Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes

Income Tax Disclosure [Text Block]

Note 6 - Income Taxes

The Partnership is not taxed on its income. The partners are taxed in their individual capacities based upon their distributive share of the Partnership's taxable income or loss and are allowed the benefits to be derived from off-setting their distributive share of the tax losses against taxable income from other sources subject to passive loss limitations. The taxable income or loss differs from amounts included in the statements of operations because different methods are used in determining the losses of the Local Partnerships as discussed below. The taxable income or loss is allocated to the partner groups in accordance with Section 704(b) of the Internal Revenue Code and therefore is not necessarily proportionate to the interest percentage owned.

A reconciliation follows:

	Years Ended December 31,
	2011	2010
	(in thousands)
Net income per financial statements	$   536	$   973
Sale of partnership interest	5,513	845
Other	(90)	(199)
Bad debt	--	(19)
Investment in Local Partnerships	(496)	(646)
Income (loss) per tax return	$ 5,463	$   954
Income (loss) per limited partnership interest	$343.46	$ 13.07

The following is a reconciliation between the Partnership’s reported amounts and the Federal tax basis of net assets at December 31, 2011 and 2010 (in thousands):

	2011	2010
Net assets as reported	$  5,591	$  5,055
Add (deduct):
Deferred offering costs	9,367	9,367
Investment in Local Partnerships	(9,319)	(14,336)
Other	3,708	3,797
Net assets – Federal tax basis	$  9,347	$  3,883

The Partnership is subject to a New Jersey tax based upon the number of resident and non-resident limited partners and apportionment of income related to the Partnership’s investment in certain Local Partnerships.  For the years ended December 31, 2011 and 2010 the expense related to this tax is reflected in tax expense in the accompanying statements of operations.  At December 31, 2011 and 2010, the Partnership’s estimate of the balance of the tax due for both 2011 and 2010 to the state of New Jersey is approximately $44,000 and $38,000, respectively, and these amounts are included in accounts payable and accrued expenses on the accompanying balance sheets as of December 31, 2011 and 2010. The actual balance of the tax due for 2010 was approximately $50,000 and was paid during the year ended December 31, 2011. The Partnership’s estimate of the tax due for 2011 is approximately $88,000, of which approximately $44,000 was paid during the year ended December 31, 2011.