June 29, 2000
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Boston Financial Tax Credit Fund Plus, A Limited Partnership
Annual Report on Form 10-KSB for the Year Ended March 31, 2000
File Number 0-22104
Dear Sir/Madam:
Pursuant to the requirements of Section 15(d) of the Securities Exchange Act of
1934, filed herewith is one copy of subject report.
Very truly yours,
/s/Stephen Guilmette
Stephen Guilmette
Assistant Controller
TCP10K-K
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2000
-------------------------------------------------
OR
[ ] 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 0-22104
Boston Financial Tax Credit Fund
Plus, A Limited Partnership
(Exact name of registrant as
specified in its charter)
Massachusetts 04-3105699
(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
-----------------------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
CLASS A AND CLASS B UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class)
100,000
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 if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Subsection 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-KSB or any amendment to this Form 10-KSB. [ X ]
State the aggregate sales price of partnership units held by nonaffiliates of
the registrant. $37,933,000 as of March 31, 2000
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE: LIST THE FOLLOWING DOCUMENTS IF
INCORPORATED BY REFERENCE AND THE PART OF THE FORM 10-KSB INTO WHICH THE
DOCUMENT IS INCORPORATED: (1) ANY ANNUAL REPORT TO SECURITY HOLDERS; (2) ANY
PROXY OR INFORMATION STATEMENT; AND (3) ANY PROSPECTUS FILED PURSUANT TO RULE
424(b) OR (c) UNDER THE SECURITIES ACT OF 1933.
Part of Report on
Form 10-KSB into
Which the Document
Documents incorporated by reference is Incorporated
Post-effective amendment No. 5 to the Form S-11
Registration Statement, File # 33-38408 Part I, Item 1
Post-effective amendment No. 6 to the Form S-11
Registration Statement File # 33-38408 Part III, Item 11
Acquisition Reports Part I, Item 1
Prospectus - Sections Entitled:
"Investment Objectives and Policies -
Principal Investment Objectives" Part I, Item 1
"Investment Risks" Part I, Item 1
"Estimated Use of Proceeds" Part III, Item 12
"Management Compensation and Fees" Part III, Item 12
"Profits and Losses for Tax Purposes, Tax
Credits and Cash Distributions" Part III, Item 12
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS, A LIMITED PARTNERSHIP
ANNUAL REPORT ON FORM 10-KSB
FOR THE YEAR ENDED MARCH 31, 2000
TABLE OF CONTENTS
Page No.
PART I
Item 1 Business K-3
Item 2 Properties K-6
Item 3 Legal Proceedings K-13
Item 4 Submission of Matters to a Vote of
Security Holders K-13
PART II
Item 5 Market for the Registrant's Units and
Related Security Holder Matters K-13
Item 6 Management's Discussion and Analysis of
Financial Condition and Results of Operations K-14
Item 7 Financial Statements and Supplementary Data K-16
Item 8 Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure K-17
PART III
Item 9 Directors and Executive Officers
of the Registrant K-17
Item 10 Management Remuneration K-18
Item 11 Security Ownership of Certain Beneficial
Owners and Management K-18
Item 12 Certain Relationships and Related Transactions K-18
PART IV
Item 13 Exhibits and Reports on Form 8-K K-21
SIGNATURES K-22
<PAGE>
PART I
Item 1. Business
Boston Financial Tax Credit Fund Plus, A Limited Partnership (the "Fund") is a
Massachusetts limited partnership formed on December 10, 1990 under the laws of
the Commonwealth of Massachusetts. The Fund's partnership agreement
("Partnership Agreement") authorized the sale of up to 100,000 Class A and Class
B units of Limited Partnership Interest ("Class A Units" and "Class B Units";
Class A Units and Class B Units are collectively called "Units") at $1,000 per
Unit, adjusted for certain discounts. The Fund raised $37,932,300 ("Gross
Proceeds"), net of discounts of $700, through the sale of 34,643 Class A Units
and 3,290 Class B Units. Such amounts exclude five unregistered Units previously
acquired for $5,000 by the Initial Limited Partner, which is also one of the
General Partners. The offering of Units terminated on January 11, 1993.
The Fund is engaged solely in the business of real estate investment.
Accordingly, a presentation of information about industry segments is not
applicable and would not be material to an understanding of the Fund's business
taken as a whole.
The Fund has invested as a limited partner in twenty-five other limited
partnerships ("Local Limited Partnerships") which own and operate residential
apartment complexes ("Properties"), some of which benefit from some form of
federal, state or local assistance programs, and all of which qualify for
low-income housing tax credits ("Tax Credits") added to the Internal Revenue
Code (the "Code") by the Tax Reform Act of 1986. The Fund also invested in, for
the benefit of the Class B Limited Partners, United States Treasury obligations
from which the interest coupons have been stripped or in such coupons themselves
(collectively "Treasury STRIPS"). The Fund used approximately 28% of the Class B
Limited Partners' capital contributions to purchase Treasury STRIPS with
maturities of 13 to 18 years, with a total redemption amount equal to the Class
B Limited Partners' capital contributions. The investment objectives of the Fund
include the following: (i) to provide investors with annual tax credits which
they may use to reduce their federal income taxes; (ii) to provide limited cash
distributions from the operations of apartment complexes; (iii) to preserve and
protect the Fund's capital with the possibility of realizing a profit through
the sale or refinancing of apartment complexes; and (iv) to provide payments to
Class B Limited Partners from Treasury STRIPS. There cannot be any assurance
that the Fund will attain any or all of these investment objectives. A more
detailed discussion of these investments objectives, along with the risk in
achieving them, is contained in the sections of the Prospectus entitled
"Investment Objectives and Policies - Principal Investment Objectives" and
"Investment Risks", which are herein incorporated by this reference.
Table A on the following page lists the Properties originally acquired by the
Local Limited Partnerships in which the Fund has invested. Item 6 of this Report
contains other significant information with respect to such Local Limited
Partnerships. The terms of the acquisition of each Local Limited Partnership
interest have been described in six supplements to the Prospectus and five Form
8-K filings which were collected in Post-effective Amendment No. 5 to the
Registration Statement (collectively, the "Acquisition Reports"); such
descriptions are incorporated herein by this reference.
<PAGE>
TABLE A
SELECTED LOCAL LIMITED
PARTNERSHIP DATA
<TABLE>
<CAPTION>
(Unaudited)
Properties owned by Date Interest
Local Limited Partnerships Location Acquired
<S> <C> <C>
Leatherwood (formerly Village Oaks)** Yoakum, TX 12/23/91
Tamaric** Cedar Park, TX 12/23/91
Northwest** Georgetown, TX 12/23/91
Pilot House Newport News, VA 02/25/92
Jardines de Juncos Juncos, PR 04/14/92
Livingston Arms* Poughkeepsie, NY 05/01/92
Broadway Tower Revere, MA 06/02/92
45th & Vincennes Chicago, IL 06/26/92
Phoenix Housing Moorhead, MN 07/06/92
Cottages of Aspen Oakdale, MN 07/02/92
Long Creek Court Kittrell, NC 07/01/92
Atkins Glen Stoneville, NC 07/01/92
Tree Trail Gainesville, FL 10/30/92
Meadow Wood Smyrna, TN 10/30/92
Primrose Grand Forks, ND 12/09/92
Sycamore Sioux Falls, ND 12/17/92
Preston Place Winchester, VA 12/21/92
Kings Grant Court Statesville, NC 12/23/92
Chestnut Plains Winston-Salem, NC 12/24/92
Bancroft Court Toledo, OH 12/31/92
Capitol Park*** Oklahoma City, OK 02/10/93
Hudson Square Baton Rouge, LA 03/08/93
Walker Woods II Dover, DE 06/11/93
Vista Villa Saginaw County, MI 08/04/93
Metropolitan* Chicago, IL 08/19/93
Carolina Woods II Greensboro, NC 10/11/93
Linden Square Genesee County, MI 10/29/93
New Garden Place* Gilmer, NC 06/24/94
Findley Place Minneapolis, MN 07/15/94
</TABLE>
* The Fund's interest in profits and losses of each Local Limited
Partnership arising from normal operations is 99%, except for an 82%
interest in Livingston Arms, a 98.75% interest in Metropolitan and a
97.9% interest in New Garden Place. Profits and losses arising from
sale or refinancing transactions will be allocated in accordance with
the respective Local Limited Partnership Agreements.
** The Managing General Partner transferred all of the assets of these
three Local Limited Partnerships, subject to their liabilities, to
unaffiliated entities. The transfers were effective May 31, 1996 for
Tamaric and Northwest and September 23, 1997 for Leatherwood.
*** The title of Capitol Park was transferred to an affiliated entity.
The transfer was effective October 7, 1997.
As previously reported, due to construction and other problems at Villas de
Montellano in Morovis, Puerto Rico, the Managing General Partner abandoned its
interest in this Local Limited Partnership to the Local General Partner. Also,
as previously reported, the Managing General Partner elected to exercise its
rights under the Repurchase Agreement and requested from the Local General
Partner and the Guarantor the repayment of the capital contributions advanced by
the Fund and of certain expenses associated with this investment. However, the
Local General Partner and the Guarantor filed for bankruptcy in May and August
1994, respectively, and it is unlikely that they will meet all of their
obligations under the Repurchase Agreement. The Fund has engaged counsel to
vigorously pursue the Fund's claim in the Bankruptcy Court. The Fund wrote off
this investment in Fiscal 1996.
