American Tax Credit Properties (XXAAN) 10-Q 2012 Q3 Quarterly report

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 30, 2011

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: 0-17619

American Tax Credit Properties L.P.

(Exact Name of Registrant as Specified in its Charter)

Delaware	13-3458875
(State or Other Jurisdiction of Organization)	(I.R.S. Employer Incorporation or Identification No.)
Richman Tax Credit Properties L.P.
340 Pemberwick Road
Greenwich, Connecticut	06831
(Address of Principal Executive Offices)	(Zip Code)

Registrant's Telephone Number, Including Area Code:  (203) 869-0900

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 filing requirements for the past 90 days.

Yes  X    No ___

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).

Yes    X     No ___  

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ___Accelerated Filer___Non-Accelerated Filer___ Smaller Reporting Company    X

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ___  No   X                                

As of January 26, 2012, there are 41,286 units of limited partnership interest outstanding.

AMERICAN TAX CREDIT PROPERTIES L.P.

PART I - FINANCIAL INFORMATION

Table of Contents
		Page
Item 1.	Financial Statements.
Balance Sheets		3
Statements of Operations		4
Statements of Cash Flows		5
Notes to Financial Statements		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	10
Item 3.	Quantitative and Qualitative Disclosure About Market Risk.	14
Item 4.	Controls and Procedures.	14

2

AMERICAN TAX CREDIT PROPERTIES L.P.

BALANCE SHEETS

(UNAUDITED)

	December 30,			March 30,
	2011			2011
ASSETS
Cash and liquid investments
Cash and cash equivalents	$	49,733		$	154,743
Investment in Pemberwick Fund		1,144,284			1,161,425
Investment in bond					99,872
Total cash and liquid investments		1,194,017			1,416,040
Due from local partnerships		50,000			50,000
Interest receivable					123
Investment in local partnerships		527,414			382,951
	$	1,771,431		$	1,849,114
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses	$	47,020		$	92,911
Deferred revenue					50,000
Payable to general partner and affiliates		27,649			152,528
		74,669			295,439
Commitments and contingencies
Partners' equity (deficit)
General partner		(348,583	)		(350,341	)
Limited partners (41,286 units of limited partnership interest outstanding)		2,060,333			1,886,338
Accumulated other comprehensive income (loss)		(14,988	)		17,678
		1,696,762			1,553,675
	$	1,771,431		$	1,849,114

See Notes to Financial Statements.

3

AMERICAN TAX CREDIT PROPERTIES L.P.

STATEMENTS OF OPERATIONS

THREE AND NINE MONTH PERIODS ENDED DECEMBER 30, 2011 AND 2010

(UNAUDITED)

	Three Months Ended December 30, 2011			Nine Months Ended  December 30, 2011			Three Months Ended December 30, 2010			Nine Months  Ended December 30, 2010
REVENUE
Interest	$	4,442		$	11,197		$	6,569		$	18,113
Other income from local partnerships		2,500			2,500			50,000			54,893
TOTAL REVENUE		6,942			13,697			56,569			73,006
EXPENSES
Administration fees		30,591			95,060			45,930			137,792
Management fee		29,216			90,787			43,865			131,599
Professional fees		7,686			46,043			14,210			42,580
State of New Jersey filing fee		11,545			34,633			(9,443	)		13,867
Printing, postage and other		1,205			10,537			8,288			19,894
TOTAL EXPENSES		80,243			277,060			102,850			345,732
		(73,301	)		(263,363	)		(46,281	)		(272,726	)
Equity in income of investment in local partnerships		55,092			144,463			26,046			74,615
Loss prior to gain on sale of limited partner interests/local partnership properties		(18,209	)		(118,900	)		(20,235	)		(198,111	)
Gain on sale of limited partner interests/local partnership properties					358,750			128,000			128,000
NET INCOME (LOSS)		(18,209	)		239,850			107,765			(70,111	)
Reclassification of unrealized gain on investment in bond					(2,730	)
Other comprehensive income (loss), net		(1,155	)		(29,936	)		185			12,852
COMPREHENSIVE INCOME (LOSS)	$	(19,364	)	$	207,184		$	107,950		$	(57,259	)
NET INCOME (LOSS) ATTRIBUTABLE TO
General partner	$	(182	)	$	2,399		$	1,078		$	(701	)
Limited partners		(18,027	)		237,451			106,687			(69,410	)
	$	(18,209	)	$	239,850		$	107,765		$	(70,111	)
NET INCOME (LOSS) per unit of limited partnership interest (41,286 units of limited partnership interest)	$	(.44	)	$	5.75		$	2.59		$	(1.68	)

See Notes to Financial Statements.

