q10063011.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011

[ ] 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: 0-21762

Gateway Tax Credit Fund III Ltd.

(Exact name of Registrant as specified in its charter)

Florida		59-3090386
(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

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 whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files).

YES [X]

NO [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ]	Smaller Reporting Company [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]

PART I - Financial Information

Item 1. Financial Statements

Balance of this page intentionally left blank.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

BALANCE SHEETS

(Unaudited)

	SERIES 7						SERIES 8						SERIES 9
	June 30,			March 31,			June 30,			March 31,			June 30,			March 31,
	2011			2011			2011			2011			2011			2011
ASSETS
Current Assets:
Cash and Cash Equivalents	$	883,933		$	770,297		$	250,481		$	231,397		$	198,382		$	142,196
Total Current Assets		883,933			770,297			250,481			231,397			198,382			142,196

Total Assets	$	883,933		$	770,297		$	250,481		$	231,397		$	198,382		$	142,196

LIABILITIES AND PARTNERS' DEFICIT
Current Liabilities:
Payable to General Partners	$	3,772		$	6,174		$	180,424		$	183,126		$	59,801		$	55,327
Distribution Payable		659,650			545,751			47,260			27,385			107,579			55,030

Total Current Liabilities		663,422			551,925			227,684			210,511			167,380			110,357

Long-Term Liabilities:
Payable to General Partners		1,078,499			1,065,589			1,170,358			1,150,230			701,509			690,195

Partners' (Deficit) Equity:
Limited Partners - 10,395, 9,980, and 6,254
units for Series 7, 8, and 9, respectively,
at June 30, 2011 and March 31, 2011		(866,203	)		(854,401	)		(1,147,722	)		(1,125,775	)		(670,967	)		(651,966	)
General Partners		8,215			7,184			161			(3,569	)		460			(6,390	)

Total Partners' (Deficit) Equity		(857,988	)		(847,217	)		(1,147,561	)		(1,129,344	)		(670,507	)		(658,356	)

Total Liabilities and Partners' Deficit	$	883,933		$	770,297		$	250,481		$	231,397		$	198,382		$	142,196

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

BALANCE SHEETS

(Unaudited)

	SERIES 10						SERIES 11				TOTAL SERIES 7 - 11
	June 30,			March 31,			June 30,		March 31,		June 30,			March 31,
	2011			2011			2011		2011		2011			2011
ASSETS
Current Assets:
Cash and Cash Equivalents	$	155,744		$	153,660		$	352,465	$	356,285	$	1,841,005		$	1,653,835
Total Current Assets		155,744			153,660			352,465		356,285		1,841,005			1,653,835

Investments in Project Partnerships, net		58,139			64,697			221,465		245,863		279,604			310,560

Total Assets	$	213,883		$	218,357		$	573,930	$	602,148	$	2,120,609		$	1,964,395

LIABILITIES AND PARTNERS' DEFICIT
Current Liabilities:
Payable to General Partners	$	30,289		$	27,005		$	2,862	$	4,167	$	277,148		$	275,799
Distribution Payable		12,000			12,000			125,774		125,774		952,263			765,940

Total Current Liabilities		42,289			39,005			128,636		129,941		1,229,411			1,041,739

Long-Term Liabilities:
Payable to General Partners		243,375			235,562			147,671		140,876		3,341,412			3,282,452

Partners' (Deficit) Equity:
Limited Partners - 5,043 and 5,127 units
for Series 10 and 11, respectively, at
June 30, 2011 and March 31, 2011		(38,883	)		(23,468	)		297,129		330,500		(2,426,646	)		(2,325,110	)
General Partners		(32,898	)		(32,742	)		494		831		(23,568	)		(34,686	)

Total Partners' (Deficit) Equity		(71,781	)		(56,210	)		297,623		331,331		(2,450,214	)		(2,359,796	)

Total Liabilities and Partners' Deficit	$	213,883		$	218,357		$	573,930	$	602,148	$	2,120,609		$	1,964,395

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED JUNE 30, 2011 AND 2010

(Unaudited)

	SERIES 7						SERIES 8						SERIES 9
	2011			2010			2011			2010			2011			2010
Revenues:
Distribution Income	$	8,047		$	4,532		$	7,894		$	2,175		$	3,382		$	2,808
Total Revenues		8,047			4,532			7,894			2,175			3,382			2,808

Expenses:
Asset Management Fee - General Partner		12,911			15,065			20,129			20,116			11,314			11,584
General and Administrative:
Other		5,928			3,684			5,988			4,291			4,223			2,726
Amortization		-			73			-			-			-			-

Total Expenses		18,839			18,822			26,117			24,407			15,537			14,310

Loss Before Interest Income		(10,792	)		(14,290	)		(18,223	)		(22,232	)		(12,155	)		(11,502	)
Gain on Sale of Project Partnerships		113,899			-			19,875			-			52,549			-
Interest Income		21			5			6			6			4			2

Net Income (Loss)	$	103,128		$	(14,285	)	$	1,658		$	(22,226	)	$	40,398		$	(11,500	)

Allocation of Net Income (Loss):
Limited Partners	$	102,097		$	(14,142	)	$	(2,072	)	$	(22,004	)	$	33,548		$	(11,385	)
General Partners		1,031			(143	)		3,730			(222	)		6,850			(115	)

	$	103,128		$	(14,285	)	$	1,658		$	(22,226	)	$	40,398		$	(11,500	)

Net Income (Loss) Per Limited Partnership Unit	$	9.82		$	(1.36	)	$	(0.21	)	$	(2.20	)	$	5.36		$	(1.82	)

Number of Limited Partnership Units Outstanding		10,395			10,395			9,980			9,980			6,254			6,254

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED JUNE 30, 2011 AND 2010

(Unaudited)

	SERIES 10						SERIES 11						TOTAL SERIES 7 - 11
	2011			2010			2011			2010			2011			2010
Revenues:
Distribution Income	$	2,080		$	3,739		$	800		$	800		$	22,203		$	14,054
Total Revenues		2,080			3,739			800			800			22,203			14,054

Expenses:
Asset Management Fee - General Partner		7,813			7,813			6,795			6,972			58,962			61,550
General and Administrative:
General Partner		-			-			-			9,813			-			9,813
Other		3,284			1,850			3,324			1,798			22,747			14,349
Amortization		-			-			-			-			-			73

Total Expenses		11,097			9,663			10,119			18,583			81,709			85,785

Loss Before Equity in Loss of Project
Partnerships and Interest Income		(9,017	)		(5,924	)		(9,319	)		(17,783	)		(59,506	)		(71,731	)
Equity in Loss of Project Partnerships		(6,558	)		-			(24,398	)		-			(30,956	)		-
Gain on Sale of Project Partnerships		-			-			-			-			186,323			-
Interest Income		4			4			9			5			44			22

Net (Loss) Income	$	(15,571	)	$	(5,920	)	$	(33,708	)	$	(17,778	)	$	95,905		$	(71,709	)

Allocation of Net (Loss) Income:
Limited Partners	$	(15,415	)	$	(5,861	)	$	(33,371	)	$	(17,600	)	$	84,787		$	(70,992	)
General Partners		(156	)		(59	)		(337	)		(178	)		11,118			(717	)

	$	(15,571	)	$	(5,920	)	$	(33,708	)	$	(17,778	)	$	95,905		$	(71,709	)

Net Loss Per Limited Partnership Unit	$	(3.06	)	$	(1.16	)	$	(6.51	)	$	(3.43	)

Number of Limited Partnership Units Outstanding		5,043			5,043			5,127			5,127

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

STATEMENTS OF PARTNERS’ EQUITY (DEFICIT)

FOR THE THREE MONTHS ENDED JUNE 30, 2011 AND 2010

(Unaudited)