Although the Fund's investments in Local Limited Partnerships are not subject to
seasonal fluctuations, the Fund's equity in losses of Local Limited
Partnerships, to the extent it reflects the operations of individual Properties,
may vary from quarter to quarter based upon changes in occupancy and operating
expenses as a result of seasonal factors.
Each Local Limited Partnership has as its general partners ("Local General
Partners") one or more individuals or entities not affiliated with the Fund or
its General Partners. In accordance with the partnership agreements under which
such entities are organized ("Local Limited Partnership Agreements"), the Fund
depends on the Local General Partners for the management of each Local Limited
Partnership. As of March 31, 2000, the following Local Limited Partnerships have
a common Local General Partner or affiliated group of Local General Partners
accounting for the specified percentage of the capital contributions to Local
Limited Partnerships: (i) Tree Trail and Meadow Wood, representing 14.16%, have
Flournoy Development Company and John Flournoy as Local General Partners; (ii)
Long Creek Court, Atkins Glen, Kings Grant Court and Chestnut Plains,
representing 5.04%, have Gordon Blackwell and MBG Investment Inc. as Local
General Partners; (iii) Phoenix Housing, Primrose and Sycamore, representing
6.66%, have Jerry Meide (see discussion below) and/or certain affiliates as
Local General Partners (Phoenix Housing has Phoenix Housing, Inc. and RRABB,
Inc., Primrose has RRABB, Inc., and Sycamore has Jerry Meide and RRABB, Inc.);
and (iv) Pilot House and Preston Place, representing 17.80%, have Castle
Development Corporation as Local General Partners. The Local General Partners of
the remaining Local Limited Partnerships are identified in the Acquisition
Reports, which are herein incorporated by reference.
The Properties owned by Local Limited Partnerships in which the Fund has
invested are, and will continue to be, subject to competition from existing and
future apartment complexes in the same areas. The continued success of the Fund
will depend on many outside factors, most of which are beyond the control of the
Fund and which cannot be predicted at this time. Such factors include general
economic and real estate market conditions, both on a national basis and in
those areas where the properties are located, the availability and cost of
borrowed funds, real estate tax rates, operating expenses, energy costs and
government regulations. In addition, other risks inherent in real estate
investment may influence the ultimate success of the Fund, including: (i)
possible reduction in rental income due to an inability to maintain high
occupancy levels or adequate rental levels; (ii) possible adverse changes in
general economic conditions and adverse local conditions, such as competitive
overbuilding, a decrease in employment or adverse changes in real estate laws,
including building codes; and (iii) possible future adoption of rent control
legislation which would not permit increased costs to be passed on to the
tenants in the form of rent increases or which suppresses the ability of the
Local Limited Partnerships to generate operating cash flow. Since most of the
properties benefit from some form of government assistance, the Fund is subject
to the risks inherent in that area including decreased subsidies, difficulties
in finding suitable tenants and obtaining permission for rent increases. In
addition, any Tax Credits allocated to investors with respect to a property are
subject to recapture to the extent that the property or any portion thereof
ceases to qualify for the Tax Credits. Other future changes in federal and state
income tax laws affecting real estate ownership or limited partnerships could
have a material and adverse affect on the business of the Fund.
The Fund is managed by Arch Street VI, Inc., the Managing General Partner of the
Fund. The other General Partner of the Fund is Arch Street VI Limited
Partnership. The Fund, which does not have any employees, reimburses Lend Lease
Real Estate Investments, Inc. ("Lend Lease"), an affiliate of the General
Partners, for certain expenses and overhead costs. A complete discussion of the
management of the Fund is set forth in Item 9 of this Report.
Item 2. Properties
The Fund owns limited partnership interests in twenty-five Local Limited
Partnerships, which own and operate Properties, some of which benefit from some
form of federal, state or local assistance programs and all of which qualify for
the Tax Credits added to the Code by the Tax Reform Act of 1986. The Fund's
ownership interest in each Local Limited Partnership is 99%, except for
Livingston Arms, Metropolitan and New Garden Place, where the Fund's ownership
interests are 82%, 98.75% and 97.9%, respectively, and Phoenix Housing, Primrose
and Sycamore, where the Fund's ownership is 49.5%.
Each of the Local Limited Partnerships has received an allocation of Tax Credits
from its relevant state tax credit agency. In general, the Tax Credit runs for
ten years from the date the Property is placed in service. The required holding
period (the "Compliance Period") of the Properties is fifteen years. During
these fifteen years, the Properties must satisfy rent restrictions, tenant
income limitations and other requirements, as promulgated by the Internal
Revenue Service, in order to maintain eligibility for the Tax Credit at all
times during the Compliance Period. Once a Local Limited Partnership has become
eligible for the Tax Credits, it may lose such eligibility and suffer an event
of recapture if its Property fails to remain in compliance with the
requirements.
In addition, some of the Local Limited Partnerships have obtained one or a
combination of different types of loans such as: i) below market rate interest
loans; ii) loans provided by a redevelopment agency of the town or city in which
the property is located at favorable terms; and iii) loans with repayment terms
that are based on a percentage of cash flow.
The schedules on the following pages provide certain key information on the
Local Limited Partnership interests acquired by the Fund.
<PAGE>
<TABLE>
<CAPTION>
Capital Contributions
Local Limited Partnership Number Total committed Paid through Mtge. loans payable Occupancy
Property Name of at March 31, March 31, at December 31, Type of at March 31,
Property Location Apt. Units 2000 2000 1999 Subsidy* 2000
------------------------------------------------------------------------------------------------------------------------------------
Division of Boston Financial
Texas Properties Limited
Partnership VI (formerly,
Yoakum-Village Oaks
Housing Associates, LTD)(A)
Leatherwood Terrace
Yoakum, TX
Tamaric Housing Associates, LTD. (A)
Tamaric
Cedar Park, TX
Georgetown - Northwest Housing Associates,
LTD. (A)
Northwest
Georgetown, TX
Pilot House Associates, L.P.
Pilot House
<S> <C> <C> <C> <C> <C> <C>
Newport News, VA 132 $2,479,707 $2,479,707 $3,252,538 None 99%
Jardines Limited Dividend
Partnership, S.E., L.P.
Jardines de Juncos
Juncos, PR 60 604,781 604,781 2,610,121 FmHA 100%
<PAGE>
Capital Contributions
Local Limited Partnership Number Total committed Paid through Mtge. loans payable Occupancy
Property Name of at March 31, March 31, at December 31, Type of at March 31,
Property Location Apt. Units 2000 2000 1999 Subsidy* 2000
-----------------------------------------------------------------------------------------------------------------------------------
99 Livingston Associates, L.P.
Livingston Arms
Poughkeepsie, NY 25 1,114,686 1,114,686 488,854 None 96%
Broadway Tower Limited
Partnership
Broadway Tower
Revere, MA 92 2,350,000 2,350,000 5,907,798 Section 8 100%
Phoenix Housing, L.P.
Phoenix Housing
Moorhead, MN 40 457,809 457,809 1,860,000 Section 8 90%
Cottage Homesteads of Aspen
Limited Partnership
Cottages of Aspen
Oakdale, MN 114 1,027,333 1,027,333 4,650,000 None 99%
45th & Vincennes Limited
Partnership
45th & Vincennes
Chicago, IL 19 689,080 689,080 644,004 Section 8 90%
Long Creek Court Limited
Partnership
Long Creek Court
Kittrell, NC 14 120,476 120,476 551,320 FmHA 100%
<PAGE>
Capital Contributions
Local Limited Partnership Number Total committed Paid through Mtge. loans payable Occupancy
Property Name of at March 31, March 31, at December 31, Type of at March 31,
Property Location Apt. Units 2000 2000 1999 Subsidy* 2000
-----------------------------------------------------------------------------------------------------------------------------------
Atkins Glen Limited Partnership
Atkins Glen
Stoneville, NC 24 205,574 205,574 953,397 FmHA 100%
Tree Trail Apartments,
A Limited Partnership
Tree Trail
Gainesville, FL 108 2,060,143 2,060,143 2,634,940 None 94%
Meadow Wood Townhomes,
A Limited Partnership
Meadow Wood
Smyrna, TN 88 1,742,671 1,742,671 2,601,034 None 100%
Dakota Square Manor
Limited Partnership
Primrose
Grand Forks, ND 48 674,557 674,557 1,076,497 None 100%
Duluth Limited Partnership II
Sycamore
Sioux Falls, ND 48 657,000 657,000 1,226,569 None 98%
Preston Place Associates, L.P.
