August 13, 1997
Securities and Exchange Commission
Filer Support, Edgar
Operation Center, Stop 0-7
6432 General Green Way
Alexandria, VA 22312
Re: Boston Financial Qualified Housing Tax Credits L.P. IV
Report on Form 10-Q for Quarter Ended June 30, 1997
File No. 0-19765
Gentlemen:
Pursuant to the requirements of section 15(d) of the Securities Exchange Act of
1934, there is filed herewith a copy of subject report.
Very truly yours,
/s/Veronica J. Curioso
Veronica J. Curioso
Assistant Controller
QH4-10Q1.DOC
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act
of 1934
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
----------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
------------- -----------------
For Quarter Ended June 30, 1997 Commission file number 0-19765
-------------- ------------
Boston Financial Qualified Housing Tax Credits L.P. IV
(Exact name of registrant as specified in its charter)
Massachusetts 04-3044617
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
101 Arch Street, Boston, Massachusetts 02110-1106
(Address of principal executive offices (Zip Code)
Registrant's telephone number, including area code (617) 439-3911
-------------------
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 .
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION Page No.
- ------------------------------ --------
Item 1. Combined Financial Statements
Combined Balance Sheets - June 30, 1997 (Unaudited)
and March 31, 1997 1
Combined Statements of Operations (Unaudited) - For the Three
Months Ended June 30, 1997 and 1996 2
Combined Statement of Changes in Partners' Equity (Deficiency)
(Unaudited) - For the Three Months Ended June 30, 1997 3
Combined Statements of Cash Flows (Unaudited) - For the
Three Months Ended June 30, 1997 and 1996 4
Notes to Combined Financial Statements (Unaudited) 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
PART II - OTHER INFORMATION
Items 1-6 13
SIGNATURE 14
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
<TABLE>
<CAPTION>
COMBINED BALANCE SHEETS - June 30, 1997 and March 31, 1997
June 30, March 31,
1997 1997
(Unaudited)
<S> <C> <C>
Assets
Cash and cash equivalents $ 256,700 $ 288,153
Marketable securities, at fair value 1,020,371 1,056,590
Accounts receivable, net of allowance for bad debt
of $355,349 and $337,793, respectively 20,161 23,778
Tenant security deposits 95,224 98,963
Investments in Local Limited Partnerships,
net of reserve for valuation of $945,277 (Note 1) 19,201,225 19,593,420
Rental property at cost, net of accumulated depreciation and
reserve for valuation of $5,857,280 and $5,670,590, respectively 15,060,043 15,217,196
Mortgagee escrow deposits 147,476 106,501
Deferred charges, net of $161,688 and $156,662 of
accumulated amortization, respectively 204,156 209,182
Other assets 22,204 38,270
------------- ------------
Total Assets $ 36,027,560 $ 36,632,053
============= ============
Liabilities and Partners' Equity
Mortgage notes payable $ 11,071,077 $11,111,888
Accounts payable to affiliates 419,200 390,926
Accounts payable and accrued expenses 427,229 366,076
Interest payable 594,088 507,457
Tenant security deposits payable 92,320 89,709
Payable to affiliated Developer 2,482,000 2,482,000
------------- ------------
Total Liabilities 15,085,914 14,948,056
------------- ------------
Minority interest in Local Limited Partnerships 401,649 421,489
------------- ------------
General, Initial and Investor Limited Partners' Equity 20,542,810 21,267,760
Net unrealized losses on marketable securities (2,813) (5,252)
------------- ------------
Total Partners' Equity 20,539,997 21,262,508
------------- ------------
Total Liabilities and Partners' Equity $ 36,027,560 $ 36,632,053
============= ============
</TABLE>
The accompanying notes are an integral part of the combined financial
statements.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
<TABLE>
<CAPTION>
COMBINED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended June 30, 1997 and 1996
1997 1996
------------ -------
<S> <C> <C>
Revenue:
Rental $ 452,882 $ 443,720
Investment 24,709 28,949
Other 74,488 13,701
------------ ------------
Total Revenue 552,079 486,370
------------ ------------
Expenses:
Asset management fee, related party 57,480 64,343
General and administrative (includes reimbursement
to affiliate in the amounts of $48,279 and
$37,026, respectively) 90,575 60,394
Bad debt expense 17,556 200,394
