August 13, 2004
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Boston Financial Qualified Housing Tax Credits L.P. IV
Report on Form 10-QSB for the Quarter Ended June 30, 2004
File Number 0-19765
Dear Sir/Madam:
Pursuant to the requirements of section 15(d) of the Securities Exchange Act of
1934, filed herewith a copy of subject report.
Very truly yours,
/s/Stephen Guilmette
Stephen Guilmette
Assistant Controller
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2004
-----------------------------------------
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-19765
Boston Financial Qualified Housing Tax Credits L.P. IV
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-3044617
- --------------------------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
101 Arch Street, Boston, Massachusetts 02110-1106
- ----------------------------------------------------- ------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-3911
----------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No .
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION Page No.
- ------------------------------ --------
Item 1. Financial Statements
Balance Sheet (Unaudited) - June 30, 2004 1
Statements of Operations (Unaudited) - For the Three
Months Ended June 30, 2004 and 2003 2
Statement of Changes in Partners' Equity (Deficiency)
(Unaudited) - For the Three Months Ended June 30, 2004 3
Statements of Cash Flows (Unaudited) - For the
Three Months Ended June 30, 2004 and 2003 4
Notes to the Financial Statements (Unaudited) 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Item 3. Controls and Procedures 12
PART II - OTHER INFORMATION
Items 1-6 13
SIGNATURE 14
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
BALANCE SHEET
June 30, 2004
(Unaudited)
Assets
Cash and cash equivalents $ 403,804
Investments in Local Limited Partnerships (Note 1) 11,957,072
Other assets 125
-------------
Total Assets $ 12,361,001
=============
Liabilities and Partners' Equity
Due to affiliate $ 565,205
Accrued expenses 69,379
-------------
Total Liabilities 634,584
General, Initial and Investor Limited Partners' Equity
Total Partners' Equity 11,726,417
-------------
Total Liabilities and Partners' Equity $ 12,361,001
=============
The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
STATEMENTS OF OPERATIONS
For the Three Months Ended June 30, 2004 and 2003
(Unaudited)
2004 2003
------------- -------------
Revenue:
Investment $ 1,079 $ 2,666
Other 25,683 70,073
------------- -------------
Total Revenue 26,762 72,739
------------- -------------
Expenses:
Asset management fees, affiliate 45,978 45,121
Provision for valuation of advances to Local
Limited Partnerships 5,685 1,956
General and administrative (includes reimbursements
to affiliate in the amounts of $74,490 and $40,867
in 2004 and 2003, respectively) 103,908 70,832
Amortization 10,170 11,994
------------- -------------
Total Expenses 165,741 129,903
------------- -------------
Loss before equity in losses of Local
Limited Partnerships (138,979) (57,164)
Equity in losses of Local Limited Partnerships (Note 1) (22,156) (318,234)
------------- -------------
Net Loss $ (161,135) $ (375,398)
============= =============
Net Loss allocated:
General Partners $ (1,611) $ (3,754)
Limited Partners (159,524) (371,644)
------------- -------------
$ (161,135) $ (375,398)
============= =============
Net Loss per Limited Partner
Unit (68,043 Units) $ (2.34) $ (5.46)
The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
STATEMENT OF CHANGES IN PARTNERS' EQUITY (Deficiency)
For the Three Months Ended June 30, 2004
(Unaudited)
Initial Investor
General Limited Limited
Partners Partners Partners Total
------------ ----------- -------------- ------------
Balance at March 31, 2004 $ (472,211) $ 5,000 $ 12,354,763 $ 11,887,552
Net Loss (1,611) - (159,524) (161,135)
------------ ----------- -------------- ------------
Balance at June 30, 2004 $ (473,822) $ 5,000 $ 12,195,239 $ 11,726,417
============ =========== ============== ============
The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
For the Three Months Ended June 30, 2004 and 2003
(Unaudited)
2004 2003
------------- -------------
Net cash used for operating activities $ (151,808) $ (260,392)
Net cash provided by (used for) investing activities (5,002) 93,117
------------- -------------
Net decrease in cash and cash equivalents (156,810) (167,275)
Cash and cash equivalents, beginning 560,614 589,683
------------- -------------
Cash and cash equivalents, ending $ 403,804 $ 422,408
============= =============
The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
Notes to the Financial Statements
(Unaudited)
The unaudited financial statements presented herein have been prepared in
accordance with the instructions to Form 10-QSB and do not include all of the
information and note disclosures required by accounting principles generally
accepted in the United States of America. These statements should be read in
conjunction with the financial statements and notes thereto included with the
Partnership's Form 10-KSB for the year ended March 31, 2004. In the opinion of
the Managing General Partner, these financial statements include all
adjustments, consisting only of normal recurring adjustments, necessary to
present fairly the Partnership's financial position and results of operations.