4

AMERICAN TAX CREDIT PROPERTIES L.P.

STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED DECEMBER 30, 2011 AND 2010

(UNAUDITED)

	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received	$	17,462		$	18,955
Cash paid for
Administration fees		(160,726	)		(295,728	)
Management fees		(150,000	)		(256,812	)
Professional fees		(57,997	)		(63,632	)
State of New Jersey filing fee		(62,475	)		(16,684	)
Printing, postage and other expenses		(16,632	)		(19,010	)
Net cash used in operating activities		(430,368	)		(632,911	)
CASH FLOWS FROM INVESTING ACTIVITIES
Investments in Pemberwick Fund		(12,795	)		(14,623	)
Proceeds in connection with sale of limited partner interests/local partnership properties		308,750			128,000
Proceeds from redemption of investment in bond		91,000
Redemptions from Pemberwick Fund					531,056
Investment in bond					(100,940	)
Distributions received from local partnerships		2,500			4,893
Net cash provided by investing activities		389,455			548,386
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions to partners		(64,097	)
Net cash used in financing activities		(64,097	)
Net decrease in cash and cash equivalents		(105,010	)		(84,525	)
Cash and cash equivalents at beginning of period		154,743			295,778
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	49,733		$	211,253
SIGNIFICANT NONCASH INVESTING AND FINANCING ACTIVITIES
Decrease in deferred revenue in connection with sale of limited partner interests/local partnership properties	$	50,000
Unrealized gain (loss) on investment in Pemberwick Fund	$	(29,936	)	$	9,371
Reclassification of unrealized gain on investment in bond	$	(2,730	)
Unrealized gain on investment in bond				$	3,481
Increase in due from local partnerships classified as other income from local partnerships				$	50,000

See reconciliation of net income (loss) to net cash used in operating activities on page 6.

See Notes to Financial Statements.

5

AMERICAN TAX CREDIT PROPERTIES L.P.

STATEMENTS OF CASH FLOWS - CONTINUED

NINE MONTHS ENDED DECEMBER 30, 2011 AND 2010

(UNAUDITED)

	2011				2010
RECONCILIATION OF NET INCOME (LOSS) TO NET CASH USED IN OPERATING ACTIVITIES
Net income (loss)		$	239,850		$	(70,111	)
Adjustments to reconcile net income (loss) to net cash used in operating activities
Equity in income of investment in local partnerships			(144,463	)		(74,615	)
Gain on sale of limited partner interests/local partnership properties			(358,750	)		(128,000	)
Other income from local partnerships			(2,500	)		(54,893	)
Accrued interest purchased at date of investment in bond						1,750
Amortization of premium on investment in bond			1,228			1,433
Loss on redemption of investment in bond			4,914
Decrease (increase) in interest receivable			123			(2,341	)
Decrease in accounts payable and accrued expenses			(45,891	)		(22,985	)
Decrease in due to general partner and affiliates			(124,879	)		(283,149	)
NET CASH USED IN OPERATING ACTIVITIES		$	(430,368	)	$	(632,911	)

See Notes to Financial Statements.

6

AMERICAN TAX CREDIT PROPERTIES L.P.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 30, 2011

(UNAUDITED)

1. Basis of Presentation

The accompanying unaudited financial statements of American Tax Credit Properties L.P. (the “Partnership”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information.  They do not include all information and footnotes required by GAAP for complete financial statements.  The results of operations are impacted, in part, by the combined results of operations of the Local Partnerships, which are provided by the Local Partnerships on an unaudited basis during interim periods.  Accordingly, the accompanying unaudited financial statements are dependent on such unaudited information.  In the opinion of the General Partner, the accompanying unaudited financial statements include all adjustments necessary to present fairly the financial position as of December 30, 2011 and the results of operations and cash flows for the interim periods presented.  All adjustments are of a normal recurring nature.  The results of operations for the nine months ended December 30, 2011 are not necessarily indicative of the results that may be expected for the entire year.

2. Investment in Local Partnerships

The Partnership originally acquired limited partner interests (the “Local Partnership Interests”) in nineteen Local Partnerships representing capital contributions in the aggregate amount of $36,228,149, which includes voluntary advances made to certain Local Partnerships and all of which has been paid.  As of December 30, 2011, the Partnership holds a Local Partnership Interest in six Local Partnerships.  See discussion below regarding the potential disposal of an additional Local Partnership Interest.  The Partnership has no legal obligation to fund any operating deficits of the Local Partnerships.

