<?xml version="1.0" encoding="us-ascii"?><InstanceReport xmlns:xsd="http://www.w3.org/2001/XMLSchema" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance"><Version>2.4.0.8</Version><ReportLongName>000080 - Disclosure - 1. Basis of Presentation</ReportLongName><DisplayLabelColumn>true</DisplayLabelColumn><ShowElementNames>false</ShowElementNames><RoundingOption /><HasEmbeddedReports>false</HasEmbeddedReports><Columns><Column FlagID="0"><Id>1</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><LabelSeparator>

</LabelSeparator><CurrencyCode /><FootnoteIndexer /><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios><MCU><KeyName /><CurrencySymbol /><contextRef><ContextID>D130331_130629</ContextID><EntitySchema>http://www.sec.gov/CIK</EntitySchema><EntityValue>0000897315</EntityValue><PeriodDisplayName /><PeriodType>duration</PeriodType><PeriodStartDate>2013-03-31T00:00:00</PeriodStartDate><PeriodEndDate>2013-06-29T00:00:00</PeriodEndDate><Segments /><Scenarios /></contextRef><UPS /><CurrencyCode /><OriginalCurrencyCode /></MCU><CurrencySymbol /><Labels><Label Key="CalendarSupplement" Id="0" Label="3 Months Ended" /><Label Key="Calendar" Id="1" Label="Jun. 29, 2013" /></Labels></Column></Columns><Rows><Row FlagID="0"><Id>1</Id><IsAbstractGroupTitle>true</IsAbstractGroupTitle><LabelSeparator>

</LabelSeparator><Level>1</Level><ElementName>us-gaap_DisclosureTextBlockAbstract</ElementName><ElementPrefix>us-gaap_</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsCalendarTitle>false</IsCalendarTitle><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><FootnoteIndexer /><Cells><Cell FlagID="0" ContextID="" UnitID=""><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText /><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>xbrli:stringItemType</ElementDataType><SimpleDataType>string</SimpleDataType><IsTotalLabel>false</IsTotalLabel><UnitID>0</UnitID><Label>Notes</Label></Row><Row FlagID="0"><Id>2</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><LabelSeparator>

</LabelSeparator><Level>2</Level><ElementName>us-gaap_BusinessDescriptionAndBasisOfPresentationTextBlock</ElementName><ElementPrefix>us-gaap_</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsCalendarTitle>false</IsCalendarTitle><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><FootnoteIndexer /><Cells><Cell FlagID="0" ContextID="D130331_130629" UnitID=""><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>&lt;!--egx--&gt;&lt;p style='margin:0in;margin-bottom:.0001pt;margin-top:0in;margin-right:.05in;margin-bottom:0in;margin-left:.5in;margin-bottom:.0001pt;text-align:justify;text-indent:-.25in'&gt;&lt;b&gt;1.&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;/b&gt;&lt;b&gt;Basis of Presentation&lt;/b&gt;&lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;margin-top:0in;margin-right:.05in;margin-bottom:0in;margin-left:.25in;margin-bottom:.0001pt;text-align:justify'&gt;&amp;nbsp;&lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;margin-top:0in;margin-right:.05in;margin-bottom:0in;margin-left:.25in;margin-bottom:.0001pt;text-align:justify'&gt;The accompanying unaudited financial statements of American Tax Credit Trust, a Delaware statutory business trust Series I (the &amp;#147;Trust&amp;#148;) have been prepared in accordance with accounting principles generally accepted in the United States of America (&amp;#147;GAAP&amp;#148;) for interim financial information. They do not include all information and footnotes required by GAAP for complete financial statements. The results of operations are impacted, in part, by the combined results of operations of the Trust&amp;#146;s investee partnerships (the &amp;#147;Local Partnerships&amp;#148;), which are provided by the general partners of the Local Partnerships (the &amp;#147;Local General Partners&amp;#148;) on an unaudited basis during interim periods. Accordingly, the accompanying unaudited financial statements are dependent on such unaudited information. In the opinion of the manager of the Trust (the &amp;#147;Manager&amp;#148;), the accompanying unaudited financial statements include all adjustments necessary to present fairly the financial position as of June 29, 2013 and the results of operations and cash flows for the interim periods presented. All adjustments are of a normal recurring nature. The results of operations for the three months ended June 29, 2013 are not necessarily indicative of the results that may be expected for the entire year.&lt;/p&gt;</NonNumbericText><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>nonnum:textBlockItemType</ElementDataType><SimpleDataType>na</SimpleDataType><ElementDefenition>The entire disclosure for the business description and basis of presentation concepts.  Business description describes the nature and type of organization including but not limited to organizational structure as may be applicable to holding companies, parent and subsidiary relationships, business divisions, business units, business segments, affiliates and information about significant ownership of the reporting entity.  Basis of presentation describes the underlying basis used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS).</ElementDefenition><ElementReferences>No definition available.</ElementReferences><IsTotalLabel>false</IsTotalLabel><UnitID>0</UnitID><Label>1. Basis of Presentation</Label></Row></Rows><Footnotes /><IsEquityReport>false</IsEquityReport><ReportName>1. Basis of Presentation</ReportName><MonetaryRoundingLevel>UnKnown</MonetaryRoundingLevel><SharesRoundingLevel>UnKnown</SharesRoundingLevel><PerShareRoundingLevel>UnKnown</PerShareRoundingLevel><ExchangeRateRoundingLevel>UnKnown</ExchangeRateRoundingLevel><HasCustomUnits>true</HasCustomUnits><IsEmbedReport>false</IsEmbedReport><IsMultiCurrency>false</IsMultiCurrency><ReportType>Sheet</ReportType><RoleURI>http://atctixbrl.com/20130629/role/idr_Disclosure1BasisOfPresentation</RoleURI><NumberOfCols>1</NumberOfCols><NumberOfRows>2</NumberOfRows></InstanceReport>
