorded a gain in the amount of the net proceeds which is included as a component of the Gain on Sale of Project Partnerships on the Statement of Operations.  The net proceeds from this sale transaction were distributed to the Series 6 Assignees in November 2005.

Fiscal Year 2005 Disposition Activity:

Series 5

   In December 2004, Gateway sold its Project Partnership investment in Highland View Apartments.  Gateway received $157,126 in net proceeds ($18.24 per beneficial assignee certificate) for the sale of this Project Partnership.  Gateway recorded a gain in the amount of the net proceeds which is included as a component of the Gain on Sale of Project Partnerships on the Statement of Operations.  The net proceeds from this sale transaction were distributed to the Series 5 Assignees in July 2005.

Project Partnership sold subsequent to March 31, 2007:

Series 2

Rolling Oaks II Apartments
 
   Subsequent to the March 31, 2007 year-end, Gateway sold its Project Partnership investment in Rolling Oaks II Apartments.  Gateway realized approximately $55,000 in net proceeds or approximately $8.96 per beneficial assignee certificate from this sale transaction which will be distributed to the Series 2 Assignees in the 2nd quarter of fiscal year 2008.
 
Gateway has approved the sale to the general partner of the Project Partnership or a third party:

Series 2

Inverness Club                                                                    Heritage Village Apartments

   These approvals are subject to a number of contingencies, the outcome of which cannot be predicted with certainty.  However, utilizing the sales amounts as approved by Gateway, should all the transactions close without modification, the estimated net proceeds to Gateway from the sales of these Project Partnerships are estimated to be $360,000, or $58.67 per beneficial assignee certificate which would be available for distribution to the Series 2 Assignees subsequent to the closing of these sales transactions which would most likely occur within the next 24-month period.

Series 4

Chestnut Apartments                                                        Ashland Estates

   These approvals are subject to a number of contingencies, the outcome of which cannot be predicted with certainty.  However, utilizing the sales amounts as approved by Gateway, should all the transactions close without modification, the estimated net proceeds to Gateway from the sales of these Project Partnerships are estimated to be $22,000, or $3.18 per beneficial assignee certificate which would be available for distribution to the Series 4 Assignees subsequent to the closing of these sales transactions which would most likely occur within the next 24-month period.

Series 5

Country Place Apartments II                                            Country Place Apartments II
   (Georgetown LP)                                                  (Portland II Ltd.)

   These approvals are subject to a number of contingencies, the outcome of which cannot be predicted with certainty.  However, utilizing the sales amounts as approved by Gateway, should all the transactions close without modification, the estimated net proceeds to Gateway from the sales of these Project Partnerships are estimated to be $90,000, or $10.45 per beneficial assignee certificate which would be available for distribution to the Series 5 Assignees subsequent to the closing of these sales transactions which would most likely occur within the next 24-month period.

 
 
 

Series 6

Autumn Place Apts.                                                                    Spring Wood Apartments

   These approvals are subject to a number of contingencies, the outcome of which cannot be predicted with certainty.  However, utilizing the sales amounts as approved by Gateway, should all the transactions close without modification, the estimated net proceeds to Gateway from the sales of these Project Partnerships are estimated to be $102,000, or $10.09 per beneficial assignee certificate which would be available for distribution to the Series 6 Assignees subsequent to the closing of these sales transactions which would most likely occur within the next 24-month period.

Gateway has consented to the general partner granting an option for either the general partner or a third-party to purchase the Project Partnership interest:

Series 2

Brookhaven Apartments                                                             Lakeshore Apartments
Lewiston Country Estates                                                           Woodland Terrace Apartments
Hidden Creek Apartments

   Should all of these options be exercised, the estimated net sales proceeds to Gateway from the sales transactions are estimated to be $715,000, or $116.53 per beneficial assignee certificate potentially available for distribution to the Series 2 Assignees over the next 24 months.  These options to purchase could expire without being exercised which would result in no sales proceeds and remarketing of the Project Partnerships, the results of which are undeterminable.

Series 3

Countrywood Apartments

   Should this option be exercised, the estimated net sales proceeds to Gateway from the sales transaction are estimated to be $85,000, or $15.58 per beneficial assignee certificate potentially available for distribution to the Series 3 Assignees over the next 24 months.  This option to purchase could expire without being exercised which would result in no sales proceeds and remarketing of the Project Partnership, the results of which are undeterminable.

Series 4

River Bend Apartments                                                               Norton Green Apartments

   Should all of these options be exercised, the estimated net sales proceeds to Gateway from the sales transactions are estimated to be $180,000, or $26.03 per beneficial assignee certificate potentially available for distribution to the Series 4 Assignees over the next 24 months.  These options to purchase could expire without being exercised which would result in no sales proceeds and remarketing of the Project Partnerships, the results of which are undeterminable.

Series 5

Villa Del Rio                                                                   Willow Apartments
Woodvale Apartments II

   Should all of these options be exercised, the estimated net sales proceeds to Gateway from the sales transactions are estimated to be $275,000, or $31.92 per beneficial assignee certificate potentially available for distribution to the Series 5 Assignees over the next 24 months.  These options to purchase could expire without being exercised which would result in no sales proceeds and remarketing of the Project Partnerships, the results of which are undeterminable.

Series 6

Country Place Apartments

   Should this option be exercised, the estimated net sales proceeds to Gateway from the sales transaction are estimated to be $90,000, or $8.91 per beneficial assignee certificate potentially available for distribution to the Series 6 Assignees over the next 24 months.  This option to purchase could expire without being exercised which would result in no sales proceeds and remarketing of the Project Partnership, the results of which are undeterminable.

Project Partnerships currently listed for sale on a commercial real estate for sale website or listed for sale by the general partner of the Project Partnership:

Series 3

Logansport Seniors Apartments                                                 Sunchase II Apartments
Mill Run Apartments

 
 
 

Series 4

Oaks Apartments                                                                           Tarpon Heights Apartments
Sonora Seniors Apartments                                                         Fredericksburg Seniors Apartments
Ozona Seniors Apartments                                                          Brackettville Seniors Apartments
Timpson Seniors Apartments                                                      Village Apartments of St. Joseph II

Series 5

Fox Ridge Apartments                                                                   Redmont II Apartments
Village Apartments of Effingham                                                 Village Apartments of Seymour II


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 Liabilities Reflected on
the Registrant’s Balance Sheet
under GAAP
 
 
$3,800,683 (1)
 
 
317,633
 
 
3,483,050
 
 
0
 
 
0

(1)  The Other Liabilities represent the asset management fees and other general and administrative expense reimbursements owed to the General Partners as of March 31,2007.  This payable 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 later than one year within the next twelve months.

Item 7A.  Quantitative and Qualitative Disclosures about Market Risk.

   As a small business issuer, no information is required.

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 Gateway Tax Credit Fund II, Ltd. (a Florida Limited Partnership) – Series 2 through 6, in total and for each series, as of March 31, 2007 and 2006, and the related statements of operations, partners’ equity (deficit), and cash flows for the total partnership and for each of the series for each of the years in the two year period ended March 31, 2007.  Gateway’s management is responsible for these financial statements.  Our responsibility is to express an opinion on these financial statements based on our audits.  The financial statements of Gateway Tax Credit Fund II, Ltd. for the year ended March 31, 2005, were audited by other auditors whose report dated September 8, 2005, expressed an unqualified opinion on those statements.

   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.  Gateway is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audits 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 Gateway’s internal control over financial reporting.  Accordingly we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 Gateway Tax Credit Fund II, Ltd. – Series 2 through 6, in total and for each series, as of March 31, 2007 and 2006, and the results of its operations and its cash flows for the total partnership and for each of the series for each of the years in the two year period ended March 31, 2007 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 15(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 report 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/ Reznick Group, P.C.
                                                          REZNICK GROUP, P.C.


Atlanta, Georgia
December 16, 2008

 
 
 



 

 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Partners of Gateway Tax Credit Fund II Ltd


   We have audited the accompanying statements of operations, partners’ equity (deficit), and cash flows of each of the five Series (Series 2 through 6) constituting Gateway Tax Credit Fund II Ltd. (a Florida Limited Partnership) for the year 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 audit.  We did not audit the financial statements of certain Project Partnerships in Series 6 for which net losses of $5,938 are included in the accompanying financial statements for the year ended March 31, 2005.  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 audit 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 statements of operations, partners’ equity (deficit), and cash flows 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 also includes examining, on a test basis, evidence supporting the amounts and disclosures in the statements of operations, partners’ equity (deficit), and cash flows, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the statements of operations, partners’ equity (deficit), and cash flows.  We believe that our audit and the reports of other auditors provide a reasonable basis for our opinion.

   In our opinion, based on our audit and the reports of other auditors, the statements of operations, partners’ equity (deficit), and cash flows present fairly, in all material respects, the results of operations and cash flows of each of the five Series (Series 2 through 6) constituting Gateway Tax Credit Fund II Ltd. for the year ended March 31, 2005, in conformity with accounting principles generally accepted in the United States of America.



                                                        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, 2007 AND 2006
 
SERIES 2
2007
----
2006
----
ASSETS
Current Assets:
 Cash and Cash Equivalents
 Investments in Securities
 
     Total Assets
 
LIABILITIES AND PARTNERS’ EQUITY (Deficit)
Current Liabilities:
 Payable to General Partners
 Other Payable
 
  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, 2007 and 2006 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, 2007 and
2006, issued and outstanding
General Partners
 
  Total Partners’ Equity (Deficit)
 
    Total Liabilities and Partners’ Equity (Deficit)
 
 
$ 129,724 
127,640 
----------
$ 257,364 
==========
 
 
$  48,705 
0 
----------
48,705 
----------
 
666,568 
----------
 
 
 
 
 
 
 
 
(399,531)
(58,378)
----------
(457,909)
----------
$ 257,364 
==========
 
 
$ 250,529 
66,276 
----------
$ 316,805 
==========
 
 
$  48,304 
8,030 
----------
56,334 
----------
 
599,253 
----------
 
 
 
 
 
 
 
 
(281,595)
(57,187)
----------
(338,782)
----------
$ 316,805 
==========


See accompanying notes to financial statements.

 
 
 


GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEET
MARCH 31, 2007 AND 2006

SERIES 3
2007
----
2006
----
ASSETS
Current Assets:
 Cash and Cash Equivalents
 Investments in Securities
 Receivable - Other
 
      Total Assets
 
LIABILITIES AND PARTNERS’ EQUITY (Deficit)
Current Liabilities:
 Payable to General Partners
 Distribution Payable
 Deferred Gain on Sale of Project Partnerships
 Other Payable
 
  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 3 had 5,456 at
March 31, 2007 and 2006 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 3 had 5,456 at March 31, 2007 and
2006, issued and outstanding
General Partners
 
  Total Partners’ Equity (Deficit)
 
    Total Liabilities and Partners’ Equity (Deficit)
 
 
$ 426,791 
127,640 
44,000 
----------
$ 598,431 
==========
 
 
$  55,354 
313,273 
43,850 
0 
----------
412,477 
----------
 
551,211 
----------
 
 
 
 
 
 
 
 
(365,257)
(0)
----------
(365,257)
----------
$ 598,431 
==========
 
 
$ 236,035 
58,952 
0 
----------
$ 294,987 
==========
 
 
$  52,905 
0 
0 
7,300 
----------
60,205 
----------
 
493,156 
----------
 
 
 
 
 
 
 
 
(207,975)
(50,399)
----------
(258,374)
----------
$ 294,987 
==========
     


See accompanying notes to financial statements.

 
 
 


GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEET
MARCH 31, 2007 AND 2006

SERIES 4
2007
----
2006
----
ASSETS
Current Assets:
 Cash and Cash Equivalents
 Investments in Securities
 Receivable - Other
 
      Total Assets
 
LIABILITIES AND PARTNERS’ EQUITY (Deficit)
Current Liabilities:
 Payable to General Partners
 Distribution Payable
 Deferred Gain on Sale of Project Partnerships
 Other Payable
 
  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 4 had 6,915 at
March 31, 2007 and 2006 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 4 had 6,915 at March 31, 2007 and
2006, issued and outstanding
General Partners
 
  Total Partners’ Equity (Deficit)
 
    Total Liabilities and Partners’ Equity (Deficit)
 
 
$  206,516 
178,897 
84,500 
-----------
$  469,913 
===========
 
 
$   60,680 
62,744 
84,200 
0 
-----------
207,624 
-----------
 
722,109 
-----------
 
 
 
 
 
 
 
 
(459,820)
0 
----------
(459,820)
----------
$  469,913 
===========
 
 
$  322,204 
74,685 
0 
-----------
$  396,889 
===========
 
 
$   59,221 
0 
0 
8,030 
-----------
67,251 
-----------
 
647,438 
-----------
 
 
 
 
 
 
 
 
(253,967)
(63,833)
----------
(317,800)
----------
$  396,889 
===========


See accompanying notes to financial statements.

 
 
 


GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEET
MARCH 31, 2007 AND 2006

SERIES 5
2007
----
2006
----
ASSETS
Current Assets:
 Cash and Cash Equivalents
 Investments in Securities
 Receivable – Other
 
  Total Current Assets
 
 Investments in Project Partnerships, Net
 
    Total Assets
 
LIABILITIES AND PARTNERS’ EQUITY (Deficit)
Current Liabilities:
 Payable to General Partners
 Other Payable
 
  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 5 had 8,616 at
March 31, 2007 and 2006 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 5 had 8,616 at March 31, 2007 and
2006, issued and outstanding
General Partners
 
  Total Partners’ Equity (Deficit)
 
    Total Liabilities and Partners’ Equity (Deficit)
 
 
$  175,920 
101,509 
0 
-----------
277,429 
 
125,403 
-----------
$  402,832 
===========
 
 
$   78,583 
0 
-----------
78,583 
-----------
 
603,864 
-----------
 
 
 
 
 
 
 
 
(275,580)
(4,035)
-----------
(279,615)
-----------
$  402,832 
===========
 
 
$  262,439 
93,086 
912 
-----------
356,437 
 
151,630 
-----------
$  508,067 
===========
 
 
$   77,770 
3,650 
-----------
81,420 
-----------
 
511,577 
-----------
 
 
 
 
 
 
 
 
(82,842)
(2,088)
-----------
(84,930)
-----------
$  508,067 
===========


See accompanying notes to financial statements.

 
 
 


GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEET
MARCH 31, 2007 AND 2006

SERIES 6
2007
----
2006
----
ASSETS
Current Assets:
 Cash and Cash Equivalents
 Investments in Securities
 
  Total Current Assets
 
 Investments in Project Partnerships, Net
 
    Total Assets
 
LIABILITIES AND PARTNERS’ EQUITY (Deficit)
Current Liabilities:
 Payable to General Partners
 Distribution Payable
 
  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 6 had 10,105 at March 31,
2007 and 2006 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 6 had 10,105 at March 31, 2007 and
2006, issued and outstanding
General Partners
 
  Total Partners’ Equity (Deficit)
 
    Total Liabilities and Partners’ Equity (Deficit)
 
 
$  193,964 
280,406 
-----------
474,370 
 
208,779 
-----------
$  683,149 
===========
 
 
$   74,311 
46 
-----------
74,357 
-----------
 
939,298 
-----------
 
 
 
 
 
 
 
 
(327,179)
(3,327)
-----------
(330,506)
-----------
$  683,149 
===========
 
 
$  463,580 
78,370 
-----------
541,950 
 
372,285 
-----------
$  914,235 
===========
 
 
$   73,971 
46 
-----------
74,017 
-----------
 
838,056 
-----------
 
 
 
 
 
 
 
 
2,162 
0 
-----------
2,162 
-----------
$  914,235 
===========


See accompanying notes to financial statements.

 
 
 


GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEET
MARCH 31, 2007 AND 2006

TOTAL SERIES 2 - 6
2007
----
2006
----
ASSETS
Current Assets:
 Cash and Cash Equivalents
 Investments in Securities
 Receivable - Other
 
  Total Current Assets
 
 Investments in Project Partnerships, Net
 
    Total Assets
 
LIABILITIES AND PARTNERS’ EQUITY (Deficit)
Current Liabilities:
 Payable to General Partners
 Distribution Payable
 Deferred Gain on Sale of Project Partnerships
 Other Payable
 
  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 2-6 had 37,228 at
March 31, 2007 and 2006 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 2-6 had 37,228 at March 31, 2007 and
2006, issued and outstanding
General Partners
 
  Total Partners’ Equity (Deficit)
 
    Total Liabilities and Partners’ Equity (Deficit)
 
 
$1,132,915 
816,092 
128,500 
-----------
2,077,507 
 
334,182 
-----------
$2,411,689 
===========
 
 
$  317,633 
376,063 
128,050 
0 
-----------
821,746 
-----------
 
3,483,050 
-----------
 
 
 
 
 
 
 
 
(1,827,367)
(65,740)
-----------
(1,893,107)
-----------
$2,411,689 
===========
 
 
$1,534,787 
371,369 
912 
-----------
1,907,068 
 
523,915 
-----------
$2,430,983 
===========
 
 
$  312,171 
46 
0 
27,010 
-----------
339,227 
-----------
 
3,089,480 
-----------
 
 
 
 
 
 
 
 
(824,217)
(173,507)
-----------
(997,724)
-----------
$2,430,983 
===========


See accompanying notes to financial statements.

 
 
 


GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,


SERIES 2
2007
----
2006
----
2005
----
Revenues:
 Distribution Income
 
  Total Revenues
 
Expenses:
 Asset Management Fee-General Partner
 General and Administrative:
  General Partner
  Other
 Amortization
 
  Total Expenses
 
Loss Before Equity in Losses of Project
  Partnerships and Other Income
Equity in Losses of Project Partnerships
Interest Income
 
Net Loss
 
Allocation of Net Loss:
 Assignees
 General Partners
 
 
Net Loss Per Beneficial Assignee Certificate
Number of Beneficial Assignee Certificates
Outstanding
 
$    15,209 
-----------
15,209 
-----------
 
67,315 
 
61,537 
19,652 
0 
-----------
148,504 
-----------
 
(133,295)
0 
14,168 
-----------
$ (119,127)
===========
 
$ (117,936)
(1,191)
-----------
$ (119,127)
===========
$   (19.22)
===========
6,136 
===========
 
$    7,263 
-----------
7,263 
-----------
 
67,609 
 
47,681 
28,551 
699 
-----------
144,540 
-----------
 
(137,277)
(32,092)
12,970 
-----------
$ (156,399)
===========
 
$ (154,835)
(1,564)
-----------
$ (156,399)
===========
$   (25.23)
===========
6,136 
===========
 
$   13,938 
-----------
13,938 
-----------
 
67,609 
 
32,074 
11,930 
697 
-----------
112,310 
-----------
 
(98,372)
(10,911)
11,763 
-----------
$  (97,520)
===========
 
$  (96,545)
(975)
-----------
$  (97,520)
===========
$   (15.73)
===========
6,136 
===========


See accompanying notes to financial statements.

 
 
 


GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,


Series 3
2007
----
2006
----
2005
----
Revenues:
 Distribution Income
 
  Total Revenues
 
Expenses:
 Asset Management Fee-General Partner
 General and Administrative:
  General Partner
  Other
 
  Total Expenses
 
Loss Before Equity in Income of Project
  Partnerships and Other Income
Equity in Income of Project Partnerships
Gain on Sale of Project Partnerships
Interest Income
 
Net Income (Loss)
 
Allocation of Net Income (Loss):
 Assignees
 General Partners
 
 
 
Net Income (Loss) Per Beneficial Assignee Certificate
Number of Beneficial Assignee Certificates
Outstanding
 
$  20,439 
----------
20,439 
----------
 
58,055 
 
63,702 
21,099 
----------
142,856 
----------
 
(122,417)
490 
412,624 
15,265 
----------
$ 305,962 
==========
 
$ 255,563 
50,399 
----------
$ 305,962 
==========
 
$   46.84 
==========
5,456 
==========
 
$  22,861 
----------
22,861 
----------
 
62,716 
 
49,848 
30,605 
---------
143,169 
----------
 
(120,308)
0 
0 
12,030 
----------
$(108,278)
==========
 
$(107,195)
(1,083)
----------
$(108,278)
==========
 
$  (19.65)
==========
5,456 
==========
 
$  18,781 
----------
18,781 
----------
 
62,717 
 
33,531 
10,716 
----------
106,964 
----------
 
(88,183)
0 
0 
10,536 
----------
$ (77,647)
==========
 
$ (76,871)
(776)
----------
$ (77,647)
==========
 
$  (14.09)
==========
5,456 
==========


See accompanying notes to financial statements.

 
 
 


GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,


SERIES 4
2007
----
2006
----
2005
----
Revenues:
 Distribution Income
 
  Total Revenues
 
Expenses:
 Asset Management Fee - General Partner
 General and Administrative:
  General Partner
  Other
 
  Total Expenses
 
Loss Before Equity in Income of Project
  Partnerships and Other Income
Equity in Income of Project Partnerships
Gain on Sale of Project Partnerships
Interest Income
 
Net Income (Loss)
 
Allocation of Net Income (Loss):
 Assignees
 General Partners
 
 
 
Net Income (Loss) Per Beneficial Assignee
Certificate
Number of Beneficial Assignee Certificates
Outstanding
 
$  20,091 
---------
20,091 
---------
 
74,671 
 
81,118 
23,570 
---------
179,359 
---------
 
(159,268)
0 
62,740 
17,252 
---------
$ (79,276)
==========
 
$(143,109)
63,833 
---------
$ (79,276)
==========
 
$  (20.70)
==========
6,915 
==========
 
$  18,473 
---------
18,473 
---------
 
77,205 
 
62,853 
33,151 
---------
173,209 
---------
 
(154,736)
0 
0 
16,432 
---------
$(138,304)
==========
 
$(136,921)
(1,383)
---------
$(138,304)
==========
 
$  (19.80)
==========
6,915 
==========
 
$  16,181 
---------
16,181 
---------
 
77,205 
 
42,279 
13,260 
---------
132,744 
---------
 
(116,563)
0 
0 
13,596 
---------
$(102,967)
==========
 
$(101,937)
(1,030)
---------
$(102,967)
==========
 
$  (14.74)
==========
6,915 
==========


See accompanying notes to financial statements.