The results of operations for the periods may not be indicative of the results
to be expected for the year.
The Managing General Partner of the Partnerships has elected to report results
of the Local Limited Partnerships in which the Partnership has a limited
partnership interest on a 90 day lag basis because the Local Limited
Partnerships report their results on a calendar year basis. Accordingly, the
financial information of the Local Limited Partnerships that is included in the
accompanying financial statements is as of March 31, 2004 and 2003.
1. Investments in Local Limited Partnerships
The Partnership has limited partnership interests in twenty-two Local Limited
Partnerships which were organized for the purpose of owning and operating
multi-family housing complexes, all of which are government-assisted. The
Partnership's ownership interest in each Local Limited Partnership is 99% with
the exception of Leawood Manor, which is 89%. The Partnership may have
negotiated or may negotiate options with the Local General Partners to purchase
or sell the Partnership's interest in the Properties at the end of the tax
credit compliance periods at nominal prices. In the event that Properties are
sold to third parties, proceeds will be distributed according to the terms of
each Local Limited Partnership agreement.
The following is a summary of investments in Local Limited Partnerships at June
30, 2004:
Capital contributions and advances paid to Local Limited Partnerships and
purchase price paid to withdrawing partners of Local Limited Partnerships $ 43,954,413
Cumulative equity in losses of Local Limited Partnerships (excluding cumulative
unrecognized losses of $12,988,659) (26,780,210)
Cumulative cash distributions received from Local Limited Partnerships (4,016,175)
-------------
Investments in Local Limited Partnerships before adjustments 13,158,028
Excess investment cost over the underlying assets acquired:
Acquisition fees and expenses 3,613,837
Cumulative amortization of acquisition fees and expenses (1,155,762)
-------------
Investments in Local Limited Partnerships before impairment allowance 15,616,103
Impairment allowance on investments in Local Limited Partnerships (3,659,031)
-------------
Investments in Local Limited Partnerships $ 11,957,072
=============
For the three months ended June 30, 2004, the Partnership advanced $5,685 to one
of the Local Limited Partnerships, all of which was impaired. The Partnership
has recorded an impairment allowance for its investments in certain Local
Limited Partnerships in order to appropriately reflect the estimated net
realizable value of these investments.
<page>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
Notes to the Financial Statements (continued)
(Unaudited)
1. Investments in Local Limited Partnerships (continued)
The Partnership's share of the net losses of the Local Limited Partnerships for
the three months ended June 30, 2004 is $913,095. For the three months ended
June 30, 2004, the Partnership has not recognized $891,929 of equity in losses
relating to certain Local Limited Partnerships in which cumulative equity in
losses and cumulative distributions exceeded its total investments in these
Local Limited Partnerships. Previously unrecognized losses of $990 were included
in losses recognized in the three months ended June 30, 2004.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Certain matters discussed herein constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. The
Partnership intends such forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements and is including this statement
for purposes of complying with these safe harbor provisions. Although the
Partnership believes the forward-looking statements are based on reasonable
assumptions, the Partnership can give no assurance that its expectations will be
attained. Actual results and timing of certain events could differ materially
from those projected in or contemplated by the forward-looking statements due to
a number of factors, including, without limitation, general economic and real
estate conditions and interest rates.