Rental operations, exclusive of depreciation 256,956 274,535
Property management fee, related party 32,552 18,739
Interest 257,839 270,378
Depreciation 186,690 177,865
Amortization 27,869 32,678
------------ ------------
Total Expenses 927,517 1,099,326
------------ ------------
Loss before equity in losses of
Local Limited Partnerships (375,438) (612,956)
Equity in losses of Local
Limited Partnerships (369,352) (578,259)
Minority interest in losses of
Local Limited Partnerships 19,840 23,031
------------ ------------
Net Loss $ (724,950) $ (1,168,184)
============ ============
Net Loss allocated:
To General Partners $ (7,250) $ (11,682)
To Limited Partners (717,700) (1,156,502)
------------ ------------
$ (724,950) $ (1,168,184)
============ ============
Net Loss per Limited Partnership Unit
(68,043 Units) $ (10.55) $ (17.00)
============ ============
</TABLE>
The accompanying notes are an integral part of the combined financial
statements.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
COMBINED STATEMENT OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
(Unaudited)
For the Three Months Ended June 30, 1997
<TABLE>
<CAPTION>
Net
Initial Investor Unrealized
General Limited Limited Gains
Partners Partners Partners (Losses) Total
<S> <C> <C> <C> <C> <C>
Balance at March 31, 1997 $ (378,408) $ 5,000 $ 21,641,168 $ (5,252) $ 21,262,508
Net change in net unrealized
losses on marketable securities
available for sale - - - 2,439 2,439
Net Loss (7,250) - (717,700) - (724,950)
---------- ------- ------------ --------- -------------
Balance at June 30, 1997 $ (385,658) $ 5,000 $ 20,923,468 $ (2,813) $ 20,539,997
========== ======= ============ ========= =============
</TABLE>
The accompanying notes are an integral part of the combined financial
statements.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
<TABLE>
<CAPTION>
COMBINED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three Months Ended June 30, 1997 and 1996
1997 1996
------------ -------
<S> <C> <C>
Net cash provided by (used for) operating activities $ (2,305) $ 16,926
----------- -----------
Cash flows from investing activities:
Purchases of marketable securities (49,094) (437,069)
Proceeds from sales and maturities of
marketable securities 87,240 618,452
Cash distributions received from Local
Limited Partnerships 64,034 64,804
Advances to Local Limited Partnerships (60,980) (241,440)
Purchase of rental property and equipment (29,537) (39,034)
----------- -----------
Net cash provided by (used for) investing activities 11,663 (34,287)
----------- -----------
Cash flows from financing activities:
Payment of mortgage principal (40,811) (73,414)
----------- -----------
Net cash used for financing activities (40,811) (73,414)
----------- -----------
Net decrease in cash and cash equivalents (31,453) (90,775)
Cash and cash equivalents, beginning 288,153 414,451
----------- -----------
Cash and cash equivalents, ending $ 256,700 $ 323,676
=========== ===========
Supplemental disclosure:
Cash paid for interest $ 171,208 $ 49,582
=========== ===========
</TABLE>
The accompanying notes are an integral part of the combined financial
statements.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
Notes to Combined Financial Statements
(Unaudited)
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 the Partnership's 10-K for the year
ended March 31, 1997. In the opinion of management, these financial statements
include all adjustments, consisting only of normal recurring adjustments,
necessary to present fairly the Partnership'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. Certain amounts in prior year financial
statements have been restated herein to conform to current year presentation.
1. Investments in Local Limited Partnerships
The Partnership uses the equity method to account for its limited partnership
interests in twenty-six Local Limited Partnerships (excluding the Combined
Entities) which own and operate multi-family housing complexes, most of which
are government-assisted. The Partnership, as Investor Limited Partner pursuant
to the various Local Limited Partnership Agreements which contain certain
operating and distribution restrictions, has generally acquired a 99% interest
in the profits, losses, tax credits and cash flows from operations of each of
the Local Limited Partnerships. Upon dissolution, proceeds will be distributed
according to each respective partnership agreement.