For the nine months ended December 30, 2011, the investment in local partnerships activity consists of the following:

Investment in local partnerships as of March 30, 2011	$	382,951
Distributions received from Local Partnerships		(2,500	)
Distributions classified as other income		2,500
Equity in income of investment in local partnerships		144,463	*
Investment in local partnerships as of December 30, 2011	$	527,414

*In the event the operations of a Local Partnership result in a loss, equity in loss of each investment in Local Partnership allocated to the Partnership is recognized to the extent of the Partnership’s investment balance in each Local Partnership.  Equity in loss in excess of the Partnership’s investment balance in a Local Partnership is allocated to other partners’ capital in any such Local Partnership.

In May 2011, the Partnership sold its Local Partnership Interest in Federal Apartments Limited Partnership (“Federal”) to an affiliate of the Local General Partner of Federal for $334,000, which is included in gain on sale of limited partner interests/local partnership properties in the accompanying unaudited statement of operations for the nine months ended December 30, 2011.  The Partnership received a $50,000 nonrefundable deposit in January 2011, which is reflected as deferred revenue in the accompanying unaudited balance sheet as of March 30, 2011, and the remaining $284,000 during the nine months ended December 30, 2011.  The Partnership’s investment balance in Federal, after cumulative equity losses, became zero during the year ended March 30, 1997.

During the year ended March 30, 2007, the Property owned by 4611 South Drexel Limited Partnership, one of the Partnership’s Local Partnership Interests, was sold.  In connection with the sale, the parties established an escrow (the “Escrow”) to provide for the potential payment of certain contingencies related to the sale.  In July 2011, the Partnership received $24,750 upon release of the Escrow; such amount is included in gain on sale of limited partner interests/local partnership properties in the accompanying unaudited statement of operations for the nine months ended December 30, 2011.

7

AMERICAN TAX CREDIT PROPERTIES L.P.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

DECEMBER 30, 2011

(UNAUDITED)

2. Investment in Local Partnerships (Continued)

Madison-Bellefield Associates (“Madison-Bellefield”) has entered into an Agreement of Sale (the “Madison-Bellefield Sale Agreement”) to sell the Property owned by Madison-Bellefield to an affiliate of the Local General Partner of Madison-Bellefield.  In connection with the Madison-Bellefield Sale Agreement, which contains certain contingencies regarding the ultimate purchase price of the Property, the sale is expected to close in September 2012 (subject to change as agreed upon by the parties).  The Partnership will be entitled to certain proceeds under the terms of the Madison-Bellefield Sale Agreement and Madison-Bellefield’s partnership agreement. There can be no assurance that the Property will be sold under the terms of the Madison-Bellefield Sale Agreement or that the Partnership will receive any proceeds.

In December 2010, Dunbar Limited Partnership (“Dunbar”) and Dunbar Limited Partnership No. 2 (“Dunbar 2”), which Local Partnerships have the same Local General Partner (the “Dunbar Local General Partner”), sold their underlying Properties to affiliates of the Dunbar Local General Partner.  During the nine months ended December 30, 2011, the Partnership paid $64,097 in withholding tax to the state in which the Properties owned by Dunbar and Dunbar 2 are located on behalf of the Partnership’s partners.  Such amount is reflected as distributions to partners in the accompanying unaudited financial statements as of and for the nine months ended December 30, 2011.

Cobbet Hill Associates Limited Partnership (“Cobbet”) was originally financed with a first mortgage with mandatory monthly payment terms with the Massachusetts Housing Finance Agency (“MHFA”) and a second mortgage with MHFA under the State Housing Assistance for Rental Production Program (the “SHARP Operating Loan”) whereby proceeds would be advanced monthly as an operating subsidy (the “Operating Subsidy Payments”).  The terms of the SHARP Operating Loan called for declining Operating Subsidy Payments over its term (not more than 15 years).  However, due to the economic condition of the Northeast region in the early 1990’s, MHFA instituted an operating deficit loan (the “ODL”) program that supplemented the scheduled reduction in the Operating Subsidy Payments.  Effective October 1, 1997, MHFA announced its intention to eliminate the ODL program, such that Cobbet no longer receives the ODL, without which Cobbet is unable to make the full mandatory debt service payments on its first mortgage.  MHFA issued a formal notice of default dated February 2, 2004.  The Local General Partners of Cobbet have informed MHFA that they would transfer the ownership of the Property to the unaffiliated management agent or to other parties, which might redevelop and recapitalize the Property.  The Partnership does not believe that it will receive any proceeds from such a transfer.  Since the date MHFA ceased funding the ODL through December 31, 2010, Cobbet has accumulated over $10,281,000 of arrearages and other charges on the first mortgage; as a result of the default, principal and accrued interest in excess of $24,000,000 in connection with the first mortgage, the SHARP Operating Loan and the ODL are considered currently due.  Cumulative voluntary advances made by the Partnership to Cobbet as of December 30, 2011 total $392,829, none of which were made during the nine months then ended.  Such voluntary advances were recorded as investment in local partnerships and were written off as additional equity in loss of investment in local partnerships.  The Partnership’s investment balance in Cobbet, after cumulative equity losses, became zero during the year ended March 30, 1994.