Preston Place
Winchester, VA 120 2,300,000 , 2,300,000 3,139,512 None 99%
<PAGE>
Capital Contributions
Local Limited Partnership Number Total committed Paid through Mtge. loans payable Occupancy
Property Name of at March 31, March 31, at December 31, Type of at March 31,
Property Location Apt. Units 2000 2000 1999 Subsidy* 2000
------------------------------------------------------------------------------------------------------------------------------------
Kings Grant Court
Limited Partnership
Kings Grant Court
Statesville, NC 36 708,530 708,530 886,762 None 100%
Chestnut Plains Limited
Partnership
Chestnut Plains
Winston-Salem, NC 24 319,810 319,810 587,262 None 100%
Prince Hall Housing Associates,
Limited Partnership (B)
Capitol Park
Oklahoma City, OK
Bancroft Street Limited
Partnership
Bancroft Court
Toledo, OH 97 902,340 902,340 1,248,729 Section 8 59%
Hudson Square Apartments
Company (A Limited
Partnership)
Hudson Square
Baton Rouge, LA 82 554,670 554,670 772,765 Section 8 95%
Walker Woods Partners, II, L.P.
Walker Woods II
Dover, DE 19 591,429 591,429 808,764 None 100%
<PAGE>
Capital Contributions
Local Limited Partnership Number Total committed Paid through Mtge. loans payable Occupancy
Property Name of at March 31, March 31, at December 31, Type of at March 31,
Property Location Apt. Units 2000 2000 1999 Subsidy* 2000
-----------------------------------------------------------------------------------------------------------------------------------
Vista Villa Limited Dividend
Housing Association
Limited Partnership
Vista Villa
Saginaw County, MI 100 1,204,762 1,204,762 4,180,642 None 97%
Metropolitan Apartments
Limited Partnership
Metropolitan
Chicago, IL 69 2,296,714 2,056,354 2,035,718 Section 8 87%
Carolina Woods Associates II,
Limited Partnership
Carolina Woods II
Greensboro, NC 40 750,238 750,238 867,868 None 98%
Linden Square Limited Dividend
Housing Association
Limited Partnership
Linden Square
Genesee County, MI 120 1,299,774 1,299,774 4,942,944 None 98%
New Garden Associates,
Limited Partnership
New Garden Place
Gilmer, NC 76 1,269,794 1,269,794 2,253,913 None 100%
<PAGE>
Capital Contributions
Local Limited Partnership Number Total committed Paid through Mtge. loans payable Occupancy
Property Name of at March 31, March 31, at December 31, Type of at March 31,
Property Location Apt. Units 2000 2000 1999 Subsidy* 2000
------------------------------------------------------------------------------------------------------------------------------------
Exodus/Lyndon/Windsor,
Limited Partnership
Findley Place Apartments
Minneapolis, MN 89 716,000 716,000 2,630,000 None 100%
------ ------------ ------------ ------------
1,684 $ 27,097,878 $ 26,857,518 $ 52,811,951
====== ============ ============ ============
</TABLE>
* FmHA This subsidy, which is authorized under Section 515 of the
Housing Act of 1949, can be one or a combination of many
different types. For instance, FmHA may provide: 1) direct
below-market-rate mortgage loans for rural rental housing;
2) mortgage interest subsidies which effectively lower the
interest rate of the loan to 1%; 3) a rental assistance subsidy
to tenants which allows them to pay no more than 30% of their
monthly income as rent with the balance paid by the federal
government; or 4) a combination of any of the above.
Section 8 This subsidy, which is authorized under Section 8 of Title II
of the Housing and Community Development Act of 1974, allows
qualified low-income tenants to pay 30% of their monthly income
as rent with the balance paid by the federal government.
(A) The Managing General Partner transferred all of the assets of
Tamaric, Northwest and Leatherwood subject to their liabilities
to unaffiliated entities effective May 31, 1996 for Tamaric and
Northwest and September 23, 1997 for Leatherwood. These Local
Limited Partnerships had total capital contributions and
mortgage payable amounts of $328,434 and $1,467,017,
respectively, at the date of transfer.
(B) Effective October 7, 1997, the Managing General Partner
transferred the title of Prince Hall Housing Associates, Limited
Partnership to an affiliated entity. The Partnership had total
capital contributions and mortgage payable amounts of $1,495,000
and $1,570,000, respectively, as of December 31, 1996.
<PAGE>
Duration of leases for occupancy in the Properties described above is six to
twelve months. The Managing General Partner believes the described herein are
adequately covered by insurance.
Additional information required under this item, as it pertains to the Fund, is
contained in Items 1, 6 and 7 of this report.
Item 3. Legal Proceedings
Except for certain claims made by the Fund against the Local General Partner and
the Guarantor of Villas De Montellano, Leatherwood, Tamaric and Northwest in
connection with their bankruptcy proceedings, the Fund is not a party to any
pending legal or administrative proceeding, and to the best of its knowledge, no
legal or administrative proceeding is threatened or contemplated against it.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5. Market for the Registrant's Units and Related Security Holder Matters
There is no public market for the Units, and it is not expected that a public
market will develop. If a Limited Partner desires to sell Units, the buyer of
those Units will be required to comply with the minimum purchase and retention
requirements and investor suitability standards imposed by applicable federal or
state securities laws and the minimum purchase and retention requirements
imposed by the Fund. The price to be paid for the Units, as well as the
commissions to be received by any participating broker-dealers, will be subject
to negotiation by the Limited Partner seeking to sell his Units. Units will not
be redeemed or repurchased by the Fund.
The Partnership Agreement does not impose on the Fund or its General Partners
any obligation to obtain periodic appraisals of assets or to provide Limited
Partners with any estimates of the current value of Units.
As of June 15, 2000, there were 2,043 record holders of Units of the Fund.
Cash distributions, when made, are paid annually. To date, the Fund has made no
cash distributions.
<PAGE>
Item 6. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Certain matters discussed herein constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. The Fund
intends such forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements and are including this statement for
purposes of complying with these safe harbor provisions. Although the Fund
believes the forward-looking statements are based on reasonable assumptions, the
Fund can give no assurance that their expectations will be attained. Actual
results and timing of certain events could differ materially from those
projected in or contemplated by the forward-looking statements due to a number
of factors, including, without limitation, general economic and real estate
conditions and interest rates.
Liquidity and Capital Resources
At March 31, 2000, the Fund had cash and cash equivalents of $216,088 as
compared with $87,134 at March 31, 1999. The increase is primarily attributable
to proceeds from sales and maturities of marketable securities and cash
distributions received from Local Limited Partnerships. These increases are
partially offset by purchases of marketable securities and advances to Local
Limited Partnerships.
Under the terms of the Partnership Agreement, the Fund initially designated 4%
of the Adjusted Gross Proceeds (which generally means Gross Proceeds minus the
amounts committed to the acquisition of Treasury STRIPS) from the sale of Units
as a reserve for working capital of the Fund and contingencies related to the
ownership of Local Limited Partnership interests. The Managing General Partner
may increase or decrease such Reserves from time to time, as it deems
appropriate. Funds totaling approximately $372,000 have been withdrawn from
Reserves to pay legal and other fees relating to various property issues. To
date, the Fund has used approximately $327,000 of operating cash to replenish
Reserves. At March 31, 2000, approximately $982,000 of cash, cash equivalents
and marketable securities have 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 Fund's ongoing operations. Reserves may be used to fund
operating deficits, if the Managing General Partner deems funding appropriate.
If Reserves are not adequate to cover Fund operations, the Fund will seek other
funding sources including, but not limited to, the deferral of Asset Management
Fees to an affiliate of the 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 Fund might deem it in its best interests to
provide such funds, voluntarily, in order to protect its investment. The Fund
has advanced approximately $213,000 to Local Limited Partnerships to fund
operating deficits.
At March 31, 2000, the Fund has committed to make future capital contributions
and pay future purchase price installments on its investments in Local Limited
Partnerships. These future payments are contingent upon the achievement of
certain criteria as set forth in the Local Limited Partnership Agreements and
total approximately $240,000.
Since the Fund invests as a limited partner, the Fund has no contractual duty to
provide additional funds to Local Limited Partnerships beyond its specified
investment. Thus, at March 31, 2000, the Fund had no contractual or other
obligation to any Local Limited Partnership which had not been paid or provided
for, except as noted above.
Cash Distributions
No cash distributions were made during the years ended March 31, 2000 or 1999.
It is not expected that cash available for distribution, if any, will be
significant during the 2000 calendar year. Based on the results of 1999
operations, the Local Limited Partnerships are not expected to distribute
significant amounts of cash to the Fund because such amounts will be needed to
fund Property operating costs. In addition, many of the Properties benefit from
some type of federal or state subsidy and, as a consequence, are subject to
restrictions on cash distributions.
<PAGE>
Results of Operations
2000 versus 1999
For the year ended March 31, 2000, the Fund's operations resulted in a net loss
of $1,760,848 as compared to a net loss of $1,597,697 for the same period in
1999. The increase in net loss is primarily attributable to an increase in
equity in losses of Local Limited Partnerships and an increase in provision for
valuation of investment in Local Limited Partnership.
Low Income Housing Tax Credits
The 1999 and 1998 Tax Credits per Unit were $144.63 and $104.13 for Class A Unit
and Class B Unit investors, respectively. The credits, which have stabilized,
are expected to remain stable for the next year, and then are expected to
decrease as certain properties reach the end of the ten year period. However,
because the compliance periods extend significantly beyond the tax credit
periods, the Fund is expected to retain most of its interest in the Local
Limited Partnerships for the foreseeable future.