Accounting Policies
The Partnership's accounting policies include those that relate to its
recognition of investments in Local Limited Partnerships using the equity method
of accounting. The Partnership's policy is as follows:
The Partnership accounts for its investments in Local Limited Partnerships using
the equity method of accounting because the Partnership does not have control
over the major operating and financial policies of the Local Limited
Partnerships in which it invests. Under the equity method, the investment is
carried at cost, adjusted for the Partnership's share of net income or loss and
for cash distributions from the Local Limited Partnerships; equity in income or
loss of the Local Limited Partnerships is included currently in the
Partnership's operations. Under the equity method, a Local Limited Partnership
investment will not be carried below zero. To the extent that equity in losses
are incurred when the Partnership's carrying value of the respective Local
Limited Partnership has been reduced to a zero balance, the losses will be
suspended and offset against future income. Income from Local Limited
Partnerships, where cumulative equity in losses plus cumulative distributions
have exceeded the total investment in Local Limited Partnerships, will not be
recorded until all of the related unrecorded losses have been offset. To the
extent that a Local Limited Partnership, with a carrying value of zero
distributes cash to the Partnership, that distribution is recorded as income on
the books of the Partnership and is included in "Other Revenue" in the
accompanying financial statements.
The Partnership has implemented policies and practices for assessing potential
impairment of its investments in Local Limited Partnerships. Real estate experts
analyze the investments to determine if impairment indicators exist. If so, the
investment is analyzed to consider the Partnership's ability to recover its
carrying value. If an other than temporary impairment in carrying value exists,
a provision to write down the asset to fair value will be recorded in the
Partnership's financial statements.
Liquidity and Capital Resources
The Partnership had a decrease in cash and cash equivalents of $156,810 from
$560,614 at March 31, 2004 to $403,804 at June 30, 2004. The decrease is
primarily attributable to cash used for operations and advances to a Local
Limited Partnership offset by cash distributions received from Local Limited
Partnerships.
The Managing General Partner originally designated 4% of the Gross Proceeds as
Reserves, as defined in the Partnership Agreement. The Reserves were established
to be used for working capital of the Partnership and contingencies related to
the ownership of Local Limited Partnership interests. The Managing General
Partner may increase or decrease such Reserves from time to time, as it deems
appropriate. At June 30, 2004, $403,804 of cash and cash equivalents has been
designated as Reserves.
To date, professional fees relating to various Property issues totaling
approximately $1,441,000 have been paid from Reserves. To date, Reserve funds in
the amount of approximately $304,000 also have been used to make additional
capital contributions to one Local Limited Partnership. In the event a Local
Limited Partnership encounters operating difficulties requiring additional
funds, the Managing General Partner might deem it in its best interest to
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Liquidity and Capital Resources (continued)
voluntarily provide such funds in order to protect its investment. As of June
30, 2004, the Partnership has advanced approximately $1,305,000 to Local Limited
Partnerships to fund operating deficits.
The Managing General Partner believes that the investment income earned on the
Reserves, along with cash distributions received from Local Limited
Partnerships, to the extent available, will be sufficient to fund the
Partnership's ongoing operations. Reserves may be used to fund Partnership
operating deficits, if the Managing General Partner deems funding appropriate.
If Reserves are not adequate to cover the Partnership's operations, the
Partnership will seek other financing sources including, but not limited to, the
deferral of Asset Management Fees paid to an affiliate of the Managing General
Partner or working with Local Limited Partnerships to increase cash
distributions. To date, the Partnership has used approximately $732,000 of
operating funds to replenish Reserves.
Since the Partnership invests as a limited partner, the Partnership has no
contractual obligation to provide additional funds to Local Limited Partnerships
beyond its specified investment. Thus, at June 30, 2004, the Partnership had no
contractual or other obligation to any Local Limited Partnership which had not
been paid or provided for.
Cash Distributions
No cash distributions were made during the three months ended June 30, 2004.