The Partnership’s investment balance in Madison-Bellefield of $527,414 as of December 30, 2011 represents more than 20% of the Partnership’s total assets and its equity in income of its investment in Madison-Bellefield of $144,463 represents more than 20% of the Partnership’s net income for the nine months ended December 30, 2011.  The following financial information represents certain unaudited balance sheet and operating statement data of Madison-Bellefield as of and for the nine months ended September 30, 2011:

Total assets	$	2,187,562
Total liabilities	$	1,664,713
Revenue	$	1,145,726
Net income	$	145,922

8

AMERICAN TAX CREDIT PROPERTIES L.P.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

DECEMBER 30, 2011

(UNAUDITED)

3. Investment in Pemberwick Fund

The Partnership carries its investment in Pemberwick Fund (“Pemberwick”) at estimated fair value.  The fair value of the Partnership’s investment in Pemberwick is classified within Level 1 of the fair value hierarchy of the guidance on Fair Value Measurements as defined in Accounting Standards Codification (“ASC”) Topic 820.  Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Partnership has the ability to access.  Pemberwick’s net asset value (“NAV”) is $9.88 per share as of December 30, 2011.  An unrealized loss of $14,988 is reflected as accumulated other comprehensive loss in the accompanying unaudited balance sheet as of December 30, 2011.  As of December 30, 2011, the Partnership has earned $33,847 of interest revenue from its investment in Pemberwick.

4. Investment in Bond

The Partnership carried its investment in bond as available-for-sale because such investment was used to facilitate and provide flexibility for its obligations.  Investment in bond was reflected in the accompanying unaudited balance sheet as of March 30, 2011 at estimated fair value and was classified within Level 1 of the fair value hierarchy of the guidance on Fair Value Measurements (see Note 3).  The bond was called during the nine months ended December 30, 2011; accordingly, there is no accumulated other comprehensive income or loss associated with the Partnership’s investment in bond in the accompanying unaudited balance sheet as of December 30, 2011.  The Partnership’s cumulative annualized return on the bond for the sixteen month holding period totaled approximately 2.94%.

5. Additional Information

Additional information, including the audited March 30, 2011 Financial Statements and the Organization, Purpose and Summary of Significant Accounting Policies, is included in the Partnership's Annual Report on Form 10-K for the fiscal year ended March 30, 2011 on file with the Securities and Exchange Commission.

9

AMERICAN TAX CREDIT PROPERTIES L.P.

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations.

Material Changes in Financial Condition

As of December 30, 2011, American Tax Credit Properties L.P. (the “Registrant”) experienced a significant change in financial condition as compared to March 30, 2011, primarily as the result of the payment of (i) operating expenses, including administration and management fees accrued as of March 30, 2011, and (ii) withholding taxes paid on behalf of the partners (see discussion below under Local Partnership Matters), partially offset by proceeds received in connection with the sale of its limited partner interest (the “Local Partnership Interest”) in Federal Apartments Limited Partnership (“Federal”) and the release of an escrow established in connection with the fiscal 2007 sale of the Property owned by 4611 South Drexel Limited Partnership (“South Drexel”) (see discussion below under Results of Operations and Local Partnership Matters). Principal changes in assets are comprised of periodic transactions and adjustments and equity in income (loss) from operations of the local partnerships (the “Local Partnerships”), which own low-income multifamily residential complexes (the “Properties”) that qualified for the low-income tax credit in accordance with Section 42 of the Internal Revenue Code (the “Low-income Tax Credit”).  During the nine months ended December 30, 2011, Registrant received cash from interest revenue, the redemption of its investment in bond, distributions from Local Partnerships, proceeds in connection with the sale of its Local Partnership Interest in Federal and the release of the escrow established in connection with South Drexel (see discussion below under Results of Operations and Local Partnership Matters), and utilized cash for operating expenses, withholding taxes paid on behalf of the partners (see discussion below under Local Partnership Matters) and investments in Pemberwick Fund (“Pemberwick”). Cash and cash equivalents, investment in Pemberwick and investment in bond decreased, in the aggregate, by approximately $222,000 during the nine months ended December 30, 2011 (which includes an unrealized loss on investment in Pemberwick and the reclassification of unrealized gain on investment in bond in the aggregate of approximately $33,000 and amortization of premium on investment in bond and the write-off of the remaining unamortized premium on the date the bond was redeemed totaling  approximately $6,000).  The bond owned by Registrant was called on October 3, 2011 at par; Registrant’s cumulative annualized return on the bond for the sixteen month holding period totaled approximately 2.94%.  Accordingly, Registrant did not experience any adverse impact in connection with such investment.  During the nine months ended December 30, 2011, the investment in local partnerships increased as a result of Registrant's equity in the Local Partnerships' net income for the nine months ended September 30, 2011 of $144,463.  Payable to general partner and affiliates represents accrued administration and management fees in the accompanying unaudited balance sheet as of December 30, 2011.