The Managing General Partner estimates that the 2000 Tax Credits allocated to
investors will be approximately $145 per Unit for Class A Unit investors and
$104 per Unit for Class B Unit investors. However, no assurance can be given in
this matter. Once the Tax Credits are stabilized, the annual amount allocated to
investors is expected to remain the same for about seven years. In years eight
through ten, the credits are expected to decrease as Properties reach the end of
the ten year credit period.
Property Discussions
As previously reported, Bancroft Street Apartments, located in Toledo, Ohio,
continues to experience significant operating deficits due to occupancy issues
and deteriorating market conditions. Occupancy as of March 31, 2000 was 59%. The
management agent is trying to address these problems by enhancing tenant
screening and marketing efforts, as well as implementing on-site tenant social
programs. However, given the severity of the operating deficits, it is possible
that the Fund will not be able to retain its interest in the property through
2000. A foreclosure would result in recapture of tax credits for investors, the
allocation of taxable income to the Fund and loss of future benefits associated
with this property. The Managing General Partner and Local General Partner are
currently in negotiations with the lender. The Managing General Partner is
closely monitoring this property.
Occupancy for Broadway Tower, located in Revere, Massachusetts, has improved and
for the past four quarters has been at 100%. However, the property is still
experiencing some operating deficits. As previously reported, in 1997 the Local
General Partner successfully negotiated with the local housing authority for
Section 8 rent increases and has implemented plans to decrease expenses
associated with tenant turnover and maintenance contracts. The property is
currently covering its operating expenses and debt service with funds from
operations and from funding by the Local General Partner. The Managing General
Partner continues to closely monitor this property.
As previously reported, Metropolitan Apartments, located in Chicago, Illinois,
has been experiencing occupancy problems. In 1998, management revised its
marketing plan and implemented new leasing policies. Occupancy as of March 31,
2000 was 87%. The property continues to operate at a deficit. It is possible
that Fund Reserves may be required to fund operating deficits. The Managing
General Partner and Local General Partner are working together to develop a plan
to help mitigate some of the deficits.
Primrose, located in Grand Forks, North Dakota, Phoenix Housing, located in
Moorhead, Minnesota, and Sycamore, located in Sioux Falls, South Dakota, which
have the same Local General Partner, have been performing satisfactorily.
However, affiliates of the Managing General Partner have been working with the
Local General Partner who has raised some concerns over the long-term financial
health of the properties. In 1997, in an effort to reduce possible future risk,
the Managing General Partner consummated the transfer of 50% of the Fund's
interest in capital and profits in Primrose, Phoenix Housing and Sycamore to an
affiliate of the Local General Partner. Subsequently, effective June 17, 1999,
the Local General Partner transferred both its general partner interest and
transferred 48.5% of its interest in capital and profits in Primrose, Phoenix
Housing and Sycamore to a non-affiliated, non-profit general partner. As a
result of this transfer, the Managing General Partner has the right to put the
Fund's remaining interest to the new Local General Partner any time after one
year from the June 17, 1999 effective date. The Fund will retain its full share
of tax credits until such time as the remaining interest is put to the Local
General Partner. In addition, the Local General Partner has the right to call
the remaining interest after the tax credit period has expired.
Findley Place Apartments, located in Minneapolis, Minnesota has been
experiencing operating deficits due to significant capital needs. The Managing
General Partner, the Local General Partner and the new management agent are
working together to develop a plan that will address the occupancy issues,
capital needs and long-term strategy for this property. The Managing General
Partner is closely monitoring this property. Occupancy continues to remain
strong and at March 31, 2000 was 100%.
The Fund has implemented policies and practices for assessing potential
impairment of its investments in Local Limited Partnerships. The investments are
analyzed by real estate experts to determine if impairment indicators exist. If
so, the carrying value is compared to the undiscounted future cash flows
expected to be derived from the asset. If there is a significant impairment in
carrying value, a provision to write down the asset to fair value will be
recorded in the Fund's financial statements.
Inflation and Other Economic Factors
Inflation had no material impact on the operations or financial condition of the
Fund for the years ended March 31, 2000 and 1999.
Since most of the Properties benefit from some form of government assistance,
the Fund is subject to the risks inherent in that area including decreased
subsidies, difficulties in finding suitable tenants and obtaining permission for
rent increases. In addition, any Tax Credits allocated to investors with respect
to a Property are subject to recapture to the extent that a Property or any
portion thereof ceases to qualify for the Tax Credits.
Certain of the Properties in which the Fund has invested are located in areas
suffering from poor economic conditions. Such conditions could have an adverse
effect on the rent or occupancy levels at such Properties. Nevertheless,
management believes that the generally high demand for below market rate housing
will tend to negate such factors. However, no assurance can be given in this
regard.
Other Development
Lend Lease Real Estate Investments, Inc. ("Lend Lease"), the U.S. subsidiary of
Lend Lease Corporation and the leading U.S. institutional real estate advisor,
as ranked by assets under management, acquired The Boston Financial Group
Limited Partnership ("Boston Financial") on November 3, 1999.
Headquartered in New York and Atlanta, Lend Lease Corporation has regional
offices in 12 cities nationwide. The company ranks as the leading U.S. manager
of tax-exempt assets invested in real estate. Lend Lease is a subsidiary of Lend
Lease Corporation, an international real estate and financial services group
listed on the Australian Stock Exchange. Worldwide, Lend Lease Corporation
operates from more than 30 cities on five continents: North America, Europe,
Asia, Australia and South America. In addition to real estate investments, the
Lend Lease Group operates in the areas of property development, project
management and construction, and capital services (infrastructure).
Item 7. Financial Statements and Supplementary Data
Information required under this Item is submitted as a separate section of this
Report. See Index on page F-1 hereof.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 9. Directors and Executive Officers of the Registrant
The Managing General Partner of the Fund is Arch Street VI, Inc., a
Massachusetts corporation (the "Managing General Partner"), an affiliate of Lend
Lease Real Estate Investments, Inc., ("Lend Lease"). The Managing General
Partner was incorporated in December, 1990. Randolph G. Hawthorne is the Chief
Operating Officer of the Managing General Partner and had the primary
responsibility for evaluating, selecting and negotiating investments for the
Fund. The Investment Committee of the Managing General Partner approved all
investments. The names and positions of the principal officers and the directors
of the Managing General Partner are set forth below.
Name Position
Jenny Netzer President, Managing Director
Michael H. Gladstone Vice President, Managing Director
Randolph G. Hawthorne Vice President, Managing Director
Paul F. Coughlan Vice President
William E. Haynsworth Vice President
The other General Partner of the Partnership is Arch Street VI Limited
Partnership, a Massachusetts limited partnership ("Arch Street VI L.P.") that
was organized in December 1990. The General Partner of Arch Street L.P. is Arch
Street VI, Inc.
The Managing General Partner provides day-to-day management of the Fund.
Compensation is discussed in Item 10 of this report. Such day-to-day management
does not include the management of the Properties.
The business experience of each of the persons listed above is described below.
There is no family relationship between any of the persons listed in this
section.
Jenny Netzer, age 44, Principal, Head of Housing and Community Investing -
Responsible for tax credit investment programs to institutional clients. Joined
Lend Lease through its 1999 acquisition of Boston Financial, started with Boston
Financial in 1987. Previously, led Boston Financial's new business initiatives
and managed firm's Asset Management division, responsible for performance of 750
properties and providing service to 35,000 investors. Prior to joining Boston
Financial, served as Deputy Budget Director for Commonwealth of Massachusetts,
responsible for Commonwealth's health care and public pension program's budgets,
served as Assistant Controller at Yale University and former member of Watertown
Zoning Board of Appeals Officer of Affordable Housing Tax Credit Coalition and
frequent speaker on affordable housing and tax credit industry issues, BA
Harvard University; Master's in Public Policy Harvard's Kennedy School of
Government.
Michael H. Gladstone, age 43, Principal, Legal - Responsible for legal work in
the areas of affordable and conventional housing and investment products and
services. Joined Lend Lease through its 1999 acquisition of Boston Financial,
started with Boston Financial in 1985; served as firm's General Counsel. Prior
to joining Boston Financial, associated with law firm of Herrick & Smith, served
on advisory board of Housing and Development Reporter. Lectured at Harvard
University on affordable housing matters, Member, The National Realty Committee,
Cornell Real Estate Council, National Association of Real Estate Investment
Managers and Massachusetts Bar, BA Emory University; JD & MBA Cornell
University.
Randolph G. Hawthorne, age 50, Principal, Housing and Community Investing -
Responsible for structuring and acquiring real estate investments. Joined Lend
Lease through its 1999 acquisition of Boston Financial, started with Boston
Financial in 1973. Previously, served as Boston Financial's Treasurer, Past
Chairman of the Board of the National Multi Housing Council, having served on
the board since 1989, Past President of the National Housing and Rehabilitation
Association, Member, Multifamily Council of the Urban Land Institute, Frequent
speaker at industry conferences. Serves on the Editorial Advisory Boards of the
Tax Credit Advisor and Multi-Housing News, BS Massachusetts Institute of
Technology; MBA Harvard Graduate School of Business. Board of Directors National
Housing Conference. Graduated MIT 1971, HBS 1973
Paul F. Coughlan, age 56, Principal, Housing and Community Investing -
Responsible for marketing and sales of institutional tax credit investments.