The following is a summary of investments in Local Limited Partnerships,
excluding the Combined Entities, at June 30, 1997:
<TABLE>
<CAPTION>
<S> <C>
Capital contributions paid to Local Limited Partnerships and purchase price paid
to withdrawing partners of Local
Limited Partnerships $ 43,318,237
Cumulative equity in losses of Local Limited
Partnerships (includes cumulative unrecognized
losses of $1,246,562) (24,757,319)
Cash distributions received from Local
Limited Partnerships (1,554,313)
Investments in Local Limited Partnerships
before adjustment 17,006,605
Excess of investment cost over the underlying net assets acquired:
Acquisition fees and expenses 3,910,599
Accumulated amortization of acquisition
fees and expenses (770,702)
Investments in Local Limited Partnerships 20,146,502
Reserve for valuation of investments
in Local Limited Partnerships (945,277)
$ 19,201,225
</TABLE>
The Partnership's share of the net losses of the Local Limited Partnerships,
excluding the Combined Entities, for the three months ended June 30, 1997 is
$656,007. For the three months ended June 30, 1997, the Partnership has not
recognized $350,689 of equity in losses relating to eight Local Limited
Partnerships where cumulative equity in losses and cumulative distributions
exceeded its total investments in these Local Limited Partnerships.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
Notes to Combined Financial Statements (continued)
(Unaudited)
2. Liquidation of Interests in Local Limited Partnerships
The Managing General Partner has transferred all of the assets of seven of the
Texas Partnerships, subject to their liabilities, to unaffiliated entities. The
transfers of Grandview Terrace Apartments, Pecan Hills Apartments, Seagraves
Garden Apartments, Hilltop Apartments and Bent Tree Housing were effective
February 21, 1996, February 29, 1996, March 8, 1996, June 6, 1996 and November
20, 1996, respectively. Justin Place Apartments and Valley View Apartments were
transferred July 9, 1997. Transfers of four of the remaining five Texas
Partnerships are expected to take place in the third quarter of 1997. The
Partnership will retain its interest in Gateway Village.
For tax purposes, these events will result in both Section 1231 Gain and
cancellation of indebtedness income. In addition, the transfer of ownership will
result in a nominal amount of recapture of tax credits, since the Texas
Partnerships represent only 3% of the Partnership's tax credits.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
Notes to Combined Financial Statements (continued)
(Unaudited)
3. Supplemental Combining Schedules
<TABLE>
<CAPTION>
Balance Sheets
Boston Financial
Qualified Housing
Tax Credits Combined Combined
L.P. IV (A) Entities (B) Eliminations (A)
Assets
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 171,414 $ 85,286 $ - $ 256,700
Marketable securities, at fair value 1,020,371 - - 1,020,371
Accounts receivable, net 483,765 20,161 (483,765) 20,161
Tenant security deposits - 95,224 - 95,224
Investments in Local
Limited Partnerships, net 19,298,876 - (97,651) 19,201,225
Rental property at cost, net - 15,060,043 - 15,060,043
Mortgagee escrow deposits - 147,476 - 147,476
Deferred charges, net - 204,156 - 204,156
Other assets 18,393 3,811 - 22,204
--------------- --------------- ------------- ------------
Total Assets $ 20,992,819 $ 15,616,157 $ (581,416) $ 36,027,560
=============== =============== ============= ============
Liabilities and Partners' Equity
Mortgage notes payable $ - $ 11,071,077 $ - $ 11,071,077
Accounts payable to affiliates 383,665 519,300 (483,765) 419,200
Accounts payable and accrued expenses 69,157 358,072 - 427,229
Interest payable - 594,088 - 594,088
Tenant security deposits payable - 92,320 - 92,320
Payable to affiliated Developer - 2,482,000 - 2,482,000
--------------- --------------- ------------- ------------
Total Liabilities 452,822 15,116,857 (483,765) 15,085,914
--------------- --------------- ------------- ------------
Minority interest in Local Limited
Partnerships - - 401,649 401,649
--------------- --------------- ------------- ------------
General, Initial and Investor
Limited Partners' Equity 20,542,810 499,300 (499,300) 20,542,810
Net unrealized losses on
marketable securities (2,813) - - (2,813)
--------------- --------------- ------------- ------------
Total Partners' Equity 20,539,997 499,300 (499,300) 20,539,997
--------------- --------------- ------------- ------------
Total Liabilities and Partners' Equity $ 20,992,819 $ 15,616,157 $ (581,416) $ 36,027,560
=============== =============== ============= ============
</TABLE>
(A) As of June 30, 1997.
