American Tax Credit Properties Ii L P (ATCIIX) 10-Q 2008 Q2 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 September 29, 2007

OR

o 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: 0-18405

American Tax Credit Properties II L.P.

(Exact name of Registrant as specified in its charter)

Delaware	13-3495678
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.
Richman Tax Credit Properties II 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 o No x

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

Large Accelerated Filer o Accelerated Filer o Non-Accelerated Filer x

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

Yes o  No x

As of February 2008, there are 55,746 units of limited partnership interest outstanding.

AMERICAN TAX CREDIT PROPERTIES II L.P.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Table of Contents	Page
Balance Sheets		3
Statements of Operations		4
Statements of Cash Flows		5
Notes to Financial Statements		7

2

AMERICAN TAX CREDIT PROPERTIES II L.P.

BALANCE SHEETS

(UNAUDITED)

			September 29,			March 30,
	Notes		2007			2007
ASSETS
Cash and cash equivalents			$	1,085,023		$	1,265,598
Investments in bonds		2		823,254			800,618
Due from local partnership		3					40,000
Investment in local partnerships		3		1,374,251			1,352,298
			$	3,282,528		$	3,458,514
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses			$	450,643		$	511,018
Payable to general partner and affiliates				1,027,567			969,263
				1,478,210			1,480,281
Commitments and contingencies		3,4
Partners' equity (deficit)
General partner				(474,755	)		(472,978	)
Limited partners (55,746 units of limited partnership interest outstanding)				2,276,378			2,452,337
Accumulated other comprehensive income (loss), net		2		2,695			(1,126	)
				1,804,318			1,978,233
			$	3,282,528		$	3,458,514

See Notes to Financial Statements.

3

AMERICAN TAX CREDIT PROPERTIES II L.P.

STATEMENTS OF OPERATIONS

(UNAUDITED)

			Three Months			Six Months			Three Months			Six Months
			Ended			Ended			Ended			Ended
	Notes		September 29, 2007			September 29, 2007			September 29, 2006			September 29, 2006
REVENUE
Interest			$	21,795		$	47,081		$	24,968		$	49,015
Other income from local partnerships		3		3,400			94,252			22,467			170,194
TOTAL REVENUE				25,195			141,333			47,435			219,209
EXPENSES
Administration fees				55,803			111,607			54,234			112,094
Management fees				55,803			111,607			54,234			112,094
Professional fees				22,647			48,878			30,319			52,901
State of New Jersey filing fee				7,465			29,417			24,344			43,994
Printing, postage and other				532			3,513			1,311			11,617
TOTAL EXPENSES				142,250			305,022			164,442			332,700
				(117,055	)		(163,689	)		(117,007	)		(113,491	)
Equity in loss of investment in local partnerships		3		(95,749	)		(14,047	)		(55,857	)		(124,271	)
Loss prior to gain on disposal of limited partner interests/local partnership properties				(212,804	)		(177,736	)		(172,864	)		(237,762	)
Gain on disposal of limited partner interests/local partnership properties		3								104,566			144,566
NET LOSS				(212,804	)		(177,736	)		(68,298	)		(93,196	)
Other comprehensive income (loss)		2		4,652			3,821			5,953			(412	)
COMPREHENSIVE LOSS			$	(208,152	)	$	(173,915	)	$	(62,345	)	$	(93,608	)
NET LOSS ATTRIBUTABLE TO
General partner			$	(2,128	)	$	(1,777	)	$	(683	)	$	(932	)
Limited partners				(210,676	)		(175,959	)		(67,615	)		(92,264	)
			$	(212,804	)	$	(177,736	)	$	(68,298	)	$	(93,196	)
NET LOSS per unit of limited partnership interest (55,746 units of limited partnership interest)			$	(3.78	)	$	(3.16	)	$	(1.22	)	$	(1.66	)

See Notes to Financial Statements.

4

AMERICAN TAX CREDIT PROPERTIES II L.P.

STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED SEPTEMBER 29, 2007 AND 2006

(UNAUDITED)

	2007			2006
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received	$	28,266		$	35,647
Cash paid for
administration fees		(14,910	)		(15,140	)
management fees		(150,000	)		(104,758	)
professional fees		(86,250	)		(70,194	)
State of New Jersey filing fee		(52,420	)		(80,000	)
printing, postage and other expenses		(3,513	)		(11,617	)
Net cash used in operating activities		(278,827	)		(246,062	)
CASH FLOWS FROM INVESTING ACTIVITIES
Advances to local partnerships		(36,000	)		(64,000	)
Cash distributions from local partnerships		94,252			170,194
Proceeds in connection with disposal of limited partner interests/local partnership properties		40,000			644,221
Proceeds from maturities/redemptions and sales of bonds					200,000
Net cash provided by investing activities		98,252			950,415
Net increase (decrease) in cash and cash equivalents		(180,575	)		704,353
Cash and cash equivalents at beginning of period		1,265,598			1,096,927
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	1,085,023		$	1,801,280
SIGNIFICANT NON-CASH INVESTING ACTIVITIES
Unrealized gain (loss) on investments in bonds, net	$	3,821		$	(412	)
Increase in due from local partnerships				$	104,566

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

See Notes to Financial Statements.

5

AMERICAN TAX CREDIT PROPERTIES II L.P.

STATEMENTS OF CASH FLOWS - (Continued)

SIX MONTHS ENDED SEPTEMBER 29, 2007 AND 2006

(UNAUDITED)

	2007			2006
RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES
Net loss	$	(177,736	)	$	(93,196	)
Adjustments to reconcile net loss to net cash used in operating activities
Equity in loss of investment in local partnerships		14,047			124,271
Distributions from local partnerships classified as other income		(94,252	)		(170,194	)
Gain on disposal of limited partner interests/local partnership properties					(144,566	)
Accretion of zero coupon bonds		(18,815	)		(18,815	)
Decrease in interest receivable					5,447
Increase in payable to general partner and affiliates		58,304			104,290
Decrease in accounts payable and accrued expenses		(60,375	)		(53,299	)
NET CASH USED IN OPERATING ACTIVITIES	$	(278,827	)	$	(246,062	)

See Notes to Financial Statements.

6

AMERICAN TAX CREDIT PROPERTIES II L.P.

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 29, 2007

(UNAUDITED)

1. Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. They do not include all information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The results of operations are impacted significantly 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 financial statements are dependent on such unaudited information. In the opinion of the General Partner, the financial statements include all adjustments necessary to present fairly the financial position as of September 29, 2007 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 six months ended September 29, 2007 are not necessarily indicative of the results that may be expected for the entire year.

2. Investments in Bonds

As of September 29, 2007, certain information concerning investments in bonds is as follows:

Description and maturity	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
U.S. Treasury debt securities
Within one year	$	820,559	$	2,695	$	—	$	823,254

7

AMERICAN TAX CREDIT PROPERTIES II L.P.

NOTES TO FINANCIAL STATEMENTS - (Continued)

SEPTEMBER 29, 2007

(UNAUDITED)

3. Investment in Local Partnerships

The Partnership originally acquired limited partner interests in fifty Local Partnerships representing capital contributions in the aggregate amount of $48,223,347, which amount includes advances made to certain Local Partnerships. As of September 29, 2007, the Partnership holds an interest in forty-one Local Partnerships that have, as of June 30, 2007, outstanding mortgage loans payable totaling approximately $59,399,000 and accrued interest payable on such loans totaling approximately $8,610,000, which are secured by security interests and liens common to mortgage loans on the Local Partnerships' real property and other assets.

For the six months ended September 29, 2007, the investment in local partnerships activity consists of the following:

Investment in local partnerships as of March 30, 2007	$	1,352,298
Advances to Local Partnerships		36,000
Equity in loss of investment in local partnerships		(14,047	)*
Cash distributions received from local partnerships		(94,252	)
Cash distributions classified as other income		94,252
Investment in local partnerships as of September 29, 2007	$	1,374,251

* Equity in loss of investment in local partnerships is limited to the Partnership's investment balance in each Local Partnership; any excess is applied to other partners' capital in any such Local Partnership. The amount of such excess losses applied to other partners' capital was $975,303 for the six months ended June 30, 2007 as reflected in the combined statement of operations of the Local Partnerships reflected herein Note 3.