Joined Lend Lease through its 1999 acquisition of Boston Financial, started with
Boston Financial in 1975. Previously, served as sales manager for Boston
Financial's retail tax credit fund, AB Brown University.
William E. Haynsworth, age 60, Principal, Housing and Community Investing -
Responsible for the structuring of real estate investments and the acquisition
of property interests. Joined Lend Lease through its 1999 acquisition of Boston
Financial, started with Boston Financial in 1977. Prior to joining Boston
Financial, Acting Executive Director and General Counsel of the Massachusetts
Housing Finance Agency. Served as Director of Non-Residential Development of the
Boston Redevelopment Authority and Associate of Goodwin, Proctor & Hoar, Past
President and current Chairman of the Board of Directors of Affordable Housing
Tax Credit Coalition, BA Dartmouth College; LLB and LLM Harvard Law School.
Item 10. Management Remuneration
Neither the directors nor officers of Arch Street VI, Inc., the partners of Arch
Street VI L.P. nor any other individual with significant involvement in the
business of the Fund receives any current or proposed remuneration from the
Fund.
Item 11. Security Ownership of Certain Beneficial Owners and Management
No person is known to the Fund to be the beneficial owner of more than 5% of the
outstanding Units.
The equity securities registered by the Fund under Section 12(g) of the Act
consist of 100,000 Units, 37,933 (34,643 Class A Units and 3,290 Class B Units)
of which have been sold to the public. The remaining Units were deregistered in
Post-Effective Amendment No. 6, dated June 15, 1993, which is herein
incorporated by reference. Holders of Units are permitted to vote on matters
affecting the Fund only in certain unusual circumstances and do not generally
have the right to vote on the operation or management of the Fund.
Arch Street VI L.P. owns five (unregistered) Units not included in the 37,933
Units sold to the public. Additionally, ten registered Units were sold to an
employee of an affiliate of the Managing General Partner of the Registrant. Such
Units were sold at a discount of 7% of the Unit price for a total discount of
$700 and a total purchase price of $9,300.
Except as described in the preceding paragraph, neither Arch Street VI, Inc.,
Arch Street VI Limited Partnership, Boston Financial nor any of their executive
officers, directors, partners or affiliates is the beneficial owner of any
Units. None of the foregoing persons possesses a right to acquire beneficial
ownership of Units.
The Fund does not know of any existing arrangement that might at a later date
result in a change in control of the Fund.
Item 12. Certain Relationships and Related Transactions
The Fund was required to pay certain fees to and reimburse certain expenses of
the Managing General Partner or its affiliates in connection with the
organization of the Fund and the offering of Units. The Fund is also required to
pay certain fees to and reimburse certain expenses of the Managing General
Partner or its affiliates in connection with the administration of the Fund and
its acquisition and disposition of investments in Local Limited Partnerships. In
addition, the General Partners are entitled to certain Fund distributions under
the terms of the Partnership Agreement. Also, an affiliate of the General
Partners will receive up to $10,000 from the sale or refinancing proceeds of
each Local Limited Partnership, if it is still a limited partner at the time of
such transaction. All such fees, expenses and distributions paid in the two
years ending March 31, 2000 are described below and in the sections of the
Prospectus entitled "Estimated Use of Proceeds", "Management Compensation and
Fees" and "Profits and Losses for Tax Purposes, Tax Credits and Cash
Distributions". Such sections are incorporated herein by reference. In addition,
affiliates of the Managing General Partner are property management agents for
Pilot House, Preston Place and Linden Square.
The Fund is permitted to enter into transactions involving affiliates of the
Managing General Partner, subject to certain limitations established in the
Partnership Agreement.
Information regarding the fees paid and expense reimbursements made in the two
years ended March 31, 2000 is presented below.
Organizational fees and expenses
In accordance with the Partnership Agreement, affiliates of the General Partners
were reimbursed by the Fund for organizational, offering and selling expenses
advanced on behalf of the Fund by its affiliates and for salaries and direct
expenses of certain employees of the Managing General Partner and its affiliates
in connection with the registration and organization of the Fund. Such expenses
include printing expenses and legal, accounting, escrow agent and depository
fees and expenses. Such expenses also include a non-accountable expense
allowance for marketing expenses equal to 1% of gross offering proceeds.
$2,035,611 of organization fees and expenses incurred on behalf of the Fund were
paid and reimbursed to an affiliate of the Managing General Partner. Total
organization and offering expenses reimbursed by the Fund did not exceed 5.5% of
the gross offering proceeds. There were no organization fees and offering
expenses paid in the two years ended March 31, 2000.
Acquisition fees and expenses
In accordance with the Partnership Agreement, the Fund is required to pay
acquisition fees to and reimburse acquisition expenses of the Managing General
Partner or its affiliates for selecting, evaluating, structuring, negotiating
and closing the Fund's investments in Local Limited Partnerships. Acquisition
fees totaled 7% of Gross Proceeds. Acquisition expenses, which include such
expenses as legal fees and expenses, travel and communications expenses, costs
of appraisals, accounting fees and expenses did not exceed 1.5% of Gross
Proceeds. Acquisition fees totaling $2,590,827 for the closing of the Fund's
Local Limited Partnership Investments have been paid to an affiliate of the
Managing General Partner. Acquisition expenses totaling $825,516 were incurred
and have been reimbursed to an affiliate of the Managing General Partner. There
were no acquisition fees or expenses paid in the two years ended March 31, 2000.
Asset Management Fees
In accordance with the Partnership Agreement, an affiliate of the Managing
General Partner is paid an annual fee for services in connection with the
administration of the affairs of the Fund. The affiliate currently receives the
base amount of $6,600 per Local Limited Partnership (as adjusted by the CPI
factor) annually as the Asset Management Fee. Asset Management Fees incurred in
each of the two years ended March 31, 2000 are as follows:
2000 1999
----------- -------
Asset Management Fees $ 163,750 $ 166,952
Salaries and benefits expense reimbursements
An affiliate of the Managing General Partner is reimbursed for the cost of the
Fund's salaries and benefits expenses. The reimbursements are based upon the
size and complexity of the Fund's operations. Reimbursements paid or payable in
each of the two years ended March 31, 2000 are as follows:
2000 1999
----------- -------
Salaries and benefits
expense reimbursements $ 104,994 $ 79,303
Property Management Fees
Affiliates of the Managing General Partner are management agents for three Local
Limited Partnerships. Fees charged in each of the two years ended December 31,
1999 are as follows:
1999 1998
----------- --------
Property Management Fees $ 116,585 $ 109,997
Cash distributions paid to the General Partners
In accordance with the Partnership Agreement, the General Partners of the Fund,
Arch Street VI, Inc. and Arch Street VI Limited Partnership, receive 1% of cash
distributions paid to partners. No cash distributions were paid to the General
Partners in the two years ended March 31, 2000.
Additional information concerning cash distributions and other fees paid or
payable to the Managing General Partner and its affiliates and the reimbursement
of expenses paid or payable to Lend Lease and its affiliates for the two years
ended March 31, 2000 is presented in Note 6 to the Financial Statements.
<PAGE>
PART IV
Item 13. Exhibits and Reports on Form 8-K
(a)(1) and (a)(2) Documents filed as a part of this Report.
In response to this portion of Item 13, the financial statements and the
auditors' report relating thereto are submitted as a separate section of this
Report. See Index to the Financial Statements on page F-1 hereof.
The reports of auditors of the Local Limited Partnerships relating to the audits
of the financial statements of such Local Limited Partnerships appear in Exhibit
28.1 of this Report.
All other financial statement schedules and exhibits for which provision is made
in the applicable accounting regulations of the Securities and Exchange
Commission are not required under related instructions or are inapplicable and
therefore have been omitted.
(a)(3) See Exhibit Index contained herein.
(a)(3)(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the year ended March 31,
2000.
(a)(3)(c) Exhibits
Number and Description in Accordance with
Item 601 of Regulation S-K
27. Financial Data Schedule
28. Additional Exhibits
(a) 28.1 Reports of Other Independent Auditors
(a)(3)(d) None.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
BOSTON FINANCIAL TAX CREDIT FUND PLUS, A LIMITED PARTNERSHIP
By: Arch Street VI, Inc.
its Managing General Partner
By: /s/Randolph G. Hawthorne Date: June 29, 2000
------------------------------ ----------------
Randolph G. Hawthorne,
Managing Director, Vice President and
Chief Operating Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the Managing General
Partner of the Fund and in the capacities and on the dates indicated:
By: /s/Randolph G. Hawthorne Date: June 29, 2000
------------------------------ ---------------
Randolph G. Hawthorne,
Managing Director, Vice President and
Chief Operating Officer
By: /s/Michael H. Gladstone Date: June 29, 2000
------------------------------ ----------------
Michael H. Gladstone,
Managing Director, Vice President
<PAGE>
Item 8. Financial Statements and Supplementary Data
BOSTON FINANCIAL TAX CREDIT FUND PLUS, A LIMITED PARTNERSHIP
ANNUAL REPORT ON FORM 10-KSB
FOR THE YEAR ENDED MARCH 31, 2000
INDEX
Page No.