(B) As of March 31, 1997.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
Notes to Combined Financial Statements (continued)
(Unaudited)
3. Supplemental Combining Schedules (continued)
<TABLE>
<CAPTION>
Statements of Operations
Boston Financial
Qualified Housing
Tax Credits Combined Combined
L.P. IV (A) Entities (B) Eliminations (A)
<S> <C> <C> <C> <C>
Revenue:
Rental $ - $ 452,882 $ - $ 452,882
Investment 21,802 2,907 - 24,709
Other 65,659 8,829 - 74,488
--------------- --------------- ------------- ------------
Total Revenue 87,461 464,618 - 552,079
--------------- --------------- ------------- ------------
Expenses:
Asset management fees, related party 57,480 - - 57,480
General and administrative 90,575 - - 90,575
Bad debt expense 17,556 - - 17,556
Rental operations, exclusive of depreciation - 256,956 - 256,956
Property management fee, related party - 32,552 - 32,552
Interest - 257,839 - 257,839
Depreciation - 186,690 - 186,690
Amortization 22,843 5,026 - 27,869
--------------- --------------- ------------- ------------
Total Expenses 188,454 739,063 - 927,517
--------------- --------------- ------------- ------------
Loss before equity in losses of Local
Limited Partnerships (100,993) (274,445) - (375,438)
Equity in losses of Local Limited
Partnerships (623,957) - 254,605 (369,352)
Minority interest in losses of
Local Limited Partnerships - - 19,840 19,840
--------------- --------------- ------------- ------------
Net Loss $ (724,950) $ (274,445) $ 274,445 $ (724,950)
=============== =============== ============= ============
</TABLE>
(A) For the three months ended June 30, 1997.
(B) For the three months ended March 31, 1997.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
Notes to Combined Financial Statements (continued)
(Unaudited)
3. Supplemental Combining Schedules (continued)
<TABLE>
<CAPTION>
Statements of Cash Flows
Boston Financial
Qualified Housing
Tax Credits Combined Combined
L.P. IV (A) Entities (B) Eliminations (A)
<S> <C> <C> <C> <C>
Net cash provided by (used for)
operating activities $ (86,513) $ 84,208 $ - $ (2,305)
----------- ------------ ------------ ------------
Cash flows from investing activities:
Purchases of marketable securities (49,094) - - (49,094)
Proceeds from sales and maturities
of marketable securities 87,240 - - 87,240
Cash distributions received from
Local Limited Partnerships 64,034 - - 64,034
Advances to Local Limited Partnerships (60,980) - - (60,980)
Purchase of rental property and equipment - (29,537) - (29,537)
----------- ------------ ------------ ------------
Net cash provided by (used for)
investing activities 41,200 (29,537) - 11,663
----------- ------------ ------------ ------------
Cash flows from financing activities:
Payment of mortgage principal - (40,811) - (40,811)
----------- ------------ ------------ ------------
Net cash used for financing activities - (40,811) - (40,811)
----------- ------------ ------------ ------------
Net increase (decrease) in cash
and cash equivalents (45,313) 13,860 - (31,453)
Cash and cash equivalents, beginning 216,727 71,426 - 288,153
----------- ------------ ------------ ------------
Cash and cash equivalents, ending $ 171,414 $ 85,286 $ - $ 256,700
=========== ============ ============ ============
</TABLE>
(A) For the three months ended June 30, 1997.
(B) For the three months ended March 31, 1997.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Partnership (including the Combined Entities) had a decrease in cash and
cash equivalents of $31,453 from $288,153 at March 31, 1997 to $256,700 at June
30, 1997. The decrease is attributable to cash used for operations and repayment
of mortgage principal and purchase of rental property and equipment by the
Combined Entities. These decreases were offset by proceeds from sales and
maturities of marketable securities in excess of purchases of marketable
securities and cash distributions received from Local Limited Partnerships.
The Managing General Partner initially designated 4% of the Gross Proceeds as
Reserves. The Reserves were established to be used for working capital of the
Partnership and contingencies related to the ownership of Local Limited
Partnership interests. Funds totaling approximately $1,093,000 have been
withdrawn from the reserve account to pay legal fees relating to various
property issues. This amount includes approximately $1,039,000 for the Texas
Partnerships. To date, Reserve funds in the amount of $304,000 have been used to
make additional capital contributions to a Local Limited Partnership. To date,
the Partnership has used approximately $904,000 of operating funds to replenish
reserves. At June 30, 1997, approximately $1,153,000 of cash, cash equivalents
and marketable securities has been designated as Reserves. Management believes
that the investment income earned on the Reserves, along with cash distributions
received from Local Limited Partnerships, to the extent available, will be
sufficient to fund the Partnership's ongoing operations. Reserves may be used to
fund Partnership operating deficits, if the Managing General Partner deems
funding appropriate. If Reserves are not adequate to cover the Partnership's
operations, the Partnership will seek other financing sources including, but not
limited to, the deferral of Asset Management Fees to an affiliate of the
Managing General Partner or working with Local Limited Partnerships to increase
cash distributions. In the event a Local Limited Partnership encounters
operating difficulties requiring additional funds, the Partnership's management
might deem it in its best interests to voluntarily provide such funds in order
to protect its investment. To date, in addition to the $1,093,000 noted above,
the Partnership has also advanced approximately $716,000 to the Texas
Partnerships to fund operating deficits. Approximately $360,000 has also been
advanced to two other Local Limited Partnerships.