The combined unaudited balance sheets of the Local Partnerships as of June 30, 2007 and December 31, 2006 and the combined unaudited statements of operations of the Local Partnerships for the three and six month periods ended June 30, 2007 and 2006 are reflected on pages 9 and 10, respectively.

8

AMERICAN TAX CREDIT PROPERTIES II L.P.

NOTES TO FINANCIAL STATEMENTS - (Continued)

SEPTEMBER 29, 2007

(UNAUDITED)

3.Investment in Local Partnerships (continued)

The combined unaudited balance sheets of the Local Partnerships as of June 30, 2007 and December 31, 2006 are as follows:

	June 30,			December 31,
	2007			2006
ASSETS
Cash and cash equivalents	$	1,488,001		$	1,588,464
Rents receivable		390,971			358,634
Escrow deposits and reserves		5,760,339			5,304,636
Land		3,197,299			3,397,304
Buildings and improvements (net of accumulated depreciation of $68,912,155 and $70,976,013)		48,350,786			52,689,974
Intangible assets (net of accumulated amortization of $368,879 and $400,750)		503,123			628,927
Other assets		1,093,948			1,348,751
	$	60,784,467		$	65,316,690
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses	$	2,640,136		$	2,428,231
Due to related parties		1,223,759			1,966,081
Mortgage loans		59,399,112			63,227,225
Notes payable		954,892			938,766
Accrued interest		8,609,882			8,368,416
Other liabilities		669,752			725,035
		73,497,533			77,653,754
Partners' equity (deficit)
American Tax Credit Properties II L.P.
Capital contributions, net of distributions		30,555,783			31,578,759
Cumulative loss		(23,955,162	)		(25,000,091	)
		6,600,621			6,578,668
General partners and other limited partners
Capital contributions, net of distributions		1,416,473			3,472,712
Cumulative loss		(20,730,160	)		(22,388,444	)
		(19,313,687	)		(18,915,202	)
		(12,713,066	)		(12,337,064	)
	$	60,784,467		$	65,316,690

9

AMERICAN TAX CREDIT PROPERTIES II L.P.

NOTES TO FINANCIAL STATEMENTS - (Continued)

SEPTEMBER 29, 2007

(UNAUDITED)

3.Investment in Local Partnerships (continued)

The combined unaudited statements of operations of the Local Partnerships for the three and six month periods ended June 30, 2007 and 2006 are as follows:

	Three Months Ended June 30,			Six Months Ended June 30,			Three Months Ended June 30,			Six Months Ended June 30,
	2007			2007			2006			2006
REVENUE
Rental	$	4,599,213		$	9,308,580		$	4,847,669		$	9,694,575
Interest and other		161,751			277,033			109,476			358,870
TOTAL REVENUE		4,760,964			9,585,613			4,957,145			10,053,445
EXPENSES
Administrative		947,488			1,965,022			1,058,556			2,076,907
Utilities		712,772			1,660,054			699,268			1,872,202
Operating and maintenance		1,210,042			2,215,862			1,217,829			2,224,049
Taxes and insurance		597,905			1,203,509			603,270			1,218,570
Financial		820,342			1,664,055			981,700			1,976,573
Depreciation and amortization		984,380			1,951,743			1,070,967			2,100,954
TOTAL EXPENSES		5,272,929			10,660,245			5,631,590			11,469,255
NET LOSS	$	(511,965	)	$	(1,074,632	)	$	(674,445	)	$	(1,415,810	)
NET LOSS ATTRIBUTABLE TO
American Tax Credit Properties II L.P.	$	(95,749	)	$	(14,047	)	$	(55,857	)	$	(124,271	)
General partners and other limited partners, which includes $390,632, $975,303, $518,545 and $1,131,788 of Partnership loss in excess of investment		(416,216	)		(1,060,585	)		(618,588	)		(1,291,539	)
	$	(511,965	)	$	(1,074,632	)	$	(674,445	)	$	(1,415,810	)

The combined results of operations of the Local Partnerships for the six months ended June 30, 2007 are not necessarily indicative of the results that may be expected for an entire operating period.