Report of Independent Accountants F-2
For the years ended March 31, 2000 and 1999
Financial Statements:
Balance Sheet - March 31, 2000 F-3
Statements of Operations - For the Years Ended
March 31, 2000 and 1999 F-4
Statements of Changes in Partners' Equity (Deficiency) -
For the Years Ended March 31, 2000 and 1999 F-5
Statements of Cash Flows - For the Years Ended
March 31, 2000 and 1999 F-6
Notes to the Financial Statements F-7
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners
Boston Financial Tax Credit Fund Plus, A Limited Partnership:
In our opinion, based on our audits and the reports of other auditors, the
financial statements listed in the accompanying index present fairly, in all
material respects, the financial position of Boston Financial Tax Credit Fund
Plus,A Limited Partnership (the "Fund") at March 31, 2000 and the results of its
operations and its cash flows for each of the two years in the period ended
March 31, 2000, in conformity with accounting principles generally accepted in
the United States. These financial statements are the responsibility of the
Partnership's management; our responsibility is to express an opinion on
these financial statements based on our audits. We did not audit the
financial statements of certain local limited partnerships for which $9,729,589
of cumulative equity in losses are included in these financial statements as
of March 31, 2000 and for which net losses of $1,173,917 and $1,050,536 are
included in the accompanying financial statements for the years ended March 31,
2000 and 1999, respectively. Those statements were audited by other auditors
whose reports thereon have been furnished to us, and our opinion expressed
herein, insofar as it relates to the amounts included for the Local Limited
Partnerships, is based solely on the reports of the other auditors. We
conducted our audits of these financial statements in accordance with
auditing standards generally accepted in the United States, which require
that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. We believe that our audits and
the reports of other auditors provide a reasonable basis for the opinions
expressed above.
/S/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
June 22, 2000
Boston, Massachusetts
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS
(A Limited Partnership)
BALANCE SHEET
March 31, 2000
<TABLE>
<CAPTION>
Assets
<S> <C>
Cash and cash equivalents $ 216,088
Marketable securities, at fair value (Note 3) 1,082,649
Other investments (Note 5) 1,672,507
Investments in Local Limited Partnerships, net (Note 4) 13,088,569
Other assets 14,723
-------------
Total Assets $ 16,074,536
=============
Liabilities and Partners' Equity
Accounts payable to affiliates (Note 6) $ 1,406,153
Accounts payable and accrued expenses 29,599
-------------
Total Liabilities 1,435,752
Commitments (Note 7)
General, Initial and Investor Limited Partners' Equity 14,651,196
Net unrealized loss on marketable securities (12,412)
Total Partners' Equity 14,638,784
Total Liabilities and Partners' Equity $ 16,074,536
=============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS
(A Limited Partnership)
STATEMENTS OF OPERATIONS
For the Years Ended March 31, 2000 and 1999
<TABLE>
<CAPTION>
2000 1999
------------ --------
Revenue:
<S> <C> <C>
Investment $ 72,855 $ 60,160
Accretion of Original Issue Discount (Note 5) 124,882 115,250
Recovery of bad debt - 10,368
Other 115,960 26,366
------------ ------------
Total Revenue 313,697 212,144
------------ ------------
Expenses:
Asset management fees, related party (Note 6) 163,750 166,952
General and administrative (includes
reimbursements to an affiliate in the amount
of $104,994 and $79,303, respectively) (Note 6) 216,657 193,976
Provision for valuation of investment in Local
Limited Partnership 150,000 -
Amortization 28,859 28,860
------------ ------------
Total Expenses 559,266 389,788
------------ ------------
Loss before equity in losses of Local Limited
Partnerships (245,569) (177,644)
Equity in losses of Local Limited
Partnerships (Note 4) (1,515,279) (1,420,053)
------------ ------------
Net Loss $ (1,760,848) $(1,597,697)
============ ============
Net Income (Loss) per Limited Partnership Unit:
Class A Unit (34,643 Units) $ (50.44) $ (45.82)
============ ============
Class B Unit (3,290 Units) $ 1.64 $ 2.04
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS
(A Limited Partnership
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
For the Years Ended March 31, 2000 and 1999
<TABLE>
<CAPTION>
Investor Investor Net
Initial Limited Limited Unrealized
General Limited Partners, Partners, Gains
Partners Partner Class A Class B (Losses) Totals
<S> <C> <C> <C> <C> <C> <C>
Balance at March 31, 1998 $ (151,122) $ 5,000 $ 15,654,223 $2,501,640$ 5,877 $ 18,015,618
---------- --------- -------------- ------------ -------- ---------------
Comprehensive Income (Loss):
Change in net unrealized
gains on marketable
securities available for sale - - - - (1,212) (1,212)
Net Income (Loss) (17,130) - (1,587,285) 6,718 - (1,597,697)
---------- --------- -------------- ----------- ----------- --------------
Comprehensive Income (Loss) (17,130) - (1,587,285) 6,718 (1,212) (1,598,909)
---------- --------- -------------- ----------- ----------- --------------
Balance at March 31, 1999 (168,252) 5,000 14,066,938 2,508,358 4,665 16,416,709
---------- --------- -------------- ----------- ----------- --------------
Comprehensive Income (Loss):
Change in net unrealized
gains on marketable
securities available for sale - - - - (17,077) (17,077)
Net Income (Loss) (18,857) - (1,747,393) 5,402 - (1,760,848)
---------- --------- -------------- ----------- ----------- --------------
Comprehensive Income (Loss) (18,857) - (1,747,393) 5,402 (17,077) (1,777,925)
---------- --------- -------------- ----------- ----------- --------------
Balance at March 31, 2000 $ (187,109) $ 5,000 $ 12,319,545 $ 2,513,760 $ (12,412) $ 14,638,784
========== ========= ============== =========== =========== ==============
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS
(A Limited Partnership
STATEMENTS OF CASH FLOWS
For the Years Ended March 31, 2000 and 1999
<TABLE>
<CAPTION>
2000 1999
------------- ---------
Cash flows from operating activities:
<S> <C> <C>
Net Loss $ (1,760,848) $ (1,597,697)
Adjustments to reconcile net loss to net cash
provided by (used for) operating activities:
Accretion of Original Issue Discount (124,882) (115,250)
Equity in losses of Local Limited Partnerships 1,515,279 1,420,053
Provision for valuation of investments in
Local Limited Partnerships 150,000 (10,368)
Gain on sales and maturities of
marketable securities (1,788) (5,607)
Amortization 28,859 28,860
Increase (decrease) in cash arising from
changes in operating assets and liabilities:
Other assets 534 6,602
Accounts payable to affiliates 194,937 168,826
Accounts payable and accrued expenses 4,003 (331,732)
------------- -------------
Net cash provided by (used for) operating activities 6,094 (436,313)
------------- -------------
Cash flows from investing activities:
Investments in Local Limited Partnerships - (100,000)
Advances to Local Limited Partnerships (120,000) (19,632)
Purchases of marketable securities (598,892) (700,187)
Proceeds from sales and maturities of
marketable securities 684,859 922,316
Cash distributions received from Local
Limited Partnerships 156,893 204,121
------------- -------------
Net cash provided by investing activities 122,860 306,618
------------- -------------
Net increase (decrease) in cash and cash
equivalents 128,954 (129,695)
Cash and cash equivalents, beginning of year 87,134 216,829
------------- -------------
Cash and cash equivalents, end of year $ 216,088 $ 87,134
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS
(A Limited Partnership
NOTES TO THE FINANCIAL STATEMENTS
1. Organization
Boston Financial Tax Credit Fund Plus, A Limited Partnership (the "Fund") is a
Massachusetts limited partnership organized to invest in other limited
partnerships ("Local Limited Partnerships") which own and operate apartment
complexes which are eligible for low income housing tax credits that may be
applied against the federal income tax liability of an investor. The Fund also
invests in, for the benefit of the Class B Limited Partners, United States
Treasury obligations from which the interest coupons have been stripped or in
such interest coupons themselves (collectively "Treasury STRIPS"). The Fund used
approximately 28% of the Class B Limited Partners' capital contributions to
purchase Treasury STRIPS with maturities of 13 to 18 years, with a total
redemption amount equal to the Class B Limited Partners' capital contributions.
Arch Street VI, Inc., a Massachusetts corporation ("Arch Street, Inc."), is the
Managing General Partner of the Fund. Arch Street VI Limited Partnership ("Arch
Street L.P."), a Massachusetts limited partnership whose general partner
consists of Arch Street, Inc., is also a General Partner. Both of the General
Partners are affiliates of Lend Lease Real Estate Investments, Inc. ("Lend
Lease"). An affiliate of the General Partners ("SLP Affiliate") is a special
limited partner in each Local Limited Partnership in which the Fund invests,
with the right to become a general partner under certain circumstances.
The fiscal year of the Fund ends on March 31.
