UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1998
OR
____ TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 33-89968
INDEPENDENCE TAX CREDIT PLUS L.P. IV
(Exact name of registrant as specified in its charter)
Delaware 13-3809869
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
625 Madison Avenue, New York, New York 10022
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212)421-5333
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securi-
ties 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>
<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
<CAPTION>
December 31, March 31,
1998 1998
<S> <C> <C>
ASSETS
Property and equipment at cost,
net of accumulated depreciation
of $2,008,143 and $1,134,299,
respectively $34,366,504 $33,487,474
Construction in progress 16,176,383 9,294,984
Cash and cash equivalents 19,506,384 9,811,741
Investments available for sale 0 17,000,000
Cash held in escrow 1,516,222 2,454,311
Deferred costs, net of accumulated
amortization
of $78,162 and $53,186, respectively 1,691,104 1,555,982
Other assets 336,373 391,570
Total assets $73,592,970 $73,996,062
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage notes payable $18,463,215 $17,371,283
Construction loans payable 6,863,581 7,468,689
Accounts payable and other
liabilities 3,817,421 4,069,053
Due to local general partners and
affiliates 3,458,558 3,320,488
Due to general partner and affiliates 380,897 507,387
Total liabilities 32,983,672 32,736,900
Minority interest 773,755 736,218
Partners' capital:
Limited partners (45,844 BACs
issued and outstanding) 39,844,721 40,525,248
General partner (9,178) (2,304)
Total partners' capital 39,835,543 40,522,944
Total liabilities and partners'
capital $73,592,970 $73,996,062
See Accompanying Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Revenues
Rental income $ 836,844 $379,196 $1,915,799 $1,012,466
Other income
(principally interest
on capital
contributions) 201,006 317,243 654,480 908,512
Total revenues 1,037,850 696,439 2,570,279 1,920,978
Expenses
General and
administrative 187,918 153,679 632,281 417,609
General and
administrative-
related parties
(Note 2) 92,992 116,779 301,234 280,674
Repairs and
maintenance 152,149 14,009 261,825 129,781
Operating 71,805 43,634 235,704 127,365
Taxes 6,172 6,307 39,686 52,752
Insurance 53,437 12,086 115,426 49,191
Interest 311,203 178,746 735,167 556,998
Depreciation and
amortization 397,562 162,633 898,820 484,806
Total expenses 1,273,238 687,873 3,220,143 2,099,176
Income (loss) before
minority interest (235,388) 8,566 (649,864) (178,198)
Minority interest in
(income) loss of
subsidiary
partnerships (15,688) 45 (37,537) 1,520
Net income (loss) $ (251,076) $ 8,611 $ (687,401) $ (176,678)
Net income (loss) -
limited partners $ (248,565) $ 8,525 $ (680,527) $ (174,911)
Number of BACs
outstanding 45,844 45,844 45,844 45,844
Net income (loss)
per BAC $ (5.42) $ .18 $ (14.84) $ (3.82)
See Accompanying Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
Consolidated Statement of Changes in Partners' Capital
(Unaudited)
<CAPTION>
Limited General
Total Partners Partner
<S> <C> <C> <C>
Partners' capital -
April 1, 1998 $40,522,944 $40,525,248 $ (2,304)
Net loss (687,401) (680,527) (6,874)
Partners' capital -
December 31, 1998 $39,835,543 $39,844,721 $ (9,178)
See Accompanying Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
<CAPTION>
Nine Months Ended
December 31,
1998 1997
<S> <C> <C>
Cash flows from operating activities:
Net loss $(687,401) $(176,678)
Adjustments to reconcile net loss
to net cash (used in) provided by
operating activities:
Depreciation and amortization 898,820 484,806
Minority interest in income (loss)
of subsidiary properties 37,537 (1,520)
Increase in cash held in escrow (54,305) (77,216)
Decrease (increase) in other assets 96,547 (49,549)
(Decrease) increase in accounts
payable and other liabilities (417,232) 336,260
Increase in due to local general
partners and affiliates 18,250 91,800
Decrease in due to local general