	SERIES 7									SERIES 8
	Limited			General						Limited			General
	Partners			Partners			Total			Partners			Partners			Total

Balance at March 31, 2010	$	(782,420	)	$	2,449		$	(779,971	)	$	(1,028,499	)	$	(6,627	)	$	(1,035,126	)

Net Loss		(14,142	)		(143	)		(14,285	)		(22,004	)		(222	)		(22,226	)

Balance at June 30, 2010	$	(796,562	)	$	2,306		$	(794,256	)	$	(1,050,503	)	$	(6,849	)	$	(1,057,352	)


Balance at March 31, 2011	$	(854,401	)	$	7,184		$	(847,217	)	$	(1,125,775	)	$	(3,569	)	$	(1,129,344	)

Net Income (Loss)		102,097			1,031			103,128			(2,072	)		3,730			1,658

Distributions		(113,899	)		-			(113,899	)		(19,875	)		-			(19,875	)

Balance at June 30, 2011	$	(866,203	)	$	8,215		$	(857,988	)	$	(1,147,722	)	$	161		$	(1,147,561	)

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

STATEMENTS OF PARTNERS’ EQUITY (DEFICIT)

FOR THE THREE MONTHS ENDED JUNE 30, 2011 AND 2010

(Unaudited)

	SERIES 9									SERIES 10
	Limited			General						Limited			General
	Partners			Partners			Total			Partners			Partners			Total

Balance at March 31, 2010	$	(552,816	)	$	(50,873	)	$	(603,689	)	$	40,732		$	(34,113	)	$	6,619

Net Loss		(11,385	)		(115	)		(11,500	)		(5,861	)		(59	)		(5,920	)

Balance at June 30, 2010	$	(564,201	)	$	(50,988	)	$	(615,189	)	$	34,871		$	(34,172	)	$	699


Balance at March 31, 2011	$	(651,966	)	$	(6,390	)	$	(658,356	)	$	(23,468	)	$	(32,742	)	$	(56,210	)

Net (Loss) Income		33,548			6,850			40,398			(15,415	)		(156	)		(15,571	)

Distributions		(52,549	)		-			(52,549	)		-			-			-

Balance at June 30, 2011	$	(670,967	)	$	460		$	(670,507	)	$	(38,883	)	$	(32,898	)	$	(71,781	)

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

STATEMENTS OF PARTNERS’ EQUITY (DEFICIT)

FOR THE THREE MONTHS ENDED JUNE 30, 2011 AND 2010

(Unaudited)

	SERIES 11									TOTAL SERIES 7 - 11
	Limited			General						Limited			General
	Partners			Partners			Total			Partners			Partners			Total

Balance at March 31, 2010	$	543,134		$	(40,969	)	$	502,165		$	(1,779,869	)	$	(130,133	)	$	(1,910,002	)

Net Loss		(17,600	)		(178	)		(17,778	)		(70,992	)		(717	)		(71,709	)

Balance at June 30, 2010	$	525,534		$	(41,147	)	$	484,387		$	(1,850,861	)	$	(130,850	)	$	(1,981,711	)


Balance at March 31, 2011	$	330,500		$	831		$	331,331		$	(2,325,110	)	$	(34,686	)	$	(2,359,796	)

Net (Loss) Income		(33,371	)		(337	)		(33,708	)		84,787			11,118			95,905

Distributions		-			-			-			(186,323	)		-			(186,323	)

Balance at June 30, 2011	$	297,129		$	494		$	297,623		$	(2,426,646	)	$	(23,568	)	$	(2,450,214	)

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED JUNE 30, 2011 AND 2010

(Unaudited)

	SERIES 7						SERIES 8
	2011			2010			2011			2010
Cash Flows from Operating Activities:
Net Income (Loss)	$	103,128		$	(14,285	)	$	1,658		$	(22,226	)
Adjustments to Reconcile Net Income (Loss)
to Net Cash Used in Operating Activities:
Amortization		-			73			-			-
Gain on Sale of Project Partnerships		(113,899	)		-			(19,875	)		-
Distribution Income		(8,047	)		(4,532	)		(7,894	)		(2,175	)
Changes in Operating Assets and Liabilities:
Increase (Decrease) in Payable to General Partners		10,508			(43,809	)		17,426			(154,931	)
Net Cash Used in Operating Activities		(8,310	)		(62,553	)		(8,685	)		(179,332	)

Cash Flows from Investing Activities:
Distributions Received from Project Partnerships		8,047			6,112			7,894			2,175
Net Proceeds from Sale of Project Partnerships		113,899			-			19,875			-
Net Cash Provided by Investing Activities		121,946			6,112			27,769			2,175

Increase (Decrease) in Cash and Cash Equivalents		113,636			(56,441	)		19,084			(177,157	)
Cash and Cash Equivalents at Beginning of Year		770,297			209,702			231,397			238,988

Cash and Cash Equivalents at End of Period	$	883,933		$	153,261		$	250,481		$	61,831

Supplemental disclosure of non-cash activities:
Increase in Distribution Payable	$	113,899		$	-		$	19,875		$	-
Distribution to Assignees		(113,899	)		-			(19,875	)		-
Increase in Payable to Affiliate		-			2,420			-			-
	$	-		$	2,420		$	-		$	-

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED JUNE 30, 2011 AND 2010

(Unaudited)

	SERIES 9						SERIES 10
	2011			2010			2011			2010
Cash Flows from Operating Activities:
Net Income (Loss)	$	40,398		$	(11,500	)	$	(15,571	)	$	(5,920	)
Adjustments to Reconcile Net Income (Loss)
to Net Cash Provided by (Used in) Operating Activities:
Equity in Loss of Project Partnerships		-			-			6,558			-
Gain on Sale of Project Partnerships		(52,549	)		-			-			-
Distribution Income		(3,382	)		(2,808	)		(2,080	)		(3,739	)
Changes in Operating Assets and Liabilities:
Increase (Decrease) in Payable to General Partners		15,788			(31,455	)		11,097			(19,378	)
Net Cash Provided by (Used in) Operating Activities		255			(45,763	)		4			(29,037	)

Cash Flows from Investing Activities:
Distributions Received from Project Partnerships		3,382			5,228			2,080			3,739
Net Proceeds from Sale of Project Partnerships		52,549			-			-			-
Net Cash Provided by Investing Activities		55,931			5,228			2,080			3,739

Increase (Decrease) in Cash and Cash Equivalents		56,186			(40,535	)		2,084			(25,298	)
Cash and Cash Equivalents at Beginning of Year		142,196			96,912			153,660			153,638

Cash and Cash Equivalents at End of Period	$	198,382		$	56,377		$	155,744		$	128,340

Supplemental disclosure of non-cash activities:
Increase in Distribution Payable	$	52,549		$	-		$	-		$	-
Distribution to Assignees		(52,549	)		-			-			-
Increase in Payable to Affiliate		-			2,420			-			-
	$	-		$	2,420		$	-		$	-

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED JUNE 30, 2011 AND 2010

(Unaudited)

	SERIES 11						TOTAL SERIES 7 - 11
	2011			2010			2011			2010
Cash Flows from Operating Activities:
Net (Loss) Income	$	(33,708	)	$	(17,778	)	$	95,905		$	(71,709	)
Adjustments to Reconcile Net (Loss) Income
to Net Cash Used in Operating Activities:
Amortization		-			-			-			73
Equity in Loss of Project Partnerships		24,398			-			30,956			-
Gain on Sale of Project Partnerships		-			-			(186,323	)		-
Distribution Income		(800	)		(800	)		(22,203	)		(14,054	)
Changes in Operating Assets and Liabilities:
Increase (Decrease) in Payable to General Partners		5,490			4,330			60,309			(245,243	)
Net Cash Used in Operating Activities		(4,620	)		(14,248	)		(21,356	)		(330,933	)