The Fund offered two classes of Limited Partnership Interests - Class A Limited
Partnership Interests, represented by Class A Units, and Class B Limited
Partnership Interests, represented by Class B Units. The capital contributions
of Class A Limited Partners available for investment by the Fund are invested
entirely in Local Limited Partnerships. The capital contributions of Class B
Limited Partners available for investment by the Fund are invested partially in
Local Limited Partnerships and partially in Treasury STRIPS.
The Partnership Agreement authorized the sale of up to 100,000 Units of limited
partnership interests ("Units") at $1,000 per Unit. Boston Financial Securities,
Inc., an affiliate of the General Partners, received selling commissions and
underwriting advisory fees in the amount of 7.0% and 1.5%, respectively, of the
Class A Gross Proceeds and 5.04% and 1.08%, respectively, of the Class B Gross
Proceeds for Units sold by the entity as a soliciting dealer. On January 11,
1994, the Fund held its final investor closing. In total, the Fund received
$34,642,300 of capital contributions, net of discounts, from investors admitted
as Class A Limited Partners for 34,643 Units and $3,290,000 of capital
contributions, net of discounts, from investors admitted as Class B Limited
Partners for 3,290 Units.
The Partnership Agreement provides that all cash available for distribution will
be allocated 99% to the Limited Partners and 1% to the General Partners. Sale or
refinancing proceeds generally will be distributed first to the Limited Partners
in an amount equal to their adjusted capital contributions, second to the
General Partners in an amount equal to their capital contributions, third to the
General Partners (after payment of the 6% return as set forth in Section 4.2.3
of the Partnership Agreement and of any accrued but unpaid Subordinated
Disposition Fee) in such amount as is necessary to cause the General Partners to
have received 5% of all distributions to the Partners and lastly, 95% to the
Limited Partners and 5% to the General Partners.
Profits and losses for tax purposes arising from general operations and tax
credits generally will be allocated 99% to the Limited Partners and 1% to the
General Partners. However, as set forth in the Partnership Agreement, profits
and losses for tax purposes arising from a sale or refinancing generally will be
allocated among the Partners in such manner as is necessary to cause their
respective capital accounts to reflect the amount that would be distributable to
them in accordance with the priorities set forth in the preceding paragraph, if
all of the Fund's assets were sold for their federal adjusted basis and the Fund
were then liquidated.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS
(A Limited Partnership
NOTES TO THE FINANCIAL STATEMENTS (continued)
1. Organization (continued)
All distributions of cash available for distribution or distributions of sale or
refinancing proceeds, and all allocations of profits and losses for tax purposes
from normal operations and from a sale or refinancing or of tax credits, which
are distributed or allocated to the General Partners, will be allocated 1% to
Arch Street, Inc. and 99% to Arch Street L.P.
Because each class of Limited Partners had a different amount of its capital
contribution available for investment by the Fund in Local Limited Partnerships
(100% for Class A Limited Partners and approximately 72% for Class B Limited
Partners), the two classes of Limited Partners have different percentage
participation as to cash distributions, sale or refinancing proceeds and
allocation of profits, losses and credits attributable to investments in Local
Limited Partnerships. As such, profits and losses for financial reporting
purposes are allocated 1% to the General Partners, 92.66% to the Class A Limited
Partners and 6.34% to the Class B Limited Partners. All profits and losses and
cash distributions attributable to Treasury STRIPS are allocable only to Class B
Limited Partners.
Under the terms of the Partnership Agreement, the Fund initially designated 4%
of the Adjusted Gross Proceeds (which generally means Gross Proceeds minus the
amounts committed to the acquisition of Treasury STRIPS) from the sale of Units
as a reserve for working capital of the Fund and contingencies related to
ownership of Local Limited Partnership interests. The Managing General Partner
may increase or decrease such amounts from time to time, as it deems
appropriate. Funds totaling approximately $372,000 have been withdrawn from
Reserves to pay legal and other fees relating to various property issues. To
date, the Fund has used approximately $327,000 of operating cash to replenish
Reserves. At March 31, 2000, the Managing General Partner has designated
approximately $982,000 of cash, cash equivalents and marketable securities as
such Reserve.
2. Significant Accounting Policies
Basis of Presentation
The Fund accounts for its investments in Local Limited Partnerships, using the
equity method of accounting because the Fund does not have control over the
major operating and financial policies of the Local Limited Partnerships in
which it invests. Under the equity method, the investment is carried at cost,
adjusted for the Fund's share of income or loss of the Local Limited
Partnership, additional investments in and cash distributions from the Local
Limited Partnerships. Equity in income or loss of the Local Limited Partnerships
is included in the Fund's operations. The Fund has no obligation to fund
liabilities of the Local Limited Partnership beyond its investment and therefore
a Local Limited Partnership's investment will not be carried below zero. To the
extent that equity losses are incurred when a Local Limited Partnership's
respective investment value has been reduced to zero, the losses will be
suspended to be used against future income. Distributions received from Local
Limited Partnerships whose respective investment value has been reduced to zero
are included in income.
Excess investment costs over the underlying net assets acquired have arisen from
acquisition fees paid and expenses reimbursed to an affiliate of the Fund. These
fees and expenses are included in Investments in Local Limited Partnerships and
are being amortized on a straight-line basis over 35 years.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS
(A Limited Partnership
NOTES TO THE FINANCIAL STATEMENTS (continued)
2. Significant Accounting Policies (continued)
Basis of Presentation (continued)
The Fund recognizes a decline in the carrying value of its investments in Local
Limited Partnerships when there is evidence of a non-temporary decline in the
recoverable amount of the investment. There is a possibility that the estimates
relating to reserves for non-temporary declines in carrying value of investments
in Local Limited Partnerships may be subject to material near term adjustments.
The Fund, as a limited partner in the Local Limited 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 for tax credits. If the
cost of operating a property exceeds the rental income earned thereon, the Fund
may deem it in its best interest to voluntarily provide funds in order to
protect its investment.
The General Partner has elected to report results of the Local Limited
Partnerships on a 90-day lag basis because the Local Limited Partnerships report
their results on a calendar year basis. Accordingly, the financial information
of the Local Limited Partnerships that is included in the accompanying financial
statements is as of December 31, 1999 and 1998.
Cash Equivalents
Cash equivalents consist of short-term highly liquid money market instruments
with original maturities of 90 days or less at acquisition and approximate fair
value.
Marketable Securities and Other Investments
Marketable securities consist primarily of U. S. Treasury instruments and
various assets backed investment vehicles. The Fund's marketable securities are
classified as "Available for Sale" securities and reported at fair value as
reported by the brokerage firm at which the securities are held. Realized gains
and losses from the sales of securities are based on the specific identification
method. Unrealized gains and losses are excluded from earnings and reported as a
separate component of partners' equity. The Fund accounts for its investments in
Treasury STRIPS, which are included in other investments in the balance sheet
using the effective interest method of accretion for the original issue
discount. The Fund has the ability and it is its intention to hold the Treasury
STRIPS until maturity. Therefore, they are classified as "Held to Maturity" and
are carried at cost plus the adjustments for the discount using the effective
interest method.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Fair Value of Financial Instruments
Statement of Financial Accounting Standards No. 107 ("SFAS No. 107"),
Disclosures About Fair Value of Financial Instruments, requires disclosure of
the fair value of most on- and off-balance sheet financial instruments for which
it is practicable to estimate that value. The scope of SFAS No. 107 excludes
certain financial instruments, such as trade receivables and payables when the
carrying value approximates the fair value and investments accounted for under
the equity method, and all nonfinancial assets, such as real property. The fair
values of the Fund's assets and liabilities, which qualify as financial
instruments under SFAS No. 107, approximate their carrying amounts in the
accompanying balance sheets.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS
(A Limited Partnership
NOTES TO THE FINANCIAL STATEMENTS (continued)
2. Significant Accounting Policies (continued)
Income Taxes
No provision for income taxes has been made, as the liability for such taxes is
an obligation of the partners of the Fund.
Reclassifications
Certain reclassifications have been made to prior year's financial statements to
conform to the current year presentation.
3. Marketable Securities
<TABLE>
<CAPTION>
A summary of marketable securities is as follows:
Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
Debt securities issued by
the US Treasury and other
US government corporation
<S> <C> <C> <C> <C>
and agencies $ 973,042 $ 109 $ (9,516) $ 963,635
Mortgage backed securities 122,019 - (3,005) 119,014
----------- --------- ---------- -----------
Marketable securities
at March 31, 2000 $ 1,095,061 $ 109 $ (12,521) $ 1,082,649
=========== ========= ========== ===========
</TABLE>
The contractual maturities at March 31, 2000 are as follows:
<TABLE>
<CAPTION>
Fair
Cost Value
<S> <C> <C>
Due in less than one year $ 499,222 $ 497,157
Due in one year to five years 473,820 466,478
Mortgage backed securities 122,019 119,014
----------- -----------
$ 1,095,061 $ 1,082,649
=========== ===========
</TABLE>
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS
(A Limited Partnership
NOTES TO THE FINANCIAL STATEMENTS (continued)
3. Marketable Securities (continued)
Actual maturities for asset backed securities may differ from contractual
maturities because some borrowers have the right to call or prepay obligations.