10

AMERICAN TAX CREDIT PROPERTIES II L.P.

NOTES TO FINANCIAL STATEMENTS - (Continued)

SEPTEMBER 29, 2007

(UNAUDITED)

3. Investment in Local Partnerships (continued)

In a series of two separate transactions in September 2006 and October 2006, the Property owned by Powelton Gardens Associates (“Powelton”) was sold, whereby the Partnership received $240,502 and Powelton was subsequently dissolved. The Partnership recognized a gain of $104,566 for the six months ended September 29, 2006, which amount is included in gain on disposal of limited partner interests/local partnership properties in the accompanying statement of operations of the Partnership for such period. The Partnership’s investment balance in Powelton, after cumulative equity losses, became zero during the year ended March 30, 2002.

The Property owned by Dermott Villas Limited Partnership (“Dermott”) was sold in October 2006, in connection with which the Partnership received $40,000 during the six months ended September 29, 2007 and which amount is reflected as due from local partnership in the accompanying balance sheet of the Partnership as of March 30, 2007. The Partnership’s investment balance in Dermott, after cumulative equity losses, became zero during the year ended March 30, 2000.

In June 2006, the Partnership withdrew from 2000-2100 Christian Street Associates (“2000 Christian Street”), and received consideration of $40,000, which is included in gain on disposal of limited partner interests/local partnership properties in the accompanying statement of operations of the Partnership for the six months ended September 29, 2006. The Partnership’s investment balance in 2000 Christian Street, after cumulative equity losses, became zero during the year ended March 30, 1997.

The non-mandatory second mortgage of Ann Ell Apartments Associates, Ltd. (“Ann Ell”) matured in February 2006 but has not been repaid. Unpaid principal and accrued interest as of December 2007 total approximately $773,000. The Local General Partner represents that the lender has not declared a default and that payments on the first mortgage and real estate taxes are current. The Partnership has made cumulative advances to Ann Ell of $569,545 as of September 29, 2007 to fund operating deficits, $36,000 of which was advanced during the six months then ended. The Partnership’s investment balance in Ann Ell, after cumulative equity losses, became zero during the year ended March 30, 1994 and advances made by the Partnership were recorded as investment in local partnerships and have been offset by additional equity in loss of investment in local partnerships.

The Local General Partner of Queen Lane Investors (“Queen Lane”) represents that, as a result of a dispute between the local housing agency (the “Agency”) and the Local General Partner regarding the adequacy of certain unit repairs mandated by the Agency, the Local General Partner requested that the Agency cancel the Section 8 voucher contract in connection with the Property. As a result, the Property has been vacant since October 2007. Two of Queen Lane’s mortgages matured in 2007 but have not been repaid, representing principal and accrued interest in excess of $1,740,000 as of December 2007. The Local General Partner further represents that the lender has not issued a notice of default. The Local General Partner is examining the potential to sell the Property. The Partnership’s investment balance in Queen Lane, after cumulative equity losses, became zero during the year ended March 30, 2001.

The non-mandatory mortgages of Littleton Avenue Community Village, L.P. (“Littleton”) matured in October 2006 but have not been repaid. Unpaid principal and accrued interest as of December 2007 total approximately $7,843,000. The Local General Partner represents that neither lender has declared a default and that negotiations are ongoing in an effort to refinance the mortgages. The Local General Partner further represents that payments on the real estate taxes are current. Registrant’s investment balance in Littleton, after cumulative equity losses, became zero during the year ended March 30, 1999.