 
 
 


GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,


SERIES 5
2007
----
2006
----
2005
----
Revenues:
 Distribution Income
 
  Total Revenues
 
Expenses:
 Asset Management Fee - General Partner
 General and Administrative:
  General Partner
  Other
 Amortization
 
  Total Expenses
 
Loss Before Equity in Losses of Project
  Partnerships and Other Income
Equity in Income (Losses) of Project Partnerships
Gain on Sale of Project Partnerships
Interest Income
 
Net Income (Loss)
 
Allocation of Net Income (Loss):
 Assignees
 General Partners
 
 
 
Net Loss Per Beneficial Assignee
Certificate
Number of Beneficial Assignee Certificates
Outstanding
 
$ 26,812 
----------
26,812 
----------
 
92,287 
 
97,901 
24,984 
15,436 
----------
230,608 
----------
 
(203,796)
(5,528)
0 
14,639 
----------
$(194,685)
==========
 
(192,738)
(1,947)
----------
$(194,685)
==========
 
$  (22.37)
==========
8,616 
==========
 
$ 22,819 
----------
22,819 
----------
 
92,722 
 
77,443 
30,180 
25,784 
----------
226,129 
----------
 
(203,310)
(22,512)
0 
17,032 
----------
$(208,790)
==========
 
(206,702)
(2,088)
----------
$(208,790)
==========
 
$  (23.99)
==========
8,616 
==========
 
$ 27,663 
----------
27,663 
----------
 
92,722 
 
52,484 
17,788 
2,005 
----------
164,999 
----------
 
(137,336)
(21,348)
157,126 
16,711 
----------
$  15,153 
==========
 
(57,812)
72,965 
----------
$  15,153 
==========
 
$   (6.71)
==========
8,616 
==========


See accompanying notes to financial statements.

 
 
 


GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,


SERIES 6
2007
----
2006
----
2005
----
Revenues:
 Distribution Income
 
  Total Revenues
 
Expenses:
 Asset Management Fee - General Partner
 General and Administrative:
  General Partner
  Other
 Amortization
 Impairment of Investment in Project
   Partnerships
 
  Total Expenses
 
Loss Before Equity in Income (Losses) of Project
Partnerships and Other Income
Equity in Income (Losses) of Project Partnerships
Gain on Sale of Project Partnerships
Interest Income
 
Net Loss
 
Allocation of Net Loss:
 Assignees
 General Partners
 
 
 
Net Loss Per Beneficial Assignee
Certificate
Number of Beneficial Assignee Certificates
Outstanding
 
$  29,678 
----------
29,678 
----------
 
101,242 
 
103,495 
28,470 
44,929 
 
103,003 
----------
381,139 
----------
 
(351,461)
(7,156)
0 
25,949 
----------
$(332,668)
==========
 
$(329,341)
(3,327)
----------
$(332,668)
==========
 
$  (32.59)
==========
10,105 
==========
 
$  26,354 
----------
26,354 
----------
 
101,592 
 
81,777 
26,202 
39,001 
 
343,241 
----------
591,813 
----------
 
(565,459)
(25,699)
224,074 
24,826 
----------
$(342,258)
==========
 
$(425,299)
83,041 
----------
$(342,258)
==========
 
$  (42.09)
==========
10,105 
==========
 
$  32,039 
----------
32,039 
----------
 
104,509 
 
55,400 
17,799 
6,106 
 
0 
----------
183,814 
----------
 
(151,775)
(65,236)
0 
18,302 
----------
$(198,709)
==========
 
$(196,722)
(1,987)
----------
$(198,709)
==========
 
$  (19.47)
==========
10,105 
==========

See accompanying notes to financial statements.

 
 
 


GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,


TOTAL SERIES 2 - 6
2007
----
2006
----
2005
----
Revenues:
 Distribution Income
 
  Total Revenues
 
Expenses:
 Asset Management Fee-General Partner
 General and Administrative:
  General Partner
  Other
 Amortization
 Impairment of Investment in Project
   Partnerships
 
  Total Expenses
 
Loss Before Equity in Income (Losses) of
Project Partnerships and Other Income
Equity in Income (Losses) of Project
Partnerships
Gain on Sale of Project Partnerships
Interest Income
 
Net Loss
 
Allocation of Net Loss:
 Assignees
 General Partners
 
$   112,229 
-----------
112,229 
-----------
 
393,570 
 
407,753 
117,775 
60,365 
 
103,003 
-----------
1,082,466 
-----------
 
(970,237)
 
(12,194)
475,364 
87,273 
-----------
$  (419,794)
============
 
$  (527,561)
107,767 
------------
$  (419,794)
============
 
$   97,770 
-----------
97,770 
-----------
 
401,844 
 
319,602 
148,689 
65,484 
 
343,241 
-----------
1,278,860 
-----------
 
(1,181,090)
 
(80,303)
224,074 
83,290 
-----------
$  (954,029)
============
 
$(1,030,952)
76,923 
------------
$  (954,029)
============
 
$  108,602 
-----------
108,602 
-----------
 
404,762 
 
215,768 
71,493 
8,808 
 
0 
-----------
700,831 
-----------
 
(592,229)
 
(97,495)
157,126 
70,908 
-----------
$  (461,690)
============
 
$  (529,887)
68,197 
------------
$  (461,690)
============


See accompanying notes to financial statements.

 
 
 



GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)

STATEMENTS OF PARTNERS’ EQUITY (DEFICIT)
FOR THE YEARS ENDED MARCH 31, 2007, 2006 AND 2005


SERIES 2
 
Assignees
---------
General
Partners
--------
 
Total
-----
 
 
Balance at March 31, 2004
 
Net Loss
 
 
Balance at March 31, 2005
 
Net Loss
 
 
Balance at March 31, 2006
 
Net Loss
 
 
Balance at March 31, 2007
 
 
$  (30,215)
 
(96,545)
-----------
 
(126,760)
 
(154,835)
-----------
 
(281,595)
 
(117,936)
-----------
 
$ (399,531)
===========
 
 
$  (54,648)
 
(975)
-----------
 
(55,623)
 
(1,564)
-----------
 
(57,187)
 
(1,191)
-----------
 
$  (58,378)
===========
 
 
$  (84,863)
 
(97,520)
-----------
 
(182,383)
 
(156,399)
-----------
 
(338,782)
 
(119,127)
-----------
 
$ (457,909)
===========



STATEMENTS OF PARTNERS’ EQUITY (DEFICIT)
FOR THE YEARS ENDED MARCH 31, 2007, 2006 AND 2005


SERIES 3
 
Assignees
---------
General
Partners
--------
 
Total
-----
 
 
Balance at March 31, 2004
 
Net Loss
 
 
Balance at March 31, 2005
 
Net Loss
 
 
Balance at March 31, 2006
 
Net Income
 
Distributions
 
 
Balance at March 31, 2007
 
 
$  (23,909)
 
(76,871)
-----------
 
(100,780)
 
(107,195)
-----------
 
(207,975)
 
255,563 
 
(412,845)
-----------
 
$ (365,257)
===========
 
 
$  (48,540)
 
(776)
-----------
 
(49,316)
 
(1,083)
-----------
 
(50,399)
 
50,399 
 
0 
-----------
 
$        0 
===========
 
 
$  (72,449)
 
(77,647)
-----------
 
(150,096)
 
(108,278)
-----------
 
(258,374)
 
305,962 
 
(412,845)
-----------
 
$ (365,257)
===========



See accompanying notes to financial statements.

 
 
 



GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)

STATEMENTS OF PARTNERS’ EQUITY (DEFICIT)
FOR THE YEARS ENDED MARCH 31, 2007, 2006 AND 2005


SERIES 4
 
Assignees
---------
General
Partners
--------
 
Total
-----
 
 
Balance at March 31, 2004
 
Net Loss
 
 
Balance at March 31, 2005
 
Net Loss
 
 
Balance at March 31, 2006
 
Net Income (Loss)
 
Distributions
 
 
Balance at March 31, 2007
 
 
$  (15,109)
 
(101,937)
-----------
 
(117,046)
 
(136,921)
-----------
 
(253,967)
 
(143,109)
 
(62,744)
-----------
 
$ (459,820)
===========
 
 
$ (61,420)
 
(1,030)
----------
 
(62,450)
 
(1,383)
----------
 
(63,833)
 
63,833 
 
0 
-----------
 
$        0 
===========
 
 
$  (76,529)
 
(102,967)
-----------
 
(179,496)
 
(138,304)
-----------
 
(317,800)
 
(79,276)
 
(62,744)
-----------
 
$ (459,820)
===========



STATEMENTS OF PARTNERS’ EQUITY (DEFICIT)
FOR THE YEARS ENDED MARCH 31, 2007, 2006 AND 2005


SERIES 5
 
Assignees
---------
General
Partners
--------
 
Total
-----
 
 
Balance at March 31, 2004
 
Net Income (Loss)
 
Distributions
 
 
Balance at March 31, 2005
 
Net Loss
 
 
Balance at March 31, 2006
 
Net Loss
 
 
Balance at March 31, 2007
 
 
$  338,798 
 
(57,812)
 
(157,126)
-----------
 
123,860 
 
(206,702)
-----------
 
(82,842)
 
(192,738)
-----------
 
$ (275,580)
===========
 
 
$ (72,965)
 
72,965 
 
0 
----------
 
0 
 
(2,088)
----------
 
(2,088)
 
(1,947)
----------
 
$  (4,035)
==========
 
 
$  265,833 
 
15,153 
 
(157,126)
-----------
 
123,860 
 
(208,790)
-----------
 
(84,930)
 
(194,685)
-----------
 
$ (279,615)
===========




See accompanying notes to financial statements.

 
 
 



GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)

STATEMENTS OF PARTNERS’ EQUITY (DEFICIT)
FOR THE YEARS ENDED MARCH 31, 2007, 2006 AND 2005


SERIES 6
 
Assignees
---------
General
Partners
--------
 
Total
-----
 
 
Balance at March 31, 2004
 
Net Loss
 
 
Balance at March 31, 2005
 
Net Income (Loss)
 
Distributions
 
 
Balance at March 31, 2006
 
Net Loss
 
 
Balance at March 31, 2007
 
 
$   848,257 
 
(196,722)
------------
 
651,535 
 
(425,299)
 
(224,074)
------------
 
2,162 
 
(329,341)
------------
 
$  (327,179)
============
 
 
$ (81,054)
 
(1,987)
----------
 
(83,041)
 
83,041 
 
0 
----------
 
0 
 
(3,327)
----------
 
$  (3,327)
==========
 
 
$  767,203 
 
(198,709)
-----------
 
568,494 
 
(342,258)
 
(224,074)
-----------
 
2,162 
 
(332,668)
-----------
 
$ (330,506)
===========



STATEMENTS OF PARTNERS’ EQUITY (DEFICIT)
FOR THE YEARS ENDED MARCH 31, 2007, 2006 AND 2005


 
TOTAL SERIES 2 - 6
 
Assignees
---------
General
Partners
--------
 
Total
-----
 
 
Balance at March 31, 2004
 
Net Income (Loss)
 
Distributions
 
 
Balance at March 31, 2005
 
Net Income (Loss)
 
Distributions
 
 
Balance at March 31, 2006
 
Net Income (Loss)
 
Distributions
 
 
Balance at March 31, 2007
 
 
$ 1,117,822 
 
(529,887)
 
(157,126)
------------
 
430,809 
 
(1,030,952)
 
(224,074)
------------
 
(824,217)
 
(527,561)
 
(475,589)
------------
 
$ (1,827,367)
============
 
 
$(318,627)
 
68,197 
 
0 
----------
 
(250,430)
 
76,923 
 
0 
----------
 
(173,507)
 
107,767 
 
0 
----------
 
$ (65,740)
==========
 
 
$  799,195 
 
(461,690)
 
(157,126)
-----------
 
180,379 
 
(954,029)
 
(224,074)
-----------
 
(997,724)
 
(419,794)
 
(475,589)
-----------
 
$ (1,893,107)
===========



See accompanying notes to financial statements.

 
 
 


GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2007, 2006 AND 2005

 
SERIES 2
2007
  
2006
  
2005
Cash Flows from Operating Activities:
          
 Net Loss
$ (119,127)
  
$ (156,399)
  
$ (97,520)
 Adjustments to Reconcile Net Loss to
          
 Net Cash Used in Operating Activities:
          
    Amortization
0 
  
699 
  
697 
Accreted Interest Income on
          
  Investments in Securities
0 
  
(4,927)
  
(9,361)
 Accreted Discount on Investments in
          
  Securities
(509)
  
0 
  
0 
 Equity in Losses of Project
          
  Partnerships
0 
  
32,092 
  
10,911 
 Distributions Included in Other
          
  Income
(15,209)
  
(7,263)
  
(13,438)
   Changes in Operating Assets and
          
    Liabilities:
          
     Increase in Interest Receivable
(2,120)
  
0 
  
0 
     Increase in Payable to General
          
       Partners
67,716 
  
70,868 
  
46,294 
     (Decrease) Increase in Other
          
       Payable
(8,030)
  
8,030 
  
0 
           
         Net Cash Used in Operating
          
         Activities
(77,279)
  
(56,900)
  
(62,417)
           
Cash Flows from Investing Activities:
          
  Distributions Received from Project
          
  Partnerships
15,209 
  
8,863 
  
15,038 
  Redemption of Investment in Securities
66,276 
  
63,562 
  
61,299 
  Investment in Securities
(125,011)
  
0 
  
0 
           
        Net Cash (Used in) Provided by
          
        Investing Activities
(43,526)
  
72,425 
  
76,337 
           
(Decrease) Increase in Cash and Cash
          
Equivalents
(120,805)
  
15,525 
  
13,920 
Cash and Cash Equivalents at Beginning
          
of Year
250,529 
  
235,004 
  
221,084 
           
Cash and Cash Equivalents at End of Year
$ 129,724 
  
$ 250,529 
  
$ 235,004 
           

See accompanying notes to financial statements.

 
 
 


GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2007, 2006 AND 2005


SERIES 3
2007
  
2006
  
2005
Cash Flows from Operating Activities:
          
  Net Income (Loss)
$ 305,962 
  
$ (108,278)
  
$ (77,647)
  Adjustments to Reconcile Net Income
          
  (Loss) to Net Cash Used in Operating
          
  Activities:
          
    Accreted Interest Income on
          
     Investments in Securities
0 
  
(4,382)
  
(8,327)
    Accreted Discount on Investments in
          
     Securities
(509)
  
0 
  
0 
    Equity in Income of Project
          
     Partnerships
(490)
  
0 
  
0 
    Gain on Sale of Project Partnerships
(412,624)
  
0 
  
0 
    Distributions Included In Other
          
     Income
(20,439)
  
(22,861)
  
(18,781)
    Changes in Operating Assets and
          
    Liabilities:
          
      Increase in Interest Receivable
(2,120)
  
0 
  
0 
      Increase in Payable to General
          
       Partners
60,504 
  
66,312 
  
62,576 
      (Decrease) Increase in Other
          
       Payable
(7,300)
  
7,300 
  
0 
           
        Net Cash Used in Operating
          
        Activities
(77,016)
  
(61,909)
  
(42,179)
           
Cash Flows from Investing Activities:
          
  Distributions Received from Project
          
  Partnerships
20,439 
  
22,861 
  
18,781 
  Net Proceeds from Sale of Project
          
  Partnerships
412,964 
  
0 
  
0 
  Redemption of Investment in Securities
58,952 
  
56,536 
  
54,526 
  Investment in Securities
(125,011)
  
0 
  
0 
           
        Net Cash Provided by Investing
          
        Activities
367,344 
  
79,397 
  
73,307 
           
Cash Flows from Financing Activities:
          
  Distributions Paid to Limited Partners
(99,572)
  
0 
  
0 
           
        Net Cash Used in Financing
          
        Activities
(99,572)
  
0 
  
0 
           
Increase in Cash and Cash Equivalents
190,756 
  
17,488 
  
31,128 
Cash and Cash Equivalents at Beginning
          
of Year
236,035 
  
218,547 
  
187,419 
           
Cash and Cash Equivalents at End of Year
$ 426,791 
  
$ 236,035 
  
$ 218,547 
           
Supplemental non-cash activities:
          
Increase in Distribution Payable
$ 313,273 
  
$         0 
  
$         0 
Distribution to Limited Partners
(313,273)
  
0 
  
0 
Increase in Receivable – Other
(44,000)
  
0 
  
0 
Proceeds from Sale of Project Partnership
44,000 
  
0 
  
0 
 
$          0 
  
$        0 
  
$        0 

See accompanying notes to financial statements.

 
 
 


GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2007, 2006 AND 2005

 
SERIES 4
2007
  
2006
  
2005
Cash Flows from Operating Activities:
          
  Net Income (Loss)
$ (79,276)
  
$ (138,304)
  
$ (102,967)
  Adjustments to Reconcile Net Income
          
  (Loss) to Net Cash Used in Operating
          
  Activities:
          
    Accreted Interest Income on
          
     Investments in Securities
0 
  
(5,552)
  
(10,549)
    Accreted Discount on Investments in
          
     Securities
(713)
  
0 
  
0 
    Equity in Income of Project
          
     Partnerships
0 
  
0 
  
0 
    Gain on Sale of Project Partnerships
(62,740)
  
0 
  
0 
    Distributions Included In Other
          
     Income
(20,091)
  
(18,473)
  
(16,173)
    Changes in Operating Assets and
          
    Liabilities:
          
      Increase in Interest Receivable
(2,972)
  
0 
  
0 
      Increase in Payable to General
          
       Partners
76,130 
  
81,955 
  
75,400 
      (Decrease) Increase in Other
          
       Payable
(8,030)
  
8,030 
  
0 
           
        Net Cash Used in Operating
          
        Activities
(97,692)
  
(72,344)
  
(54,289)
           
Cash Flows from Investing Activities:
          
  Distributions Received from Project
          
  Partnerships
20,091 
  
18,473 
  
16,173 
  Net Proceeds from Sale of Project
          
  Partnerships
62,440 
  
0 
  
0 
  Redemption of Investment in Securities
74,685 
  
71,628 
  
69,078 
  Investment in Securities
(175,212)
  
0 
  
0 
           
        Net Cash (Used in) Provided by
          
        Investing Activities
(17,996)
  
90,101 
  
85,251 
           
(Decrease) Increase in Cash and Cash
          
Equivalents
(115,688)
  
17,757 
  
30,962 
Cash and Cash Equivalents at Beginning
          
of Year
322,204 
  
304,447 
  
273,485 
           
Cash and Cash Equivalents at End of Year
$ 206,516 
  
$ 322,204 
  
$ 304,447 
           
Supplemental non-cash activities:
          
Increase in Distribution Payable
$   62,744 
  
$            0 
  
$           0 
Distribution to Limited Partners
(62,744)
  
0 
  
0 
Increase in Receivable – Other
(84,500)
  
0 
  
0 
Proceeds from Sale of Project Partnership
84,500 
  
0 
  
0 
 
$            0 
  
$           0 
  
$          0 
 

See accompanying notes to financial statements.

 
 
 


GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2007, 2006 AND 2005

 


SERIES 5
2007
  
2006
  
2005
Cash Flows from Operating Activities:
          
 Net Loss
$ (194,685)
  
$ (208,790)
  
$  15,153 
 Adjustments to Reconcile Net Loss to
          
 Net Cash Used in Operating Activities:
          
 Amortization
15,436 
  
25,784 
  
2,005 
 Accreted Interest Income on
          
  Investments in Securities
0 
  
(6,919)
  
(13,147)
 Accreted Discount on Investments in
          
  Securities
(405)
  
0 
  
0 
 Equity in Losses of Project
          
  Partnerships
5,528 
  
22,512 
  
21,348 
 Gain on Sale of Project Partnerships
0 
  
0 
  
(157,126)
 Distributions Included in Other
          
  Income
(26,812)
  
(22,819)
  
(27,063)
   Changes in Operating Assets and
          
    Liabilities:
          
     Increase in Interest Receivable
(1,686)
  
0 
  
0 
     Decrease (Increase) in Receivable –
          
      Other
912 
  
(912)
  
0 
     Increase in Payable to General
          
       Partners
93,100 
  
97,702 
  
(69,716)
     (Decrease) Increase in Other Payable
(3,650)
  
2,950 
  
700 
           
         Net Cash Used in Operating
          
         Activities
(112,262)
  
(90,492)
  
(227,846)
           
Cash Flows from Investing Activities:
          
  Distributions Received from Project
          
  Partnerships
32,075 
  
25,298 
  
30,934 
  Proceeds from Sale of Project
          
  Partnerships
0 
  
0 
  
0 
  Redemption of Investment in Securities
93,086 
  
89,273 
  
86,098 
  Investment in Securities
(99,418)
  
0 
  
0 
           
        Net Cash Provided by Investing
          
        Activities
25,743 
  
114,571 
  
117,032 
           
(Decrease) Increase in Cash and Cash
          
Equivalents
(86,519)
  
24,079 
  
(110,814)
Cash and Cash Equivalents at Beginning
          
of Year
262,439 
  
238,360 
  
349,174 
           
Cash and Cash Equivalents at End of Year
$ 175,920 
  
$ 262,439 
  
$ 238,360 
           

 
See accompanying notes to financial statements.