Results of Operations

Registrant’s operating results are dependent, in part, upon the operating results of the Local Partnerships and are impacted by the Local Partnerships’ policies.  In addition, the operating results herein are not necessarily the same for tax reporting.  Registrant accounts for its investment in local partnerships in accordance with the equity method of accounting.  Accordingly, the investment is carried at cost and is adjusted for Registrant’s share of each Local Partnership’s results of operations and by cash distributions received.  In the event the operations of a Local Partnership result in a loss, equity in loss of each investment in Local Partnership allocated to Registrant is recognized to the extent of Registrant’s investment balance in each Local Partnership.  Equity in loss in excess of Registrant’s investment balance in a Local Partnership is allocated to other partners’ capital in any such Local Partnership.

Cumulative losses and cash distributions in excess of investment in local partnerships may result from a variety of circumstances, including a Local Partnership's accounting policies, subsidy structure, debt structure and operating deficits, among other things.  In addition, the book value of Registrant’s investment in each Local Partnership (the “Local Partnership Carrying Value”) may be reduced if the Local Partnership Carrying Value is considered to exceed the estimated value derived by management.  Accordingly, cumulative losses and cash distributions in excess of the investment or an adjustment to a Local Partnership’s Carrying Value are not necessarily indicative of adverse operating results of a Local Partnership.

Registrant’s operations for the three months ended December 30, 2011 and 2010 resulted in net income (loss) of $(18,209) and $107,765, respectively.  The increase in net loss from fiscal 2010 to fiscal 2011 is primarily attributable to (i) the sale of one of Registrant’s Local Partnership Interests in fiscal 2010 resulting in a gain of $128,000 and (ii) a decrease in interest revenue and other income from local partnerships in the cumulative amount of approximately $50,000, all partially offset by (i) a decrease in operating expenses of approximately $23,000 and (ii) an increase in equity in income of investment in local partnerships of approximately $29,000, which is attributable to an increase in the net income of the Local Partnership in which Registrant continues to have an investment balance.  Other comprehensive loss for the three months ended December 30, 2011 resulted from an unrealized loss on investment in Pemberwick of $1,155.

10

AMERICAN TAX CREDIT PROPERTIES L.P.

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued).

Registrant’s operations for the nine months ended December 30, 2011 and 2010 resulted in net income (loss) of $239,850 and $(70,111), respectively.  The increase in net income from fiscal 2010 to fiscal 2011 is primarily attributable to (i) gains of $334,000 and approximately $25,000 recognized in fiscal 2011 in connection with Registrant’s sale of its Local Partnership Interest in Federal and the release of the South Drexel escrow, respectively, (see discussion below under Local Partnership Matters) as compared to a gain of $128,000 recognized in connection with the sale of one of Registrant’s Local Partnership Interests in fiscal 2010, (ii) a decrease in operating expenses of approximately $69,000 and (iii) an increase in equity in income of investment in local partnerships of approximately $70,000, which is attributable to an increase in the net income of the Local Partnership in which Registrant continues to have an investment balance, all partially offset by a decrease in interest revenue and other income from local partnerships in the cumulative amount of approximately $59,000.  Other comprehensive loss for the nine months ended December 30, 2011 resulted from an unrealized loss on investment in Pemberwick and the reclassification of unrealized gain on investment in bond of $29,936 and $2,730, respectively.