One of the mortgages of The Pendleton (A Louisiana Partnership in Commendam) (“Pendleton”), which was scheduled to commence amortization in May 2004, is over three years in arrears (approximately $123,000) as of December 2007. The Local General Partner represents that it is negotiating with the lender, that the lender has not commenced foreclosure proceedings and that payments on the other mortgage and the real estate taxes are current. The Partnership has made cumulative advances to Pendleton of $3,300 as of June 29, 2007 to fund operating deficits, none of which was advanced during the three months then ended; such advances were recorded as investment in local partnerships and have been offset by additional equity in loss of investment in local partnerships. The Partnership’s investment balance in Pendleton, after cumulative equity losses, became zero during the year ended March 30, 2002.

11

AMERICAN TAX CREDIT PROPERTIES II L.P.

NOTES TO FINANCIAL STATEMENTS - (Continued)

SEPTEMBER 29, 2007

(UNAUDITED)

4. Additional Information

Additional information, including the audited March 30, 2007 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, 2007 on file with the Securities and Exchange Commission.

12

AMERICAN TAX CREDIT PROPERTIES II L.P.

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

Material Changes in Financial Condition

As of September 29, 2007, American Tax Credit Properties II L.P. (the “Registrant”) has not experienced a significant change in financial condition as compared to March 30, 2007. Principal changes in assets are comprised of periodic transactions and adjustments and equity in 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 six months ended September 29, 2007, Registrant received cash from interest revenue, proceeds in connection with disposals of limited partner interests/local partnership properties (see Local Partnership Matters below) and distributions from Local Partnerships and utilized cash for operating expenses and making advances to a Local Partnership (see Local Partnership Matters below). Cash and cash equivalents and investments in bonds decreased, in the aggregate, by approximately $158,000 during the six months ended September 29, 2007 (which includes accretion of zero coupon bonds of approximately $19,000 and a net unrealized gain on investment in bonds of approximately $4,000). Notwithstanding circumstances that may arise in connection with the Properties, Registrant does not expect to realize significant gains or losses on its investments in bonds, if any. During the six months ended September 29, 2007, the investment in local partnerships increased as a result of Registrant’s equity in the Local Partnerships’ net loss for the six months ended June 30, 2007 of advances to a Local Partnership of $36,000 (see discussion below under Local Partnership Matters), partially offset by $14,047 of equity in the Local Partnerships’ net loss for the six months ended June 30, 2007. Accounts payable and accrued expenses includes deferred administration fees of $344,665, and payable to general partner and affiliates represents deferred administration and management fees in the accompanying balance sheet as of September 29, 2007.

Results of Operations

Registrant’s operating results are dependent upon the operating results of the Local Partnerships and are significantly 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. 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. As a result, the reported equity in loss of investment in local partnerships is expected to decrease as Registrant’s investment balances in the respective Local Partnerships become zero. However, the combined statements of operations of the Local Partnerships reflected in Note 3 to Registrant’s financial statements include the operating results of all Local Partnerships, irrespective of Registrant’s investment balances.

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. See discussion below under Local Partnership Matters regarding certain Local Partnerships currently operating below economic break even levels.

Registrant’s operations for the three months ended September 29, 2007 and 2006 resulted in a net loss of $212,804 and $68,298, respectively. The increase in net loss from fiscal 2006 to fiscal 2007 is primarily attributable to a gain on disposal of limited partner interests/local partnership properties of approximately $105,000 recognized in fiscal 2006 in connection with Powelton Gardens Associates (“Powelton”) and 2000-2100 Christian Street Associates (“2000 Christian Street”) (see discussion below under Local Partnership Matters) and an increase in equity in loss of investment in local partnerships of approximately $40,000, which increase is primarily the result of an increase in advances made to a certain Local Partnership in fiscal 2007 that were written off as equity in loss of investment in local partnerships (see discussion below under Local Partnership Matters). Other comprehensive income for the three months ended September 29, 2007 and 2006 resulted from a net unrealized gain on investments in bonds of $4,652 and $5,953, respectively.

13

AMERICAN TAX CREDIT PROPERTIES II L.P.