Results of Operations
The Partnership's results of operations for the three months ended June 30, 2004
resulted in a net loss of $161,135 as compared to a net loss of $375,398 for the
same period in 2003. The change between years is primarily attributable to a
decrease in equity in losses, partially offset by a decrease in other income and
an increase in general and administrative expenses. Equity in losses decreased
between years due to an increase in unrecognized losses of Local Limited
Partnerships with carrying values of zero. The decrease in other income is
attributable to fewer distributions from Local Limited Partnerships with
carrying values of zero. The increase in general and administrative expenses is
primarily due to increased charges from an affiliate of the General Partner for
operational and administrative expenses necessary for the operation of the
Partnership.
Portfolio Update
The Partnership's investment portfolio consists of limited partnership interests
in twenty-two Local Limited Partnerships, each of which owns and operates a
multi-family apartment complex and each of which has generated Tax Credits.
Since inception, the Partnership has generated Tax Credits, net of recapture, of
approximately $1,287 per Limited Partner Unit with an immaterial amount of Tax
Credits expected to be generated during 2004 and 2005.
Properties that receive low income housing Tax Credits must remain in compliance
with rent restriction and set-aside requirements for at least 15 years from the
date the property is completed. Failure to do so would result in recapture of a
portion of the Property's Tax Credits. Between 2003 and continuing through 2006,
the Compliance Period of the twenty-two Properties in which the Partnership has
an interest will expire. The Managing General Partner has negotiated agreements
that will ultimately allow the Partnership to dispose of its interest in eight
Local Limited Partnerships. It is unlikely that the disposition of any of these
Local Limited Partnership interests will generate any material cash
distributions to the Partnership.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Portfolio Update (continued)
The Managing General Partner will continue to closely monitor the operations of
the Properties during the Compliance Period and will formulate disposition
strategies with respect to the Partnership's remaining Local Limited Partnership
interests. It is unlikely that the Managing General Partner's efforts will
result in the Partnership disposing of all of its remaining Local Limited
Partnership interests concurrently with the expiration of each Property's
Compliance Period. The Partnership shall dissolve and its affairs shall be wound
up upon the disposition of the final Local Limited Partnership interest and
other assets of the Partnership. Investors will continue to be Limited Partners,
receiving K-1s and quarterly and annual reports, until the Partnership is
dissolved.
A lawsuit was filed by an investor in the Partnership for access to certain of
its records. The Managing General Partner is currently negotiating with the
plaintiff to resolve the issues in dispute. The Managing General Partner does
not view the economic risk to the Fund as material.
Property Discussions
Many of the Properties in which the Partnership has an interest have stabilized
operations and operate above break-even. Some Properties generate cash flow
deficits that the Local General Partners of those Properties fund through
project expense loans, subordinated loans or operating escrows. However, some
Properties have had persistent operating difficulties that could either: i) have
an adverse impact on the Partnership's liquidity; ii) result in their
foreclosure; or iii) result in the Managing General Partner deeming it
appropriate for the Partnership to dispose of its interest in the Local Limited
Partnership prior to the expiration of the Compliance Period. Also, the Managing
General Partner, in the normal course of the Partnership's business, may arrange
for the future disposition of its interest in certain Local Limited
Partnerships. The following Property discussions focus only on such Properties.
As previously reported, the Local General Partner of Hampton Lane, located in
Buena Vista, Georgia, and Green Tree Village, located in Greenville, Georgia,
expressed to the Managing General Partner some concerns over the long-term
financial health of these Properties. In response to these concerns and to
reduce possible future risk, the Managing General Partner reached agreement with
the Local General Partner on a plan that will ultimately transfer ownership of
the Local Limited Partnerships to the Local General Partner. The plan includes
provisions to minimize the risk of recapture. The Properties have generated all
of their total Tax Credits. The Managing General Partner has not yet transferred
any of the Partnership's interest in these Local Limited Partnerships.