 
 
 


GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2007, 2006 AND 2005

 
SERIES 6
2007
  
2006
  
2005
Cash Flows from Operating Activities:
          
 Net Loss
$ (332,668)
  
$ (342,258)
  
$ (198,709)
 Adjustments to Reconcile Net Loss to
          
 Net Cash Used in Operating Activities:
          
 Amortization
44,929 
  
39,001 
  
6,106 
 Impairment of Investment in Project
          
  Partnerships
103,003 
  
343,241 
  
0 
 Accreted Interest Income on
          
  Investments in Securities
(4,630)
  
(9,931)
  
(14,483)
 Accreted Discount on Investments in
          
  Securities
(1,117)
  
0 
  
0 
 Equity in Losses of Project
          
  Partnerships
7,156 
  
25,699 
  
65,236 
 Gain on Sale of Project Partnerships
0 
  
(224,074)
  
0 
 Distributions Included in Other
          
  Income
(29,678)
  
(26,354)
  
(32,039)
   Changes in Operating Assets and
          
    Liabilities:
          
     Increase in Interest Receivable
(4,659)
  
0 
  
0 
     Decrease (Increase) in Receivable –
          
      Other
0 
  
700 
  
(700)
     Increase in Payable to General
          
       Partners
101,582 
  
106,984 
  
104,268 
     (Decrease) Increase in Other Payable
0 
  
(500)
  
500 
           
         Net Cash Used in Operating
          
         Activities
(116,082)
  
(87,492)
  
(69,821)
           
Cash Flows from Investing Activities:
          
  Distributions Received from Project
          
   Partnerships
38,096 
  
27,275 
  
38,038 
  Net Proceeds from Sale of Project
          
   Partnerships
0 
  
224,074 
  
0 
  Redemption of Investment in Securities
83,000 
  
79,000 
  
74,999 
  Investment in Securities
(274,630)
  
0 
  
0 
           
        Net Cash (Used in) Provided by
          
        Investing Activities
(153,534)
  
330,349 
  
113,037 
           
Cash Flows from Financing Activities:
          
  Distributions Paid to Limited Partners
0 
  
(224,028)
  
0 
           
        Net Cash Used in Financing
          
        Activities
0 
  
(224,028)
  
0 
           
(Decrease) Increase in Cash and Cash
          
Equivalents
(269,616)
  
18,829 
  
43,216 
Cash and Cash Equivalents at Beginning
          
of Year
463,580 
  
444,751 
  
401,535 
           
Cash and Cash Equivalents at End of Year
$ 193,964 
  
$ 463,580 
  
$ 444,751 
           

 
See accompanying notes to financial statements.

 
 
 


GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2007, 2006 AND 2005

 
TOTAL SERIES 2 - 6
2007
  
2006
  
2005
Cash Flows from Operating Activities:
          
  Net Loss
$ (419,794)
  
$ (954,029)
  
$ (461,690)
  Adjustments to Reconcile Net Loss to
          
  Net Cash Used in Operating Activities:
          
    Amortization
60,365 
  
65,484 
  
8,808 
    Impairment of Investment in Project
          
     Partnerships
103,003 
  
343,241 
  
0 
    Accreted Interest Income on
          
     Investments in Securities
(4,630)
  
(31,711)
  
(55,867)
    Accreted Discount on Investments in
          
     Securities
(3,253)
  
0 
  
0 
    Equity in Losses of Project
          
     Partnerships
12,194 
  
80,303 
  
97,495 
    Gain on Sale of Project Partnerships
(475,364)
  
(224,074)
  
(157,126)
    Distributions Included In Other Income
(112,229)
  
(97,770)
  
(107,494)
    Changes in Operating Assets and
          
    Liabilities:
          
      Increase in Interest Receivable
(13,557)
  
0 
  
0 
      Decrease (Increase) in Receivable –
          
       Other
912 
  
(212)
  
(700)
      Increase in Payable to General
          
       Partners
399,032 
  
423,821 
  
218,822 
      (Decrease) Increase in Other Payable
(27,010)
  
25,810 
  
1,200 
           
        Net Cash Used in Operating
          
        Activities
(480,331)
  
(369,137)
  
(456,552)
           
Cash Flows from Investing Activities:
          
  Distributions Received from Project
          
  Partnerships
125,910 
  
102,770 
  
118,964 
  Net Proceeds from Sale of Project
          
  Partnerships
475,404 
  
224,074 
  
0 
  Redemption of Investment in Securities
375,999 
  
359,999 
  
346,000 
  Investment in Securities
(799,282)
  
0 
  
0 
           
        Net Cash Provided by Investing
          
        Activities
178,031 
  
686,843 
  
464,964 
           
Cash Flows from Financing Activities:
          
  Distributions Paid to Limited Partners
(99,572)
  
(224,028)
  
0 
           
        Net Cash Used in Financing
          
        Activities
(99,572)
  
(224,028)
  
0 
           
(Decrease) Increase in Cash and Cash
          
Equivalents
(401,872)
  
93,678 
  
8,412 
Cash and Cash Equivalents at Beginning
          
of Year
1,534,787 
  
1,441,109 
  
1,432,697 
           
Cash and Cash Equivalents at End of Year
$ 1,132,915 
  
$ 1,534,787 
  
$ 1,441,109 
           
Supplemental non-cash activities:
          
Increase in Distribution Payable
$    376,017 
  
$               0 
  
$              0 
Distribution to Limited Partners
(376,017)
  
0 
  
0 
Increase in Receivable – Other
(128,500)
  
0 
  
0 
Proceeds from Sale of Project Partnership
128,500 
  
0 
  
0 
 
$              0 
  
$              0 
  
$             0 


See accompanying notes to financial statements.

 
 
 


GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2007, 2006 AND 2005

NOTE 1 - ORGANIZATION:

   Gateway Tax Credit Fund II Ltd. ("Gateway"), a Florida Limited Partnership, was formed September 12, 1989, under the laws of Florida.  Operations commenced on September 14, 1990 for Series 2, September 28, 1990 for Series 3, February 1, 1991 for Series 4, July 1, 1991 for Series 5 and January 1, 1992 for Series 6.  Each Series has invested, as a limited partner, in other limited partnerships ("Project Partnerships") each of which owns and operates one or more apartment complexes eligible for Low-Income Housing Tax Credits (“Tax Credits”), provided for in Section 42 of the Internal Revenue Code of 1986.  Gateway will terminate on December 31, 2040, or sooner, in accordance with the terms of the limited partnership agreement (the “Agreement”).  As of March 31, 2007, Gateway had received capital contributions of $1,000 from the General Partners and $37,228,000 from Beneficial Assignee Certificate investors (the "Assignees").  The fiscal year of Gateway for reporting purposes ends on March 31.

   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.

   Raymond James Partners, Inc. and Raymond James Tax Credit Funds, Inc., wholly-owned subsidiaries of Raymond James Financial, Inc., are the General Partner and the Managing General Partner, respectively.

   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, 2007.  Each Series is treated as a separate partnership, investing in a separate and distinct pool of Project Partnerships.  Net proceeds from each Series are 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 properties are allocated as formulated in the Agreement.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:

Basis of Accounting

   Gateway utilizes the accrual basis of accounting whereby revenues are recognized when earned and expenses are recognized when obligations are incurred.

   Gateway accounts for its investments as the limited partner in Project Partnerships ("Investments in Project Partnerships"), using the equity method of accounting, because management believes that Gateway does not have a majority control of the major operating and financial policies of the Project Partnerships in which it invests, and reports the equity in losses of the Project Partnerships on a 3-month lag in the Statements of Operations.  Under the equity method, the Investments in Project Partnerships initially include:

   1) Gateway’s capital contribution,
   2) Acquisition fees paid to the General Partner for services rendered in selecting properties for acquisision, and
   3) Acquisition expenses including legal fees, travel and other miscellaneous costs relating to acquiring properties.

Quarterly the Investments in Project Partnerships are increased or decreased as follows:

   1) Increased for equity in income or decreased for equity in losses of the Project Partnerships,
   2) Decreased for cash distributions received from the Project Partnerships, and
   3) Decreased for the amortization of the acquisition fees and expenses.

   For the fiscal year ended March 31, 2006, Gateway changed the period over which the intangible acquisition fees and expenses are amortized.  In all prior years, the period in which such intangible assets had been amortized was 35 years.  In the fiscal year ended March 31, 2006, this amortization period was changed to 15 years to better approximate the period over which the benefits of these investments are realized.  As a result of this change in estimate, an additional amortization expense of $23,779 for Series 5 and $33,465

 
 
 

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued):

for Series 6, or a total of $57,244 for all Series of Gateway, was recognized during the year-ended March 31, 2006, as compared to the amortization expense amount which would have been realized had the estimated amortization period not changed during the year.  The amortization expense is shown on the Statements of Operations.

   Pursuant to the limited partnership agreements for the Project Partnerships, cash losses generated by the Project Partnerships are allocated to the general partners of those partnerships.  In subsequent years, cash profits, if any, are first allocated to the general partners to the extent of the allocation of prior years’ cash losses.

   Since Gateway invests as a limited partner, and therefore is not obligated to fund losses or make additional capital contributions, it does not recognize losses from individual Project Partnerships to the extent that these losses would reduce the investment in those Project Partnerships below zero.  The suspended losses will be used to offset future income from the individual Project Partnerships.  Any cash distributions received from Project Partnerships which have a zero investment balance are accounted for as distribution income in the period the cash distribution is received by Gateway.

   Gateway reviews its investments in Project Partnerships to determine if there has been any permanent impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable.  If the sum of the expected future cash flows is less than the carrying amount of the investment, Gateway recognizes an impairment loss.  For the fiscal years ended March 31, 2007 and 2006, impairment expense was recognized in the Statement of Operations in Series 6 in the total amount of $103,003 and $343,241, respectively.  There was no impairment expense in fiscal year 2005.  Refer to Note 5 – Investment in Project Partnerships for further details regarding the components of the Investment in Project Partnership balance.

   Gateway, as a limited partner in the Project Partnerships, is subject to risks inherent in the ownership of property which are beyond its control, such as fluctuations in occupancy rates and operating expenses, variations in rental schedules, proper maintenance and continued eligibility of tax credits.  If the cost of operating a property exceeds the rental income earned thereon, Gateway may deem it in its best interest to voluntarily provide funds in order to protect its investment.  However, Gateway does not guarantee any of the mortgages or other debt of the Project Partnerships.  No such funding to Project Partnership’s occurred during fiscal year 2007, 2006 or 2005.

Variable Interest Entities

   In January 2003, the FASB issued FASB Interpretation No. 46 (“FIN46”), “Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51” which was subsequently revised in December, 2003.  Gateway has adopted FIN 46 and applied its requirements to all Project Partnerships in which Gateway held an interest.  Generally, a variable interest entity, or VIE, is an entity with one or more of the following characteristics, (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (b) as a group the holders of the equity investment at risk lack (i) the ability to make decisions about an entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights.  FIN 46 requires a VIE to be consolidated in the financial statements of the entity that is determined to be the primary beneficiary of the VIE.  The primary beneficiary, as is applicable to Gateway’s circumstances, is the party in the Project Partnership equity group that is most closely associated with the Project Partnership.

   Gateway holds variable interests in 134 VIEs, which consist of Project Partnerships, of which Gateway is not the primary beneficiary.  Two of Gateway’s Project Partnership investments were determined not to be VIEs.  Gateway’s maximum exposure to loss as a result of its involvement with unconsolidated VIEs is limited to Gateway’s recorded investments in and receivables from those VIEs, which is approximately $334,182 at March 31, 2007.  Gateway may be subject to additional losses to the extent of any financial support that Gateway voluntarily provides to those Project Partnerships in the future.

Cash and Cash Equivalents

   Gateway’s policy is to include short-term investments with an original maturity of three months or less in Cash and Cash Equivalents.  Short-term investments are comprised of money market mutual funds.

Concentration of Credit Risk

   Financial instruments which potentially subject Gateway to concentrations of credit risk consist of cash investments in a money market mutual fund whose investment advisor is a wholly-owned subsidiary of Raymond James Financial, Inc.

 
 
 

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued):

Use of Estimates in the Preparation of Financial Statements

   The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates that affect certain reported amounts and disclosures.  These estimates are based on management’s knowledge and experience.  Accordingly, actual results could differ from these estimates.

Investment in Securities

   Gateway applies Statement of Financial Accounting Standards No. 115, Accounting for Certain Investments in Debt and Equity Securities ("FAS 115").  Under FAS 115, Gateway is required to categorize its debt securities as held-to-maturity, available-for-sale or trading securities, dependent upon Gateway’s intent in holding the securities.  Gateway’s intent is to hold all of its debt securities (U.S. Government Security Strips and U.S. Treasury Notes) until maturity and to use these assets to fund Gateway’s ongoing operations. The U.S. Treasury Notes are carried at amortized cost, which approximates market value, and are adjusted for amortization of premiums and accretion of discounts to maturity.  Such adjustments are included in Interest Income.  Interest income is recognized ratably on the U.S. Government Strips using the effective yield to maturity.  As of March 31, 2007, Investment in Securities on the Balance Sheet consisted entirely of U.S. Treasury Notes.

Income Taxes

   No provision for income taxes has been made in these financial statements, as income taxes are a liability of the partners rather than of Gateway.

Reclassifications

   For comparability, certain prior year amounts have been reclassified, where appropriate, to conform with the financial statement presentation used in 2007.

NOTE 3 - INVESTMENT IN SECURITIES:

   The March 31, 2007 Balance Sheet includes Investment in Securities consisting of U.S. Treasury Notes which represents their cost, plus accreted interest income and discounts of $2,969 for Series 2, $2,969 for Series 3, $3,685 for Series 4, $2,091 for Series 5 and $5,776 for Series 6.  The Investment in Securities are commonly held in a brokerage account maintained at Raymond James and Associates, Inc., an affiliate of the General Partners.  A separate accounting is maintained for each series’ share of the investments.

 
 
Estimated Market
Value     
----------------
Cost Plus Accreted
Interest and   
Discounts    
-----------------
 
Gross Unrealized 
Gains and (Losses)
------------------
Series 2
$   126,549
$   127,640
$   (1,091)
Series 3
126,549
127,640
(1,091)
Series 4
177,368
178,897
(1,529)
Series 5
100,641
101,509
(868)
Series 6
278,010
280,406
(2,396)

As of March 31, 2007, the cost plus accreted interest and discounts of debt securities by contractual maturities is as follows:

 
Series 2
--------
Series 3
--------
Series 4
--------
Due within 1 year
$  127,640
$  127,640
$  178,897
After 1 year through 5 years
0
---------
0
---------
0
---------
  Total Amount Carried on Balance Sheet
$  127,640
=========
$  127,640
=========
$  178,897
=========

 
Series 5
--------
Series 6
--------
Total
--------
Due within 1 year
$   101,509
$   280,406
$  816,092
After 1 year through 5 years
0
----------
0
----------
0
----------
  Total Amount Carried on Balance Sheet
$   101,509
==========
$   280,406
==========
$  816,092
==========

 
 
 


NOTE 4 - RELATED PARTY TRANSACTIONS:

   The Payable to General Partners primarily represents the asset management fees owed to the General Partners at the end of the period.  It is unsecured, due on demand and, in accordance with the limited partnership agreement, non-interest bearing.  Within the next 12 months, the Managing General Partner does not intend to demand payment on the portion of Asset Management Fees payable classified as long-term on the Balance Sheet.

   For the years ended March 31, 2007, 2006 and 2005 the General Partners and affiliates are entitled to compensation and reimbursement for costs and expenses incurred by Gateway as follows:

   Asset Management Fee - The Managing General Partner is entitled to be paid an annual asset management fee equal to 0.25% of the aggregate cost of Gateway’s interest in the projects owned by the Project Partnerships.  The asset management fee will be paid only after all other expenses of Gateway have been paid.  These fees are included in the Statements of Operations.

 
2007
----
2006
----
2005
----
Series 2
$  67,315
$  67,609
$  67,609
Series 3
58,055
62,716
62,717
Series 4
74,671
77,205
77,205
Series 5
92,287
92,722
92,722
Series 6
101,242
---------
101,592
---------
104,509
---------
Total
$ 393,570
=========
$ 401,844
=========
$ 404,762
=========

   General and Administrative Expenses - The Managing General Partner is reimbursed for general and administrative expenses of Gateway on an accountable basis.  This expense is included in the Statements of Operations.

 
2007
----
2006
----
2005
----
Series 2
$  61,537
$  47,681
$  32,074
Series 3
63,702
49,848
33,531
Series 4
81,118
62,853
42,279
Series 5
97,901
77,443
52,484
Series 6
103,495
--------
81,777
--------
55,400
--------
Total
$407,753
$319,602
$215,768
 
========
========
========

   Total unpaid asset management fees and administrative expenses payable to the General Partners, which are included on the Balance Sheet as of March 31, 2007 and 2006 are as follows.

 
March 31, 2007
--------------
March 31, 2006
--------------
  
Series 2
$  715,273 
$  647,557 
  
Series 3
606,565 
546,061 
  
Series 4
782,789 
706,659 
  
Series 5
682,447 
589,347 
  
Series 6
1,013,609 
-----------
912,027 
-----------
  
Total
$3,800,683 
===========
$3,401,651 
===========
  


 
 
 

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS:

SERIES 2

   As of March 31, 2007, the Partnership had acquired a 99% interest in the profits, losses and Tax Credits as a limited partner in 22 Project Partnerships which own and operate government assisted multi-family housing complexes.  Cash flows from operations are allocated according to each Partnership agreement.  Upon dissolution, proceeds will be distributed according to each Partnership agreement.

   The following is a summary of Investments in Project Partnerships as of:

 
MARCH 31, 2007
--------------
MARCH 31, 2006
--------------
Capital Contributions to Project Partnerships and
purchase price paid for limited partner interests in
Project Partnerships
 
Cumulative equity in losses of Project Partnerships (1)
 
Cumulative distributions received from Project
Partnerships
 
Investment in Project Partnerships before Adjustment
 
Excess of investment cost over the underlying assets
acquired:
 Acquisition fees and expenses
 Accumulated amortization of acquisition fees and
 expenses
 
 
Investments in Project Partnerships
 
$ 4,524,678 
 
(4,742,761)
 
 
(87,605)
-----------
(305,688)
 
 
 
390,838 
 
(85,150)
-----------
 
$        0 
===========
 
$ 4,524,678 
 
(4,742,761)
 
 
(87,605)
-----------
(305,688)
 
 
 
390,838 
 
(85,150)
-----------
 
$        0 
===========

(1) In accordance with the Partnership’s accounting policy to not carry Investments in Project Partnerships below zero, cumulative suspended losses of $6,160,318 for the year ended March 31, 2007 and cumulative suspended losses of $5,632,737 for the year ended March 31, 2006 are not included.

 
 
 

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

SERIES 3

   As of March 31, 2007, the Partnership had acquired a 99% interest in the profits, losses and Tax Credits as a limited partner in 17 Project Partnerships which own and operate government assisted multi-family housing complexes.  Cash flows from operations are allocated according to each Partnership agreement.  Upon dissolution, proceeds will be distributed according to each Partnership agreement.

   The following is a summary of Investments in Project Partnerships as of:

 
MARCH 31, 2007
--------------
MARCH 31, 2006
--------------
Capital Contributions to Project Partnerships and
purchase price paid for limited partner interests in
Project Partnerships
 
Cumulative equity in losses of Project Partnerships (1)
 
Cumulative distributions received from Project
Partnerships
 
Investment in Project Partnerships before Adjustment
 
Excess of investment cost over the underlying assets
acquired:
 Acquisition fees and expenses
 Accumulated amortization of acquisition fees and
 expenses
 
 
Investments in Project Partnerships
 
$ 2,866,874 
 
(3,060,820)
 
 
(116,035)
-----------
(309,981)
 
 
 
365,375 
 
(55,394)
-----------
 
$         0 
============
 
$ 3,888,713 
 
(4,133,478)
 
 
(164,417)
-----------
(409,182)
 
 
 
491,746 
 
(82,564)
-----------
 
$         0 
============

(1) In accordance with the Partnership’s accounting policy to not carry Investments in Project Partnerships below zero, cumulative suspended losses of $5,412,602 for the year ended March 31, 2007 and cumulative suspended losses of $6,446,347 for the year ended March 31, 2006 are not included.

 
 
 

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

SERIES 4

   As of March 31, 2007, the Partnership had acquired a 99% interest in the profits, losses and Tax Credits as a limited partner in 25 Project Partnerships which own and operate government assisted multi-family housing complexes.  Cash flows from operations are allocated according to each Partnership agreement.  Upon dissolution, proceeds will be distributed according to each Partnership agreement.

   The following is a summary of Investments in Project Partnerships as of:

 
MARCH 31, 2007
--------------
MARCH 31, 2006
--------------
Capital Contributions to Project Partnerships and
purchase price paid for limited partner interests in
Project Partnerships
 
Cumulative equity in losses of Project Partnerships (1)
 
Cumulative distributions received from Project
Partnerships
 
Investment in Project Partnerships before Adjustment
 
Excess of investment cost over the underlying assets
acquired:
 Acquisition fees and expenses
 Accumulated amortization of acquisition fees  and
expenses
 
 
Investments in Project Partnerships
 
$ 4,273,215 
 
(4,545,684)
 
 
(96,180)
-----------
(368,649)
 
 
 
466,220 
 
(97,571)
-----------
 
$        0 
===========
 
$ 4,952,519 
 
(5,268,905)
 
 
(124,819)
-----------
(441,205)
 
 
 
562,967 
 
(121,762)
-----------
 
$        0 
===========

1) In accordance with the Partnership’s accounting policy to not carry Investments in Project Partnerships below zero, cumulative suspended losses of $5,924,461 for the year ended March 31, 2007 and cumulative suspended losses of $5,604,678 for the year ended March 31, 2006 are not included.