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

The Local Partnerships’ net loss of approximately $512,000 for the three months ended June 30, 2007 was attributable to rental and other revenue of approximately $4,761,000, exceeded by operating and interest expenses (including interest on non-mandatory debt) of approximately $4,289,000 and approximately $984,000 of depreciation and amortization expense. The Local Partnerships’ loss from operations of approximately $674,000 for the three months ended June 30, 2006 was attributable to rental and other revenue of approximately $4,957,000, exceeded by operating and interest expenses (including interest on non-mandatory debt) of approximately $4,560,000 and approximately $1,071,000 of depreciation and amortization expense. The Local Partnerships’ revenue and expenses have decreased in 2007 as compared to 2006 as the result of recent Property sales and Registrant’s withdrawal from certain Local Partnerships. The results of operations of the Local Partnerships for the three months ended June 30, 2007 are not necessarily indicative of the results that may be expected in future periods.

Registrant’s operations for the six months ended September 29, 2007 and 2006 resulted in a net loss of $177,736 and $93,196,, respectively. The increase in net loss from fiscal 2006 to fiscal 2007 is primarily attributable to (i) a gain on disposal of limited partner interests/local partnership properties of approximately $145,000 recognized in fiscal 2006 in connection with Powelton and 2000 Christian Street (see discussion below under Local Partnership Matters) and (ii) a decrease in other income from local partnerships of approximately $76,000, all partially offset by (i) a decrease in operating expenses of approximately $28,000 and (ii) a decrease in equity in loss of investment in local partnerships of approximately $110,000, which decrease is primarily the result of a decrease in advances made to a certain Local Partnership that were written off as equity in loss of investment in local partnerships and a decrease in the operating losses of certain Local Partnerships in which Registrant continues to have an investment balance. Other comprehensive income (loss) for the six months ended September 29, 2007 and 2006 resulted from a net unrealized gain (loss) on investments in bonds of $3,821 and ($412), respectively.

The Local Partnerships’ net loss of approximately $1,075,000 for the six months ended June 30, 2007 was attributable to rental and other revenue of approximately $9,586,000, exceeded by operating and interest expense (including interest on non-mandatory debt) of approximately $8,709,000 and depreciation and amortization expense of approximately $1,952,000. The Local Partnerships’ loss from operations of approximately $1,416,000 for the six months ended June 30, 2006 was attributable to rental and other revenue of approximately $10,053,000, exceeded by operating and interest expense (including interest on non-mandatory debt) of approximately $9,368,000 and depreciation and amortization expense of approximately $2,101,000. The Local Partnerships’ revenue and expenses have decreased in 2007 as compared to 2006 as the result of recent Property sales and Registrant’s withdrawal from certain Local Partnerships. The results of operations of the Local Partnerships for the six months ended June 30, 2007 are not necessarily indicative of the results that may be expected in future periods.

Local Partnership Matters

Registrant's primary objective has been to provide Low-income Tax Credits to limited partners generally over a ten year period. The relevant state tax credit agency has allocated each of Registrant’s 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 substantially fully exhausted by the Local Partnerships as of December 31, 2001. 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"). In addition, certain of the Local Partnerships have 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, regardless of any sale of the Properties by the Local Partnerships after the Compliance Period. The Properties must satisfy various requirements including rent restrictions and tenant income limitations (the "Low-income Tax Credit Requirements") in order to maintain eligibility for the recognition of the Low-income Tax Credit at all times during the Compliance Period. Once a Local Partnership has become eligible for the Low-income Tax Credit, it may lose such eligibility and suffer an event of recapture if its Property fails to remain in compliance with the Low-income Tax Credit Requirements. As of December 31, 2006, the Compliance Period of all of the Local Partnerships had expired. It is the General Partner’s intention to sell or assign Registrant’s interests in Local Partnerships subsequent to the expiration of the respective Compliance Periods. It is uncertain as to the amount, if any, that Registrant will receive with respect to each specific Property from such sales and assignments.

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AMERICAN TAX CREDIT PROPERTIES II L.P.