As previously reported, the Managing General Partner negotiated an agreement
with an unaffiliated entity to have the ability to transfer its interest to an
unaffiliated entity or its designee with respect to the following Local Limited
Partnerships: Orocovix IV, located in Orocovix, Puerto Rico, Canfield Crossing,
located in Milan, Michigan, Orchard View, located in Gobles, Michigan and
Whitehills II, located in Howell, Michigan. Although these Properties do not
share a common Local General Partner, they are all Rural Housing Section 515
("FMHA") properties. The Managing General Partner has the right to put its
interest in any of the Local Limited Partnerships at any time in exchange for a
contingent note that grants the Partnership 50% of all future net cash receipts
from such Local Limited Partnership interest.
As previously reported, in June of 1998, the Managing General Partner was
informed that the Local General Partner of Bentley Court, located in Columbia,
South Carolina was indicted on various criminal charges and pled guilty on
certain counts. The Managing General Partner replaced the Local General Partner
and the site management company. Furthermore, an IRS audit of the 1993 tax
return for the Local Limited Partnership questioned the treatment of certain
items and had findings of non-compliance in 1993. The IRS then expanded the
scope of the audit to include the 1994 and 1995 tax returns. As a result, the
IRS disallowed the Property's Tax Credits for each of these years. On behalf of
the Partnership, the Managing General Partner retained counsel to appeal the
IRS's
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Property Discussions (continued)
findings in order to minimize the loss of Tax Credits. This administrative
appeal has been unsuccessful to date and the IRS continues to take the position
of disallowing Tax Credits for 1993, 1994 and 1995, a total of approximately
$2,562,000, or $38 per Unit, not including interest. In addition, the Local
General Partner received formal notification that the IRS was expanding its
claims to recapturing approximately $500,000 of Tax Credits deducted in 1990,
1991 and 1992, or $7 per Unit, not including interest. It is possible that the
IRS will further expand its claims for additional amounts with respect to other
years. The Managing General Partner is currently considering its options
including an appeal in Federal Court and possible settlement with the IRS.
Absent further litigation or a settlement, it is anticipated that the IRS will
contact Limited Partners directly for any adjustments that need to be made to
returns for those years. It is possible that the Managing General Partner may
decide to sell the Bentley Court property to generate proceeds that may be used
in connection with the tax liabilities described above.
As previously reported, on April 28, 2000, the Managing General Partner, on
behalf of the Partnership, filed suit against the former Local General Partner
of Bentley Court and certain affiliates of the former Local General Partner
alleging mismanagement of the Local Limited Partnership. During May 2001, the
former Local General Partner authorized the release of funds held in escrow in
the amount of approximately $640,000 to the Partnership that was used to
reimburse the Partnership for advances made in previous years. Previously, weak
market conditions had caused Bentley Court to be unable to establish a
stabilized occupancy. However, recent strong occupancy enabled the Property to
operate above breakeven during 2003 with appropriate debt service coverage and
working capital levels. Previously, both the Local General Partner and the
Managing General Partner had advanced the Property funds to enable it to stay
current on its financial obligations.
As previously reported, in February 1997, due to concerns about the Property's
long-term viability, the Managing General Partner consummated a transfer of 50%
of the Partnership's interest in capital and profits of BK Apartments, located
in Jamestown, North Dakota, to the Local General Partner. The Property generated
its final year of Tax Credits in 2001 and the Partnership retained its full
share of the Property's Tax Credits through such time period. The Local General
Partner subsequently transferred its general partner interest to a new,
nonprofit general partner. The Managing General Partner also has the right to
put the Partnership's remaining interest to the new Local General Partner any
time after December 1, 2001. In addition, the new Local General Partner has the
right to call the remaining interest after the Compliance Period has expired.
The Property operated above break-even during 2003.
As previously reported, although the neighborhood in which 46th & Vincennes
(Chicago, Illinois) is located has improved in the last few years, potential
tenants are reluctant to occupy the Property due to its location and curb
appeal. As a result, maintaining occupancy, and therefore revenues, continues to
be an issue and debt service coverage and working capital are below appropriate
levels. A site visit by the Managing General Partner found the Property in need
of some minor improvements but in overall fair condition. However, the Managing
General Partner believes that the Local General Partner and its affiliated
management company are not adequately performing their responsibilities with
respect to the Property. The Managing General Partner has expressed these
concerns to the Local General Partner and will continue to closely monitor the
Property's operations. Advances from the Local General Partner's Developer
Escrow have enabled the Property to stay current on its loan obligations.