 
 
 

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

SERIES 5

   As of March 31, 2007, the Partnership had acquired a 99% interest in the profits, losses and Tax Credits as a limited partner in 35 Project Partnerships which own and operate government assisted multi-family housing complexes.  Cash flows from operations are allocated according to each Partnership agreement.  Upon dissolution, proceeds will be distributed according to each Partnership agreement.

   The following is a summary of Investments in Project Partnerships as of:

 
MARCH 31, 2007
--------------
MARCH 31, 2006
--------------
Capital Contributions to Project Partnerships and
purchase price paid for limited partner interests in
Project Partnerships
 
Cumulative equity in losses of Project Partnerships (1)
 
Cumulative distributions received from Project
Partnerships
 
Investment in Project Partnerships before Adjustment
 
Excess of investment cost over the underlying assets
acquired:
 Acquisition fees and expenses
 Accumulated amortization of acquisition fees and
 expenses
 
 
Investments in Project Partnerships
 
$ 6,010,273 
 
(6,132,734)
 
 
(204,351)
-----------
(326,812)
 
 
 
632,419 
 
(180,204)
-----------
 
$   125,403 
============
 
$ 6,010,273 
 
(6,127,206)
 
 
(199,089)
-----------
(316,022)
 
 
 
632,419 
 
(164,767)
-----------
 
$   151,630 
============

(1) In accordance with the Partnership’s accounting policy to not carry Investments in Project Partnerships below zero, cumulative suspended losses of $7,065,462 for the year ended March 31, 2007 and cumulative suspended losses of $6,332,840 for the year ended March 31, 2006 are not included.

 
 
 

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

SERIES 6

   As of March 31, 2007, the Partnership had acquired a 99% interest in the profits, losses and Tax Credits as a limited partner in 37 Project Partnerships which own and operate government assisted multi-family housing complexes.  Cash flows from operations are allocated according to each Partnership agreement.  Upon dissolution, proceeds will be distributed according to each Partnership agreement.

   The following is a summary of Investments in Project Partnerships as of:

 
MARCH 31, 2007
--------------
MARCH 31, 2006
--------------
Capital Contributions to Project Partnerships and
purchase price paid for limited partner interests in
Project Partnerships
 
Cumulative equity in losses of Project Partnerships (1)
 
Cumulative distributions received from Project
Partnerships
 
Investment in Project Partnerships before Adjustment
 
Excess of investment cost over the underlying assets
acquired:
 Acquisition fees and expenses
 Accumulated amortization of acquisition fees and 
 expenses
 
Impairment of Investment in Project Partnerships
 
 
Investments in Project Partnerships
 
$ 7,250,034 
 
(6,853,010)
 
 
(226,728)
-----------
170,296 
 
 
 
768,912 
 
(284,185)
 
(446,244)
-----------
 
$   208,779 
============
 
$ 7,250,034 
 
(6,845,853)
 
 
(218,311)
-----------
185,870 
 
 
 
768,912 
 
(239,256)
 
(343,241)
-----------
 
$   372,285 
============

(1) In accordance with the Partnership’s accounting policy to not carry Investments in Project Partnerships below zero, cumulative suspended losses of $4,856,648 for the year ended March 31, 2007 and cumulative suspended losses of $4,294,234 for the year ended March 31, 2006 are not included.

 
 
 

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

TOTAL SERIES 2 - 6

   The following is a summary of Investments in Project Partnerships:

 
MARCH 31, 2007
--------------
MARCH 31, 2006
--------------
Capital Contributions to Project Partnerships and
purchase price paid for limited partner interests in
Project Partnerships
 
Cumulative equity in losses of Project Partnerships
 
Cumulative distributions received from Project
Partnerships
 
Investment in Project Partnerships before Adjustment
 
Excess of investment cost over the underlying assets
acquired:
 Acquisition fees and expenses
 Accumulated amortization of acquisition fees
 and expenses
 
Impairment of Investment in Project Partnerships
 
 
Investments in Project Partnerships
 
$ 24,925,074 
 
(25,335,009)
 
 
(730,899)
-----------
(1,140,834)
 
 
 
2,623,764 
 
(702,504)
 
(446,244)
-----------
 
$  334,182 
===========
 
$ 26,626,217 
 
(27,118,203)
 
 
(794,241)
-----------
(1,286,227)
 
 
 
2,846,882 
 
(693,499)
 
(343,241)
-----------
 
$  523,915 
===========

 
 
 

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   In accordance with Gateway’s policy of presenting the financial information of the Project Partnerships on a three month lag, below is the summarized financial information for the Series’ Project Partnerships as of December 31 of each year:
 
               DECEMBER 31,
SERIES 2
2006
----
2005
----
2004
----
SUMMARIZED BALANCE SHEETS
Assets:
  Current assets
  Investment properties, net
  Other assets
 
    Total assets
 
Liabilities and Partners’ Equity:
  Current liabilities
  Long-term debt
 
    Total liabilities
 
Partners’ deficit
  Limited Partner
  General Partners
 
    Total Partners’ deficit
 
    Total liabilities and
    partners’ deficit
 
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income
Expenses:
  Operating expenses
  Interest expense
  Depreciation and amortization
 
    Total expenses
 
      Net loss
 
Other partners’ share of net loss
 
Gateway’s share of net loss
 
Suspended losses
 
Equity in Losses of Project Partnerships
 
 
$ 2,213,621 
14,180,401 
1,676 
------------
$16,395,698 
============
 
$   559,702 
22,550,086 
------------
23,109,788 
------------
 
(6,543,604)
(170,486)
------------
(6,714,090)
------------
 
$16,395,698 
============
 
$ 4,556,821 
------------
2,202,862 
2,000,437 
886,432 
------------
5,089,731 
------------
$ (532,910)
============
$   (5,329)
============
$ (527,581)
 
527,581 
------------
$        0 
============
 
 
$ 2,097,770 
14,995,365 
770 
------------
$17,093,905 
============
 
$   583,236 
22,653,237 
------------
23,236,473 
------------
 
(5,999,431)
(143,137)
------------
(6,142,568)
------------
 
$17,093,905 
============
 
$ 4,432,488 
------------
2,194,634 
2,006,234 
875,459 
------------
5,076,327 
------------
$ (643,839)
============
$   (6,439)
============
$ (637,400)
 
605,308 
------------
$  (32,092)
============
 
 
$ 1,968,967 
15,779,910 
770 
------------
$17,749,647 
============
 
$   483,214 
22,746,522 
------------
23,229,736 
------------
 
(5,354,226)
(125,863)
------------
(5,480,089)
------------
 
$17,749,647 
============
 
$ 4,270,346 
------------
2,079,978 
2,007,179 
869,716 
------------
4,956,873 
------------
$ (686,527)
============
$   (6,865)
============
$ (679,662)
 
668,751 
------------
$  (10,911)
============



 
 
 

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   In accordance with Gateway’s policy of presenting the financial information of the Project Partnerships on a three month lag, below is the summarized financial information for the Series’ Project Partnerships as of December 31 of each year:
 
                   DECEMBER 31,
SERIES 3
2006
----
2005
----
2004
----
SUMMARIZED BALANCE SHEETS
Assets:
  Current assets
  Investment properties, net
  Other assets
 
    Total assets
 
Liabilities and Partners’ Equity:
  Current liabilities
  Long-term debt
 
    Total liabilities
 
Partners’ equity (deficit)
  Limited Partner
  General Partners
 
    Total Partners’ equity (deficit)
 
    Total liabilities and
    partners’ equity
 
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income
Expenses:
  Operating expenses
  Interest expense
  Depreciation and amortization
 
    Total expenses
 
      Net loss
 
Other partners’ share of net loss
 
Gateway’s share of net loss
 
Suspended losses
 
Equity in Income of Project Partnerships
 
 
$ 1,904,835 
7,844,423 
30,170 
-----------
$ 9,779,428 
===========
 
$   296,133 
15,224,112 
-----------
15,520,245 
-----------
 
(6,019,771)
278,954 
-----------
(5,740,817)
-----------
 
$ 9,779,428 
============
 
$ 3,345,693 
-----------
1,609,096 
1,342,779 
731,144 
-----------
3,683,019 
-----------
$  (337,326)
============
$    (3,378)
============
$  (333,948)
 
334,438 
-----------
$       490 
============
 
 
$ 2,653,096 
12,036,053 
158,818 
-----------
$14,847,967 
===========
 
$   498,630 
21,307,645 
-----------
21,806,275 
-----------
 
(7,286,069)
327,761 
-----------
(6,958,308)
-----------
 
$14,847,967 
============
 
$ 4,412,036 
-----------
2,094,632 
1,957,438 
965,926 
-----------
5,017,996 
-----------
$  (605,960)
============
$   (10,373)
============
$  (595,587)
 
595,587 
-----------
$         0 
============
 
 
$ 2,560,603 
12,872,999 
166,839 
-----------
$15,600,441 
===========
 
$   508,518 
21,412,108 
-----------
21,920,626 
-----------
 
(6,676,166)
355,981 
-----------
(6,320,185)
-----------
 
$15,600,441 
============
 
$ 4,301,073 
-----------
2,100,539 
1,967,487 
973,367 
-----------
5,041,393 
-----------
$  (740,320)
============
$   (12,676)
============
$  (727,644)
 
727,644 
-----------
$         0 
============



 
 
 

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   In accordance with Gateway’s policy of presenting the financial information of the Project Partnerships on a three month lag, below is the summarized financial information for the Series’ Project Partnerships as of December 31 of each year:
 
                   DECEMBER 31,
SERIES 4
2006
----
2005
----
2004
----
SUMMARIZED BALANCE SHEETS
Assets:
  Current assets
  Investment properties, net
  Other assets
 
    Total assets
 
Liabilities and Partners’ Equity:
  Current liabilities
  Long-term debt
 
    Total liabilities
 
Partners’ equity (deficit)
  Limited Partner
  General Partners
 
    Total Partners’ equity (deficit)
 
    Total liabilities and
    partners’ equity
 
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income
Expenses:
  Operating expenses
  Interest expense
  Depreciation and amortization
 
    Total expenses
 
      Net loss
 
Other partners’ share of net loss
 
Gateway’s share of net loss
 
Suspended losses
 
Equity in Losses of Project Partnerships
 
 
$ 2,090,839 
15,571,596 
28,137 
-----------
$17,690,572 
===========
 
$   965,479 
22,405,799 
-----------
23,371,278 
-----------
 
(6,383,645)
702,939 
-----------
(5,680,706)
-----------
 
$17,690,572 
============
 
$ 4,469,730 
-----------
2,430,631 
1,738,893 
921,420 
-----------
5,090,944 
-----------
$  (621,214)
===========
$   (28,655)
===========
$  (592,559)
 
592,559 
-----------
$        0 
===========
 
 
$ 2,373,954 
19,168,917 
34,344 
-----------
$21,577,215 
===========
 
$   970,492 
26,080,239 
-----------
27,050,731 
-----------
 
(6,140,112)
666,596 
-----------
(5,473,516)
-----------
 
$21,577,215 
============
 
$ 5,161,594 
-----------
2,637,778 
2,189,427 
1,044,298 
-----------
5,871,503 
-----------
$  (709,909)
===========
$   (25,473)
===========
$  (684,436)
 
684,436 
-----------
$        0 
===========
 
 
$ 2,310,917 
20,049,998 
33,120 
-----------
$22,394,035 
===========
 
$   910,446 
26,191,312 
-----------
27,101,758 
-----------
 
(5,435,023)
727,300 
-----------
(4,707,723)
-----------
 
$22,394,035 
============
 
$ 4,938,004 
-----------
2,576,638 
2,138,281 
1,045,249 
-----------
5,760,168 
-----------
$  (822,164)
===========
$   (15,617)
===========
$  (806,547)
 
806,547 
-----------
$        0 
===========



 
 
 

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   In accordance with Gateway’s policy of presenting the financial information of the Project Partnerships on a three month lag, below is the summarized financial information for the Series’ Project Partnerships as of December 31 of each year:
 
                   DECEMBER 31,
SERIES 5
2006
----
2005
----
2004
----
SUMMARIZED BALANCE SHEETS
Assets:
  Current assets
  Investment properties, net
  Other assets
 
    Total assets
 
Liabilities and Partners’ Equity:
  Current liabilities
  Long-term debt
 
    Total liabilities
 
Partners’ deficit
  Limited Partner
  General Partners
 
    Total Partners’ deficit
 
    Total liabilities and
    partners’ deficit
 
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income
Expenses:
  Operating expenses
  Interest expense
  Depreciation and amortization
 
    Total expenses
 
      Net loss
 
Other partners’ share of net loss
 
Gateway’s share of net loss
 
Suspended losses
 
Equity in Losses of Project Partnerships
 
 
$ 3,526,899 
20,498,625 
4,705 
-----------
$24,030,229 
============
 
$   757,056 
31,099,840 
-----------
31,856,896 
-----------
 
(7,456,075)
(370,592)
-----------
(7,826,667)
-----------
 
$24,030,229 
============
 
$ 6,297,579 
-----------
3,299,478 
2,523,667 
1,220,039 
-----------
7,043,184 
-----------
$  (745,605)
============
$    (7,456)
============
$  (738,149)
 
732,621 
-----------
$    (5,528)
============
 
 
$ 3,285,139 
21,704,303 
4,245 
-----------
$24,993,687 
============
 
$   779,213 
31,256,580 
-----------
32,035,793 
-----------
 
(6,681,292)
(360,814)
-----------
(7,042,106)
-----------
 
$24,993,687 
============
 
$ 6,113,199 
-----------
3,049,363 
2,591,786 
1,203,506 
-----------
6,844,655 
-----------
$  (731,456)
============
$    (7,315)
============
$  (724,141)
 
701,629 
-----------
$   (22,512)
============
 
 
$ 3,075,902 
22,749,373 
51,964 
-----------
$25,877,239 
============
 
$   736,200 
31,392,413 
-----------
32,128,613 
-----------
 
(5,930,379)
(320,995)
-----------
(6,251,374)
-----------
 
$25,877,239 
============
 
$ 5,792,482 
-----------
3,096,406 
2,229,541 
1,247,246 
-----------
6,573,193 
-----------
$  (780,711)
============
$    (7,807)
============
$  (772,904)
 
746,794 
-----------
$   (26,110)
============

As of March 31, 2007, Gateway’s Series 5 investment balance in Zapata Housing and Yorkshire Retirement Village, comprised 19.5% and 11.6%, respectively, of the total assets of Series 5.

 
 
 

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   Below is the summarized balance sheet for Zapata Housing as of December 31, 2006, 2005, and 2004 and its summarized statement of operations for the years then ended.  The reporting period is consistent with Gateway’s policy of presenting the financial information of Project Partnerships on a three-month lag.
   
 
2006
----
2005
----
2004
----
SUMMARIZED BALANCE SHEETS
Assets:
  Current assets
  Investment properties, net
  Other assets
 
    Total assets
 
Liabilities and Partners’ Equity
(Deficit):
  Current liabilities
  Long-term debt
 
    Total liabilities
 
Partners’ equity (deficit)
  Limited Partner
  General Partners
 
    Total Partners’ equity
    (deficit)
 
    Total liabilities and
    partners’ equity (deficit)
 
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income
Expenses:
  Operating expenses
  Interest expense
  Depreciation and amortization
 
    Total expenses
 
      Net income (loss)
 
Other partners’ share of net income
(loss)
 
Gateway’s share of net income (loss)
 
Suspended losses
 
Equity in Income (Loss) of Project
Partnerships
 
 
$  226,867 
801,356 
527 
-----------
$1,028,750 
============
 
 
$    8,626 
955,915 
-----------
964,541 
-----------
 
76,764 
(12,555)
-----------
 
64,209 
-----------
 
$1,028,750 
============
 
$  211,180 
-----------
101,937 
83,866 
23,442 
-----------
209,245 
-----------
$    1,935 
============
 
$       19 
============
 
$    1,916 
 
0 
-----------
$    1,916 
============
 
 
$  215,343 
824,798 
77 
-----------
$1,040,218 
============
 
 
$   14,592 
960,568 
-----------
975,160 
-----------
 
76,240 
(11,182)
-----------
 
65,058 
-----------
 
$1,040,218 
============
 
$  200,259 
-----------
100,659 
84,254 
23,410 
-----------
208,323 
-----------
$   (8,064)
============
 
$      (81)
============
 
$   (7,983)
 
0 
-----------
$   (7,983)
============
 
 
$  201,455 
847,943 
77 
-----------
$1,049,475 
============
 
 
$    8,737 
964,832 
-----------
973,569 
-----------
 
85,615 
(9,709)
-----------
 
75,906 
-----------
 
$1,049,475 
============
 
$  199,775 
-----------
95,544 
84,610 
23,425 
-----------
203,579 
-----------
$   (3,804)
============
 
$      (38)
============
 
$   (3,766)
 
0 
-----------
$   (3,766)
============

 
 
 

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   Below is the summarized balance sheet for Yorkshire Retirement Village as of December 31, 2006, 2005, and 2004 and its summarized statement of operations for the years then ended.  The reporting period is consistent with Gateway’s policy of presenting the financial information of Project Partnerships on a three-month lag.
   
 
2006
----
2005
----
2004
----
SUMMARIZED BALANCE SHEETS
Assets:
  Current assets
  Investment properties, net
  Other assets
 
    Total assets
 
Liabilities and Partners’ Equity
(Deficit):
  Current liabilities
  Long-term debt
 
    Total liabilities
 
Partners’ equity (deficit)
  Limited Partner
  General Partners
 
    Total Partners’ equity
    (deficit)
 
    Total liabilities and
    partners’ equity (deficit)
 
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income
Expenses:
  Operating expenses
  Interest expense
  Depreciation and amortization
 
    Total expenses
 
      Net income (loss)
 
Other partners’ share of net income
(loss)
 
Gateway’s share of net income (loss)
 
Suspended losses
 
Equity in Income (Loss) of Project
Partnerships
 
 
$  289,117 
1,806,162 
0 
-----------
$2,095,279 
============
 
 
$   35,548 
2,035,490 
-----------
2,071,038 
-----------
 
46,485 
(22,244)
-----------
 
24,241 
-----------
 
$2,095,279 
============
 
$  406,077 
-----------
188,352 
169,849 
55,395 
-----------
413,596 
-----------
$   (7,519)
============
 
$      (75)
============
 
$   (7,444)
 
0 
-----------
$   (7,444)
============
 
 
$  275,111 
1,844,423 
0 
-----------
$2,119,534 
============
 
 
$   57,054 
2,044,999 
-----------
2,102,053 
-----------
 
56,409 
(38,928)
-----------
 
17,481 
-----------
 
$2,119,534 
============
 
$  388,142 
-----------
173,440 
169,109 
53,896 
-----------
396,445 
-----------
$   (8,303)
============
 
$      (83)
============
 
$   (8,220)
 
0 
-----------
$   (8,220)
============
 
 
$  223,973 
1,872,708 
48,019 
-----------
$2,144,700 
============
 
 
$   60,068 
2,053,758 
-----------
2,113,826 
-----------
 
67,109 
(36,235)
-----------
 
30,874 
-----------
 
$2,144,700 
============
 
$  257,977 
-----------
171,288 
46,872 
50,346 
-----------
268,506 
-----------
$  (10,529)
============
 
$     (105)
============
 
$  (10,424)
 
0 
-----------
$  (10,424)
============

 
 
 

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   In accordance with the Gateway’s policy of presenting the financial information of the Project Partnerships on a three month lag, below is the summarized financial information for the Series’ Project Partnerships as of December 31 of each year:
 
                  DECEMBER 31,
SERIES 6
2006
----
2005
----
2004
----
SUMMARIZED BALANCE SHEETS
Assets:
  Current assets
  Investment properties, net
  Other assets
 
    Total assets
 
Liabilities and Partners’ Equity:
  Current liabilities
  Long-term debt
 
    Total liabilities
 
Partners’ deficit
  Limited Partner
  General Partners
 
    Total Partners’ deficit
 
    Total liabilities and
    partners’ deficit
 
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income
Expenses:
  Operating expenses
  Interest expense
  Depreciation and amortization
 
    Total expenses
 
      Net loss
 
Other partners’ share of net loss
 
Gateway’s share of net loss
 
Suspended losses
 
Equity in Losses of Project Partnerships
 
 
$ 4,250,761 
24,869,739 
116,772 
------------
$29,237,272 
===========
 
$   907,348 
33,717,352 
------------
34,624,700 
------------
 
(4,829,486)
(557,942)
------------
(5,387,428)
------------
 
$29,237,272 
============
 
$ 6,690,179 
------------
3,337,342 
2,625,897 
1,303,827 
------------
7,267,066 
------------
$  (576,887)
============
$    (7,317)
============
$  (569,570)
 
562,414 
------------
$    (7,156)
============
 
 
$ 4,214,285 
25,343,325 
5,642 
------------
$29,563,252 
===========
 
$   759,168 
33,537,501 
------------
34,296,669 
------------
 
(4,222,518)
(510,899)
------------
(4,733,417)
------------
 
$29,563,252 
============
 
$ 6,612,944 
------------
3,195,528 
2,722,033 
1,293,203 
------------
7,210,764 
------------
$  (597,820)
============
$    (6,863)
============
$  (590,957)
 
565,258 
------------
$   (25,699)
============
 
 
$ 4,075,629 
27,082,558 
3,934 
------------
$31,162,121 
===========
 
$   760,481 
34,688,448 
------------
35,448,929 
------------
 
(3,799,474)
(487,334)
------------
(4,286,808)
------------
 
$31,162,121 
============
 
$ 6,536,265 
------------
3,184,179 
2,666,928 
1,367,028 
------------
7,218,135 
------------
$  (681,870)
============
$    (8,157)
============
$  (673,713)
 
608,477 
------------
$   (65,236)
============

As of March 31, 2007, Gateway’s Series 6 investment balance in Autumn Village II comprised 18.2% of the total assets of Series 6.