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

The Properties are principally comprised of subsidized and leveraged low-income multifamily residential complexes located throughout the United States and 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 during and after the Compliance Periods of the Local Partnerships. 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. Eleven Local Partnerships’ Section 8 contracts, certain of which cover only certain rental units, are currently subject to renewal under applicable HUD guidelines. In addition, two Local Partnerships have entered into restructuring agreements, resulting in a change to both rent subsidy and mandatory debt service.

The Local Partnerships have various financing structures which include (i) required debt service payments (“Mandatory Debt Service”) and (ii) debt service payments which 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"). During the six months ended June 30, 2007, revenue from operations of the Local Partnerships was generally sufficient to cover operating expenses and Mandatory Debt Service. Most of the Local Partnerships were effectively operating at or above break even levels, although certain Local Partnerships’ operating information reflects operating deficits that do not represent cash deficits due to their mortgage and financing structure and the required deferral of property management fees. However, as discussed below, certain Local Partnerships' operating information indicates below break even operations after taking into account their mortgage and financing structure and any required deferral of property management fees.

In a series of two separate transactions in September 2006 and October 2006, the Property owned by Powelton was sold, in connection with which Registrant received $240,502, of which $104,566 is included in gain on disposal of limited partner interests/local partnership properties in the accompanying statement of operations of Registrant for the six months ended September 29, 2006. Powelton has since been dissolved; the Compliance Period for Powelton expired prior to such sale. Registrant’s investment balance in Powelton, after cumulative equity losses, became zero during the year ended March 30, 2002.

The Property owned by Dermott Villas Limited Partnership (“Dermott”) was sold in October 2006, in connection with which Registrant received $40,000 during the six months ended September 29, 2007 and which amount is reflected as due from local partnership in the accompanying balance sheet of Registrant as of March 30, 2007. Registrant withdrew from Dermott effective December 31, 2006; the Compliance Period for Dermott expired prior to such sale. Registrant’s investment balance in Dermott, after cumulative equity losses, became zero during the year ended March 30, 2000.

In June 2006, Registrant withdrew from 2000 Christian Street and received consideration of $40,000, which is included in gain on disposal of limited partner interests/local partnership properties in the accompanying statement of operations of Registrant for the six months ended September 29, 2007. The Compliance Period for 2000 Christian Street expired prior to such withdrawal. Registrant’s investment balance in 2000 Christian Street, after cumulative equity losses, became zero during the year ended March 30, 1997.

The non-mandatory second mortgage of Ann Ell Apartments Associates, Ltd. (“Ann Ell”) matured in February 2006 but has not been repaid. Unpaid principal and accrued interest as of December 2007 total approximately $773,000. The Local General Partner represents that the lender has not declared a default and that payments on the first mortgage and real estate taxes are current. Registrant has made cumulative advances to Ann Ell of $569,545 as of September 29, 2007 to fund operating deficits, $36,000 of which was advanced during the six months then ended. Registrant’s investment balance in Ann Ell, after cumulative equity losses, became zero during the year ended March 30, 1994 and advances made by Registrant were recorded as investment in local partnerships and have been offset by additional equity in loss of investment in local partnerships. The Compliance Period for Ann Ell has expired.

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AMERICAN TAX CREDIT PROPERTIES II L.P.

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

The Local General Partner of Queen Lane Investors (“Queen Lane”) represents that, as a result of a dispute between the local housing agency (the “Agency”) and the Local General Partner regarding the adequacy of certain unit repairs mandated by the Agency, the Local General Partner requested that the Agency cancel the Section 8 voucher contract in connection with the Property. As a result, the Property has been vacant since October 2007. Two of Queen Lane’s mortgages matured in 2007 but have not been repaid, representing principal and accrued interest in excess of $1,740,000 as of December 2007. The Local General Partner further represents that the lender has not issued a notice of default. The Local General Partner is examining the potential to sell the Property. Registrant’s investment balance in Queen Lane, after cumulative equity losses, became zero during the year ended March 30, 2001. The Compliance Period for Queen Lane has expired.