partners and affiliates (98,367) 0
Decrease in due to
general partner and affiliates (126,490) (6,726)
Total adjustments 354,760 777,855
Net cash (used in) provided by
operating activities (332,641) 601,177
Cash flows from investing activities:
Increase in property and equipment (1,752,874) (997,922)
Increase in construction in progress (6,881,399) (12,762,975)
Decrease (increase) in cash
held in escrow 992,394 (1,548,895)
Increase in accounts payable and
other liabilities 165,600 596,484
Increase in other assets (41,350) (718,904)
Increase in due to local general
partners and affiliates 712,373 1,248,581
Decrease in due to local general
partners and affiliates (494,186) (775,469)
Decrease (increase) in investments
available for sale 17,000,000 (1,000,000)
(Increase) decrease in deferred costs (24,548) 532,558
Net cash provided by (used in)
investing activities 9,676,010 (15,426,542)
Cash flows from financing activities:
Proceeds from mortgage notes 1,139,000 1,303,324
Repayments of mortgage notes (47,068) (29,643)
Proceeds from construction loans 1,185,967 5,006,862
Repayments of construction loans (1,791,075) (2,279,189)
Increase in deferred costs (135,550) (20,058)
Net cash provided by financing
activities 351,274 3,981,296
Net increase (decrease) in cash and
cash equivalents 9,694,643 (10,844,069)
Cash and cash equivalents at
beginning of period 9,811,741 17,061,164
Cash and cash equivalents at
end of period $19,506,384 $ 6,217,095
Supplemental disclosures of
noncash investing activities:
Consolidation of investment in
subsidiary partnership:*
Increase in property and
equipment $ 0 $(2,660,030)
Decrease in construction in
progress $ 0 $ 2,660,030
*Prior to consolidation, investment in subsidiary partnerships are
included in property and equipment.
See Accompanying Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
Notes to Financial Statements
December 31, 1998
(Unaudited)
Note 1 - General
Independence Tax Credit Plus L.P. IV (a Delaware limited part-
nership) (the "Partnership") was organized on February 22, 1995,
and commenced the public offering on July 6, 1995. The general
partner of the Partnership is Related Independence L.L.C., a
Delaware limited liability company (the "General Partner").
The Partnership's business is to invest in other partnerships ("Lo-
cal Partnerships", "subsidiaries" or "subsidiary partnerships")
owning apartment complexes that are eligible for the low-income
housing tax credit ("Housing Tax Credit") enacted in the Tax Re-
form Act of 1986, some of which complexes may also be eligible
for the historic rehabilitation tax credit ("Historic Tax Credit";
together with Housing Tax Credits, "Tax Credits").
As of December 31, 1998, the Partnership has acquired a limited
partnership interest in ten subsidiary partnerships. The Partner-
ship anticipates acquiring limited partnership interests in addi-
tional subsidiary partnerships in the future. The Partnership's
investment in each Local Partnership represents from 98.99% to
99.89% with one Local Partnership at 58.12% of the partnership
interests in the Local Partnership. Through the rights of the Part-
nership and/or an affiliate of the General Partner, which affiliate
has a contractual obligation to act on behalf of the Partnership, to
remove the general partner of the subsidiary partnerships and to
approve certain major operating and financial decisions, the Part-
nership has a controlling financial interest in the subsidiary part-
nership.
For financial reporting purposes, the Partnership's fiscal quarter
ends December 31. All subsidiaries have fiscal quarters ending
September 30. Accounts of the subsidiaries have been adjusted for
intercompany transactions from October 1 through December 31.
The Partnership's fiscal quarter ends December 31 in order to al-
low adequate time for the subsidiaries financial statements to be
prepared and consolidated.
All intercompany accounts and transactions with the subsidiary
partnerships have been eliminated in consolidation.