Cash Flows from Investing Activities:
Distributions Received from Project Partnerships		800			800			22,203			18,054
Net Proceeds from Sale of Project Partnerships		-			-			186,323			-
Net Cash Provided by Investing Activities		800			800			208,526			18,054

(Decrease) Increase in Cash and Cash Equivalents		(3,820	)		(13,448	)		187,170			(312,879	)
Cash and Cash Equivalents at Beginning of Year		356,285			209,968			1,653,835			909,208

Cash and Cash Equivalents at End of Period	$	352,465		$	196,520		$	1,841,005		$	596,329

Supplemental disclosure of non-cash activities:
Increase in Distribution Payable	$	-		$	-		$	186,323		$	-
Distribution to Assignees		-			-			(186,323	)		-
Increase in Receivable from Affiliate		-			(4,840	)		-			(4,840	)
Increase in Payable to Affiliate		-			-			-			4,840
	$	-		$	(4,840	)	$	-		$	-

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2011

(Unaudited)

NOTE 1 - ORGANIZATION:

Gateway Tax Credit Fund III Ltd. (“Gateway”), a Florida Limited Partnership, was formed October 17, 1991 under the laws of Florida. Gateway offered its limited partnership interests in Series (“Series”). The first Series for Gateway is Series 7. Operations commenced on July 16, 1992 for Series 7, January 4, 1993 for Series 8, September 30, 1993 for Series 9, January 21, 1994 for Series 10 and April 29, 1994 for Series 11. Each Series invests, as a limited partner, in other limited partnerships (“Project Partnerships”), each of which owns and operates 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 June 30, 2011, Gateway had received capital contributions of $1,000 from the General Partners and $36,799,000 from the investor Limited Partners.

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

Gateway received capital contributions of $10,395,000, $9,980,000, $6,254,000, $5,043,000 and $5,127,000 from the investor Limited Partners in Series 7, 8, 9, 10 and 11, respectively. Each Series is treated as though it were a separate partnership, investing in a separate and distinct pool of Project Partnerships. Income or loss and all tax items from the Project Partnerships acquired by each Series are specifically allocated among the Limited Partners of such Series.

Operating profits and losses, cash distributions from operations and Tax Credits from each Series are generally allocated 99% to the Limited Partners in that Series and 1% to the General Partners. Profit or loss and cash distributions from sales of properties by each Series are allocated as specified in the Agreement.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:

Basis of Accounting

Gateway utilizes the accrual basis of accounting whereby revenues are recognized as earned and expenses are recognized as 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 loss 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 acquisition,

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 loss of the Project Partnerships,

2)	Decreased for cash distributions received from the Project Partnerships,

3)	Decreased for the amortization of the acquisition fees and expenses,

4)	Increased for loans or advances made to the Project Partnerships by Gateway,

5)	Decreased, where appropriate, for impairment.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued):

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 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. In accordance with GAAP, once the net investment in a Project Partnership is reduced to zero, receivables due from the Project Partnership are decreased by Gateway’s share of Project Partnership losses. 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 remaining low-income housing tax credits and other tax benefits is less than the carrying amount of the investment, Gateway recognizes an impairment loss. As part of its analysis, Gateway has historically considered the residual value of the Project Partnerships as one key component of its estimate of future cash flows. Gateway is continuing to execute its process of disposition of its interest in Project Partnerships that have reached the end of their Tax Credit compliance period, refer to Note 5 - Summary of Disposition Activities for the most recent update of those on-going activities. No impairment expense was recognized during each of the three month periods ended June 30, 2011 or 2010.

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 Partnerships occurred during each of the three month periods ended June 30, 2011 or 2010.

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.

Concentrations of Credit Risk

Financial instruments which potentially subject Gateway to concentrations of credit risk consist of cash investments in a money market mutual fund.

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.

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. Gateway files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. Gateway is no longer subject to U.S. federal examination by tax authorities for years prior to calendar year 2008. The income tax returns subject to state examination by tax authorities are generally consistent with the federal period.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued):

Distribution Payable

Distribution payable consists of amounts received as net sales proceeds. These amounts, net of the applicable state tax withholding, are due and payable to the Assignees and will be distributed at such time that state tax withholding liabilities have been settled.

State Tax Withholding

Certain state tax jurisdictions impose a capital gains tax on the taxable gains associated with the sale of investments in partnerships. As General Partner of Gateway, it is Gateway’s obligation to calculate and withhold the applicable state taxes that are payable by the Partners of Gateway when Project Partnerships are sold or otherwise disposed by Gateway. In most cases, the state taxes are due regardless if proceeds are received from the sale of Project Partnerships. Therefore, Gateway has estimated the withholding taxes payable and the amount is included in Distribution Payable on the Balance Sheet.

Variable Interest Entities

In June 2009, the FASB issued new consolidation guidance applicable to variable interest entities. Gateway adopted this new guidance as of April 1, 2010. The adoption of this new guidance had no impact on Gateway’s financial statements.

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 power to direct the activities of the entity that most significantly affect its economic performance, (ii) the obligation to absorb the expected losses or the right to receive the expected benefits 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. GAAP requires a VIE to be consolidated in the financial statements of the entity that is determined to be the primary beneficiary of the VIE. Determination of the primary beneficiary of each VIE requires judgment and is based on an analysis of control of the entity and economic factors. A VIE would be required to be consolidated if it has (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (2) the obligation to absorb losses or receive benefits that could possibly be significant to the VIE. In the design of Project Partnership VIEs, the overriding concept centers around the premise that the limited partner invests solely for tax attributes associated with the property held by the VIE, while the general partner of the Project Partnership is responsible for overseeing its operations. Based upon its analysis of all the relevant facts and considerations, Gateway has concluded that the general partner of the Project Partnership has the power to direct the activities of the Project Partnership that most significantly impact its economic performance, and the obligation to absorb losses or receive benefits that could be significant to the Project Partnership and therefore, Gateway is not the primary beneficiary.

Gateway holds variable interests in 105 VIEs, which consist of Project Partnerships (Refer to Note 1 - Organization for information about Gateway’s involvement in the Project Partnerships). Gateway is not the primary beneficiary of the VIEs. Since its inception, Gateway’s maximum exposure to loss as a result of its involvement with unconsolidated VIEs is limited to Gateway’s capital contributions to those VIEs, which is approximately $22,321,101 at June 30, 2011. Over the course of the investment and Tax Credit Cycle, this maximum exposure to loss was offset by actual losses experienced by the Project Partnerships recorded by Gateway in its equity accounting. Accordingly, at the current stage of the investment and Tax Credit Cycle, the carrying value of Gateway’s interest in the VIEs has been reduced to $279,604. Tabular disclosures within Note 4 - Investments in Project Partnerships detail total capital contributions to VIEs, the carrying amount of assets and liabilities related to Gateway’s VIEs and the aggregate assets, liabilities and Gateway’s exposure to loss from those VIEs. 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. Gateway does not currently intend to provide future financial support to the Project Partnerships.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued):

Basis of Preparation

The unaudited financial statements presented herein have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles. These statements should be read in conjunction with the financial statements and notes thereto included with Gateway's report on Form 10-K for the year ended March 31, 2011. In the opinion of management, these financial statements include adjustments, consisting only of normal recurring adjustments, necessary to fairly summarize Gateway's financial position and results of operations. The results of operations for the periods may not be indicative of the results to be expected for the year.

NOTE 3 - RELATED PARTY TRANSACTIONS:

The Payable to General Partners primarily represents the asset management fees and general and administrative expenses owed to the General Partners at the end of the period. It is unsecured, due on demand and, in accordance with the 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.