The non-mandatory mortgages of Littleton Avenue Community Village, L.P. (“Littleton”) matured in October 2006 but have not been repaid. Unpaid principal and accrued interest as of December 2007 total approximately $7,843,000. The Local General Partner represents that neither lender has declared a default and that negotiations are ongoing in an effort to refinance the mortgages. The Local General Partner further represents that payments on the real estate taxes are current. Registrant’s investment balance in Littleton, after cumulative equity losses, became zero during the year ended March 30, 1999. The Compliance Period for Littleton has expired.

One of the mortgages of The Pendleton (A Louisiana Partnership in Commendam) (“Pendleton”), which was scheduled to commence amortization in May 2004, is over three years in arrears (approximately $123,000) as of December 2007. The Local General Partner represents that it is negotiating with the lender, that the lender has not commenced foreclosure proceedings and that payments on the other mortgage and the real estate taxes are current. Registrant has made cumulative advances to Pendleton of $3,300 as of September 29, 2007 to fund operating deficits, none of which was advanced during the six months then ended; such advances were recorded as investment in local partnerships and have been offset by additional equity in loss of investment in local partnerships. Registrant’s investment balance in Pendleton, after cumulative equity losses, became zero during the year ended March 30, 2002. The Compliance Period for Pendleton has expired.

The terms of the partnership agreement of Patton Place Limited Partnership (“Patton Place”) require the Local General Partners to cause the management agent to defer property management fees in order to avoid a default under the mortgage. During the six months ended June 30, 2007, Patton Place incurred an operating deficit of approximately $20,000, which includes property management fees of approximately $4,000. The Local General Partners represent that payments on the mortgage and real estate taxes are current. The Compliance Period for Patton Place has expired.

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AMERICAN TAX CREDIT PROPERTIES II L.P.

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

Critical Accounting Policies and Estimates

The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, 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 financial statements.

· Registrant accounts for its investment in local partnerships in accordance with the equity method of accounting since Registrant does not control the operations of a Local Partnership.

· 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 sum of the total amount of the remaining tax credits to be allocated to Registrant and 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 under Financial Accounting Standards Board Interpretation No. 46 - Revised, “Consolidation of Variable Interest Entities,” 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 strength of the Local General Partners.

Item 3.Quantitative and Qualitative Disclosure about Market Risk

Registrant has invested a significant portion of its working capital reserves in U.S. Treasury instruments. The market value of such investment is subject to fluctuation based upon changes in interest rates relative to the investment’s maturity date and the associated bond rating. Since Registrant’s investments in bonds mature in 2008, the value of such investment may be adversely impacted in an environment of rising interest rates in the event Registrant decides to liquidate the investment prior to its maturity. Although Registrant may utilize reserves to pay for its operating expenses and/or to assist an under performing Property, it otherwise intends to hold such investment to its maturity. Therefore, Registrant does not anticipate any material adverse impact in connection with such investment.

Item 4. Controls and Procedures

As of September 29, 2007, under the direction of the Chief Executive Officer and Chief Financial Officer, Registrant evaluated the effectiveness of its disclosure controls and procedures and concluded that (i) Registrant’s disclosure controls and procedures were effective as of September 29, 2007, and (ii) there has been no change in Registrant’s internal control over financial reporting during the quarter ended September 29, 2007 that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

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AMERICAN TAX CREDIT PROPERTIES II L.P.

PART II - OTHER INFORMATION

Item 1.Legal Proceedings

Registrant is not aware of any material legal proceedings.

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, 2007.

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 defaults of certain Local Partnerships.

Item 4.Submission of Matters to a Vote of Security Holders

None

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

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SIGNATURES

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

	AMERICAN TAX CREDIT PROPERTIES II L.P.
	(a Delaware limited partnership)
	By:	Richman Tax Credit Properties II L.P.,
		General Partner
	by:	Richman Tax Credits Inc.,
		general partner
Dated: March 28, 2008	by:	/s/ David Salzman
		David Salzman
		Chief Executive Officer
Dated: March 28, 2008	by:	/s/ Neal Ludeke
		Neal Ludeke
		Chief Financial Officer
Dated: March 28, 2008	by:	/s/ Richard Paul Richman
		Richard Paul Richman
		Director

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