Increases (decreases) in the capitalization of consolidated subsidi-
aries attributable to minority interest arise from cash contributions
from and cash distributions to the minority interest partners.
Losses attributable to minority interests which exceed the minority
interests' investment in a subsidiary have been charged to the
Partnership. Such losses aggregated approximately $0 and $5,000
and $0 and $83,000 for the three and nine months ended Decem-
ber 31, 1998 and 1997, respectively. The Partnership's investment
in each subsidiary is equal to the respective subsidiary's partners'
equity less minority interest capital, if any. In consolidation, all
subsidiary partnership losses are included in the Partnership's
capital account except for losses allocated to minority interest
capital.
Certain information and note disclosures normally included in
financial statements prepared in accordance with generally ac-
cepted accounting principles have been omitted or condensed.
These condensed financial statements should be read in conjunc-
tion with the financial statements and notes thereto included in
the Partnership's Annual Report on Form 10-K for the period
ended March 31, 1998.
The books and records of the Partnership are maintained on the
accrual basis of accounting in accordance with generally accepted
accounting principles. In the opinion of the General Partner of the
Partnership, the accompanying unaudited financial statements
contain all adjustments (consisting only of normal recurring ad-
justments) necessary to present fairly the financial position of the
Partnership as of December 31, 1998, the results of operations for
the three and nine months ended December 31, 1998 and 1997 and
cash flows for the nine months ended December 31, 1998 and
1997. However, the operating results for the nine months ended
December 31, 1998 may not be indicative of the results for the
year.
Note 2 - Related Party Transactions
An affiliate of the General Partner has a .01% interest as a special
limited partner in each of the Local Partnerships.
The costs incurred to related parties are as follows:
A) Acquisition Fees and Expenses
The General Partner is entitled to an acquisition fee equal to 6.0%
of the gross proceeds of the offering paid upon investor closings,
for its services in connection with assisting the Local Partnerships
in acquiring apartment complexes and supervising the construc-
tion of the complexes. Such fees will be capitalized as a cost of the
investments upon closing of subsidiary partnership acquisitions.
As of both December 31, 1998 and March 31, 1998, $2,750,640 of
such costs have been incurred, of which $1,770,677 have been
capitalized.
B) Other Related Party Expenses
<TABLE>
The costs incurred to related parties for the three and nine months
ended December 31, 1998 and 1997 were as follows:
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Partnership manage-
ment fees (a) $69,451 $88,905 $208,108 $173,134
Expense reimburse-
ment (b) 15,160 18,000 68,524 78,813
Local administra-
tive fee (d) 1,250 1,250 3,750 3,750
Total general and
administrative-
General Partner 85,861 108,155 280,382 255,697
Property manage-
ment fees incurred
to affiliates of
the subsidiary
partnerships'
general partners (c) 7,131 8,624 20,852 24,977
Total general and
administrative-
related parties $92,992 $116,779 $301,234 $280,674
</TABLE>
(a) The General Partner is entitled to receive a partnership man-
agement fee, after payment of all Partnership expenses, which
together with the annual local administrative fees will not exceed
a maximum of 0.5% per annum of invested assets (as defined in
the Partnership Agreement), for administering the affairs of the
Partnership. Subject to the foregoing limitation, the partnership
management fee will be determined by the General Partner in its
sole discretion based upon its review of the Partnership's invest-
ments. Unpaid partnership management fees for any year will be
accrued without interest and will be payable from working capital
reserves or to the extent of available funds after the Partnership
has made distributions to the limited partners of sale or refinanc-
ing proceeds equal to their original capital contributions plus a
10% priority return thereon (to the extent not theretofore paid out
of cash flow). Partnership management fees owed to the General
Partner amounting to approximately $206,000 and $269,000 were
accrued and unpaid as of December 31, 1998 and March 31, 1998,
respectively.
(b) The Partnership reimburses the General Partner and its affili-
ates for actual Partnership operating expenses incurred by the
General Partner and its affiliates on the Partnership's behalf. The
amount of reimbursement from the Partnership is limited by the
provisions of the Partnership Agreement. Another affiliate of the
General Partner performs asset monitoring for the Partnership.