Value Partners, Inc., an affiliate of Gateway, acquired the general partner interest in Logan Heights, one of the Project Partnerships in Series 8, in 2003 (see further discussion in Note 4).

For the three months ended June 30, 2011 and 2010, 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 receive an annual asset management fee equal to the greater of (i) $2,000 for each limited partnership in which Gateway invests, or (ii) 0.275% of Gateway's gross proceeds from the sale of limited partnership interests. In either event (i) or (ii), the maximum amount may not exceed 0.2% of the aggregate cost (Gateway's capital contribution plus Gateway's share of the Properties' mortgage) of Gateway's interest in properties 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.

	2011		2010
Series 7	$	12,911	$	15,065
Series 8		20,129		20,116
Series 9		11,314		11,584
Series 10		7,813		7,813
Series 11		6,795		6,972
Total	$	58,962	$	61,550

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. During fiscal year 2011, the General Partner ceased further allocations of general and administrative expenses to Gateway.

	2011		2010
Series 7	$	-	$	-
Series 8		-		-
Series 9		-		-
Series 10		-		-
Series 11		-		9,813
Total	$	-	$	9,813

NOTE 4 - INVESTMENTS IN PROJECT PARTNERSHIPS:


As of June 30, 2011, Gateway had acquired a 99% interest in the profits, losses, and Tax Credits as a limited partner in Project Partnerships (Series 7 - 21, Series 8 - 39, and Series 9 - 20) which own and operate government assisted multi-family housing complexes. Cash flows from operations are allocated according to each Project Partnership agreement. Upon dissolution, proceeds will be distributed according to each Project Partnership agreement.

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

	SERIES 7						SERIES 8						SERIES 9
	June 30,			March 31,			June 30,			March 31,			June 30,			March 31,
	2011			2011			2011			2011			2011			2011
Capital Contributions to Project Partnerships
and purchase price paid for limited partner
interests in Project Partnerships	$	3,857,952		$	4,648,444		$	6,793,467		$	6,965,669		$	4,121,282		$	4,599,313

Cumulative equity in losses of Project
Partnerships (1) (2)		(3,677,126	)		(4,533,144	)		(6,704,158	)		(6,877,633	)		(3,759,606	)		(4,242,472	)

Cumulative distributions received from
Project Partnerships		(170,762	)		(177,214	)		(179,115	)		(179,115	)		(151,583	)		(164,111	)

Investment in Project Partnerships before
Adjustment		10,064			(61,914	)		(89,806	)		(91,079	)		210,093			192,730

Excess of investment cost over the underlying
assets acquired:
Acquisition fees and expenses		406,038			496,983			512,354			513,903			193,978			218,681
Accumulated amortization of acquisition
fees and expenses		(210,633	)		(229,600	)		(161,278	)		(161,554	)		(96,139	)		(103,479	)

Reserve for Impairment of Investment in
Project Partnerships		(205,469	)		(205,469	)		(261,270	)		(261,270	)		(307,932	)		(307,932	)

Investments in Project Partnerships	$	-		$	-		$	-		$	-		$	-		$	-

(1) In accordance with Gateway's accounting policy to not carry Investments in Project Partnerships below zero, cumulative suspended losses of $3,804,293 in Series 7, $8,682,070 in Series 8, and $3,095,832 in Series 9 for the period ended June 30, 2011; and cumulative suspended losses of $5,196,366 in Series 7, $8,784,792 in Series 8, and $3,506,137 in Series 9 for the year ended March 31, 2011 are not included.
(2) In accordance with Gateway's accounting policy to apply equity in losses of Project Partnerships to receivables from Project Partnerships, $24,220 in losses are included in Series 8 as of June 30, 2011 and March 31, 2011. (See discussion in Note 2 - Significant Accounting Policies).

NOTE 4 - INVESTMENTS IN PROJECT PARTNERSHIPS (Continued):


As of June 30, 2011, Gateway had acquired a 99% interest in the profits, losses, and Tax Credits as a limited partner in Project Partnerships (Series 10 - 14 and Series 11 - 11) which own and operate government assisted multi-family housing complexes. Cash flows from operations are allocated according to each Project Partnership agreement. Upon dissolution, proceeds will be distributed according to each Project Partnership agreement.

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

	SERIES 10						SERIES 11						TOTAL SERIES 7 - 11
	June 30,			March 31,			June 30,			March 31,			June 30,			March 31,
	2011			2011			2011			2011			2011			2011
Capital Contributions to Project Partnerships
and purchase price paid for limited partner
interests in Project Partnerships	$	3,716,106		$	3,716,106		$	3,832,294		$	3,832,294		$	22,321,101		$	23,761,826

Cumulative equity in losses of Project
Partnerships (1)		(2,357,389	)		(2,350,831	)		(2,038,078	)		(2,013,680	)		(18,536,357	)		(20,017,761	)

Cumulative distributions received from
Project Partnerships		(241,641	)		(241,641	)		(203,283	)		(203,283	)		(946,384	)		(965,363	)

Investment in Project Partnerships before
Adjustment		1,117,076			1,123,634			1,590,933			1,615,331			2,838,360			2,778,702

Excess of investment cost over the underlying
assets acquired:
Acquisition fees and expenses		174,878			174,878			267,568			267,568			1,554,816			1,672,013
Accumulated amortization of acquisition
fees and expenses		(147,889	)		(147,889	)		(200,224	)		(200,224	)		(816,163	)		(842,746	)

Reserve for Impairment of Investment in
Project Partnerships		(1,085,926	)		(1,085,926	)		(1,436,812	)		(1,436,812	)		(3,297,409	)		(3,297,409	)

Investments in Project Partnerships	$	58,139		$	64,697		$	221,465		$	245,863		$	279,604		$	310,560

(1) In accordance with Gateway's accounting policy to not carry Investments in Project Partnerships below zero, cumulative suspended losses of $879,618 in Series 10 and $1,627,379 in Series 11 for the period ended June 30, 2011; and cumulative suspended losses of $856,925 in Series 10 and $1,579,776 in Series 11 for the year ended March 31, 2011 are not included.

NOTE 4 - 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 balance sheets for the Project Partnerships of Series 7 and Series 8 as of March 31 and the respective summarized statements of operations for the three months ended March 31 of each year:

	SERIES 7						SERIES 8 (1)
	2011			2010			2011			2010
SUMMARIZED BALANCE SHEETS
Assets:
Current assets	$	2,572,680		$	3,538,515		$	4,322,168		$	4,331,684
Investment properties, net		11,024,940			15,931,880			19,811,954			21,033,213
Other assets		21,297			27,939			69,940			318,674
Total assets	$	13,618,917		$	19,498,334		$	24,204,062		$	25,683,571

Liabilities and Partners' Deficit:
Current liabilities	$	565,301		$	775,867		$	1,447,465		$	1,373,763
Long-term debt		17,184,255			24,463,674			32,313,356			33,354,386
Total liabilities		17,749,556			25,239,541			33,760,821			34,728,149

Partners' deficit
Limited Partner		(3,868,639	)		(5,421,690	)		(8,723,835	)		(8,356,287	)
General Partners		(262,000	)		(319,517	)		(832,924	)		(688,291	)
Total partners' deficit		(4,130,639	)		(5,741,207	)		(9,556,759	)		(9,044,578	)

Total liabilities and partners' deficit	$	13,618,917		$	19,498,334		$	24,204,062		$	25,683,571

SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income	$	705,518		$	1,023,057		$	1,317,890		$	1,329,118
Expenses:
Operating expenses		534,607			798,447			972,624			968,590
Interest expense		82,180			125,188			166,767			169,647
Depreciation and amortization		168,738			252,060			346,867			349,321