Local Partnership Matters

Registrant's primary objective, to provide Low-income Tax Credits to its limited partners (the “Limited Partners”), has been completed.  The relevant state tax credit agency allocated each of the Local Partnerships an amount of Low-income Tax Credits, which are generally available for a ten year period from the year the Property is placed in service (the “Ten Year Credit Period”).  The Ten Year Credit Period was fully exhausted with respect to all of the Properties as of December 31, 2003.  The required holding period of each Property, in order to avoid Low-income Tax Credit recapture, is fifteen years from the year in which the Low-income Tax Credits commence on the last building of the Property (the "Compliance Period").  The Compliance Period of all of the Local Partnerships had expired as of December 31, 2004.  In addition, certain of the Local Partnerships entered into agreements with the relevant state tax credit agencies whereby the Local Partnerships must maintain the low-income nature of the Properties for a period which exceeds the Compliance Period (in certain circumstances, up to 50 years from when the Property is placed in service, but commonly 30 years from the date any such Property is placed in service), regardless of a sale of the Properties by the Local Partnerships after the Compliance Period (the “Extended Use Provisions”).  Although the Extended Use Provisions do not extend the Compliance Period of the respective Local Partnerships, such provisions may limit the number and availability of potential purchasers of the Properties.  Accordingly, a sale of a Property may happen well after the expiration of the Compliance Period and/or may be significantly discounted.  Registrant is in the process of disposing of its Local Partnership Interests.  As of January 2012, Registrant owns six of the nineteen Local Partnership Interests originally acquired.  See discussion below regarding the potential disposal of an additional Local Partnership Interest.  Registrant has served a demand on the local general partners (the “Local General Partners”) of all remaining Local Partnerships to commence a sale process to dispose of the Properties.  In the event a sale cannot be consummated, it is the General Partner’s intention to sell or assign Registrant’s Local Partnership Interests.  Following the final disposition of its Local Partnership Interests, Registrant intends to dissolve.  It is uncertain as to the amount, if any, that Registrant will receive with respect to each specific Property from such sales or assignments.  There can be no assurance as to when Registrant will dispose of its remaining Local Partnership Interests.

The Properties are principally comprised of subsidized and leveraged low-income multifamily residential complexes located throughout the United States and in Puerto Rico.  Many of the Local Partnerships receive rental subsidy payments, including payments under Section 8 of Title II of the Housing and Community Development Act of 1974 ("Section 8”); the subsidy agreements expire at various times.  Since October 1997, the United States Department of Housing and Urban Development (“HUD”) has issued a series of directives related to project based Section 8 contracts that define owners’ notification responsibilities, advise owners of project based Section 8 properties of what their options are regarding the renewal of Section 8 contracts, provide guidance and procedures to owners, management agents, contract administrators and HUD staff concerning renewal of Section 8 contracts, provide policies and procedures on setting renewal rents and handling renewal rent adjustments and provide the requirements and procedures for opting-out of a Section 8 project based contract.  Registrant cannot reasonably predict legislative initiatives and governmental budget negotiations, the outcome of which could result in a reduction in funds available for the various federal and state administered housing programs including the Section 8 program.  Such changes could adversely affect the future net operating income before debt service (“NOI”) and debt structure of any or all Local Partnerships currently receiving such subsidy or similar subsidies.  Five Local Partnerships’ Section 8 contracts are currently subject to renewal under applicable HUD guidelines.  Of the five Local Partnerships noted above, two have entered into restructuring agreements, resulting in a change to both rent subsidy and mandatory debt service.

11

AMERICAN TAX CREDIT PROPERTIES L.P.

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued).

The Local Partnerships have various financing structures which include (i) required debt service payments ("Mandatory Debt Service") and (ii) debt service payments that are payable only from available cash flow subject to the terms and conditions of the notes, which may be subject to specific laws, regulations and agreements with appropriate federal and state agencies ("Non-Mandatory Debt Service or Interest").  Registrant has no legal obligation to fund any operating deficits of the Local Partnerships.

In May 2011, Registrant sold its Local Partnership Interest in Federal to an affiliate of the Local General Partner of Federal for $334,000, which is included in gain on sale of limited partner interests/local partnership properties in the accompanying unaudited statement of operations for the nine months ended December 30, 2011.  Registrant received a $50,000 nonrefundable deposit in January 2011, which is reflected as deferred revenue in the accompanying unaudited balance sheet as of March 30, 2011, and the remaining $284,000 during the nine months ended December 30, 2011.  Registrant’s investment balance in Federal, after cumulative equity losses, became zero during the year ended March 30, 1997.

During the year ended March 30, 2007, the Property owned by South Drexel, one of Registrant’s Local Partnership Interests, was sold.  In connection with the sale, the parties established an escrow (the “Escrow”) to provide for the potential payment of certain contingencies related to the sale.  In July 2011, Registrant received $24,750 upon release of the Escrow; such amount is included in gain on sale of limited partner interests/local partnership properties in the accompanying unaudited statement of operations for the nine months ended December 30, 2011.