Proceeds from sales of marketable securities were approximately $263,000 and
$525,000 during the years ended March 31, 2000 and 1999, respectively. Proceeds
from the maturities of marketable securities were approximately $422,000 and
$397,000 during the years ended March 31, 2000 and 1999, respectively. Included
in investment income are gross gains of $1,924 and $6,095 and gross losses of
$136 and $488 that were realized on these sales during the years ended March,
2000 and 1999, respectively.
4. Investments in Local Limited Partnerships
The Fund uses the equity method to account for its limited partnership interests
in twenty-five Local Limited Partnerships which own and operate multi-family
housing complexes, most of which are government assisted. The Fund, as Investor
Limited Partner pursuant to the various Local Limited Partnership Agreements,
which contain certain operating and distribution restrictions, has acquired a
99% interest in the profits, losses, tax credits and cash flows from operations
of each of the Local Limited Partnerships, except for Livingston Arms,
Metropolitan and New Garden Place, in which 82%, 98.75% and 97.9% interests have
been acquired, respectively. Upon dissolution, proceeds will be distributed
according to each respective partnership agreement.
The following is a summary of Investments in Local Limited Partnerships at March
31, 2000:
<TABLE>
<CAPTION>
Capital contributions and advances paid to Local Limited Partnerships and purchase
<S> <C>
price paid to withdrawing partners of Local Limited Partnerships $ 27,178,914
Cumulative equity in losses of Local Limited Partnerships (excluding
cumulative unrecognized losses of $473,930) (12,338,299)
Cash distributions received from Local Limited Partnerships (782,897)
-------------
Investments in Local Limited Partnerships before adjustments 14,057,718
Excess of investment cost over the underlying net assets acquired:
Acquisition fees and expenses 1,122,226
Accumulated amortization of acquisition fees and expenses (215,199)
-------------
14,964,745
Reserve for valuation Investments in Local Limited Partnerships (1,876,176)
-------------
$ 13,088,569
</TABLE>
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS
(A Limited Partnership
NOTES TO THE FINANCIAL STATEMENTS (continued)
4. Investments in Local Limited Partnerships (continued)
The Fund has provided a reserve for valuation for four of its investments in
Local Limited Partnerships, Bancroft Court, Phoenix Housing, Primrose and
Sycamore, because there is evidence of non-temporary declines in the recoverable
amount of the investments.
Summarized financial information as of December 31, 1999 and 1998 (due to the
Fund's policy of reporting the financial information of its Local Limited
Partnership interests on a 90-day lag basis) of all Local Limited Partnerships
in which the Fund has invested as of that date is as follows:
Summarized Balance Sheets - as of December 31,
<TABLE>
<CAPTION>
1999 1998
------------ --------
Assets:
<S> <C> <C>
Investment property, net $ 66,735,658 $ 69,053,346
Current assets 1,595,317 2,039,137
Other assets 3,946,585 3,869,751
------------ ------------
Total Assets $ 72,277,560 $ 74,962,234
============ ============
Liabilities and Partners' Equity:
Current liabilities (includes current portion
of long-term debt) $ 2,962,229 $ 2,961,881
Long-term debt 51,956,857 52,855,222
Other debt 3,214,764 2,630,760
------------ ------------
Total Liabilities 58,133,850 58,447,863
Fund's Equity 12,764,924 14,927,073
Other Partners' Equity 1,378,786 1,587,298
------------ ------------
Total Liabilities and Partners' Equity $ 72,277,560 $ 74,962,234
============ ============
Summarized Income Statements -
for the years ended December 31,
1999 1998
------------ --------
Rental and other income $ 10,212,301 $ 10,265,533
------------ ------------
Expenses:
Operating 5,818,020 5,541,256
Interest 3,464,002 3,563,300
Depreciation and amortization 2,748,464 2,812,942
------------ ------------
Total Expenses 12,030,486 11,917,498
------------ ------------
Net Loss $ (1,818,185) $ (1,651,965)
============ ============
Fund's share of Net Loss $ (1,782,829) $ (1,626,433)
============ ============
Other partners' share of Net Loss $ (35,356) $ (25,532)
============ ============
</TABLE>
For the years ended March 31, 2000 and 1999, the Fund has not recognized
$267,550 and $206,380, respectively, of equity in losses relating to three Local
Limited Partnerships in which cumulative equity in losses have exceeded their
total investment.
The Fund's equity as reflected by the Local Limited Partnerships of $12,764,924
differs from the Fund's investments in Local Limited Partnerships before
adjustment of $14,057,718 primarily because of cumulative unrecognized losses of
$473,930 described above and differences in the accounting treatment of
miscellaneous items.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS
(A Limited Partnership
NOTES TO THE FINANCIAL STATEMENTS (continued)
5. Other Investments
Other investments consists of the aggregate cost of the Treasury STRIPS
purchased by the Fund for the benefit of the Class B Limited Partners. The
amortized cost at March 31, 2000 is composed of the following:
Aggregate cost of Treasury STRIPS $ 918,397
Accumulated accretion of
Original Issue Discount 754,110
$ 1,672,507
The fair value of these securities at March 31, 2000 is $1,904,618. Maturity
dates for the STRIPS range from February 15, 2007 to May 15, 2010 with a final
maturity value of $3,290,000.
6. Transactions with Affiliates
An affiliate of the Managing General Partner currently receives the base amount
of $6,600 per Local Limited Partnership (as adjusted by the CPI factor) annually
as the Asset Management Fee for administering the affairs of the Fund. Included
in the statements of operations for the years ended March 31, 2000 and 1999 is
$163,750 and $166,952, respectively, of fees earned by the affiliate. At March
31, 2000, the affiliate is due $1,359,565 for these fees.
An affiliate of the Managing General Partner is reimbursed for the actual cost
of the Fund's operating expenses. Included in general and administrative
expenses for the years ended March 31, 2000 and 1999 is $104,994 and $79,303
respectively, that has been paid or is payable by the Fund as reimbursements for
salaries and benefits expenses. At March 31, 2000, $46,588 is payable to an
affiliate of the Managing General Partner.
Affiliates of the Managing General Partner manage three properties in which the
Fund has invested. Included in operating expenses in the summarized income
statements in Note 4 to the Financial Statements is $116,585 and $109,997 of
fees earned by these affiliates for the years ended December 31, 1999 and 1998,
respectively.
7. Commitments
At March 31, 2000, the Fund has committed to make future capital contributions
and pay future purchase price installments on its investment in a Local Limited
Partnership. These future payments are contingent upon the achievement of
certain criteria as set forth in the Local Limited Partnership Agreement and
total approximately $240,000.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS
(A Limited Partnership
NOTES TO THE FINANCIAL STATEMENTS (continued)
8. Federal Income Taxes
The following schedule reconciles the reported financial statement loss for the
fiscal years ended March 31, 2000 and 1999 to the loss reported on the Form
1065, U. S. Partnership Return of Income for the years ended December 31, 1999
and 1998:
<TABLE>
<CAPTION>
2000 1999
-------------- ----------
<S> <C> <C>
Net Loss per financial statements $ (1,760,848) $ (1,597,697)
Adjustment to reflect March 31 fiscal year end
to December 31 tax year end 36,275 (9,133)
Adjustment for equity in losses of Local Limited
Partnerships for tax purposes in excess of equity
in losses for financial reporting purposes (342,700) (413,357)
Euity in losses of Local Limited Parnerships not
recognized for financial reporting purposes (267,550) (206,380)
Loss on write-off of investment in Local Limited
Partnership for tax purposes - (404,224)
Bad debt expense not deductible for tax purposes 150,000 -
Related party expenses not currently deductible for
tax purposes 163,332 168,159
Amortization of acquisition fees and expenses for
tax purposes in excess of amortization for financial
reporting purposes (11,949) (11,948)
-------------- -------------
Net Loss per tax return $ (2,033,440) $ (2,474,580)
============== =============
</TABLE>
The differences in the assets and liabilities of the Fund for financial
reporting purposes and tax reporting purposes for the year ended March 31,
2000 are as follows:
<TABLE>
<CAPTION>
Financial Tax
Reporting Reporting
Purposes Purposes Differences
<S> <C> <C> <C>
Investments in Local Limited Partnerships $ 13,088,569 $ 10,768,801 $ 2,319,768
============= ============= ================
Other assets $ 2,985,967 $ 8,251,136 $ (5,265,169)
============= ============= ================
Liabilities $ 1,435,752 $ 32,918 $ 1,402,834
============= ============= ================
</TABLE>
The differences in the assets and liabilities of the Fund for financial
reporting purposes are primarily attributable to: i) the cumulative equity in
losses from Local Limited Partnerships for tax reporting purposes is
approximately $3,832,000 greater than for financial reporting purposes including
approximately $474,000 of losses the Fund has not recognized for financial
reporting purposes; ii) organizational and offering costs of approximately
$5,132,000 have been capitalized for tax reporting purposes but are charged to
Limited Partners' equity for financial reporting purposes; and iii) related
party expenses which are deductible for financial reporting purposes of
approximately $1,360,000 are not deductible for tax reporting purposes.
<PAGE>