Total expenses		785,525			1,175,695			1,486,258			1,487,558

Net loss	$	(80,007	)	$	(152,638	)	$	(168,368	)	$	(158,440	)

Other partners' share of net income	$	11,459		$	12,441		$	2,256		$	50

Gateway's share of net loss	$	(91,466	)	$	(165,079	)	$	(170,624	)	$	(158,490	)
Suspended losses		91,466			165,079			170,624			158,490

Equity in Loss of Project Partnerships	$	-		$	-		$	-		$	-

NOTE 4 - INVESTMENTS IN PROJECT PARTNERSHIPS (Continued):


(1) As discussed in Note 4, an affiliate of the General Partner (Value Partners, Inc.) is the operating general partner in one of the Project Partnerships included in Series 8 above (Logan Heights). The Logan Heights Project Partnership is not consolidated in Gateway's financial statements as Gateway's investment in Logan Heights is accounted for under the equity method. The information below is included for related party disclosure purposes. The Project Partnership's financial information for the periods ending March 2011 and March 2010 is as follows:

	March 2011			March 2010
Total Assets	$	450,294		$	428,350
Total Liabilities		801,794			796,030
Gateway Deficit		(234,155	)		(335,354	)
Other Partner's Deficit		(117,344	)		(32,326	)
Total Revenue		34,094			31,027
Net Income	$	3,473		$	517

NOTE 4 - 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 balance sheets for the Project Partnerships of Series 9 and Series 10 as of March 31 and the respective summarized statements of operations for the three months ended March 31 of each year:

	SERIES 9						SERIES 10
	2011			2010			2011			2010
SUMMARIZED BALANCE SHEETS
Assets:
Current assets	$	1,980,187		$	2,178,303		$	2,102,567		$	2,014,727
Investment properties, net		10,925,240			13,097,601			9,898,785			10,277,874
Other assets		46,744			32,754			62,800			47,814
Total assets	$	12,952,171		$	15,308,658		$	12,064,152		$	12,340,415

Liabilities and Partners' Deficit:
Current liabilities	$	466,819		$	487,037		$	489,722		$	465,954
Long-term debt		15,858,420			18,523,562			11,854,606			11,952,788
Total liabilities		16,325,239			19,010,599			12,344,328			12,418,742

Partners' (deficit) equity
Limited Partner		(2,970,739	)		(3,261,773	)		246,568			414,769
General Partners		(402,329	)		(440,168	)		(526,744	)		(493,096	)
Total partners' deficit		(3,373,068	)		(3,701,941	)		(280,176	)		(78,327	)

Total liabilities and partners' deficit	$	12,952,171		$	15,308,658		$	12,064,152		$	12,340,415

SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income	$	643,991		$	703,785		$	478,706		$	471,902
Expenses:
Operating expenses		459,621			546,435			342,401			324,939
Interest expense		76,205			93,807			47,289			48,528
Depreciation and amortization		162,807			186,805			109,906			109,912

Total expenses		698,633			827,047			499,596			483,379

Net loss	$	(54,642	)	$	(123,262	)	$	(20,890	)	$	(11,477	)

Other partners' share of net (loss) income	$	(546	)	$	(1,233	)	$	8,361		$	15,370

Gateway's share of net loss	$	(54,096	)	$	(122,029	)	$	(29,251	)	$	(26,847	)
Suspended losses		54,096			122,029			22,693			26,847

Equity in Loss of Project Partnerships	$	-		$	-		$	(6,558	)	$	-

NOTE 4 - 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 balance sheets for the Project Partnerships of Series 11 and Total Series 7 - 11 as of March 31 and the respective summarized statements of operations for the three months ended March 31 of each year:

	SERIES 11						TOTAL SERIES 7 - 11
	2011			2010			2011			2010
SUMMARIZED BALANCE SHEETS
Assets:
Current assets	$	1,114,618		$	1,186,260		$	12,092,220		$	13,249,489
Investment properties, net		8,187,103			8,899,952			59,848,022			69,240,520
Other assets		222,849			268,513			423,630			695,694
Total assets	$	9,524,570		$	10,354,725		$	72,363,872		$	83,185,703

Liabilities and Partners' Deficit:
Current liabilities	$	422,442		$	400,879		$	3,391,749		$	3,503,500
Long-term debt		9,604,676			9,799,866			86,815,313			98,094,276
Total liabilities		10,027,118			10,200,745			90,207,062			101,597,776

Partners' (deficit) equity
Limited Partner		(28,653	)		574,026			(15,345,298	)		(16,050,955	)
General Partners		(473,895	)		(420,046	)		(2,497,892	)		(2,361,118	)
Total partners' (deficit) equity		(502,548	)		153,980			(17,843,190	)		(18,412,073	)

Total liabilities and partners' deficit	$	9,524,570		$	10,354,725		$	72,363,872		$	83,185,703

SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income	$	461,767		$	468,575		$	3,607,872		$	3,996,437
Expenses:
Operating expenses		356,431			361,050			2,665,684			2,999,461
Interest expense		49,476			52,124			421,917			489,294
Depreciation and amortization		131,021			130,989			919,339			1,029,087

Total expenses		536,928			544,163			4,006,940			4,517,842

Net loss	$	(75,161	)	$	(75,588	)	$	(399,068	)	$	(521,405	)

Other partners' share of net (loss) income	$	(3,161	)	$	(1,698	)	$	18,369		$	24,930

Gateway's share of net loss	$	(72,000	)	$	(73,890	)	$	(417,437	)	$	(546,335	)
Suspended losses		47,602			73,890			386,481			546,335

Equity in Loss of Project Partnerships	$	(24,398	)	$	-		$	(30,956	)	$	-

NOTE 4 - INVESTMENTS IN PROJECT PARTNERSHIPS (Continued):

The aggregate assets, liabilities and exposure to loss from the VIEs in which Gateway holds a variable interest, but has concluded that it is not the primary beneficiary, are provided in the table below (refer to Note 2 for discussion of variable interest entities).

	March 31, 2011						March 31, 2010
	Aggregate Assets		Aggregate Liabilities		Our Risk Of Loss		Aggregate Assets		Aggregate Liabilities		Our Risk Of Loss
Series 7	$	13,618,917	$	17,749,556	$	-	$	19,498,334	$	25,239,541	$	-
Series 8		24,204,062		33,760,821		-		25,683,571		34,728,149		-
Series 9		12,952,171		16,325,239		-		15,308,658		19,010,599		-
Series 10		12,064,152		12,344,328		58,139		12,340,415		12,418,742		64,697
Series 11		9,524,570		10,027,118		221,465		10,354,725		10,200,745		245,863
Total	$	72,363,872	$	90,207,062	$	279,604	$	83,185,703	$	101,597,776	$	310,560

NOTE 5 - SUMMARY OF DISPOSITION ACTIVITIES:

Gateway at one time held investments in 133 Project Partnerships (39 in Series 7, 43 in Series 8, 24 in Series 9, 15 in Series 10, and 12 in Series 11). As of June 30, 2011, Gateway has sold its interest in 28 Project Partnerships (18 in Series 7, 4 in Series 8, 4 in Series 9, 1 in Series 10 and 1 in Series 11). A summary of the sale transactions for the Project Partnerships disposed during the current fiscal year-to-date and the previous fiscal year are summarized below.