Since the Partnership invests as a limited partner, the Partnership has no
contractual obligation to provide additional funds to Local Limited Partnerships
beyond its specified investment. Thus, at June 30, 1997, the Partnership had no
contractual or other obligation to any Local Limited Partnership which had not
been paid or provided for.
Cash Distributions
No cash distributions were made during the three months ended June 30, 1997.
Results of Operations
The Partnership's results of operations for the three months ended June 30, 1997
resulted in a net loss of $724,950 as compared to a net loss of $1,168,184 for
the same period in 1996. The decrease in net loss is primarily attributable to a
decrease in equity in losses of Local Limited Partnerships, an increase in other
revenue and a decrease in bad debt expense. The decrease in equity in losses of
Local Limited Partnerships is due to an increase in losses not recognized by the
Partnership for Local Limited Partnerships whose cumulative equity in losses and
cumulative distributions exceeded its total investment in those partnerships.
The increase in other revenue is due to distribution income recognized for these
partnerships. The decrease in bad debt expense is the result of advances made to
one Local Limited Partnership during the three months ended March 31, 1996 which
were reserved for.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Property Discussions
Prior to the transfer of seven of the Texas Partnerships, Limited Partnership
interests had been acquired in thirty-seven Local Limited Partnerships which are
located in thirteen states, Washington, D.C. and Puerto Rico. Fifteen of the
properties with 1,440 apartments were newly constructed, and twenty-two of the
properties with 2,061 apartments were rehabilitated. Most of the Local Limited
Partnerships have stable operations, operating at break-even or generating
operating cash flow.
A few properties are experiencing operating difficulties and cash flow deficits
due to a variety of reasons. The Local General Partners of those properties have
funded operating deficits through project expense loans, subordinated loans or
payments from operating escrows. In instances where the Local General Partners
have stopped funding deficits because their obligation to do so has expired or
otherwise, the Managing General Partner is working with the Local General
Partners to increase operating income, reduce expenses or refinance the debt at
lower interest rates in order to improve cash flow.
Audobon Apartments, located in Massachusetts, is operating below break-even
primarily due to decreased rental subsidy assistance, increased operating
expenses and adverse market conditions. During the first quarter, the management
agent was replaced with a local unaffiliated firm. The Local General Partner has
also obtained preliminary approval for additional operating subsidies from the
state and released from lender escrows to fund certain cash deficits. The
Managing General Partner continues to work with the lender to develop a
satisfactory workout. It is likely that a workout would require an advance from
Partnership reserves.
Despite improving occupancy at BK Apartments, located in Jamestown, North
Dakota, the property continues to generate operating deficits. The lender
recently issued a default notice and is threatening to foreclose. Affiliates of
the Managing General Partner continue to negotiate with the Local General
Partner and lender to cure the mortgage default and complete required capital
repairs. The Managing General Partner made a proposal to the bondholder for its
consideration. If negotiations are not successful, it is likely that a
foreclosure will occur prior to the end of the fourth quarter which will result
in recapture and the allocation of taxable income to the Partnership.
Bentley Court, located in Columbia, South Carolina, continues to generate
significant deficits despite the July 1996 debt refinancing. As we previously
reported, an agreement was set up with the lender which enabled an affiliate of
the Managing General Partner to become an additional General Partner and a
substitute management agent, subject to lender approval, with the right to take
control of the property, if it becomes necessary. In addition, the agreement
stipulates that if the Local Limited Partnership defaults on the agreement the
lender has the right to remove the management company. The Managing General
Partner will continue to monitor property operations closely. Operating deficits
are currently being funded by the Local General Partner.