These service include site visits and evaluations of the subsidiary
partnerships' performance.
(c) Property management fees incurred by the Local Partnerships
amounted to $60,903 and $22,880 and $133,607 and $62,979 for the
three and nine months ended December 31, 1998 and 1997, respec-
tively. Of these fees $7,131 and $8,624 and $20,852 and $24,977
were incurred to affiliates of the subsidiary partnerships' general
partners.
(d) Independence SLP IV L.P., a special limited partner of the
subsidiary partnerships, is entitled to receive a local administra-
tive fee of up to $5,000 per year from each subsidiary partnership.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Con-
dition and Results of Operations
Liquidity and Capital Resources
The Partnership's primary source of funds include (i) interest
earned on Gross Proceeds which are invested in tax-exempt
money market instruments pending acquisition of and final pay-
ments to Local Partnerships and (ii) working capital reserve and
interest earned thereon. All these sources of funds are available to
meet obligations of the Partnership.
As of December 31, 1998, the Partnership has invested approxi-
mately $29,312,000 (including approximately $1,161,000 classified
as a loan repayable from sale/refinancing proceeds in accordance
with the Contribution Agreement and not including acquisition
fees of approximately $1,771,000) of net proceeds in ten Local
Partnerships of which approximately $7,568,000 remains to be
paid to the Local Partnerships (including approximately
$1,320,000 being held in escrow) as certain benchmarks, such as
occupancy level, must be attained prior to the release of the funds.
During the nine months ended December 31, 1998, the Partnership
exercised its option to purchase an additional 3% interest in one
Local Partnership for a purchase price of approximately $33,000
(all of which was paid). One Local Partnership was acquired
during the nine months ended December 31, 1998 for a purchase
price of approximately $1,889,000 of which approximately
$283,000 remains to be paid. The Partnership has approximately
$7,134,000 available for future investments. During the nine
months ended December 31, 1998, approximately $7,606,000 was
paid to Local Partnerships ($1,217,000 of which was released from
escrow). An additional $225,000 was placed into escrow for pur-
chase price payments during the nine months ended December 31,
1998. The Partnership will be acquiring additional properties, and
the Partnership may be required to fund potential purchase price
adjustments based on tax credit adjustor clauses. There were no
purchase price adjustments during the nine months ended De-
cember 31, 1998.
For the nine months ended December 31, 1998, cash and cash
equivalents of the Partnership and its ten consolidated Local Part-
nerships increased approximately $9,695,000 primarily due to a
decrease in cash held in escrow ($992,000), an increase in accounts
payables and other liabilities relating to investing activities
($166,000), a net increase in due to local general partners and af-
filiates relating to investing activities ($218,000), a decrease in
investments available for sale ($17,000,000) and net proceeds from
mortgage and construction loans ($2,325,000) which exceeded
cash used in operating activities ($333,000), an increase in property
and equipment ($1,753,000), an increase in construction in prog-
ress ($6,881,000), an increase in deferred costs ($136,000) and net
repayments of mortgage and construction loans ($1,838,000).
Included in the adjustments to reconcile the net loss to cash used
in operations is depreciation and amortization of approximately
$899,000.
A working capital reserve of approximately $1,146,000 (2.5% of
gross equity) has been established from the Partnership's funds
available for investment, which includes amounts which may be
required for potential purchase price adjustments based on tax
credit adjustor clauses. At December 31, 1998 and March 31, 1998,
none of this reserve was used. The General Partner believes that
these reserves, plus any cash distributions received from the op-
erations of the Local Partnerships, will be sufficient to fund the
Partnership's ongoing operations for the foreseeable future. As of
December 31, 1998 and 1997, there has been no cash distributions
from the Local Partnerships. Management anticipates receiving
distributions in the future, although not to a level sufficient to
permit providing cash distributions to the BACs holders.