Fiscal Year 2012 Disposition Activity:

Series 7

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
April 2011	Blue Ridge Elderly Housing	$	32,675	$	3.14	$	32,675
April 2011	Lakeland II		23,875		2.30		23,875
April 2011	Meadow Run Apartments		38,275		3.68		38,275
April 2011	Mount Vernon Rental Housing		19,074		1.83		19,074
						$	113,899

The net proceeds per LP unit from the sale of Blue Ridge Elderly Housing, Lake Lakeland II, Meadow Run Apartments and Mount Vernon Rental Housing are a component of the Distribution Payable on the Balance Sheet as of June 30, 2011. These net proceeds, less the applicable state tax withholding, will be distributed to the Series 7 Limited Partners in a subsequent period at such time that state withholding tax liabilities have been settled.

Series 8

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
April 2011	Cottondale Rental Housing	$	19,875	$	1.99	$	19,875
						$	19,875

The net proceeds per LP unit from the sale of Cottondale Rental Housing is a component of the Distribution Payable on the Balance Sheet as of June 30, 2011. These net proceeds, less the applicable state tax withholding, will be distributed to the Series 8 Limited Partners in a subsequent period at such time that state withholding tax liabilities have been settled.

NOTE 5 - SUMMARY OF DISPOSITION ACTIVITIES (Continued):

Series 9

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
April 2011	Arbor Trace Apartments Phase I	$	19,075	$	3.05	$	19,075
April 2011	Arbor Trace Apartments Phase II		33,474		5.35		33,474
						$	52,549

The net proceeds per LP unit from the sale of Arbor Trace Apartment Phase and Arbor Trace Apartments Phase II are a component of the Distribution Payable on the Balance Sheet as of June 30, 2011. These net proceeds, less the applicable state tax withholding, will be distributed to the Series 9 Limited Partners in a subsequent period at such time that state withholding tax liabilities have been settled.

Fiscal Year 2011 Disposition Activity:

Series 7

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
August 2010	Pioneer Apartments, L.P.	$	157,949	$	15.19	$	157,949
December 2010	Lake Village Apartments		65,124		6.27		65,124
December 2010	Savannah Park of Atoka		65,125		6.27		65,125
December 2010	Savannah Park of Coalgate		65,125		6.27		65,125
December 2010	Cardinal Apartments		272,071		26.17		187,362
						$	540,685

The net proceeds per LP unit from the sale of Pioneer Apartments, Lake Village Apartments, Savannah Park of Atoka, Savannah Park of Coalgate and Cardinal Apartments are a component of the Distribution Payable on the Balance Sheet as of March 31, 2011. These net proceeds, less the applicable state tax withholding, will be distributed to the Series 7 Limited Partners in a subsequent period at such time that state withholding tax liabilities have been settled.

Series 8

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
	Other, net (see below)	$	-	$	-	$	4,000
						$	4,000

Gateway recognized an additional gain on sale of Project Partnerships in the amount of $4,000 resulting from the true-up of certain legal and other sale transaction closing expenses arising from Project Partnership sale transactions which closed in the prior fiscal year. This amount, less the applicable state tax withholding, will be distributed to the Series 8 Limited Partners in a subsequent period at such time that state withholding tax liabilities have been settled.

Series 9

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
September 2010	Stilwell Properties III	$	43,030	$	6.88	$	43,030
	Other, net (see below)		-		-		2,000
						$	45,030

The net proceeds per LP unit from the sale of Stilwell Properties III is a component of the Distribution Payable on the Balance Sheet as of March 31, 2011. These net proceeds, less the applicable state tax withholding, will be distributed to the Series 9 Limited Partners in a subsequent period at such time that state withholding tax liabilities have been settled.

NOTE 5 - SUMMARY OF DISPOSITION ACTIVITIES (Continued):

Gateway recognized an additional gain on sale of Project Partnerships in the amount of $2,000 resulting from the true-up of certain legal and other sale transaction closing expenses arising from a Project Partnership sale transaction which closed in the prior fiscal year. This amount, less the applicable state tax withholding, will be distributed to the Series 9 Limited Partners in a subsequent period at such time that state withholding tax liabilities have been settled.

Series 10

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
	Other, net (see below)	$	-	$	-	$	2,000
						$	2,000

Gateway recognized an additional gain on sale of Project Partnerships in the amount of $2,000 resulting from the true-up of certain legal and other sale transaction closing expenses arising from a Project Partnership sale transaction which closed in the prior fiscal year. This amount, less the applicable state tax withholding, will be distributed to the Series 10 Limited Partners in a subsequent period at such time that state withholding tax liabilities have been settled.

Series 11

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
December 2010	Cardinal Apartments	$	175,667	$	34.26	$	125,774
						$	125,774

The net proceeds per LP unit from the sale of Cardinal Apartments is a component of the Distribution Payable on the Balance Sheet as of March 31, 2011. These net proceeds, less the applicable state tax withholding, will be distributed to the Series 11 Limited Partners in a subsequent period at such time that state withholding tax liabilities have been settled.

NOTE 6 - SIGNIFICANT EQUITY INVESTEES:

Certain Project Partnerships constitute 20% or more of assets, equity or income (loss) from continuing operations of the respective Series in which they are held (“Significant Project Partnerships”). In accordance with Gateway’s policy of presenting the financial information of the Project Partnerships on a three month lag, below is the summarized results of operations as of March 31, 2011 for each Significant Project Partnership:

Series 10
	Heatherwood Apartments, Ltd.			Stigler Properties
Rental and other income	$	34,948		$	22,002
Gross profit		5,796			5,269
Net loss	$	(4,728	)	$	(1,896	)

Series 11
	Creekstone Apartments, L.P.			Magnolia Place Apartments, L.P.
Rental and other income	$	50,400		$	37,851
Gross profit		2,040			942
Net loss	$	(15,032	)	$	(9,612	)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the results of operations and financial condition of Gateway. The MD&A is provided as a supplement to, and should be read in conjunction with the financial statements and accompanying footnotes to the financial statements contained elsewhere in this report.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued):

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 have been implemented by Gateway and other provisions will be implemented by Gateway in subsequent years.

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.

Results of Operations

As more fully detailed in the Exit Strategy discussion included within this MD&A, all of the Project Partnerships have delivered their Tax Credits to Gateway and the Tax Credit compliance period has expired for all 133 of the Project Partnerships initially held. Gateway is in the process of selling or disposing of its interests in Project Partnerships that have reached the end of their Tax Credit compliance period. Net proceeds received from the sales are in turn distributed to the Limited Partners. Once all Project Partnership interests have been sold or otherwise disposed of, Gateway will be liquidated. The target date for liquidation of Gateway is on or before December 31, 2012, although there is no certainty, and it may not even be considered likely at this time, that all the activities necessary to occur as of such date will have transpired.

Distribution income arises from any cash distributions received from Project Partnerships which have a zero investment balance for financial reporting purposes. Distribution income increased $8,149 from $14,054 for the three months ended June 30, 2010 to $22,203 for the three months ended June 30, 2011. The increase in distribution income for the period ended June 30, 2011 results primarily from an increase of gross distributions received from Project Partnerships. The gross distributions received from Project Partnerships increased from $18,054 for the three month period ended June 30, 2010 to $22,203 for the same period ended in 2011.

Total expenses of Gateway were $81,709 for the three months ended June 30, 2011, a decrease of $4,076 as compared to the three months ended June 30, 2010 total expenses of $85,785. The decrease results primarily from decreases in asset management fees and general and administrative expenses - General Partner due to sales of Project Partnerships (Gateway ceases accruing Asset Management Fees and General and Administrative expenses - General Partner for sold Project Partnerships) along with the cessation of accruals for general and administrative expenses - General Partner in Series 8 beginning in fiscal year 2010, and Series 7, Series 9, Series 10, and Series 11 beginning in fiscal year 2011.

