5. Investment in Local Partnerships

12 Months Ended

Mar. 30, 2018

Notes

5. Investment in Local Partnerships

5.       Investment in Local Partnerships

The Trust initially acquired a Local Partnership Interest in ten Local Partnerships. As of March 30, 2018, the Trust owns a 99% Local Partnership Interest in one Local Partnership, Vision Limited Dividend Housing Association Limited Partnership (“Vision”).  In connection with the initial purchase of ten Local Partnership Interests, under the terms of the partnership agreement of each Local Partnership, as of March 30, 2018 the Trust is committed to make capital contributions in the aggregate of $14,837,956, which includes Advances to certain Local Partnerships and all of which has been paid.

Vision owns a 97 unit subsidized and leveraged low-income multifamily residential complex located in Detroit, Michigan. The required holding period of each Property, in order to avoid Low-income Housing Tax Credit recapture, is fifteen years from the year in which the Low-income Housing Tax Credits commence on the last building of the Property (the “Compliance Period”). The Compliance Periods of all the Local Partnerships expired in a prior year. The rents of Vision are subject to specific laws, regulations and agreements with federal and state agencies.

During the year ended March 30, 2018, the Trust sold its Local Partnership Interest in Creative Choice Homes VII, Ltd. to an unaffiliated third party; the Trust received $900,000 in connection with the sale. Such amount is reflected as gain on sale of limited partner interests/local partnership properties in the accompanying statement of operations and comprehensive income (loss) of the Trust for the year ended March 30, 2018.

During the year ended March 30, 2017, the Trust sold its Local Partnership Interest in ACP Housing Associates, L.P. (“ACP Housing”) to an affiliate of the Local General Partner of ACP Housing; the Trust received $1,331,798 in connection with the sale. Such amount is reflected as gain on sale of limited partner interests/local partnership properties in the accompanying statement of operations and comprehensive income (loss) of the Trust for the year ended March 30, 2017.

Equity in loss of investment in local partnerships is limited to the Trust’s investment balance in each Local Partnership; any excess is applied to other partners' capital in any such Local Partnership (see Note 1). The amount of such excess losses applied to other partners' capital was $112,218 and $180,177 for the years ended December 31, 2017 and 2016, respectively, as reflected in the combined statements of operations of the Local Partnerships herein Note 5.

The differences between the Trust’s investment in local partnerships as of March 30, 2018 and 2017 and the amounts reflected as the Trust’s investment balance in the combined balance sheets of the Local Partnerships as of December 31, 2017 and 2016 herein Note 5 represent cumulative Carrying Value adjustments made by the Trust (see Note 1).

The combined balance sheets of the Local Partnerships as of December 31, 2017 and 2016 and the combined statements of operations of the Local Partnerships for the years then ended are reflected on pages 21 and 22, respectively. The combined balance sheets of the Local Partnerships as of December 31, 2017 and 2016 do not include any balances in connection with the Local Partnerships in which the Trust no longer owns an interest as of such dates, while the combined statements of operations of the Local Partnerships for the years then ended include the results of operations of such Local Partnerships for the period prior to the sales or other dispositions (see discussion above herein Note 5). Accordingly, the combined balance sheet of the Local Partnerships as of December 31, 2017 only includes balances for Vision.

The combined balance sheets of the Local Partnerships as of December 31, 2017 and 2016 are as follows:

	2017	2016
ASSETS
Cash and cash equivalents	$      75,844	$      179,344
Rents receivable	5,065	28,960
Escrow deposits and reserves	386,784	1,296,653
Land	179,799	179,799
Buildings and improvements (net of accumulated depreciation of $5,593,736 and $7,820,447)	3,464,656	6,037,801
Other assets	82,650	105,387
	$    4,194,798	$    7,827,944
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses	$       11,899	$      39,284
Due to related parties	56,474	861,622
Mortgages and notes payable	4,609,748	6,236,502
Accrued interest	324,377	2,075,697
Other liabilities	36,264	53,034
	5,038,762	9,266,139
Partners' equity (deficit)
American Tax Credit Trust, Series I
Capital contributions, net of distributions	1,405,544	3,775,145
Cumulative loss	(1,197,744)	(3,273,345)
	207,800	501,800
General partners and other limited partners
Capital contributions, net of distributions	100	(5,897)
Cumulative loss	(1,051,864)	(1,934,098)
	(1,051,764)	(1,939,995)
	(843,964)	(1,438,195)
	$    4,194,798	$    7,827,944

The combined statements of operations of the Local Partnerships for the years ended December 31, 2017 and 2016 are as follows:

	2017	2016
REVENUE
Rental	$    1,380,099	$    2,227,795
Interest and other	35,090	121,318
TOTAL REVENUE	1,415,189	2,349,113
EXPENSES
Administrative	215,732	279,499
Payroll	161,618	303,714
Utilities	197,457	409,131
Operating and maintenance	195,659	473,314
Taxes and insurance	138,041	196,083
Financial	165,585	258,378
Depreciation and amortization	452,802	563,241
TOTAL EXPENSES	1,526,894	2,483,360
NET LOSS	$    (111,705)	$    (134,247)
NET LOSS ATTRIBUTABLE TO
American Tax Credit Trust, Series I	$                 --	$                 --
General partners and other limited partners (includes    $112,218 and $180,177 of Trust losses in excess of investment and specially allocated income of $1,631 and $47,273)	(111,705)	(134,247)
	$    (111,705)	$    (134,247)