The Partnership has negotiated Development Deficit Guarantees
with the development stage Local Partnerships in which it has
invested. The Local General Partners and/or their affiliates have
agreed to fund development deficits through the breakeven dates
of each of the ten Local Partnerships.
The Partnership has negotiated Operating Deficit Guaranty
Agreements with the development stage Local Partnerships by
which the general partners of such Local Partnerships and/or
their affiliates have agreed to fund operating deficits for a speci-
fied period of time. The terms of the Operating Deficit Guaranty
Agreements vary for each of these Local Partnerships, with maxi-
mum dollar amounts to be funded for a specified period of time,
generally seven years, commencing on the break-even date. The
gross amount of the Operating Deficit Guarantees aggregates ap-
proximately $2,665,000 as of December 31, 1998.
The Partnership has also negotiated a Rent-Up Guaranty Agree-
ment with one Local Partnership, in which the Local General Part-
ner agrees to pay liquidated damages if predetermined occupancy
rates are not achieved.
The Development Deficit, Operating Deficit and the Rent-Up
Guaranty Agreements were negotiated to protect the Partnership's
interest in the Local Partnerships and to provide incentive to the
Local General Partners to generate positive cash flow.
The Partnership has invested or committed for investment ap-
proximately 80% of the net proceeds available for investment in
ten Local Partnerships, of which two commenced to generate tax
credits in 1996, three have commenced to generate tax credits in
1997 and five are anticipated to commence to generate tax credits
in 1998.
Management is not aware of any trends or events, commitments
or uncertainties, which have not otherwise been disclosed that will
or are likely to impact liquidity in a material way. Management
believes the only impact would be from laws that have not yet
been adopted. The portfolio will be diversified by the location of
the properties around the United States so that if one area of the
country is experiencing downturns in the economy, the remaining
properties in the portfolio may be experiencing upswings. How-
ever the geographic diversification of the portfolio may not protect
against a general downturn in the national economy. The tax
credits will be attached to the project for a period of ten years, and
will be transferable with the property during the remainder of
such ten-year period. If the General Partner determined that a sale
of a property is warranted, the remaining tax credits would trans-
fer to the new owner, thereby adding value to the property on the
market, which are not included in the financial statement carrying
amount.
Results of Operations
As of December 31, 1998 and 1997, the Partnership had acquired
an interest in ten and nine Local Partnerships, respectively, ten
and six of which were consolidated at December 31, 1998 and
1997. The Partnership intends to utilize the net proceeds of the
offering to acquire additional interests in Local Partnerships.
The Partnership's results of operations for the three and nine
months ended December 31, 1998 and 1997 consisted primarily of
(1) approximately $142,000 and $288,000 and $477,000 and
$831,000, respectively, of tax-exempt interest income earned on
funds not currently invested in Local Partnerships and (2) the
results of the Partnership's investment in nine of ten and five of six
consolidated Local Partnerships, respectively.
For the three and nine months ended December 31, 1998 as com-
pared to 1997, rental income and all categories of expenses in-
creased except general and administrative-related parties and
taxes and the results of operations are not comparable due to the
acquisition, construction and rent up of properties, and are not
reflective of future operations of the Partnership due to uncom-
pleted property construction, rent up of properties and the contin-
ued utilization of the net proceeds of the Offering to invest in Lo-
cal Partnerships. In addition, interest income will decrease in
future periods since a substantial portion of the proceeds from the
Offering will be included in or released to Local Partnerships.
Other income decreased approximately $116,000 and $254,000 for
the three and nine months ended December 31, 1998 as compared
to the corresponding periods in 1997 primarily due to a decrease
in interest income as a result of the acquisition of and the release
of proceeds to the Local Partnerships. General and administra-
tive-related parties decreased approximately $24,000 for the three
months ended December 31, 1998 as compared to the corre-
sponding period in 1997 primarily due to the partnership man-
agement fees payable to the General Partner being increased to the
maximum amount in the third quarter of 1997. Taxes decreased
approximately $13,000 for the nine months ended December 31,
1998 as compared to the corresponding period in 1997 primarily
due to the reduction of city taxes resulting from low income
housing status at one Local Partnership.