As previously reported, during 1994, the Local General Partner of Dorsett
Apartments, located in Philadelphia, Pennsylvania, transferred its interest in
the Local Limited Partnership. The IRS subsequently conducted a compliance audit
of the Property and took the position that the Property is subject to recapture
due to non-compliance issues. The Managing General Partner disagrees with the
IRS and is working to resolve the matter. In the opinion of the Managing General
Partner, there is a risk that the Property and the Partnership could suffer
significant Tax Credit recapture or Tax Credit disallowance. However, it is not
possible to quantify the potential amount at this time. Further, the Property
suffers from poor location and security issues. Vandalism caused an
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Property Discussions (continued)
increase in maintenance and repair expenses and negatively affected the
Property's occupancy levels and tenant profile, causing debt service coverage
and working capital to drop below appropriate levels. The Managing General
Partner and the Local General Partner have had discussions concerning a put
option agreement that would allow the Partnership to transfer its interest in
the Local Partnership to the Local General Partner for a nominal interest. The
Managing General Partner has determined that there is little likelihood of any
realizable cash distributable to the Partnership from a sale of the Property.
As previously reported, the Managing General Partner negotiated an agreement to
transfer the Local General Partner interest in West Pine, located in Findlay,
Pennsylvania, to an affiliate of the Allegheny County Housing Authority ("ACHA")
contingent upon receiving approval from the U.S. Department of Housing and Urban
Development ("HUD"). HUD approval was received and the Local General Partner
interest was transferred on October 17, 2003. In addition, the ACHA had informed
the Managing General Partner of its interest in acquiring the Partnership's
interest in the Local Limited Partnership, pending their assumption of the Local
General Partner interest. Concurrent with the replacement of the Local General
Partner, another ACHA affiliate acquired 30% of the Partnership's Limited
Partner interest in the Local Limited Partnership. As part of this transaction,
the Partnership acquired a put option for the remaining 70% exercisable for $1
upon the expiration of the Compliance Period, December 31, 2006. West Pine
generated its final year of Tax Credits in 2001.
Willow Ridge, located in Prescott, Arizona, has experienced operating
difficulties during the last few quarters. Despite relatively strong occupancy,
the Property operated below break-even during 2003 and the Local Limited
Partnership has not made any debt service payments in 2004. The Property
generated all of its total Tax Credits by 2001 and its Compliance Period expires
on December 31, 2004. In order to minimize the Partnership's risk, the Managing
General Partner has a tentative agreement with an unaffiliated entity to be
admitted as a co-Local General Partner. This admittance would require the
approval of the U.S. Department of Housing and Urban Development. The co-Local
General Partner would be required to cure the mortgage arrearages. In addition,
the Partnership would receive the right to put its interest in the Property at
any time after December 31, 2004.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
CONTROLS AND PROCEDURES
Controls and Procedures
Based on the Partnership's evaluation as of the end of the period covered by
this report, the Partnership's director has concluded that the Partnership's
disclosure controls and procedures are effective to ensure that information
required to be disclosed in the reports that the Partnership files or submits
under the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms.
There have been no significant changes in the Partnership's internal controls or
in other factors that could significantly affect those controls subsequent to
the date of their evaluation.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
PART II OTHER INFORMATION
Items 1-5 Not applicable
Item 6 Exhibits and reports on Form 8-K
(a) Exhibits
31.1 Certification of Jenny Netzer pursuant to section 302
of the Sarbanes-Oxley Act of 2002
32.1 Certification of Jenny Netzer pursuant to section 906
of the Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K - No reports on Form 8-K were filed during
the quarter ended June 30, 2004
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DATED: August 13, 2004 BOSTON FINANCIAL QUALIFIED HOUSING
TAX CREDITS L.P. IV
By: Arch Street VIII, Inc.,
its Managing General Partner
/s/Jenny Netzer
Jenny Netzer
Executive Vice President
MMA Financial, LLC