Madison-Bellefield Associates (“Madison-Bellefield”) has entered into an Agreement of Sale (the “Madison-Bellefield Sale Agreement”) to sell the Property owned by Madison-Bellefield to an affiliate of the Local General Partner of Madison-Bellefield.  In connection with the Madison-Bellefield Sale Agreement, which contains certain contingencies regarding the ultimate purchase price of the Property, the sale is expected to close in September 2012 (subject to change as agreed upon by the parties).  Registrant will be entitled to certain proceeds under the terms of the Madison-Bellefield Sale Agreement and Madison-Bellefield’s partnership agreement. There can be no assurance that the Property will be sold under the terms of the Madison-Bellefield Sale Agreement or that Registrant will receive any proceeds.

In December 2010, Dunbar Limited Partnership (“Dunbar”) and Dunbar Limited Partnership No. 2 (“Dunbar 2”), which Local Partnerships have the same Local General Partner (the “Dunbar Local General Partner”), sold their underlying Properties to affiliates of the Dunbar Local General Partner.  During the nine months ended December 30, 2011, Registrant paid $64,097 in withholding tax to the state in which the Properties owned by Dunbar and Dunbar 2 are located on behalf of Registrant’s partners.  Such amount is reflected as distributions to partners in the accompanying unaudited financial statements as of and for the nine months ended December 30, 2011.

Cobbet Hill Associates Limited Partnership (“Cobbet”) was originally financed with a first mortgage with mandatory monthly payment terms with the Massachusetts Housing Finance Agency (“MHFA”) and a second mortgage with MHFA under the State Housing Assistance for Rental Production Program (the “SHARP Operating Loan”) whereby proceeds would be advanced monthly as an operating subsidy (the “Operating Subsidy Payments”).  The terms of the SHARP Operating Loan called for declining Operating Subsidy Payments over its term (not more than 15 years).  However, due to the economic condition of the Northeast region in the early 1990’s, MHFA instituted an operating deficit loan (the “ODL”) program that supplemented the scheduled reduction in the Operating Subsidy Payments.  Effective October 1, 1997, MHFA announced its intention to eliminate the ODL program, such that Cobbet no longer receives the ODL, without which Cobbet is unable to make the full mandatory debt service payments on its first mortgage.  MHFA issued a formal notice of default dated February 2, 2004.  The Local General Partners of Cobbet have informed MHFA that they would transfer the ownership of the Property to the unaffiliated management agent or to other parties, which might redevelop and recapitalize the Property.  Registrant does not believe that it will receive any proceeds from such a transfer.  Since the date MHFA ceased funding the ODL through December 31, 2010, Cobbet has accumulated over $10,281,000 of arrearages and other charges on the first mortgage; as a result of the default, principal and accrued interest in excess of $24,000,000 in connection with the first mortgage, the SHARP Operating Loan and the ODL are considered currently due.  Registrant’s investment balance in Cobbet, after cumulative equity losses, became zero during the year ended March 30, 1994.

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AMERICAN TAX CREDIT PROPERTIES L.P.

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued).

Critical Accounting Policies and Estimates

The accompanying unaudited financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), which requires Registrant to make certain estimates and assumptions.  The following section is a summary of certain aspects of those accounting policies that may require subjective or complex judgments and are most important to the portrayal of Registrant’s financial condition and results of operations.  Registrant believes that there is a low probability that the use of different estimates or assumptions in making these judgments would result in materially different amounts being reported in the accompanying unaudited financial statements.

·   Registrant accounts for its investment in local partnerships in accordance with the equity method of accounting.

·   If the book value of Registrant’s investment in a Local Partnership exceeds the estimated value derived by management, Registrant reduces its investment in any such Local Partnership and includes such reduction in equity in loss of investment in local partnerships.  Registrant makes such assessment at least annually in the fourth quarter of its fiscal year or whenever there are indications that a permanent impairment may have occurred.  A loss in value of an investment in a Local Partnership other than a temporary decline would be recorded as an impairment loss.  Impairment is measured by comparing the investment carrying amount to the estimated residual value of the investment.

·   Registrant does not consolidate the accounts and activities of the Local Partnerships, which are considered Variable Interest Entities as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810; Subtopic 10, because Registrant is not considered the primary beneficiary.  Registrant’s balance in investment in local partnerships represents the maximum exposure to loss in connection with such investments.  Registrant’s exposure to loss on the Local Partnerships is mitigated by the condition and financial performance of the underlying Properties as well as the financial strength of the Local General Partners.  In addition, the Local Partnerships’ partnership agreements grant the Local General Partners the power to direct the activities that most significantly impact the Local Partnerships’ economic success.