For the three months ended December 31, 1998 and 1997, none of
the Partnership's nine and six consolidated properties, respec-
tively, completed construction and were in various stages of rent
up. In addition, three and zero of the properties, respectively, had
completed construction in a previous fiscal quarter, but were in
various stages of rent up for the three months. Also, for the three
months ended December 31, 1998 and 1997, three and three of the
properties had completed construction and were rented up in a
previous fiscal quarter. For the nine months ended December 31,
1998 and 1997, three and zero of the Partnership's nine and six
consolidated properties, respectively, had completed construction
in a previous fiscal year, but were in various stages of rent up for
the nine months. In addition three and two of the properties,
respectively, had completed construction and were rented up in a
previous fiscal year. As of the end of the nine months ended De-
cember 31, 1998 and 1997, three and three of the Partnership's nine
and six consolidated properties, respectively, were still under
construction and three and three of the properties, respectively,
had construction loans with commitments for permanent financ-
ing.
Year 2000 Compliance
The Partnership utilizes the computer services of an affiliate of the
General Partner. The affiliate of the General Partner is in the proc-
ess of upgrading its computer information systems to be year 2000
compliant and beyond. The Year 2000 compliance issue concerns
the inability of a computerized system to accurately record dates
after 1999. The affiliate of the General Partner recently underwent
a conversion of its financial systems applications and is in the
process of upgrading and testing the in house software and hard-
ware inventory. The workstations that experienced problems
from this process were corrected with an upgrade patch. The costs
incurred to the General Partner are not being charged to the Part-
nership. In regard to third parties, the Partnership's General Part-
ner is in the process of evaluating the potential adverse impact
that could result from the failure of material service providers to
be year 2000 compliant. A detailed survey and assessment of third
party readiness was sent to material third parties in the fourth
quarter of 1998. The results of the surveys will be compiled in
early 1999. No estimate can be made at this time as to the impact
of the readiness of such third parties. The Partnership's General
Partner plans to have these issues fully assessed by early 1999, at
which time the risks will be addressed and a contingency plan will
be implemented if necessary.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders - None
Item 5. Other Information
As set forth in Schedule 13D filed by Lehigh Tax Credit
Partners III L.L.C. ("Lehigh III") and Lehigh Tax Credit Partners,
Inc., (the "Managing Member") on January 25, 1999 with the Secu-
rities and Exchange Commission (the "Commission"), Lehigh III
acquired 2,856.06 BACs pursuant to a tender offer on Schedule
14D-1, commenced on October 14, 1998 (the "Tender Offer"). Le-
high III previously owned 10 BACs which brought the total BACs
owned by Lehigh III following the Tender Offer to 2,868.06. Le-
high III and the Managing Member are affiliates of the General
Partner.
Pursuant to a letter agreement dated October 6, 1998
among the Partnership, Lehigh III and the General Partner (the
"Standstill Agreement"), Lehigh III agreed that, prior to October 6,
2008 (the "Standstill Expiration Date"), it will not and it will cause
certain affiliates not to (i) seek to propose to enter into, directly or
indirectly, any merger, consolidation, business combination, sale
or acquisition of assets, liquidation, dissolution or other similar
transaction involving the Partnership; (ii) form, join or otherwise
participate in a "group" (within the meaning of Section 13(d)(3) of
the Securities and Exchange Act of 1934) with respect to any vot-
ing securities of the Partnership, except that those affiliates bound
by the Standstill Agreement will not be deemed to have violated it
and formed a "group" solely by acting in accordance with the
Standstill Agreement; (iii) disclose in writing to any third party
any intention, plan or arrangement inconsistent with the terms of
the Standstill Agreement, or (iv) loan money to, advise, assist or
encourage any person in connection with any action inconsistent
with the terms of the Standstill Agreement. By the terms of the
Standstill Agreement, Lehigh III also agreed to vote its BACs in
the same manner as a majority of all voting BACs holders; pro-
vided, however, Lehigh III is entitled to vote its BACs as it deter-
mines with regard to any proposal (i) to remove the General Part-
ner as a general partner of the Partnership or (ii) concerning the
reduction of any fees, profits, distributions or allocations for the
benefit of the General Partner or its affiliates.