Equity in Loss of Project Partnerships increased from $0 for the three months ended June 30, 2010 to $30,956 for the three months ended June 30, 2011 because of an increase in the losses from Project Partnerships with a positive investment balance. Because Gateway utilizes the equity method of accounting to account for its investment in Project Partnerships, income or losses from Project Partnerships with a zero investment balance are not recognized in the Statement of Operations. For the three months ended March 31, 2011 (Project Partnership financial information is on a three-month lag), Gateway’s share of the net loss was $417,437, of which $386,481 was suspended. For the three months ended March 31, 2010, Gateway’s share of the net loss was $546,335, of which $546,335 was suspended.

Gain on Sale of Project Partnerships increased from $0 for the three months ended June 30, 2010 to $186,323 for the three months ended June 30, 2011. As more fully discussed within this MD&A, seven Project Partnership investments were sold during the first quarter of fiscal year 2012 as compared to the first quarter of fiscal year 2011 when no Project Partnership investments were sold. The amount of the gain or loss from the sale of a Project Partnership and the period 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 within this MD&A.

Interest income increased $22 from $22 for the three months ended June 30, 2010 to $44 for the three months ended June 30, 2011. The change in interest income results primarily from the fluctuation of interest rates on short-term investments over this period along with the maturation of investments in securities over the same period. Cash and Cash Equivalents increased $1,244,676 from $596,329 as of June 30, 2010 to $1,841,005 as of June 30, 2011. Interest income is generally one source of funds available to pay administrative costs of Gateway.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued):

Liquidity and Capital Resources

The capital resources of each Series are used to pay General and Administrative operating costs including personnel, supplies, data processing, travel, legal, and accounting and audit fees 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.

The sources of funds to pay the expenses of Gateway are cash and cash equivalents and cash distributed to the Series from the operations of the Project Partnerships. Due to the rent limitations applicable to the Project Partnerships as a result of their qualifying for Tax Credits, Gateway does not expect there to be a significant increases in future rental income of the Project Partnerships. Therefore, cash distributions from the operations of the Project Partnerships are not expected to increase. However, operational factors of the Project Partnerships and the timing of distributions contribute to fluctuations of distributions from period to period and year to year. 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.

In total, Gateway reported net income of $95,905 from operations for the three months ended June 30, 2011. Cash and Cash Equivalents increased by $187,170 during the three months ended June 30, 2011. Of the Cash and Cash Equivalents on hand as of June 30, 2011 and March 31, 2011, $952,263 and $765,940, respectively, are payable to certain Series’ Limited Partners arising from the sale of Project Partnerships. Distributions will occur to those certain Limited Partners in a subsequent period, less the applicable state tax withholding.

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

Series 7 - Gateway closed this series on October 16, 1992 after receiving $10,395,000 from 635 Limited Partner investors. Equity in Loss of Project Partnerships has been $0 for each of the three month periods ended June 30, 2011 and 2010. For the three months ended March 31, 2011 and 2010, the Project Partnerships generated a loss of $80,007 and $152,638 on Rental and other income of $705,518 and $1,023,057, respectively. Gateway’s share of the Project Partnerships’ net loss for the three months ended March 31, 2011 and 2010 was $91,466 and $165,079, of which $91,466 and $165,079 were suspended, respectively. 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 $168,738 and $252,060 for the three months ended March 31, 2011 and 2010, respectively. Overall, management believes the Project Partnerships are operating as expected and have generated Tax Credits which met projections.

At June 30, 2011, the Series had $883,933 of Cash and Cash Equivalents. 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 net income of $103,128 for the three months ended June 30, 2011. However, after considering the changes in operating assets and liabilities, net cash used in operating activities was $8,310. Cash provided by investing activities totaled $121,946 consisting of $8,047 in cash distributions from the Project Partnerships and $113,899 in net proceeds from the Sale of Project Partnerships (refer to the Exit Strategy section within this MD&A for more detailed discussion of these sales of Project Partnerships).

Series 8 - Gateway closed this Series on June 28, 1993 after receiving $9,980,000 from 664 Limited Partner investors. Equity in Loss of Project Partnerships has been $0 for each of the three month periods ended June 30, 2011 and 2010. For the three months ended March 31, 2011 and 2010, the Project Partnerships generated a loss of $168,368 and $158,440 on Rental and other income of $1,317,890 and $1,329,118, respectively. Gateway’s share of the Project Partnerships’ net loss for the three months ended March 31, 2011 and 2010 was $170,624 and $158,490, of which $170,624 and $158,490 were suspended, respectively. 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 $346,867 and $349,321 for the three months ended March 31, 2011 and 2010, respectively. Overall, management believes the Project Partnerships are operating as expected and have generated Tax Credits which met projections.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued):

At June 30, 2011, the Series had $250,481 of Cash and Cash Equivalents. 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 net income of $1,658 for the three months ended June 30, 2011. However, after considering the changes in operating assets and liabilities, net cash used in operating activities was $8,685. Cash provided by investing activities totaled $27,769 consisting of $7,894 in cash distributions from the Project Partnerships and $19,875 in net proceeds from the Sale of Project Partnerships (refer to the Exit Strategy section within this MD&A for more detailed discussion of these sales of Project Partnerships).

Series 9 - Gateway closed this Series on September 30, 1993 after receiving $6,254,000 from 406 Limited Partner investors. Equity in Loss of Project Partnerships has been $0 for each of the three month periods ended June 30, 2011 and 2010. For the three months ended March 31, 2011 and 2010, the Project Partnerships generated a loss of $54,642 and $123,262 on Rental and other income of $643,991and $703,785, respectively. Gateway’s share of the Project Partnerships’ net loss for three months ended March 31, 2011 and 2010 was $54,096 and $122,029, of which $54,096 and $122,029 were suspended, respectively. 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 $162,807 and $186,805 for the three months ended March 31, 2011 and 2010, respectively. Overall, management believes the Project Partnerships are operating as expected and have generated Tax Credits which met projections.

At June 30, 2011, the Series had $198,382 of Cash and Cash Equivalents. 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 net income of $40,398 for the three months ended June 30, 2011. However, after considering the changes in operating assets and liabilities, net cash provided by operating activities was $255. Cash provided by investing activities totaled $55,931 consisting of $3,382 in cash distributions from the Project Partnerships and $52,549 in net proceeds from the Sale of Project Partnerships (refer to the Exit Strategy section within this MD&A for more detailed discussion of these sales of Project Partnerships).

Series 10 - Gateway closed this Series on January 21, 1994 after receiving $5,043,000 from 325 Limited Partner investors. Equity in Loss of Project Partnerships increased from $0 for the three months ended June 30, 2010 to $6,558 for the three months ended June 30, 2011. For the three months ended March 31, 2011 and 2010, the Project Partnerships generated a loss of $20,890 and $11,477 on Rental and other income of $478,706 and $471,902, respectively. Gateway’s share of the Project Partnerships’ net loss for the three months ended March 31, 2011 and 2010 was $29,251 and $26,847, of which $22,693 and $26,847 were suspended, respectively. 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 $109,906 and $109,912 for the three months ended March 31, 2011 and 2010, respectively. Overall, management believes the Project Partnerships are operating as expected and have generated Tax Credits which met projections.

At June 30, 2011, the Series had $155,744 of Cash and Cash Equivalents. 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 $15,571 for the three months ended June 30, 2011. However, after considering the changes in operating assets and liabilities, net cash provided by operating activities was $4. Cash provided by investing activities totaled $2,080 consisting of cash distributions from the Project Partnerships.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued):

Series 11 - Gateway closed this Series on April 29, 1994 after receiving $5,127,000 from 330 Limited Partner investors. Equity in Loss of Project Partnerships increased from $0 for the three months ended June 30, 2010 to $24,398 for the three months ended June 30, 2011. For the three months ended March 31, 2011 and 2010, the Project Partnerships generated a loss of $75,161 and $75,588 on Rental and other income of $461,767 and $468,575, respectively. Gateway’s share of the Project Partnerships’ net loss for the three months ended March 31, 2011 and 2010 was $72,000 and $73,890, of which $47,602 and $73,890 were suspended, respectively. 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 $131,021 and $130,989 for the three months ended March 31, 2011 and 2010, respectively. Overall, management believes the Project Partnerships are operating as expected and have generated Tax Credits which met projections.