At Findlay Market (Cincinnati, Ohio), reconstruction of the property units
damaged by fire was completed in December 1996, and lease-up is currently
underway. As previously reported, in order to reconstruct the units, the
Partnership agreed to advance up to $345,000 to help cover the funding shortfall
between the insurance proceeds, lender funding and a City grant. To date, the
Partnership has advanced approximately $294,000 of this amount. However, the
property continues to generate operating deficits which caused the default of
the first mortgage. At this juncture, the lender is not amenable to a cure of
the mortgage and is expected to exercise its rights to foreclose on the mortgage
during the third quarter 1997. Despite these indications, the Managing and Local
General Partners continue to negotiate with the lender in hopes of averting the
foreclosure. A foreclosure of this property will result in recapture of tax
credits and the allocation of taxable income to the Partnership.
The Managing General Partner has transferred all of the assets of seven of the
Texas Partnerships, subject to their liabilities, to unaffiliated entities. The
transfers of Grandview Terrace Apartments, Pecan Hills Apartments, Seagraves
Garden Apartments, Hilltop Apartments and Bent Tree Housing were effective
February 21, 1996, February 29, 1996, March 8, 1996, June 6, 1996 and November
20, 1996, respectively. Justin Place Apartments and
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Property Discussions (continued)
Valley View Apartments were transferred on July 9, 1997. Transfers of four of
the remaining five Texas Partnerships are expected to take place in the third
quarter of 1997. The Partnership will retain its interest in Gateway Village.
For tax purposes, these events will result in both Section 1231 Gain and
cancellation of indebtedness income. In addition, the transfer of ownership will
result in a nominal amount of recapture of tax credits, since the Texas
Partnerships represent only 3% of the Partnership's tax credits.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
PART II OTHER INFORMATION
Items 1-5 Not applicable
Item 6 Exhibits and reports on Form 8-K
(a)Exhibits - None
(b)Reports on Form 8-K - No reports on Form 8-K were filed
during the quarter ended June 30, 1997.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
SIGNATURE
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.
DATED: August 13, 1997 BOSTON FINANCIAL QUALIFIED HOUSING
TAX CREDITS L.P. IV
By: Arch Street IV, Inc.,
its Managing General Partner
/s/Vincent J. Costantini
Vincent J. Costantini
Treasurer and Chief Financial Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> JUN-30-1997
<CASH> 256,700
<SECURITIES> 1,020,371
<RECEIVABLES> 20,161
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 000
<PP&E> 15,060,043
<DEPRECIATION> 000
<TOTAL-ASSETS> 36,027,560<F1>
<CURRENT-LIABILITIES> 000
<BONDS> 000
000
000
<COMMON> 000
<OTHER-SE> 20,539,997
<TOTAL-LIABILITY-AND-EQUITY> 36,027,560<F2>
<SALES> 000
<TOTAL-REVENUES> 552,079<F3>
<CGS> 000
<TOTAL-COSTS> 000
<OTHER-EXPENSES> 669,678<F4>
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 257,839
<INCOME-PRETAX> 000
<INCOME-TAX> 000
<INCOME-CONTINUING> 000
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> (724,950)<F5>
<EPS-PRIMARY> (10.55)
<EPS-DILUTED> 000
<FN>
<F1>Included in total assets: Investments in Local Limited Partnerships of
$19,201,225, Deferred charges, net $204,156, Tenant security deposits $95,224,
Mortgagee escrow deposits $147,476 and other assets $22,204.
<F2>Included in Total Liabilities and Equity: Mortgage notes payable of
$11,071,077, Accounts payable to affiliates of $419,200, Accounts payable
and accrued expenses of $427,229, Interest payable of $594,088, Tenant security
deposits payable of $92,320, Payable to affiliated developer of $2,482,000 and
Minority interest in Local Limited Partnerships of $401,649.
<F3>Total revenue includes: Rental of $452,882, Investment of $24,709 and Other
of $74,488.
<F4>Included in Other Expenses: Asset management fees of $57,480, General
and administrative of $90,575, Rental operations, exclusive of depreciation of
$256,956, Bad debt of $17,556, Property management fees of $32,552, Depreciation
of $186,690 and Amortization of $27,869.
<F5>Net loss reflects: Equity in losses of Local Limited Partnerships of
$369,352 and Minority interest in losses of Local Limited Partnerships of
$19,840.
</FN>
</TABLE>