In connection with a tender offer commenced on April 10,
1997 by Lehigh Tax Credit Partners L.L.C. ("Lehigh I") and the
settlement of matters relating to such tender offer, Lehigh I en-
tered into any agreement with Everest Properties, Inc. ("Everest"),
dated April 23, 1997 (the "Everest Agreement"). Pursuant to the
Everest Agreement, Lehigh I granted to Everest, among other
things, an option to purchase up to 25% of the BACs tendered in
the Tender Offer (and other similar tender offers) on the same
terms and conditions as Lehigh I's purchase of BACs (the "Everest
Option"). The Everest Agreement and the Everest Option apply to
BACs obtained by affiliates of Lehigh I, including Lehigh III. Ev-
erest notified Lehigh III that it had elected to exercise the Everest
Option to purchase approximately 25% of the BACs tendered
pursuant to the Tender Offer and as a result acquired 952.69 BACs
out of the 3,810.75 BACs tendered in the Tender Offer.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(4) Form of Amended and Restated Agreement of
Limited Partnership of the Partnership (attached to the Prospectus
as Exhibit A)*
(10A) Form of Subscription Agreement (attached to
the Prospectus as Exhibit B)*
(10B) Form of Escrow Agreement between the Part-
nership and the Escrow Agent**
(10C) Form of Purchase and Sales Agreement per-
taining to the Partnership's acquisition of Local Partnership Inter-
ests**
(10D) Form of Amended and Restated Agreement of
Limited Partnership of Local Partnerships**
(27) Financial Data Schedule (filed herewith)
* Incorporated herein by reference to the final
Prospectus as filed pursuant to Rule 424 under the Securities Act
of 1933.
** Filed as an exhibit to the Registration Statement
on Form S-11 of the Partnership (File No. 33-89968) and incorpo-
rated herein by reference thereto.
(b) Reports on Form 8-K - No reports on Form 8-K were
filed during the quarter.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securi-
ties Exchange Act of 1934, the registrant has duly caused this re-
port to be signed on its behalf by the undersigned, thereunto duly
authorized.
INDEPENDENCE TAX CREDIT PLUS L.P. IV
(Registrant)
By: RELATED INDEPENDENCE L.L.C.,
General Partner
Date: February 3, 1999
By: /s/ Alan P. Hirmes
Alan P. Hirmes,
Senior Vice President
(principal financial officer)
Date: February 3, 1999
By: /s/ Glenn F. Hopps
Glenn F. Hopps,
Treasurer
(principal accounting officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial information extracted
from the financial statements for Independence Tax Credit Plus
L.P. IV and is qualified in its entirety by reference to such financial
statements
</LEGEND>
<CIK> 0000940329
<NAME> Independence Tax Credit Plus L.P. IV
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> APR-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 21,022,606
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 336,373
<PP&E> 52,551,030
<DEPRECIATION> 2,008,143
<TOTAL-ASSETS> 73,592,970
<CURRENT-LIABILITIES> 7,656,876
<BONDS> 25,326,796
0
0
<COMMON> 0
<OTHER-SE> 40,609,298
<TOTAL-LIABILITY-AND-EQUITY> 73,592,970
<SALES> 0
<TOTAL-REVENUES> 2,570,279
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,484,976
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 735,167
<INCOME-PRETAX> (649,864)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (649,864)
<EPS-PRIMARY> (14.84)
<EPS-DILUTED> 0
</TABLE>