 
 
 

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   Below is the summarized balance sheet for Autumn Village II as of December 31, 2006, 2005, and 2004 and its summarized statement of operations for the years then ended.  The reporting period is consistent with Gateway’s policy of presenting the financial information of Project Partnerships on a three-month lag.
   
 
2006
----
2005
----
2004
----
SUMMARIZED BALANCE SHEETS
Assets:
  Current assets
  Investment properties, net
  Other assets
 
    Total assets
 
Liabilities and Partners’ Equity
(Deficit):
  Current liabilities
  Long-term debt
 
    Total liabilities
 
Partners’ equity (deficit)
  Limited Partner
  General Partners
 
    Total Partners’ equity
    (deficit)
 
    Total liabilities and
    partners’ equity (deficit)
 
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income
Expenses:
  Operating expenses
  Interest expense
  Depreciation and amortization
 
    Total expenses
 
      Net income (loss)
 
Other partners’ share of net income
(loss)
 
Gateway’s share of net income (loss)
 
Suspended losses
 
Equity in Income (Loss) of Project
Partnerships
 
 
$   76,435 
381,803 
0 
-----------
$  458,238 
============
 
 
$   16,502 
112,696 
-----------
129,198 
-----------
 
327,160 
1,880 
-----------
 
329,040 
-----------
 
$  458,238 
============
 
$   66,370 
-----------
33,118 
8,622 
14,043 
-----------
55,783 
-----------
$   10,587 
============
 
$      106 
============
 
$   10,481 
0 
-----------
 
$   10,481 
============
 
 
$   73,900 
395,846 
0 
-----------
$  469,746 
============
 
 
$   16,035 
135,258 
-----------
151,293 
-----------
 
316,679 
1,774 
-----------
 
318,453 
-----------
 
$  469,746 
============
 
$   62,451 
-----------
29,914 
10,152 
14,043 
-----------
54,109 
-----------
$    8,342 
============
 
$       83 
============
 
$    8,259 
0 
-----------
 
$    8,259 
============
 
 
$   71,606 
409,889 
0 
-----------
$  481,495 
============
 
 
$   15,085 
156,299 
-----------
171,384 
-----------
 
308,420 
1,691 
-----------
 
310,111 
-----------
 
$  481,495 
============
 
$   60,687 
-----------
29,720 
11,578 
16,528 
-----------
57,826 
-----------
$    2,861 
============
 
$       29 
============
 
$    2,832 
0 
-----------
 
$    2,832 
============

 
 
 

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   In accordance with the Gateway’s policy of presenting the financial information of the Project Partnerships on a three month lag, below is the summarized financial information for the Series’ Project Partnerships as of December 31 of each year:
 
                  DECEMBER 31,
TOTAL SERIES 2 – 6
2006
----
2005
----
2004
----
SUMMARIZED BALANCE SHEETS
Assets:
  Current assets
  Investment properties, net
  Other assets
 
    Total assets
 
Liabilities and Partners’ Equity:
  Current liabilities
  Long-term debt
 
    Total liabilities
 
Partners’ equity (deficit)
  Limited Partner
  General Partners
 
    Total Partners’ equity (deficit)
 
    Total liabilities and
    partners’ equity
 
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income
Expenses:
  Operating expenses
  Interest expense
  Depreciation and amortization
 
    Total expenses
 
      Net loss
 
Other partners’ share of net loss
 
Gateway’s share of net loss
 
Suspended losses
 
Equity in Losses of Project Partnerships
 
 
$ 13,986,955 
82,964,784 
181,460 
-------------
$ 97,133,199 
=============
 
$  3,485,718 
124,997,189 
------------
128,482,907 
------------
 
(31,232,581)
(117,127)
------------
(31,349,708)
------------
 
$ 97,133,199 
=============
 
$ 25,360,002 
------------
12,879,409 
10,231,673 
5,062,862 
------------
28,173,944 
------------
$ (2,813,942)
=============
$    (52,135)
=============
$ (2,761,807)
 
2,749,613 
------------
$    (12,194)
=============
 
 
$ 14,624,244 
93,247,963 
203,819 
-------------
$108,076,026 
=============
 
$  3,590,739 
134,835,202 
------------
138,425,941 
------------
 
(30,329,422)
(20,493)
------------
(30,349,915)
------------
 
$108,076,026 
=============
 
$ 26,732,261 
------------
13,171,935 
11,466,918 
5,382,392 
------------
30,021,245 
------------
$ (3,288,984)
=============
$    (56,463)
=============
$ (3,232,521)
 
3,152,218 
------------
$    (80,303)
=============
 
 
$ 13,992,018 
98,534,838 
256,627 
-------------
$112,783,483 
=============
 
$  3,398,859 
136,430,803 
------------
139,829,662 
------------
 
(27,195,268)
149,089 
------------
(27,046,179)
------------
 
$112,783,483 
=============
 
$ 25,838,170 
------------
13,037,740 
11,009,416 
5,502,606 
------------
29,549,762 
------------
$ (3,711,592)
=============
$    (51,122)
=============
$ (3,660,470)
 
3,558,213 
------------
$   (102,257)
=============

 
 
 

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS(continued):

   Gateway’s equity by Series as reflected by the Project Partnerships differs from the Investments in Project Partnerships before acquisition fees and expenses and amortization by Series primarily because of suspended losses on Gateway’s books and differences in the accounting treatment of miscellaneous items.

   By Series these differences are as follows:

 
Equity Per Project
Partnership   
------------------
 
Equity Per Gateway
------------------
Series 2
$(6,543,604)
$  (305,689)
Series 3
(6,019,771)
(309,983)
Series 4
(6,383,645)
(368,647)
Series 5
(7,456,075)
(326,813)
Series 6
(4,829,486)
170,297 

   Gateway at one time held investments in 148 Project Partnerships (22 in Series 2, 23 in Series 3, 29 in Series 4, 36 in Series 5, and 38 in Series 6).  As of March 31, 2007, Gateway has sold its interest in 12 Project Partnerships (6 in Series 3, 4 in Series 4, 1 in Series 5 and 1 in Series 6).  The transactions summaries for the Project Partnerships sold during the past three fiscal years are summarized below:

Fiscal Year 2007 Disposition Activity:

Series 3

   In March 2007, Gateway sold its Project Partnership investment in Belmont Senior Apartments.  In accordance with FASB No. 66 (“FASB No. 66”) “Accounting for Sales of Real Estate,” although the sale of this Project Partnership was consummated on or prior to March 31, 2007, the estimated net proceeds and gain on the sale of this investment is $43,850 which is being deferred on the Balance Sheet of Gateway as of March 31, 2007 and not recognized in the Statement of Operations until the period that the proceeds are received.  The entire balance of the net proceeds due from this sale were subsequently received and distributed to the Series 3 Assignees in the amount of $8.04 per beneficial assignee certificate during the first quarter of fiscal year 2008.

   In January 2007, Gateway sold its Project Partnership investment in Southwood Apartments. Gateway received $42,652 in net proceeds ($7.82 per beneficial assignee certificate) for the sale of this Project Partnership.  The net proceeds are a component of the Distribution Payable on the Balance Sheet as of March 31, 2007 and Gateway recorded a gain in the amount of the net proceeds which is included as a component of the Gain on Sale of Project Partnerships on the Statement of Operations.  Subsequent to the March 31, 2007 year-end, the net proceeds from this sale transaction were distributed to the Series 3 Assignees.

   In January 2007, Gateway sold its Project Partnership investment in Plaza Senior Village Apartments.  Gateway received $82,145 in net proceeds ($15.06 per beneficial assignee certificate) for the sale of this Project Partnership.  The net proceeds are a component of the Distribution Payable on the Balance Sheet as of March 31, 2007 and Gateway recorded a gain in the amount of the net proceeds which is included as a component of the Gain on Sale of Project Partnerships on the Statement of Operations.  Subsequent to the March 31, 2007 year-end, the net proceeds from this sale transaction were distributed to the Series 3 Assignees.

   In January 2007, Gateway sold its Project Partnership investment in Brubaker Square Apartments.  Gateway received $115,009 in net proceeds ($21.08 per beneficial assignee certificate) for the sale of this Project Partnership.  The net proceeds are a component of the Distribution Payable on the Balance Sheet as of March 31, 2007 and Gateway recorded a gain in the amount of the net proceeds which is included as a component of the Gain on Sale of Project Partnerships on the Statement of Operations.  Subsequent to the March 31, 2007 year-end, the net proceeds from this sale transaction were distributed to the Series 3 Assignees.

   In January 2007, Gateway sold its Project Partnership investment in Villa Allegra Apartments.  Gateway received $73,408 in net proceeds ($13.45 per beneficial assignee certificate) for the sale of this Project Partnership.  The net proceeds are a component of the Distribution Payable on the Balance Sheet as of March 31, 2007 and Gateway recorded a gain in the amount of the net proceeds which is included as a component of the Gain on Sale of Project Partnerships on the Statement of Operations.  Subsequent to the March 31, 2007 year-end, the net proceeds from this sale transaction were distributed to the Series 3 Assignees.

   In November 2006, Gateway sold its Project Partnership investment in Birchwood Apartments.  Gateway received $99,410 in net proceeds ($18.25 per beneficial assignee certificate) for the sale of the Project Partnership.  Gateway recorded a gain in the amount of the net proceeds which is included as a component of the Gain on Sale of Project Partnerships on the Statement of Operations.  The net proceeds from this sale transaction were distributed to the Series 3 Assignees in December 2006.

 
 
 

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS(continued):

Series 4

   In March 2007, Gateway sold its Project Partnership investment in Edmonton Senior Apartments. In accordance with FASB No. 66, although the sale of this Project Partnership was consummated on or prior to March 31, 2007, the estimated net proceeds and gain on the sale of this investment is $38,350 which is being deferred on the Balance Sheet of Gateway as of March 31, 2007 and not recognized in the Statement of Operations until the period that the proceeds are received.  The entire balance of the net proceeds due from this sale were subsequently received and distributed in the amount of $5.55 per beneficial assignee certificate to the Series 4 Assignees during the first quarter of fiscal year 2008.

   In March 2007, Gateway sold its Project Partnership investment in Owingsville Senior Apartments.  In accordance with FASB No. 66, although the sale of this Project Partnership was consummated on or prior to March 31, 2007, the estimated net proceeds and gain on the sale of this investment is $45,850 which is being deferred on the Balance Sheet of Gateway as of March 31, 2007 and not recognized in the Statement of Operations until the period that the proceeds are received.  The entire balance of the net proceeds due from this sale were subsequently received and distributed in the amount of $6.63 per beneficial assignee certificate to the Series 4 Assignees during the first quarter of fiscal year 2008.

   In January 2007, Gateway sold its Project Partnership investment in Alsace Village Apartments.  Gateway received $23,370 in net proceeds ($3.38 per beneficial assignee certificate) for the sale of this Project Partnership.  The net proceeds are a component of the Distribution Payable on the Balance Sheet as of March 31, 2007 and Gateway recorded a gain in the amount of the net proceeds which is included as a component of the Gain on Sale of Project Partnerships on the Statement of Operations.  Subsequent to the March 31, 2007 year-end, the net proceeds from this sale transaction were distributed to the Series 4 Assignees.

   In January 2007, Gateway sold its Project Partnership investment in Greenbriar Apartments.  Gateway received $39,370 in net proceeds ($5.69 per beneficial assignee certificate) for the sale of this Project Partnership.  The net proceeds are a component of the Distribution Payable on the Balance Sheet as of March 31, 2007 and Gateway recorded a gain in the amount of the net proceeds which is included as a component of the Gain on Sale of Project Partnerships on the Statement of Operations.  Subsequent to the March 31, 2007 year-end, the net proceeds from this sale transaction were distributed to the Series 4 Assignees.

Fiscal Year 2006 Disposition Activity:

Series 6

   In August 2005, Gateway sold its Project Partnership investment in Mountain Crest Apartments.  Gateway received $224,074 in net proceeds ($22.17 per beneficial assignee certificate) for the sale of this Project Partnership.  Gateway recorded a gain in the amount of the net proceeds which is included as a component of the Gain on Sale of Project Partnerships on the Statement of Operations.  The net proceeds from this sale transaction were distributed to the Series 6 Assignees in November 2005.

Fiscal Year 2005 Disposition Activity:

Series 5

   In December 2004, Gateway sold its Project Partnership investment in Highland View Apartments.  Gateway received $157,126 in net proceeds ($18.24 per beneficial assignee certificate) for the sale of this Project Partnership.  Gateway recorded a gain in the amount of the net proceeds which is included as a component of the Gain on Sale of Project Partnerships on the Statement of Operations.  The net proceeds from this sale transaction were distributed to the Series 5 Assignees in July 2005.

 
 
 

NOTE 6 - TAXABLE INCOME (LOSS):

   The following is a reconciliation between Net Income (Loss) as described in the financial statements and the Gateway income (loss) for tax purposes:

SERIES 2
2007
----
2006
----
2005
----
Net Loss per Financial Statements
$ (119,127)
$ (156,399)
$  (97,520)
 
Equity in Losses of Project Partnerships
for tax purposes less than (in excess of)
losses for financial statement purposes
 
 
 
(662,986)
 
 
 
(693,743)
 
 
 
(797,850)
 
Adjustments to convert March 31, fiscal
year end to December 31, taxable year end
 
 
(14,677)
 
 
19,019 
 
 
1,376 
 
Items Expensed for Financial Statement
purposes not expensed for Tax purposes:
  Asset Management Fee
  Amortization Expense
  Other Adjustments
 
 
 
67,438 
174 
(7,948)
-----------
 
 
 
67,448 
699 
(10,999)
-----------
 
 
 
53,428 
696 
(14,217)
-----------
Gateway loss for tax purposes as of
December 31
 
$  (737,126)
============
 
$  (773,975)
============
 
$  (854,087)
============
 
 
December 31,
2006   
------------
 
December 31,
2005   
------------
 
December 31,
2004   
------------
Federal Low Income Housing Tax Credits
 (Unaudited)
 
$       139 
============
 
$       892 
============
 
$       892 
============

   The differences in the assets and liabilities of the Series for financial reporting purposes and tax reporting purposes for the year ended March 31, 2007 are as follows:
 
 
Financial  
 
Tax           
   
 
Reporting
  
Reporting
    
 
Purposes
  
Purposes
  
Differences
Investments in Local Limited
          
Partnerships
$                0 
  
$ (7,958,671)
  
$  7,958,671 
           
Other Assets
$     257,364 
  
$     997,761 
  
$   (740,397)
           
Liabilities
$     715,273 
  
$         6,718 
  
$     708,555 


                               
 
 
 

NOTE 6 - TAXABLE INCOME (LOSS)(Continued):

  The following is a reconciliation between Net Income (Loss) as described in the financial statements and the Gateway income (loss) for tax purposes:

SERIES 3
2007
----
2006
----
2005
----
Net Income (Loss) per Financial Statements
$   305,962 
$  (108,278)
$   (77,647)
 
Equity in Losses of Project Partnerships
for tax purposes less than (in excess of)
 losses for financial statement purposes
 
 
 
(513,871)
 
 
 
(664,379)
 
 
 
(752,598)
 
Adjustments to convert March 31, fiscal
year end to December 31, taxable year end
 
 
(19,674)
 
 
16,892 
 
 
2,140 
 
Additional Loss on Sale of Project
Partnerships for tax purposes
 
 
(32,068)
 
 
0 
 
 
0 
 
Items Expensed for Financial Statement
purposes not expensed for Tax purposes:
  Asset Management Fee
  Amortization Expense
  Other Adjustments
 
 
 
62,523 
0 
(14,245)
-----------
 
 
 
62,486 
0 
(24,829)
-----------
 
 
 
67,931 
129 
(20,866)
-----------
Gateway loss for tax purposes as of
December 31
 
$  (211,373)
============
 
$  (718,108)
============
 
$  (780,911)
============
 
 
December 31,
2006   
------------
 
December 31,
2005   
------------
 
December 31,
2004   
------------
Federal Low Income Housing Tax Credits
 (Unaudited)
 
$         0 
============
 
$         0 
============
 
$         0 
============

   The differences in the assets and liabilities of the Series for financial reporting purposes and tax reporting purposes for the year ended March 31, 2007 are as follows:
 
Financial  
 
Tax           
   
 
Reporting
  
Reporting
    
 
Purposes
  
Purposes
  
Differences
Investments in Local Limited
          
Partnerships
$                0 
  
$ (7,034,773)
  
$  7,034,773 
           
Other Assets
$     598,431 
  
$     897,499 
  
$   (299,068)
           
Liabilities
$     963,688 
  
$         7,529 
  
$     956,159 
 
 
 
 
 
 

NOTE 6 - TAXABLE INCOME (LOSS)(Continued):

   The following is a reconciliation between Net Income (Loss) as described in the financial statements and the Gateway income (loss) for tax purposes:

SERIES 4
2007
----
2006
----
2005
----
 
Net Loss per Financial Statements
 
$   (79,276)
 
$  (138,304)
 
$  (102,967)
 
Equity in Losses of Project Partnerships
for tax purposes less than (in excess of)
losses for financial statement purposes
 
 
 
(879,415)
 
 
 
(947,123)
 
 
 
(907,174)
 
Adjustments to convert March 31, fiscal
year end to December 31, taxable year end
 
 
(11,564)
 
 
15,734 
 
 
(971)
 
Additional Loss on Sale of Project
Partnerships for tax purposes
 
 
(62,740)
 
 
0 
 
 
0 
 
Items Expensed for Tax purposes not
expensed for Financial Statement purposes:
  Interest Income
 
 
 
566 
 
 
 
0 
 
 
 
0 
 
Items Expensed for Financial Statement
purposes not expensed for Tax purposes:
  Asset Management Fee
  Amortization Expense
  Other Adjustments
 
 
 
76,999 
0 
(18,236)
-----------
 
 
 
77,022 
0 
(17,244)
-----------
 
 
 
79,874 
(256)
(14,332)
-----------
Gateway loss for tax purposes as of
December 31
 
$  (973,666)
============
 
$ (1,009,915)
============
 
$  (945,826)
============
 
 
December 31,
2006   
------------
 
December 31,
2005   
------------
 
December 31,
2004   
------------
Federal Low Income Housing Tax Credits
 (Unaudited)
 
$         0 
============
 
$     8,516 
============
 
$     1,484 
============

   The differences in the assets and liabilities of the Series for financial reporting purposes and tax reporting purposes for the year ended March 31, 2007 are as follows:
 
Financial  
 
Tax           
   
 
Reporting
  
Reporting
    
 
Purposes
  
Purposes
  
Differences
Investments in Local Limited
          
Partnerships
$                0 
  
$ (9,075,286)
  
$  9,075,286 
           
Other Assets
$     469,913 
  
$   1,162,123 
  
$   (692,210)
           
Liabilities
$     929,733 
  
$          8,736 
  
$     920,997 

 
                                   
 
 
 

NOTE 6 - TAXABLE INCOME (LOSS)(Continued):

   The following is a reconciliation between Net Income (Loss) as described in the financial statements and the Gateway income (loss) for tax purposes:

SERIES 5
2007
----
2006
----
2005
----
Net Loss per Financial Statements
$  (194,685)
$  (208,790)
$    15,153 
 
Equity in Losses of Project Partnerships
for tax purposes less than (in excess of)
losses for financial statement purposes
 
 
 
(862,361)
 
 
 
(854,948)
 
 
 
(791,008)
 
Adjustments to convert March 31, fiscal
year end to December 31, taxable year end
 
 
(23,044)
 
 
44,499 
 
 
(7,065)
 
Additional Loss on Sale of Project
Partnership for tax purposes
 
 
0 
 
 
0 
 
 
(157,126)
 
Items Expensed for Tax purposes not
expensed for Financial Statement purposes:
  Administrative Expense
 
 
 
(57)
 
 
 
0 
 
 
 
0 
 
Items Expensed for Financial Statement
purposes not expensed for Tax purposes:
  Asset Management Fee
  Amortization Expense
  Other Adjustments
 
 
 
92,470 
35,858 
(25,866)
-----------
 
 
 
90,877 
85 
(26,566)
-----------
 
 
 
(58,836)
4,380 
(46,206)
-----------
Gateway loss for tax purposes as of
December 31
 
$  (977,685)
============
 
$  (954,843)
============
 
$ (1,040,708)
============
 
 
December 31,
2006   
------------
 
December 31,
2005   
------------
 
December 31,
2004   
------------
Federal Low Income Housing Tax Credits
 (Unaudited)
 
$         0 
============
 
$         0 
============
 
$    20,278 
============

   The differences in the assets and liabilities of the Series for financial reporting purposes and tax reporting purposes for the year ended March 31, 2007 are as follows:
 
Financial  
 
Tax           
   
 
Reporting
  
Reporting
    
 
Purposes
  
Purposes
  
Differences
Investments in Local Limited
          
Partnerships
$     125,403 
  
$ (9,023,411)
  
$  9,148,814 
           
Other Assets
$     277,429 
  
$   1,327,715 
  
$ (1,050,286)
           