Forward-Looking Information

As a cautionary note, with the exception of historical facts, the matters discussed in this quarterly report on Form 10-Q are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”).  Forward-looking statements may relate to, among other things, current expectations, forecasts of future events, future actions, future performance generally, business development activities, capital expenditures, strategies, the outcome of contingencies, future financial results, financing sources and availability and the effects of regulation and competition.  Words such as “anticipate,” “expect,” “intend,” “plan,” “seek,” “estimate” and other words and terms of similar meaning in connection with discussions of future operating or financial performance signify forward-looking statements.  Registrant may also provide written forward-looking statements in other materials released to the public.  Such statements are made in good faith by Registrant pursuant to the “Safe Harbor” provisions of the Reform Act.  Registrant undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future events or otherwise.  Such forward-looking statements involve known risks, uncertainties and other factors that may cause Registrant’s actual results of operations or actions to be materially different from future results of operations or actions expressed or implied by the forward-looking statements.

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AMERICAN TAX CREDIT PROPERTIES L.P.

Item 3.  Quantitative and Qualitative Disclosure About Market Risk.

Registrant’s investment in Pemberwick is subject to certain risk.  The fixed income securities in which Pemberwick invests are subject to interest rate risk, credit risk, prepayment risk, counterparty risk, municipal securities risk, liquidity risk, management risk, government security risk and valuation risk.  Typically, when interest rates rise, the market prices of fixed income securities go down.  Pemberwick is classified as “non-diversified,” and thus may invest most of its assets in securities issued by or representing a small number of issuers.  As a result, Pemberwick may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.  These risks could adversely affect Pemberwick’s net asset value (“NAV”), yield and total return. An unrealized loss of $14,988 is reflected as accumulated other comprehensive loss in the accompanying unaudited balance sheet as of December 30, 2011.  As of December 30, 2011, Registrant has earned $33,847 of interest revenue from its investment in Pemberwick.

Item 4.  Controls and Procedures.

Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed by Registrant in reports that Registrant files or submits under the Exchange Act is recorded, processed, summarized and timely reported as provided in SEC rules and forms.  Registrant periodically reviews the design and effectiveness of its disclosure controls and procedures, including compliance with various laws and regulations that apply to its operations.  Registrant makes modifications to improve the design and effectiveness of its disclosure controls and procedures, and may take other corrective action, if its reviews identify a need for such modifications or actions.  In designing and evaluating the disclosure controls and procedures, Registrant recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Registrant has carried out an evaluation, under the supervision and the participation of its management, including the Chief Executive Officer and Chief Financial Officer of the general partner of the General Partner, of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act), as of the three months ended December 30, 2011.  Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer of the general partner of the General Partner concluded that Registrant’s disclosure controls and procedures were effective as of December 30, 2011.

There were no changes in Registrant’s internal control over financial reporting during the three months ended December 30, 2011 that have materially affected, or are reasonably likely to materially affect, Registrant’s internal control over financial reporting.

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AMERICAN TAX CREDIT PROPERTIES L.P.

Part II - OTHER INFORMATION

Item 1.	Legal Proceedings.
	None.
Item 1A.	Risk Factors.
	There have been no material changes from the risk factors previously disclosed in Item 1A of Registrant’s Annual Report on Form 10-K for the year ended March 30, 2011.
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.
	None.
Item 3.	Defaults Upon Senior Securities.
	None; see Item 2 of Part I regarding the mortgage default of a certain Local Partnership.
Item 4.	Removed and Reserved.
Item 5.	Other Information.
	None.
Item 6.	Exhibits.
	Exhibit 31.1 - Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
	Exhibit 31.2 - Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
	Exhibit 32.1 - Section 1350 Certification of Chief Executive Officer.
	Exhibit 32.2 - Section 1350 Certification of Chief Financial Officer.
	Exhibit 101.ins - XBRL Instance.
	Exhibit 101.xsd - XBRL Schema.
	Exhibit 101.cal - XBRL Calculation.
	Exhibit 101.def - XBRL Definition.
	Exhibit 101.lab - XBRL Label.
	Exhibit 101.pre - XBRL Presentation.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	AMERICAN TAX CREDIT PROPERTIES L.P.
	(a Delaware limited partnership)
	By:  Richman Tax Credit Properties L.P.,
	General Partner
	By:  Richman Tax Credit Properties Inc.,
	general partner
Dated: January 26, 2012	/s/David Salzman
	By:David Salzman
	Chief Executive Officer
Dated: January 26, 2012	/s/James Hussey
	By:James Hussey
	Chief Financial Officer
Dated: January 26, 2012	/s/Richard Paul Richman
	By:Richard Paul Richman
	Sole Director

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