At June 30, 2011, the Series had $352,465 of Cash and Cash Equivalents. 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 $33,708 for the three months ended June 30, 2011. However, after considering the changes in operating assets and liabilities, net cash used in operating activities was $4,620. Cash provided by investing activities consists of cash distributions from the Project Partnerships totaling $800.

Critical Accounting Estimates

Exit Strategy upon Expiration of the Project Partnership Tax Credit Compliance Period

The IRS compliance period for low-income housing Tax Credit properties is generally 15 years from occupancy following construction or rehabilitation completion. When Project Partnerships reach the end of their Tax Credit compliance period, Gateway initiates the process of disposing of its investment in the Project Partnership; the objective of the process is to sell Gateway’s interest in the properties for fair market value and ultimately, when Gateway’s last Project Partnership investment is sold, liquidate Gateway. 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 June 30, 2011, Gateway holds a limited partner interest in 105 Project Partnerships which own and operate government assisted multi-family housing complexes. Gateway at one time held investments in 133 Project Partnerships. As of December 31, 2010, all of the Project Partnerships had reached the end of their Tax Credit compliance period. As of June 30, 2011, 28 of the Project Partnerships have been sold (18 in Series 7, 4 in Series 8, 4 in Series 9, 1 in Series 10 and 1 in Series 11) 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 Limited Partners of the respective Series. A summary of the sale transactions for the Project Partnerships disposed during the current fiscal year-to-date and the previous fiscal year are summarized below.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued):

Fiscal Year 2012 Disposition Activity:

Series 7

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
April 2011	Blue Ridge Elderly Housing	$	32,675	$	3.14	$	32,675
April 2011	Lakeland II		23,875		2.30		23,875
April 2011	Meadow Run Apartments		38,275		3.68		38,275
April 2011	Mount Vernon Rental Housing		19,074		1.83		19,074
						$	113,899

Series 8

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
April 2011	Cottondale Rental Housing	$	19,875	$	1.99	$	19,875
						$	19,875

Series 9

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
April 2011	Arbor Trace Apartments Phase I	$	19,075	$	3.05	$	19,075
April 2011	Arbor Trace Apartments Phase II		33,474		5.35		33,474
						$	52,549

Fiscal Year 2011 Disposition Activity:

Series 7

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
August 2010	Pioneer Apartments, L.P.	$	157,949	$	15.19	$	157,949
December 2010	Lake Village Apartments		65,124		6.27		65,124
December 2010	Savannah Park of Atoka		65,125		6.27		65,125
December 2010	Savannah Park of Coalgate		65,125		6.27		65,125
December 2010	Cardinal Apartments		272,071		26.17		187,362
						$	540,685

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued):

Series 8

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
	Other, net (see below)	$	-	$	-	$	4,000
						$	4,000

Series 9

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
September 2010	Stilwell Properties III	$	43,030	$	6.88	$	43,030
	Other, net (see below)		-		-		2,000
						$	45,030

Series 10

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
	Other, net (see below)	$	-	$	-	$	2,000
						$	2,000

Gateway recognized an additional gain on sale of Project Partnerships in the amount of $2,000 resulting from the true-up of certain legal and other sale transaction closing expenses arising from a Project Partnership sale transaction which closed in the prior fiscal year. This amount, less the applicable state tax withholding, will be distributed to the Series 10 Limited Partners in a subsequent period at such time that state withholding tax liabilities have been settled.

Series 11

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
December 2010	Cardinal Apartments	$	175,667	$	34.26	$	125,774
						$	125,774

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued):

Status Update on Unsold Project Partnerships:

The following summarizes the most recent status of the sale/disposal process for the Project Partnership investments held as of June 30, 2011:

Gateway has approved the sale to the general partner of the Project Partnership or a third party:

Series 8

Antlers Properties	Logan Heights, Ltd.
AAA Properties of Bentonville	Meadowview Properties Limited Partnership
Concordia Senior Housing, L.P.	Mountainburg Properties
Kirksville Senior Apartments, Limited Partnership	Wetumka Properties

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 $572,000, or $57.31 per limited partnership unit. Sales proceeds would be available for distribution, less the applicable state tax withholding, to the Series 8 Limited Partners in a period subsequent to the closing of these sales transactions which would most likely occur within the next two years.

Series 9

Abernathy Properties	Jay Properties II
Boxwood Place Properties	Lamar Properties, L.P.

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 $260,000, or $41.57 per limited partnership unit. Sales proceeds would be available for distribution, less the applicable state tax withholding, to the Series 9 Limited Partners in a period subsequent to the closing of these sales transactions which would most likely occur within the next two years.

Series 10

Stigler Properties

This approval is subject to a number of contingencies, the outcome of which cannot be predicted with certainty. However, utilizing the sale amount as approved by Gateway, should the transaction close without modification, the estimated net proceeds to Gateway from the sale of this Project Partnership is estimated to be $54,000, or $10.71 per limited partnership unit. Sales proceeds would be available for distribution, less the applicable state tax withholding, to the Series 10 Limited Partners in a period subsequent to the closing of this sales transaction which would most likely occur within the next two years.

Item 3. Quantitative and Qualitative Disclosure About Market Risk.

As a smaller reporting company, no information is required.

Item 4. Controls and Procedures.

Not applicable to this report.

Item 4T. Controls and Procedures.

Disclosure controls are procedures designed to ensure that information required to be disclosed in Gateway's reports filed under the Exchange Act, such as this report, is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms. Disclosure controls are also designed to ensure that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives, as Gateway's are designed to do, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Under the supervision and with the participation of the Managing General Partner’s management, including the Chief Executive Officer and Chief Financial Officer, Gateway has evaluated the effectiveness of its disclosure controls and procedures applicable to each of the Series as well as to the total partnership pursuant to Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures applicable to each of the Series as well as to the total partnership are effective. There were no changes in Gateway’s internal control over financial reporting during the three months ended June 30, 2011 that have materially affected, or are reasonably likely to materially affect, Gateway’s internal control over financial reporting.

With respect to the Rule 13a-14(a)/15d-14(a) Certifications of the President and Chief Financial Officer, respectively, of the Managing General Partner of Gateway (see Exhibits 31.1 and 31.2 included herein), such certifications are applicable to each of the Series as well as to the total partnership.

PART II - Other Information

Item 1. Legal Proceedings.

Not applicable to this report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Not applicable to this report.

Item 3. Defaults upon Senior Securities.

Not applicable to this report.

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

Not applicable to this report.

Item 5. Other Information.

Not applicable to this report.

Item 6. Exhibits.

31.1 Principal Executive Officer Certification as required by Rule 13a-14(a)/15d-14(a), filed herewith.

31.2 Principal Financial Officer Certification as required by Rule 13a-14(a)/15d-14(a), filed herewith.

32. Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350,

as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.

SIGNATURES

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

GATEWAY TAX CREDIT FUND III, LTD.

(A Florida Limited Partnership)

By: Raymond James Tax Credit Funds, Inc.

(the Managing General Partner)

Date: August 15, 2011		By:/s/ Ronald M. Diner
		Ronald M. Diner
		President

Date: August 15, 2011		By:/s/ Toni S. Matthews
		Toni S. Matthews
		Vice President and Chief Financial Officer