Liabilities
$     682,447 
  
$        10,678 
  
$     671,769 

                
 
 
 

NOTE 6 - TAXABLE INCOME (LOSS)(Continued):

   The following is a reconciliation between Net Income (Loss) as described in the financial statements and the Gateway income (loss) for tax purposes:

SERIES 6
2007
----
2006
----
2005
----
Net Loss per Financial Statements
$  (332,668)
$  (342,258)
$  (198,709)
 
Equity in Losses of Project Partnerships
for tax purposes less than (in excess of)
losses for financial statement purposes
 
 
 
(800,074)
 
 
 
(815,335)
 
 
 
(849,870)
 
Adjustments to convert March 31, fiscal
year end to December 31, taxable year end
 
 
(255,313)
 
 
385,232 
 
 
3,894 
 
Additional Gain on Sale of Project
Partnerships for tax purposes
 
 
0 
 
 
188,930 
 
 
0 
 
Items Expensed for Tax purposes not
expensed for Financial Statement purposes:
  Administrative Expense
  Interest Income
 
 
 
(46)
0 
 
 
 
0 
0 
 
 
 
0 
0 
 
Items Expensed for Financial Statement
purposes not expensed for Tax purposes:
  Asset Management Fee
  Amortization Expense
  Impairment Expense
  Other Adjustments
 
 
 
99,788 
63,389 
343,241 
(32,725)
------------
 
 
 
103,448 
3,954 
0 
(23,282)
------------
 
 
 
111,482 
8,034 
0 
(36,754)
------------
Gateway loss for tax purposes as of
December 31
 
$  (914,408)
============
 
$  (499,311)
============
 
$  (961,923)
============
 
 
December 31,
2006   
-----------
 
December 31,
2005   
-----------
 
December 31,
2004   
-----------
Federal Low Income Housing Tax Credits
 (Unaudited)
 
$         0 
============
 
$         0 
============
 
$    38,926 
============

   The differences in the assets and liabilities of the Series for financial reporting purposes and tax reporting purposes for the year ended March 31, 2007 are as follows:
 
Financial  
 
Tax           
   
 
Reporting
  
Reporting
    
 
Purposes
  
Purposes
  
Differences
Investments in Local Limited
          
Partnerships
$     208,779 
  
$ (7,387,861)
  
$  7,596,640 
           
Other Assets
$     474,370 
  
$   1,670,608 
  
$ (1,196,238)
           
Liabilities
$  1,013,655 
  
$        11,519 
  
$  1,002,136 

 
            
 
 
 

NOTE 6 - TAXABLE INCOME (LOSS)(Continued):

   The following is a reconciliation between Net Income (Loss) as described in the financial statements and the Gateway income (loss) for tax purposes:

TOTAL SERIES 2 - 6
2007
----
2006
----
2005
----
Net Loss per Financial Statements
$  (419,794)
$  (954,029)
$  (461,690)
 
Equity in Losses of Project Partnerships
for tax purposes less than (in excess of)
losses for financial statement purposes
 
 
 
(3,718,707)
 
 
 
(3,975,528)
 
 
 
(4,098,500)
 
Adjustments to convert March 31, fiscal
year end to December 31, taxable year end
 
 
(324,272)
 
 
481,376 
 
 
(626)
 
Additional Gain (Loss) on Sale of Project
Partnerships for tax purposes
 
 
(94,808)
 
 
188,930 
 
 
(157,126)
 
Items Expensed for Tax purposes not
expensed for Financial Statement purposes:
  Administrative Expense
  Interest Income
 
 
 
(103)
566 
 
 
 
0 
0 
 
 
 
0 
0 
 
Items Expensed for Financial Statement
purposes not expensed for Tax purposes:
  Asset Management Fee
  Amortization Expense
  Impairment Expense
  Other Adjustments
 
 
 
399,218 
99,421 
343,241 
(99,020)
-----------
 
 
 
401,281 
4,738 
0 
(102,920)
-----------
 
 
 
253,879 
12,983 
0 
(132,375)
-----------
Gateway loss for tax purposes as of
December 31
 
$  (3,814,259)
============
 
$ (3,956,152)
============
 
$ (4,583,455)
============

   The difference in the total value of Gateway’s Investment in Project Partnerships is approximately $7,958,671 higher for Series 2, $7,034,773 higher for Series 3, $9,075,286 higher for Series 4, $9,148,814 higher for Series 5 and $7,596,640 higher for Series 6 for financial reporting purposes than for tax return purposes because (i) there were depreciation differences between financial reporting purposes and tax return purposes and (ii) certain expenses are not deductible for tax purposes.

  The differences in the assets and liabilities of Gateway for financial reporting purposes and tax reporting purposes for the year ended March 31, 2007 are as follows:
 
Financial  
 
Tax           
   
 
Reporting
  
Reporting
    
 
Purposes
  
Purposes
  
Differences
Investments in Local Limited
          
Partnerships
$     334,182 
  
$ (40,480,001)
  
$  40,814,183 
           
Other Assets
$  2,077,507 
  
$    6,055,706 
  
$  (3,978,199)
           
Liabilities
$  4,304,796 
  
$         45,180 
  
$   4,259,616 
 

 
 
 

NOTE 7 - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED):
 
Series 2
  
Quarter 1
  
Quarter 2
  
Quarter 3
  
Quarter 4
Year 2007
  
6/30/2006
  
9/30/2006
  
12/31/2006
  
3/31/2007
                 
Total Revenues
  
$    2,556 
  
$     1,237 
  
$     1,600 
  
$     9,816 
                 
Net Income (Loss)
  
$ (21,277)
  
$  (43,720)
  
$ (31,286)
  
$ (22,844)
                 
Earnings (Loss) Per
                
Weighted Average
                
Beneficial Assignee
                
Certificates Outstanding
  
$     (3.43)
  
$      (7.05)
  
$    (5.05)
  
$    (3.69)


Series 3
  
Quarter 1
  
Quarter 2
  
Quarter 3
  
Quarter 4
Year 2007
  
6/30/2006
  
9/30/2006
  
12/31/2006
  
3/31/2007
                 
Total Revenues
  
$   10,940 
  
$        874 
  
$           0 
  
$     8,625 
                 
Net Income (Loss)
  
$ (17,860)
  
$  (39,285)
  
$  66,370 
  
$ 296,737 
                 
Earnings (Loss) Per
                
Weighted Average
                
Beneficial Assignee
                
Certificates Outstanding
  
$    (3.24)
  
$     (7.13)
  
$    12.04 
  
$    45.17 


Series 4
  
Quarter 1
  
Quarter 2
  
Quarter 3
  
Quarter 4
Year 2007
  
6/30/2006
  
9/30/2006
  
12/31/2006
  
3/31/2007
                 
Total Revenues
  
$    5,977 
  
$     7,370 
  
$           0 
  
$    6,744 
                 
Net Income (Loss)
  
$ (29,728)
  
$ (41,536)
  
$ (40,484)
  
$  32,472 
                 
Earnings (Loss) Per
                
Weighted Average
                
Beneficial Assignee
                
Certificates Outstanding
  
$    (4.26)
  
$    (5.95)
  
$    (5.80)
  
$   (4.69)


Series 5
  
Quarter 1
  
Quarter 2
  
Quarter 3
  
Quarter 4
Year 2007
  
6/30/2006
 
9/30/2006
  
12/31/2006
  
3/31/2007
                 
Total Revenues
  
$   12,500 
  
$     6,528 
  
$     1,654 
  
$     6,130 
                  
Net Income (Loss)
  
$ (37,249)
  
$ (55,517)
  
$ (45,256)
  
$ (56,663)
                 
Earnings (Loss) Per
                
Weighted Average
                
Beneficial Assignee
                
Certificates Outstanding
  
$    (4.28)
  
$    (6.38)
  
$    (5.20)
  
$    (6.51)


Series 6
  
Quarter 1
  
Quarter 2
  
Quarter 3
  
Quarter 4
Year 2007
  
6/30/2006
  
9/30/2006
 
12/31/2006
  
3/31/2007
                 
Total Revenues
  
$  13,373 
  
$    7,628 
  
$     3,740 
  
$       4,937 
                 
Net Income (Loss)
  
$ (40,971)
  
$ (49,935)
  
$ (56,389)
  
$ (185,373)
                 
Earnings (Loss) Per
                
Weighted Average
                
Beneficial Assignee
                
Certificates Outstanding
  
$    (4.01)
  
$    (4.89)
  
$    (5.52)
  
$    (18.17)


Series 2 - 6
  
Quarter 1
  
Quarter 2
  
Quarter 3
 
Quarter 4
Year 2007
  
6/30/2006
  
9/30/2006
  
12/31/2006
  
3/31/2007
                 
Total Revenues
  
$    45,346 
  
$    23,637 
  
$      6,994 
  
$  36,252 
                 
Net Income (Loss)
  
$ (147,085)
  
$ (229,993)
  
$ (107,045)
  
$  64,329 



 
 
 

NOTE 7 - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Continued):
 
Series 2
  
Quarter 1
  
Quarter 2
  
Quarter 3
  
Quarter 4
Year 2006
  
6/30/2005
  
9/30/2005
  
12/31/2005
  
3/31/2006
                 
Total Revenues
  
$    2,250 
  
$     1,237 
  
$     1,221 
  
$     2,555 
                 
Net Income (Loss)
  
$ (33,601)
  
$  (39,394)
  
$ (30,846)
  
$ (52,558)
                 
Earnings (Loss) Per
                
Weighted Average
                
Beneficial Assignee
                
Certificates Outstanding
  
$    (5.42)
  
$     (6.36)
  
$    (4.98)
  
$    (8.47)


Series 3
  
Quarter 1
  
Quarter 2
  
Quarter 3
  
Quarter 4
Year 2006
  
6/30/2005
  
9/30/2005
  
12/31/2005
  
3/31/2006
                 
Total Revenues
  
$  12,398 
  
$      4,618 
  
$     3,414 
  
$     2,431 
                 
Net Income (Loss)
  
$ (14,283)
  
$  (33,117)
  
$ (24,237)
  
$ (36,641)
                 
Earnings (Loss) Per
                
Weighted Average
                
Beneficial Assignee
                
Certificates Outstanding
  
$    (2.59)
  
$     (6.01)
  
$    (4.40)
  
$     (6.65)


Series 4
  
Quarter 1
  
Quarter 2
  
Quarter 3
  
Quarter 4
Year 2006
  
6/30/2005
  
9/30/2005
  
12/31/2005
  
3/31/2006
                 
Total Revenues
  
$    5,113 
  
$    7,587 
  
$       884 
  
$    4,889 
                 
Net Income (Loss)
  
$ (26,707)
  
$ (36,676)
  
$ (33,089)
  
$ (41,832)
                 
Earnings (Loss) Per
                
Weighted Average
                
Beneficial Assignee
                
Certificates Outstanding
  
$     (3.82)
  
$     (5.25)
  
$    (4.74)
  
$    (5.99)


Series 5
  
Quarter 1
  
Quarter 2
  
Quarter 3
  
Quarter 4
Year 2006
  
6/30/2005
  
9/30/2005
  
12/31/2005
  
3/31/2006
                 
Total Revenues
  
$  11,176 
  
$     4,805 
  
$    1,654 
  
$     5,184 
                 
Net Income (Loss)
  
$ (31,297)
  
$ (44,906)
  
$ (43,496)
  
$ (89,091)
                 
Earnings (Loss) Per
                
Weighted Average
                
Beneficial Assignee
                
Certificates Outstanding
  
$     (3.60)
  
$    (5.16)
  
$    (5.00)
  
$   (10.23)


Series 6
  
Quarter 1
  
Quarter 2
  
Quarter 3
  
Quarter 4
Year 2006
  
6/30/2005
  
9/30/2005
  
12/31/2005
  
3/31/2006
                 
Total Revenues
  
$   10,190 
  
$     4,677 
  
$     3,503 
  
$       7,984 
                 
Net Income (Loss)
  
$ (36,442)
  
$ (43,655)
  
$ 172,237 
  
$ (434,398)
                 
Earnings (Loss) Per
                
Weighted Average
                
Beneficial Assignee
                
Certificates Outstanding
  
$    (3.57)
  
$    (4.28)
  
$     8.75 
  
$    (42.99)


Series 2 - 6
  
Quarter 1
  
Quarter 2
  
Quarter 3
  
Quarter 4
Year 2006
  
6/30/2005
  
9/30/2005
  
12/31/2005
  
3/31/2006
                 
Total Revenues
  
$    41,127 
  
$    22,924 
  
$  10,676 
  
$    23,043 
                 
Net Income (Loss)
  
$ (142,330)
  
$ (197,748)
  
$  40,569 
  
$ (654,520)
 

 
 
 
 

NOTE 8 – SUBSEQUENT EVENTS:

Series 2

   Subsequent to the March 31, 2007 year-end Gateway sold its Project Partnership investment in Rolling Oaks II Apartments.  Gateway realized approximately $55,000 in net proceeds or approximately $8.96 per beneficial assignee certificate from this sale transaction which will be distributed to the Series 2 Assignees in the 2nd quarter of fiscal year 2008.

 
 
 


Donald W. Causey & Associates, P.C.
516 Walnut Street - P.O. Box 775
Gadsden, AL 35902
PHONE: 256-543-3707
FAX: 256-543-9800
 
INDEPENDENT AUDITORS’ REPORT
----------------------------

To the Partners
Meadowcrest Apartments Ltd.
Luverne, Alabama

We have audited the accompanying balance sheets of Meadowcrest Apartments, Ltd., a limited partnership, as of December 31, 2004 and 2003, and the related statements of operations, partners’ deficit and cash flows for the years then ended.  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 conducted the audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The partnership has determined that it 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 the audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Meadowcrest Apartments, Ltd., as of December 31, 2004 and 2003, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.

The audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole.  The supplemental information on pages 10 and 11 is presented for purposes of additional analysis and is not a required part of the basic financial statements.  Such information has been subjected to the audit procedures applied in the audit of the basic financial statements and, in our opinion is fairly stated in all material respects in relation to the basic financial statements taken as a whole.


/s/ Donald W. Causey & Associates, P.C.
Certified Public Accountants
Gadsden, Alabama
February 27, 2005


 
 
 


Item 9.  Changes in and disagreements with Accountants on Accounting and Financial Disclosures.

  None.

Item 9A.  Controls and Procedures

   As of the end of the period covered by this report, under the supervision and with the participation of management including the chief executive and chief financial officers of Gateway’s Managing General Partner, an evaluation of the effectiveness of Gateway’s disclosure controls and procedures (as defined in Rule 13a-14(c) under the Securities and Exchange Act of 1934) was performed.  Based on this evaluation, such officers have concluded that Gateway’s disclosure controls and procedures were effective as of the date of that evaluation in alerting them in a timely manner to material information relating to Gateway required to be included in this report and Gateway’s other reports that it files or submits under the Securities Exchange Act of 1934.  There were no significant changes in Gateway’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

Item 9a(T).  Controls and Procedures

  Not applicable to Gateway’s annual report for fiscal year ended March 31, 2007.

Item 9B.  Other Information

  None.

 
 
 


PART III

Item 10.  Directors and Executive Officers of Gateway

   Gateway has no directors or executive officers.  Gateway’s affairs are managed and controlled by the Managing General Partner.  Certain information concerning the directors and officers of the Managing General Partner are set forth below.

Raymond James Tax Credit Funds, Inc. - Managing General Partner

   Raymond James Tax Credit Funds, Inc. is the Managing General Partner and is responsible for decisions pertaining to the acquisition and sale of Gateway’s interests in the Project Partnerships and other matters related to the business operations of Gateway.  Certain officers and the directors of the Managing General Partner are as follows:

   Ronald M. Diner, age 63, is President and a Director.  He is a Senior Vice President of Raymond James & Associates, Inc., with whom he has been employed since June 1983.  Mr. Diner received an MBA degree from Columbia University (1968) and a BS degree from Trinity College (1966).  Prior to joining Raymond James & Associates, Inc., he managed the broker-dealer activities of Pittway Real Estate, Inc., a real estate development firm.  He was previously a loan officer at Marine Midland Realty Credit Corp., and spent three years with Common, Dann & Co., a New York regional investment firm.  He has served as a member of the Board of Directors of the Council for Rural Housing and Development, a national organization of developers, managers and syndicators of properties developed under the RECD Section 515 program, and is a member of the Board of Directors of the Florida Council for Rural Housing and Development.  Mr. Diner  has been a speaker and panel member at state and national seminars relating to the low-income housing credit.

   J. Davenport Mosby III, age 51, is a Vice President and a Director.  He is a Senior Managing Director of Raymond James & Associates, Inc. which he joined in 1982.  Mr. Mosby received an MBA from the Harvard Business School (1982).  He graduated magna cum laude with a BA from Vanderbilt University where he was elected to Phi Beta Kappa.

   Raymond James Tax Credit Funds, Inc. is a wholly owned subsidiary of Raymond James Financial, Inc. (“RJF”).  RJF has adopted a Business Ethics and Corporate Policy that is applicable to the officers and employees of Raymond James Tax Credit Funds, Inc., the Managing General Partner of Gateway.  That policy is posted on RJF’s Internet website at www.raymondjames.com under “About Our Company” --- Investor Relations --- Corporate Governance --- Employee Code of Ethics.

Raymond James Partners, Inc. -

   Raymond James Partners, Inc. was formed to act as the general partner, with affiliated corporations, in limited partnerships sponsored by Raymond James Financial, Inc.

   Information regarding the officers and directors of Raymond James Partners, Inc. is included on pages 58 and 59 of the Prospectus under the section captioned "Management" (consisting of pages 56 through 59 of the Prospectus) which is incorporated herein by reference.

Item 11.  Executive Compensation

   Gateway has no directors or officers.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

   Neither of the General Partners nor their directors and officers own any units of the outstanding securities of Gateway as of March 31, 2007.

   Gateway is a Limited Partnership and therefore does not have voting shares of stock.  To the knowledge of Gateway, no person owns of record or beneficially, more than 5% of Gateway’s outstanding units.

Item 13.  Certain Relationships and Related Transactions and Director Independence

   Gateway has no officers or directors.  However, various kinds of compensation and fees are payable to the General Partners and their affiliates during the organization and operations of Gateway.  Additionally, the General Partners will receive distributions from Gateway if there is cash available for distribution or residual proceeds as defined in the Partnership Agreement.  The amounts and kinds of compensation and fees are described on pages 15 to 18 of the Prospectus under the caption "Management Compensation", which is incorporated herein by reference.  See Note 4 of Notes to Financial Statements in Item 8 of this Third Amended Annual Report on Form 10-K/A-3 for amounts accrued or paid to the General Partners and their affiliates during the years ended March 31, 2007, 2006, and 2005.

 
 
 


   The Payable to General Partners primarily represents the asset management fees owed to the General Partners at the end of the period.  It is unsecured, due on demand and, in accordance with the limited partnership agreement, non-interest bearing.  Within the next 12 months, the Managing General Partner does not intend to demand payment on the portion of Asset Management Fees payable classified as long-term on the Balance Sheet.

   For the years ended March 31, 2007, 2006 and 2005 the General Partners and affiliates are entitled to compensation and reimbursement for costs and expenses incurred by Gateway as follows:

   Asset Management Fee - The Managing General Partner is entitled to be paid an annual asset management fee equal to 0.25% of the aggregate cost of Gateway’s interest in the projects owned by the Project Partnerships.  The asset management fee will be paid only after all other expenses of Gateway have been paid.  These fees are included in the Statements of Operations.

 
2007
----
2006
----
2005
----
Series 2
$  67,315
$  67,609
$  67,609
Series 3
58,055
62,716
62,717
Series 4
74,671
77,205
77,205
Series 5
92,287
92,722
92,722
Series 6
101,242
---------
101,592
---------
104,509
---------
Total
$ 393,570
=========
$ 401,844
=========
$ 404,762
=========

   General and Administrative Expenses - The Managing General Partner is reimbursed for general and administrative expenses of Gateway on an accountable basis.  This expense is included in the Statements of Operations.

 
2007
----
2006
----
2005
----
Series 2
$  61,537
$  47,681
$  32,074
Series 3
63,702
49,848
33,531
Series 4
81,118
62,853
42,279
Series 5
97,901
77,443
52,484
Series 6
103,495
---------
81,777
---------
55,400
---------
Total
$ 407,753
$ 319,602
$ 215,768
 
=========
=========
=========

   Total unpaid asset management fees and administrative expenses payable to the General Partners, which are included on the Balance Sheet as of March 31, 2007 and 2006 are as follows:

 
March 31, 2007
--------------
March 31, 2006
--------------
Series 2
$  715,273 
$  647,557 
Series 3
606,565 
546,061 
Series 4
782,789 
706,659 
Series 5
682,447 
589,347 
Series 6
1,013,609 
-----------
912,027 
-----------
Total
$3,800,683 
===========
$3,401,651 
===========

Item 14.  Principal Accounting Fees & Services

   Audit Fees

   The aggregate fees billed by Gateway’s principal accounting firm, Reznick Group, P.C., for professional services rendered for the audit of the annual financial statements and review of financial statements included in the Gateway’s quarterly report on Form 10-Q was $50,000 and $40,000 for the years ended March 31, 2007 and 2006, respectively.  The aggregate fees incurred by Gateway’s former principal accuonting firm, Spence, Marston, Bunch, Morris and Co., totaled $2,000 for the year ended March 31, 2007 for services pertaining to prior years audit reports and $1,750 during fiscal year 2006 for review of certain quarterly reports on Form 10-Q.

   Tax Fees

   During fiscal 2007 and 2006, Spence, Marston, Bunch, Morris and Co. was engaged to prepare Gateway’s federal tax return, for which they billed $9,000 and $7,000 for 2007 and 2006, respectively.

 
 
 


  Other Fees

   The two members of Raymond James Tax Credit Funds, Inc. Board of Directors, Ronald M. Diner and J. Davenport Mosby III also serve as the members of the Audit Committee on behalf of Gateway.  The audit committee charter requires that the committee approve the engagement of the principal accounting firm prior to the rendering of any audit or non-audit services. During fiscal 2007, 100% of the audit related and other services and 100% of the tax services were pre-approved by the Audit Committee.

PART IV

Item 15.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

a.(1) Financial Statements

  (2) Financial Statement Schedules -

   Schedule III - Real Estate and Accumulated Depreciation of Property Owned by Project Partnerships

   Schedule IV – Mortgage loans on real estate

   All other schedules are omitted because they are not applicable or not required, or because the required information is shown either in the financial statements or in the notes thereto.

   (3) Exhibit Listing

Exhibit
Number   Description
3.1       Amended Certificate of Limited Partnership of Gateway Tax Credit Fund, Ltd. (Filed as an Exhibit to Registration Statement on Form S-11, File No. 33-31821 and incorporated herein by reference.)
4.1       The form of Partnership Agreement of the Partnership (included as Exhibit "A" to the Prospectus, File No. 33-31821, and incorporated herein by reference.)
23        The consent of Reznick Group, P.C. (Filed herewith.)
23        The consent of Spence, Marston, Bunch, Morris & Co. (Filed herewith.)
31.1     Certification required by Rule 15d-14(a). (Filed herewith.)
31.2     Certification required by Rule 15d-14(a). (Filed herewith.)
32        Certification required by Rule 15d-14(b). (Filed herewith.)

 
 
 

GATEWAY TAX CREDIT FUND II LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006

SERIES 2
Apartment Properties
 
Partnership
-----------
 
 
Location
--------
 
 
# of Units
----------
 
Mortgage
Loan Balance
-------------
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 Sr.
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
34
48
30
21
29
21
44
49
24
16
642,668
685,046
688,430
1,171,645
1,222,313
1,028,943
977,060
822,721
1,168,971
964,101
2,920,262
604,276
846,957
1,451,303
866,842
560,309
760,210
953,728
1,353,436
1,421,548
1,013,039
426,278
     
------------
     
$ 22,550,086
     
============
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006

SERIES 2
Apartment Properties
Cost At Acquisition
--------------------
  
 
 
 
Partnership
-----------
 
 
 
Land
----
 
Buildings,
Improvements
and Equipment
-------------
Net Improvements
Capitalized
Subsequent to
Acquisition
----------------
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 Sr.
$   33,400
33,600
22,700
62,000
21,500
28,600
38,400
16,000
37,500
22,500
205,500
15,000
31,500
88,000
36,400
21,750
28,000
66,500
66,080
36,000
140,250
64,373
$   766,138
820,962
836,998
1,376,297
1,451,283
1,238,749
1,178,185
1,060,098
1,480,089
1,223,370
3,111,565
767,590
1,027,512
1,710,725
1,047,107
680,437
930,574
1,150,214
1,648,081
1,746,076
1,123,454
444,257
9,094
0
0
27,810
95,730
37,108
17,350
0
0
0
179,759
(1,130)
(1,141)
(4,183)
(1,315)
(1,252)
(2,760)
184,702
68,356
(462)
113,814
33,424
 
-----------
------------
-----------
 
$1,115,553
$26,819,761
$  754,904
 
===========
============
===========

 
 
 

GATEWAY TAX CREDIT FUND II LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006

SERIES 2
Apartment Properties
Gross Amount At Which Carried At December 31, 2006
--------------------
 
 
Partnership
-----------
 
 
Land
----
Buildings,
Improvements
and Equipment
-------------
 
 
Total
-----
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 Sr.
33,400
33,600
22,700
70,041
28,520
33,414
38,400
16,000
37,500
22,500
205,500
15,000
31,500
88,000
36,400
21,750
28,000
109,044
69,475
36,000
140,250
71,440
775,232
820,962
836,998
1,396,066
1,539,993
1,271,043
1,195,535
1,060,098
1,480,089
1,223,370
3,291,324
766,460
1,026,371
1,706,542
1,045,792
679,185
927,814
1,292,372
1,713,042
1,745,614
1,237,268
470,614
808,632
854,562
859,698
1,466,107
1,568,513
1,304,457
1,233,935
1,076,098
1,517,589
1,245,870
3,496,824
781,460
1,057,871
1,794,542
1,082,192
700,935
955,814
1,401,416
1,782,517
1,781,614
1,377,518
542,054
 
-----------
------------
------------
 
$1,188,434
$27,501,784
$28,690,218
 
===========
============
============

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006

SERIES 2
Apartment Properties
Partnership
-----------
 
Accumulated Depreciation
------------------------
 
Depreciable Life
----------------
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 Sr.
458,423
490,069
502,073
579,280
664,438
548,401
486,589
703,532
960,847
728,188
1,874,969
420,042
556,884
960,642
571,649
372,885
504,626
603,947
743,932
937,815
520,173
320,413
5-27.5
5-27.5
5-27.5
5-27.5
5-40
5-40
5-40
5-25
5-25
5-27.5
5-27.5
5-30
5-30
5-30
5-30
5-30
5-30
5-40
5-40
5-30
5-40
5-27.5
 
-----------
  
 
$14,509,817
  
 
===========
  

 
 
 

GATEWAY TAX CREDIT FUND II LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006

SERIES 3
Apartment Properties
Partnership
-----------
 
Location
--------
 
# of Units
----------
Mortgage
Loan Balance
-------------
Poteau II
Sallisaw
Nowata Properties
Waldron Properties
Roland II
Stilwell
Hornellsville
Sunchase II
CE McKinley II
Weston Apartments
Countrywood Apts.
Wildwood Apts.
Hancock
Hopkins
Elkhart Apts.
Heritage Villas
Logansport Seniors
Poteau, OK
Sallisaw, OK
Oolagah, OK
Waldron, AR
Roland, OK
Stilwell, OK
Arkport, NY
Watertown, SD
Rising Sun, MD
Weston, AL
Centreville, AL
Pineville, LA
Hawesville, KY
Madisonville, KY
Elkhart, TX
Helena, GA
Logansport, LA
52
52
32
24
52
48
24
41
16
10
40
28
12
24
54
25
32
1,262,905
1,282,190
837,803
623,604
1,279,965
1,161,938
871,568
1,176,774
551,354
266,943
1,166,581
829,462
342,931
710,649
1,078,853
662,032
1,118,560
     
------------
     
$15,224,112
     
============

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006

SERIES 3
Apartment Properties
Cost At Acquisition
--------------------
  
 
 
 
Partnership
-----------
 
 
 
Land
----
 
Buildings,
Improvements
and Equipment
-------------
Net Improvements
Capitalized
Subsequent to
Acquisition
----------------
Poteau II
Sallisaw
Nowata Properties
Waldron Properties
Roland II
Stilwell
Hornellsville
Sunchase II
CE McKinley II
Weston Apartments
Countrywood Apts.
Wildwood Apts.
Hancock
Hopkins
Elkhart Apts.
Heritage Villas
Logansport Seniors
76,827
70,000
45,500
26,000
70,000
37,500
41,225
113,115
11,762
0
55,750
48,000
20,700
43,581
35,985
21,840
27,621
1,712,321
1,674,103
1,102,984
834,273
1,734,010
1,560,201
1,018,523
1,198,373
745,635
339,144
1,447,439
1,018,897
419,725
885,087
1,361,096
801,128
1,058,773
0
0
0
0
0
0
110,568
168,631
91,265
8,433
118,356
39,791
0
(1,412)
293,428
1,791
298,357
 
-----------
------------
------------
 
$  745,406
$18,911,712
$1,129,208
 
===========
============
============

 
 
 

GATEWAY TAX CREDIT FUND II LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006

SERIES 3
Apartment Properties
Gross Amount At Which Carried At December 31, 2006
--------------------
 
 
Partnership
-----------
 
 
Land
----
Buildings,
Improvements
and Equipment
-------------
 
 
Total
-----
Poteau II
Sallisaw
Nowata Properties
Waldron Properties
Roland II
Stilwell
Hornellsville
Sunchase II
CE McKinley II
Weston Apartments
Countrywood Apts.
Wildwood Apts.
Hancock
Hopkins
Elkhart Apts.
Heritage Villas
Logansport Seniors
76,827
70,000
45,500
26,000
70,000
37,500
41,225
120,858
11,749
0
59,940
48,000
20,700
43,581
23,378
21,840
27,621
1,712,321
1,674,103
1,102,984
834,273
1,734,010
1,560,201
1,129,091
1,359,261
836,913
347,577
1,561,605
1,058,688
419,725
883,675
1,667,131
802,919
1,357,130
1,789,148
1,744,103
1,148,484
860,273
1,804,010
1,597,701
1,170,316
1,480,119
848,662
347,577
1,621,545
1,106,688
440,425
927,256
1,690,509
824,759
1,384,751
 
-----------
------------
------------
 
$  744,719
$20,041,607
$20,786,326
 
===========
============
============

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006

SERIES 3
Partnership
-----------
Accumulated Depreciation
------------------------
Depreciable Life
----------------
Poteau II
Sallisaw
Nowata Properties
Waldron Properties
Roland II
Stilwell
Hornellsville
Sunchase II
CE McKinley II
Weston Apartments
Countrywood Apts.
Wildwood Apts.
Hancock
Hopkins
Elkhart Apts.
Heritage Villas
Logansport Seniors
1,269,111
1,209,986
789,301
597,487
1,278,342
1,142,120
745,698
688,186
552,509
235,932
1,009,690
642,312
249,424
525,139
1,039,014
444,483
523,169
5-25
5-25
5-25
5-25
5-25
5-25
5-27.5
5-40
5-27.5
5-27.5
5-27.5
5-30
5-27.5
5-27.5
5-25
5-30
5-40
 
-----------
  
 
$12,941,903
  
 
===========
  

 
 
 

GATEWAY TAX CREDIT FUND II LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006

SERIES 4
Apartment Properties
Partnership
-----------
 
Location
--------
 
# of Units
----------
Mortgage
Loan Balance
-------------
Seneca Apartments
Eudora Senior
Westville
Wellsville Senior
Stilwell II
Spring Hill Senior
Tarpon Heights
Oaks Apartments
Wynnwood Common
Chestnut Apartments
St. George
Williston
Brackettville Sr.
Sonora Seniors
Ozona Seniors
Fredericksburg Sr.
St. Joseph
Courtyard
Rural Development
Jasper Villas
Jonesville Manor
Norton Green
Timpson Seniors
Piedmont
S.F. Arkansas City
Seneca, MO
Eudora, KS
Westville, OK
Wellsville, KS
Stilwell, OK
Spring Hill, KS
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
Jonesville, VA
Norton, VA
Timpson, TX
Barnesville, GA
 Arkansas City, KS
24
36
36
24
52
24
48
32
34
24
24
24
32
32
24
48
24
21
25
25
40
40
28
36
12
595,304
937,429
839,986
633,441
1,259,978
681,038
1,372,818
796,106
1,340,852
836,165
735,713
781,078
804,278
824,492
617,690
1,177,484
809,871
696,321
1,180,721
839,945
1,320,675
1,311,765
658,399
1,018,623
335,627
     
------------
     
$22,405,799
     
============
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006

SERIES 4
Apartment Properties
Cost At Acquisition
--------------------
  
 
 
 
Partnership
-----------
 
 
 
Land
----
 
Buildings,
Improvements
and Equipment
-------------
Net Improvements
Capitalized
Subsequent to
Acquisition
----------------
Seneca Apartments
Eudora Senior
Westville
Wellsville Senior
Stilwell II
Spring Hill Senior
Tarpon Heights
Oaks Apartments
Wynnwood Common
Chestnut Apartments
St. George
Williston
Brackettville Sr.
Sonora Seniors
Ozona Seniors
Fredericksburg Sr.
St. Joseph
Courtyard
Rural Development
Jasper Villas
Jonesville Manor
Norton Green
Timpson Seniors
Piedmont
S.F. Arkansas City
76,212
50,000
27,560
38,000
30,000
49,800
85,000
42,000
68,000
57,200
22,600
25,000
28,600
51,000
40,000
45,000
28,000
24,500
38,200
27,000
100,000
120,000
13,500
29,500
16,800
640,702
1,207,482
1,074,126
772,971
1,627,974
986,569
1,408,434
989,522
1,578,814
977,493
915,400
959,345
963,366
962,315
719,843
1,357,563
940,580
810,110
1,361,892
1,067,890
1,578,135
1,535,373
802,416
1,259,547
395,228
104,215
32,661
0
(1)
0
0
769,580
500,637
78,648
44,989
1,018
5,681
50,297
33,717
42,246
41,689
8,303
51,699
28,911
28,096
106,294
173,477
0
0
0
 
-----------
------------
------------
 
$1,133,472
$26,893,090
$2,102,157
 
===========
============
============

 
 
 

GATEWAY TAX CREDIT FUND II LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006

SERIES 4
Apartment Properties
Gross Amount At Which Carried At December 31, 2006
--------------------
 
 
Partnership
-----------
 
 
Land
----
Buildings,
Improvements
and Equipment
-------------
 
 
Total
-----
Seneca Apartments
Eudora Senior
Westville
Wellsville Senior
Stilwell II
Spring Hill Senior
Tarpon Heights
Oaks Apartments
Wynnwood Common
Chestnut Apartments
St. George
Williston
Brackettville Sr.
Sonora Seniors
Ozona Seniors
Fredericksburg Sr.
St. Joseph
Courtyard
Rural Development
Jasper Villas
Jonesville Manor
Norton Green
Timpson Seniors
Piedmont
S.F. Arkansas City
79,386
64,278
27,560
38,000
30,000
49,800
85,000
42,000
118,004
63,800
22,600
25,000
28,600
51,000
40,000
45,000
28,000
29,471
38,200
27,000
100,000
120,000
13,500
29,500
16,800
741,743
1,225,865
1,074,126
772,970
1,627,974
986,569
2,178,014
1,490,159
1,607,458
1,015,882
916,418
965,026
1,013,663
996,032
762,089
1,399,252
948,883
856,838
1,390,803
1,095,986
1,684,429
1,708,850
802,416
1,259,547
395,228
821,129
1,290,143
1,101,686
810,970
1,657,974
1,036,369
2,263,014
1,532,159
1,725,462
1,079,682
939,018
990,026
1,042,263
1,047,032
802,089
1,444,252
976,883
886,309
1,429,003
1,122,986
1,784,429
1,828,850
815,916
1,289,047
412,028
 
-----------
------------
------------
 
$1,212,499
$28,916,220
$30,128,719
 
===========
============
============

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006

SERIES 4
Apartment Properties
Partnership
-----------
 
Accumulated Depreciation
------------------------
 
Depreciable Life
----------------
Seneca Apartments
Eudora Senior
Westville
Wellsville Senior
Stilwell II
Spring Hill Senior
Tarpon Heights
Oaks Apartments
Wynnwood Common
Chestnut Apartments
St. George
Williston
Brackettville Sr.
Sonora Seniors
Ozona Seniors
Fredericksburg Sr.
St. Joseph
Courtyard
Rural Development
Jasper Villas
Jonesville Manor
Norton Green
Timpson Seniors
Piedmont
S.F. Arkansas City
482,149
717,244
637,120
460,362
966,190
647,577
697,720
522,580
690,067
492,323
570,360
577,841
374,633
389,006
283,335
534,879
565,659
497,981
851,412
457,025
985,499
1,026,842
333,713
560,942
234,664
5-27.5
5-27.5
5-27.5
5-25
5-27.5
5-25
5-40
5-40
5-40
5-40
5-27.5
5-27.5
5-40
5-40
5-40
5-40
5-27.5
5-27.5
5-27.5
5-40
5-27.5
5-27.5
5-40
5-27.5
5-27.5
 
-----------
  
 
$14,557,123
  
 
===========
  

 
 
 

GATEWAY TAX CREDIT FUND II LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006

SERIES 5
Apartment Properties
Partnership
-----------
 
Location
--------
 
# of Units
----------
Mortgage
Loan Balance
-------------
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
S. 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
Chandler, TX
Cloverdale, IN
Pineville, MO
Americus, GA
37
24
12
16
24
20
78
40
44
24
32
24
27
46
31
25
60
40
24
24
24
24
24
24
36
24
24
40
60
20
24
24
44
12
24
1,208,960
786,073
327,812
446,851
562,545
548,664
2,615,056
1,357,065
1,428,626
714,573
878,253
710,115
721,748
1,290,416
910,271
727,680
2,035,490
1,239,859
720,474
680,279
653,073
717,627
624,409
640,033
1,101,039
614,238
383,337
955,915
1,400,753
569,662
724,248
741,553
1,041,693
312,642
708,808
     
------------
     
$31,099,840
     
============

 
 
 

GATEWAY TAX CREDIT FUND II LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006

SERIES 5
Apartment Properties
Cost At Acquisition
-------------------
  
 
 
 
Partnership
-----------
 
 
 
Land
----
 
Buildings,
Improvements
and Equipment
-------------
Net Improvements
Capitalized
Subsequent to
Acquisition
----------------
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
S. Timber Ridge
Pineville
Ravenwood
$   59,500
38,500
18,000
21,600
25,200
28,000
248,067
44,475
0
15,930
21,330
14,700
13,500
60,000
48,000
16,600
100,000
70,000
39,781
25,000
35,600
45,000
12,020
22,660
70,868
21,000
13,900
44,000
28,000
43,102
0
40,000
43,705
59,661
14,300
$ 1,452,557
940,327
382,920
542,959
687,929
658,961
722,560
992,158
214,335
61,495
92,063
196,071
512,531
413,143
578,709
187,812
2,212,045
842,335
848,996
814,432
835,930
912,710
767,228
749,504
1,318,926
721,251
553,230
1,120,538
414,429
410,683
149,483
583,115
1,233,570
328,468
873,596
5,645
1,790
1,482
8,365
19,213
8,947
2,247,274
654,881
1,545,898
788,834
975,271
675,563
375,617
1,129,290
502,075
703,300
345,882
720,079
1,164
1,164
0
0
(2,523)
51,479
59,584
16,885
11,203
78,580
1,299,240
363,593
847,122
395,597
70,311
45,851
13,100
 
-----------
------------
------------
 
$1,401,999
$24,326,999
$13,961,756
 
===========
============
============

 
 
 

GATEWAY TAX CREDIT FUND II LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006

SERIES 5
Apartment Properties
Gross Amount At Which Carried At December 31, 2006
--------------------
 
 
Partnership
-----------
 
 
Land
----
Buildings,
Improvements
and Equipment
-------------
 
 
Total
-----
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
S. Timber Ridge
Pineville
Ravenwood
59,500
38,500
18,000
21,600
25,200
28,000
248,068
55,575
84,582
15,930
16,845
14,700
13,500
60,000
48,000
16,600
119,888
70,000
39,781
25,000
35,600
45,000
12,020
22,660
70,868
21,000
97,313
46,323
28,000
15,000
50,393
40,000
33,300
61,056
14,300
1,458,202
942,117
384,402
551,324
707,142
667,908
2,969,833
1,635,939
1,675,651
850,329
1,071,819
871,634
888,148
1,542,433
1,080,784
891,112
2,538,039
1,562,414
850,160
815,596
835,930
912,710
764,705
800,983
1,378,510
738,136
481,020
1,196,795
1,713,669
802,378
946,212
978,712
1,314,286
372,924
886,696
1,517,702
980,617
402,402
572,924
732,342
695,908
3,217,901
1,691,514
1,760,233
866,259
1,088,664
886,334
901,648
1,602,433
1,128,784
907,712
2,657,927
1,632,414
889,941
840,596
871,530
957,710
776,725
823,643
1,449,378
759,136
578,333
1,243,118
1,741,669
817,378
996,605
1,018,712
1,347,586
433,980
900,996
 
-----------
------------
------------
 
$1,612,102
$38,078,652
$39,690,754
 
===========
============
============

 
 
 

GATEWAY TAX CREDIT FUND II LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006

SERIES 5
Partnership
-----------
Accumulated Depreciation
------------------------
Depreciable Life
----------------
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
S. Timber Ridge
Pineville
Ravenwood
849,073
543,560
229,861
297,309
418,757
399,101
1,565,986
839,647
872,160
420,069
529,269
452,758
458,931
770,896
553,172
451,808
851,765
577,534
294,508
285,315
476,064
571,700
438,270
450,052
839,876
230,712
299,902
441,762
1,043,730
372,047
418,687
573,076
789,778
245,206
339,788
5-27.5
5-27.5
5-27.5
5-27.5
5-27.5
5-27.5
5-27.5
5-27.5
5-27.5
5-30
5-30
5-30
5-30
5-30
5-30
5-30
5-50
5-40
5-50
5-50
5-27.5
5-25
5-27.5
5-27.5
5-25
5-30
5-30
5-27.5
5-25
5-27.5
5-50
5-27.5
5-25
5-27.5
5-27.5
 
-----------
  
 
$19,192,129
  
 
===========
  

 
 
 

GATEWAY TAX CREDIT FUND II LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006

SERIES 6
Apartment Properties
Partnership
-----------
 
Location
--------
 
# of Units
----------
Mortgage
Loan Balance
-------------
Spruce
Shannon Apartments
Carthage
Coal City
Blacksburg Terrace
Frazier
Ehrhardt
Sinton
Frankston
Flagler Beach
Oak Ridge
Monett
Arma
Southwest City
Meadowcrest
Parsons
Newport Village
Goodwater Falls
Northfield Station
Pleasant Hill Square
Winter Park
Cornell
Heritage Drive S.
Brodhead
Mt. Village
Hazelhurst
Sunrise
Stony Creek
Logan Place
Haines
Maple Wood
Summerhill
Dorchester
Lancaster
Autumn Village
Hardy
Dawson
Pierre, SD
O’Neill, NE
Carthage, MO
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
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
25
40
895,639
524,129
557,262
956,195
1,061,228
1,440,715
548,717
831,957
549,052
1,375,503
794,786
770,981
703,434
311,685
984,894
1,230,818
1,271,276
1,067,565
781,074
762,826
980,840
851,801
961,118
769,501
767,537
939,949
1,137,508
1,313,314
1,227,319
2,335,876
778,941
1,167,891
453,569
1,066,724
112,696
272,603
1,160,429
     
------------
     
$33,717,352
     
============

 
 
 

GATEWAY TAX CREDIT FUND II LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006

SERIES 6
Apartment Properties
Cost At Acquisition
--------------------
  
 
 
 
Partnership
-----------
 
 
 
Land
----
 
Buildings,
Improvements
and Equipment
-------------
Net Improvements
Capitalized
Subsequent to
Acquisition
----------------
Spruce
Shannon Apartments
Carthage
Coal City
Blacksburg Terrace
Frazier
Ehrhardt
Sinton
Frankston
Flagler Beach
Oak Ridge
Monett
Arma
Southwest City
Meadowcrest
Parsons
Newport Village
Goodwater Falls
Northfield Station
Pleasant Hill Square
Winter Park
Cornell
Heritage Drive S.
Brodhead
Mt. Village
Hazelhurst
Sunrise
Stony Creek
Logan Place
Haines
Maple Wood
Summerhill
Dorchester
Lancaster
Autumn Village
Hardy
Dawson
$  60,040
5,000
115,814
60,055
39,930
51,665
9,020
42,103
30,000
118,575
40,000
170,229
85,512
67,303
72,500
49,780
61,350
32,000
44,250
35,000
95,000
32,000
44,247
21,600
55,000
60,000
90,000
0
39,300
189,323
79,000
23,000
13,000
37,500
20,000
0
40,000
$   108,772
94,494
578,597
1,121,477
1,278,860
1,619,209
671,750
985,010
639,068
1,534,541
995,782
782,795
771,316
319,272
1,130,651
1,483,188
1,470,505
1,142,517
977,220
893,323
1,121,119
1,017,572
1,151,157
932,468
884,596
1,118,734
1,269,252
1,428,656
1,477,527
2,851,953
924,144
788,157
239,455
1,361,272
595,604
473,695
346,569
1,012,714
605,300
80,684
147,091
59,726
5,968
29,111
25,946
7,863
65,560
9,864
81,562
51,666
50,307
35,324
0
146,355
240,461
1,091
33,603
115,612
118,227
39,694
28,620
19,913
11,422
140,341
227,479
10,085
66,487
36,646
508,629
308,553
(11,737)
478
458,294
1,088,404
 
-----------
------------
------------
 
$2,029,096
$36,580,277
$5,857,343
 
===========
============
============

 
 
 

GATEWAY TAX CREDIT FUND II LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006

SERIES 6
Apartment Properties
Gross Amount At Which Carried At December 31, 2006
 
 
Partnership
-----------
 
 
Land
----
Buildings,
Improvements
and Equipment
-------------
 
 
Total
-----
Spruce
Shannon Apartments
Carthage
Coal City
Blacksburg Terrace
Frazier
Ehrhardt
Sinton
Frankston
Flagler Beach
Oak Ridge
Monett
Arma
Southwest City
Meadowcrest
Parsons
Newport Village
Goodwater Falls
Northfield Station
Pleasant Hill Square
Winter Park
Cornell
Heritage Drive S.
Brodhead
Mt. Village
Hazelhurst
Sunrise
Stony Creek
Logan Place
Haines
Maple Wood
Summerhill
Dorchester
Lancaster
Autumn Village
Hardy
Dawson
86,308
21,526
119,404
60,055
39,930
51,665
9,020
42,103
30,000
118,575
40,000
173,663
89,512
88,436
87,700
49,780
61,350
32,000
44,250
29,550
102,494
44,479
37,440
21,600
55,000
60,000
112,363
108,200
39,300
189,323
79,000
23,000
13,000
37,500
20,000
21,250
40,000
1,095,218
683,268
655,691
1,268,568
1,338,586
,625,177
700,861
1,010,956
646,931
1,600,101
1,005,646
860,923
818,982
348,446
1,150,775
1,483,188
1,616,860
1,382,978
978,311
932,376
1,229,237
1,123,320
1,197,658
961,088
904,509
1,130,156
1,387,230
1,547,935
1,487,612
2,918,440
960,790
1,296,786
548,008
1,349,535
596,082
910,739
1,434,973
1,181,526
704,794
775,095
1,328,623
1,378,516
1,676,842
709,881
1,053,059
676,931
1,718,676
1,045,646
1,034,586
908,494
436,882
1,238,475
1,532,968
1,678,210
1,414,978
1,022,561
961,926
1,331,731
1,167,799
1,235,098
982,688
959,509
1,190,156
1,499,593
1,656,135
1,526,912
3,107,763
1,039,790
1,319,786
561,008
1,387,035
616,082
931,989
1,474,973
 
-----------
------------
------------
 
$2,278,776
$42,187,940
$44,466,716
 
===========
============
============

 
 
 

GATEWAY TAX CREDIT FUND II LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006

SERIES 6
Partnership
-----------
Accumulated Depreciation
------------------------
Depreciable Life
----------------
  
Spruce
Shannon Apartments
Carthage
Coal City
Blacksburg Terrace
Frazier
Ehrhardt
Sinton
Frankston
Flagler Beach
Oak Ridge
Monett
Arma
Southwest City
Meadowcrest
Parsons
Newport Village
Goodwater Falls
Northfield Station
Pleasant Hill Square
Winter Park
Cornell
Heritage Drive S.
Brodhead
Mt. Village
Hazelhurst
Sunrise
Stony Creek
Logan Place
Haines
Maple Wood
Summerhill
Dorchester
Lancaster
Autumn Village
Hardy
Dawson
505,609
270,139
464,781
522,742
781,085
946,877
368,322
319,231
201,594
603,132
543,048
585,312
541,583
247,211
461,351
872,507
891,255
536,390
375,895
359,476
566,719
437,100
688,100
356,393
341,545
383,205
728,796
594,626
686,179
1,554,156
525,016
450,681
282,340
545,113
234,279
345,761
479,428
5-30
5-40
5-27.5
5-27.5
5-27.5
5-27.5
5-27.5
5-50
5-30
5-40
5-27.5
5-27.5
5-27.5
5-27.5
5-40
5-27.5
5-27.5
5-27.5
5-27.5
5-27.5
5-40
5-40
5-25
5-40
5-50
5-40
5-27.5
5-27.5
5-27.5
5-27.5
5-27.5
5-27.5
5-27.5
5-40
5-40
5-40
5-40
 
-----------
    
 
$19,596,977
    
 
===========
    

 
 
 

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
GATEWAY TAX CREDIT FUND II LTD.
NOTES TO SCHEDULE III

Reconciliation of Land, Building & Improvements current year changes:

SERIES 2
Balance at beginning of period - December 31, 2005
 Additions during period:
  Acquisitions through foreclosure
  Other acquisitions
  Improvements, etc.
  Other
 
 
 Deductions during period:
  Cost of real estate sold
  Other
 
 
0 
48,934 
22,533 
0 
---------
 
 
0 
0 
---------
$28,618,751 
 
 
 
 
 
 
71,467 
 
 
 
 
0 
---------
Balance at end of period - December 31, 2006
 
 
  
$28,690,218 
============
Reconciliation of Accumulated Depreciation current year changes:
 
Balance at beginning of period - December 31, 2005
  Current year expense
  Less Accumulated Depreciation of real estate sold
  Prior Year Adjustment
 
 
 
 
886,431 
0 
0 
---------
 
 
$13,623,386 
 
 
 
886,431 
----------
Balance at end of period - December 31, 2006
 
  
$ 14,509,817 
===========

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
GATEWAY TAX CREDIT FUND II LTD.
NOTES TO SCHEDULE III

Reconciliation of Land, Building & Improvements current year changes:

SERIES 3
Balance at beginning of period - December 31, 2005
 Additions during period:
  Acquisitions through foreclosure
  Other acquisitions
  Improvements, etc.
  Other
 
 
 Deductions during period:
  Cost of real estate sold
  Other
 
 
0 
130,599 
(70,733)
0 
---------
 
 
(7,645,116)
(2)
---------
$28,371,578 
 
 
 
 
 
 
59,866 
 
 
 
 
(7,645,118)
---------
Balance at end of period - December 31, 2006
 
 
  
$20,786,326 
===========
Reconciliation of Accumulated Depreciation current year changes:
 
Balance at beginning of period - December 31, 2005
  Current year expense
  Less Accumulated Depreciation of real estate sold
  Prior Year Adjustment
 
 
 
730,021 
(4,123,641)
(2)
--------
 
 
$16,335,525 
 
 
 
 
(3,393,622)
----------
Balance at end of period - December 31, 2006
  
$12,941,903 
============

 
 
 

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
GATEWAY TAX CREDIT FUND II LTD.
NOTES TO SCHEDULE III

Reconciliation of Land, Building & Improvements current year changes:

SERIES 4
Balance at beginning of period - December 31, 2005
 Additions during period:
  Acquisitions through foreclosure
  Other acquisitions
  Improvements, etc.
  Other
 
 
 Deductions during period:
  Cost of real estate sold
  Other
 
 
0 
216,078 
(32,540)
0 
---------
 
 
(4,533,671)
(131,410)
---------
$34,610,262 
 
 
 
 
 
 
183,538 
 
 
 
 
(4,665,081)
-----------
Balance at end of period - December 31, 2006
  
$30,128,719 
=============
Reconciliation of Accumulated Depreciation current year changes:
 
Balance at beginning of period - December 31, 2005
  Current year expense
  Less Accumulated Depreciation of real estate sold
  Prior Year Adjustment
 
 
1,043,927 
(1,796,739)
(131,410)
---------
 
$ 15,441,345 
 
 
 
 
(884,222)
----------
Balance at end of period - December 31, 2006
  
$14,557,123 
===========
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
GATEWAY TAX CREDIT FUND II LTD.
NOTES TO SCHEDULE III

Reconciliation of Land, Building & Improvements current year changes:

SERIES 5
Balance at beginning of period - December 31, 2005
 Additions during period:
  Acquisitions through foreclosure
  Other acquisitions
  Improvements, etc.
  Other
 
 
 Deductions during period:
  Cost of real estate sold
  Other
 
 
0 
61,854 
1,050 
0 
---------
 
 
0 
0 
---------
$39,627,850 
 
 
 
 
 
 
62,904 
 
 
 
 
0 
---------
Balance at end of period - December 31, 2006
  
$39,690,754 
============
Reconciliation of Accumulated Depreciation current year changes:
 
Balance at beginning of period - December 31, 2005
  Current year expense
  Less Accumulated Depreciation of real estate sold
  Prior Year Adjustment
 
 
1,220,039 
0 
48,543 
--------
 
$17,923,547 
 
 
 
1,268,582 
----------
Balance at end of period  December 31, 2006
  
$19,192,129 
============

 
 
 

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
GATEWAY TAX CREDIT FUND II LTD.
NOTES TO SCHEDULE III
 
Reconciliation of Land, Building & Improvements current year changes:
 
SERIES 6
Balance at beginning of period - December 31, 2005
 Additions during period:
  Acquisitions through foreclosure
  Other acquisitions
  Improvements, etc.
  Other
 
 Deductions during period:
  Cost of real estate sold (Mt.Crest)
  Other
 
 
 
 
 
 
 
 
 
 
 
0 
749,565 
13,194 
0 
---------
 
0 
0 
---------
 
 
 
 
 
 
 
 
$43,703,957 
 
 
 
 
 
 
762,759 
 
 
 
0 
----------
Balance at end of period - December 31, 2006
  
$44,466,716 
============
Reconciliation of Accumulated Depreciation current year changes:
 
Balance at beginning of period - December 31, 2005
  Current year expense
  Less Accumulated Depreciation of real estate sold
  Prior Year Adjustment
 
 
1,303,793 
0 
(67,448)
----------
 
$18,360,632 
 
 
 
 
1,236,345 
----------
Balance at end of period - December 31, 2006
  
$19,596,977 
============

 
 
 

GATEWAY TAX CREDIT FUND II LTD.
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
AS OF DECEMBER 31, 2006

SERIES 2
 
 
PARTNERSHIP
-----------
 
# OF
UNITS
------
 
 
BALANCE
-------
 
INTEREST
RATE 
--------
MONTHLY
DEBT 
SERVICE
--------
 
TERM
(YEARS)
------
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 Sr.
24
24
24
33
32
34
25
32
47
36
72
25
34
48
30
21
29
21
44
49
24
16
642,668
685,046
688,430
1,171,645
1,222,313
1,028,943
977,060
822,721
1,168,971
964,101
2,920,262
604,276
846,957
1,451,303
866,842
560,309
760,210
953,728
1,353,436
1,421,548
1,013,039
426,278
8.75%
8.75%
8.75%
8.75%
8.75%
8.75%
9.00%
8.75%
8.75%
8.75%
8.75%
9.00%
8.75%
9.00%
8.75%
8.75%
8.75%
9.00%
8.75%
8.75%
9.00%
8.25%
5,883
6,284
5,307
9,011
9,218
7,905
7,720
6,333
8,980
7,407
27,905
4,926
6,517
11,466
6,666
4,309
5,882
7,515
10,536
10,958
7,739
3,102
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
   
$22,550,086
===========
      

SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
AS OF DECEMBER 31, 2006

SERIES 3
 
 
PARTNERSHIP
-----------
 
# OF
UNITS
------
 
 
BALANCE
--------
 
INTEREST
RATE 
-------
MONTHLY
DEBT 
SERVICE
-------
 
TERM 
(YEARS)
------
Poteau II
Sallisaw
Nowata Properties
Waldron Properties
Roland II
Stilwell
Hornellsville
Sunchase II
CE McKinley II
Weston Apartments
Countrywood Apts.
Wildwood Apts.
Hancock
Hopkins
Elkhart Apts.
Heritage Villas
Logansport Seniors
52
52
32
24
52
48
24
41
16
10
40
28
12
24
54
25
32
1,262,905
1,282,190
837,803
623,604
1,279,965
1,161,938
871,568
1,176,774
551,354
266,943
1,166,581
829,462
342,931
710,649
1,078,853
662,032
1,118,560
9.50%
9.50%
9.50%
9.00%
9.50%
9.50%
9.00%
9.00%
8.75%
9.00%
9.00%
9.50%
9.50%
8.75%
9.00%
8.75%
8.75%
10,682
10,654
6,905
4,950
10,657
9,727
6,927
9,279
5,146
2,131
9,310
6,906
3,119
5,815
9,198
5,110
6,745
50
50
50
50
50
50
50
50
50
50
50
50
50
50
40
50
50
   
$15,224,112
===========
      

 
 
 

GATEWAY TAX CREDIT FUND II LTD.
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
AS OF DECEMBER 31, 2006

SERIES 4
 
 
PARTNERSHIP
-----------
 
# OF
UNITS
-----
 
 
BALANCE
-------
 
INTEREST
RATE  
-------
MONTHLY
DEBT 
SERVICE
-------
 
TERM 
(YEARS)
------
Seneca Apartments
Eudora Senior
Westville
Wellsville Senior
Stilwell II
Spring Hill Senior
Tarpon Heights
Oaks Apartments
Wynnwood Common
Chestnut Apartments
St. George
Williston
Brackettville Sr.
Sonora Seniors
Ozona Seniors
Fredericksburg Sr.
St. Joseph
Courtyard
Rural Development
Jasper Villas
Jonesville Manor
Norton Green
Timpson Seniors
Piedmont
S.F. Arkansas City
24
36
36
24
52
24
48
32
34
24
24
24
32
32
24
48
24
21
25
25
40
40
28
36
12
595,304
937,429
839,986
633,441
1,259,978
681,038
1,372,818
796,106
1,340,852
836,165
735,713
781,078
804,278
824,492
617,690
1,177,484
809,871
696,321
1,180,721
839,945
1,320,675
1,311,765
658,399
1,018,623
335,627
9.00%
8.75%
8.75%
8.75%
8.75%
8.75%
8.75%
9.00%
8.75%
8.75%
8.75%
9.00%
8.75%
8.75%
8.75%
8.75%
9.00%
9.25%
9.25%
8.75%
8.75%
8.75%
8.75%
8.75%
10.62%
4,692
7,269
6,448
4,859
9,672
5,236
9,347
6,663
10,300
6,419
5,677
6,147
6,172
6,337
4,744
9,050
6,379
5,622
9,539
6,450
10,159
10,085
5,058
7,856
3,056
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
  
   
$22,405,799
===========
        
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
AS OF DECEMBER 31, 2006

SERIES 5
 
 
PARTNERSHIP
-----------
 
# OF
UNITS
-----
 
 
BALANCE
-------
 
INTEREST
RATE  
-------
MONTHLY
DEBT 
SERVICE
-------
 
TERM 
(YEARS)
------
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
S. Timber Ridge
Pineville
Ravenwood
37
24
12
16
24
20
78
40
44
24
32
24
27
46
31
25
60
40
24
24
24
24
24
24
36
24
24
40
60
20
24
24
44
12
24
1,208,960
786,073
327,812
446,851
562,545
548,664
2,615,056
1,357,065
1,428,626
714,573
878,253
710,115
721,748
1,290,416
910,271
727,680
2,035,490
1,239,859
720,474
680,279
653,073
717,627
624,409
640,033
1,101,039
614,238
383,337
955,915
1,400,753
569,662
724,248
741,553
1,041,693
312,642
708,808
8.75%
8.75%
11.37%
10.62%
10.62%
11.87%
7.75%
8.25%
8.25%
7.75%
7.75%
8.25%
8.25%
8.25%
8.25%
8.25%
8.25%
8.25%
9.00%
8.75%
8.25%
8.75%
8.75%
8.75%
8.25%
8.75%
8.75%
8.75%
8.25%
8.75%
8.25%
8.75%
8.75%
8.25%
7.25%
9,346
6,032
3,016
4,049
5,126
5,498
18,064
9,870
10,398
4,937
6,129
5,172
5,264
9,389
6,632
5,302
14,842
9,402
5,673
5,355
4,760
8,018
4,782
4,913
8,018
4,715
3,688
7,377
10,192
4,388
5,265
5,693
7,986
2,318
4,595
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
   
$31,099,840
===========
      

 
 
 

GATEWAY TAX CREDIT FUND II LTD.
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
AS OF DECEMBER 31, 2006

SERIES 6
 
 
PARTNERSHIP
-----------
 
# OF
UNITS
-----
 
 
BALANCE
-------
 
INTEREST
RATE  
-------
MONTHLY
DEBT 
SERVICE
-------
 
TERM 
(YEARS)
------
Spruce
Shannon Apartments
Carthage
Coal City
Blacksburg Terrace
Frazier
Ehrhardt
Sinton
Frankston
Flagler Beach
Oak Ridge
Monett
Arma
Southwest City
Meadowcrest
Parsons
Newport Village
Goodwater Falls
Northfield Station
Pleasant Hill Square
Winter Park
Cornell
Heritage Drive S.
Brodhead
Mt. Village
Hazelhurst
Sunrise
Stony Creek
Logan Place
Haines
Maple Wood
Summerhill
Dorchester
Lancaster
Autumn Village
Hardy
Dawson
24
16
24
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
25
40
895,639
524,129
557,262
956,195
1,061,228
1,440,715
548,717
831,957
549,052
1,375,503
794,786
770,981
703,434
311,685
984,894
1,230,818
1,271,276
1,067,565
781,074
762,826
980,840
851,801
961,118
769,501
767,537
939,949
1,137,508
1,313,314
1,227,319
2,335,876
778,941
1,167,891
453,569
1,066,724
112,696
272,603
1,160,429
8.75%
8.75%
8.75%
7.75%
8.25%
8.25%
7.75%
8.25%
8.75%
8.25%
8.25%
8.25%
8.75%
8.25%
8.25%
7.75%
7.75%
7.75%
7.75%
7.75%
8.25%
8.25%
8.25%
7.75%
8.25%
8.25%
8.75%
8.75%
8.25%
8.25%
7.75%
8.25%
7.75%
7.75%
7.00%
6.00%
7.25%
6,857
4,014
4,371
6,578
7,738
10,470
3,791
6,063
4,207
9,864
5,800
5,598
5,388
2,271
7,160
8,485
8,798
7,980
5,379
5,315
7,131
6,193
6,990
5,303
5,574
7,105
8,711
9,065
8,909
16,950
5,381
5,911
3,118
7,775
2,608
3,639
7,524
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
18
50
   
$33,717,352
===========
      

 
 
 



SIGNATURES

   Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
 
GATEWAY TAX CREDIT FUND II, LTD.
(A Florida Limited Partnership)
By: Raymond James Tax Credit Funds, Inc.
                               
 
Date: December 22, 2008
  
By:/s/ Ronald M. Diner
   
Ronald M. Diner
   
President


Date: December 22, 2008
  
By:/s/ J. Davenport Mosby III
   
J. Davenport Mosby III
   
Director


Date: December 22, 2008
  
By:/s/ Jonathan Oorlog
   
Jonathan Oorlog
   
Vice President and Chief Financial Officer


Date: December 22, 2008
  
By:/s/ Sandra C. Humphreys
   
Sandra C. Humphreys
   
Secretary and Treasurer