Microsoft Word 11.0.6502; November 14, 2006 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Re: Boston Financial Qualified Housing Tax Credits L.P. V Report on Form 10-QSB for the Quarter Ended September 30, 2006 File Number 0-19706 Dear Sir/Madam: Pursuant to the requirements of Section 15(d) of the Securities Exchange Act of 1934, filed herewith one copy of subject report. Very truly yours, /s/Stephen Guilmette Stephen Guilmette Assistant Controller QH5-Q2.DOC 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 September 30, 2006 ---------------------------------- 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 0-19706 Boston Financial Qualified Housing Tax Credits L.P. V - ----------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 04-3054464 - -------------------------------------- ------------------------------ (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. V (A Limited Partnership) TABLE OF CONTENTS PART I - FINANCIAL INFORMATION Page No. - ------------------------------ -------- Item 1. Financial Statements Balance Sheet (Unaudited) - September 30, 2006 1 Statements of Operations (Unaudited) - For the Three and Six Months Ended September 30, 2006 and 2005 2 Statement of Changes in Partners' Equity (Unaudited) - For the Six Months Ended September 30, 2006 3 Statements of Cash Flows (Unaudited) - For the Six Months Ended September 30, 2006 and 2005 4 Notes to the Financial Statements (Unaudited) 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 PART II - OTHER INFORMATION Items 1-6 16 SIGNATURE 17 CERTIFICATIONS 18 BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) BALANCE SHEET September 30, 2006 (Unaudited) Assets Cash and cash equivalents $ 8,174,462 Restricted cash 40,355 Investment securities, at fair value 943,689 Investments in Local Limited Partnerships (Note 1) 5,480,631 Accounts receivable 91,212 Other assets 34,041 --------------- Total Assets $ 14,764,390 =============== Liabilities and Partners' Equity Due to affiliates $ 321,969 Accounts payable 600,000 Accrued expenses 52,869 Deferred revenue 40,355 --------------- Total Liabilities 1,015,193 --------------- General, Initial and Investor Limited Partners' Equity 13,752,942 Net unrealized losses on investment securities (3,745) --------------- Total Partners' Equity 13,749,197 --------------- Total Liabilities and Partners' Equity $ 14,764,390 =============== The accompanying notes are an integral part of these financial statements. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) STATEMENTS OF OPERATIONS For the Three and Six Months Ended September 30, 2006 and 2005 (Unaudited) Three Months Ended Six Months Ended September 30, September 30, September 30, September 30, 2006 2005 2006 2005 ---------------- ---------------- ---------------- --------------- Revenue Investment $ 83,298 $ 24,918 $ 161,588 $ 42,735 Other (48,295) - 166,263 84,723 ---------------- ---------------- ---------------- --------------- Total Revenue 35,003 24,918 327,851 127,458 ---------------- ---------------- ---------------- --------------- Expenses: Asset management fees, affiliate 73,547 70,715 147,094 141,430 Provision for valuation allowance on advances to Local Limited Partnerships, net of recovery - - (106,457) 59,058 Provision for valuation allowance on investments in Local Limited Partnerships - 373,250 - 373,250 General and administrative (includes reimbursement to affiliate in the amounts of $93,454 and $92,029 for the six months ended September 30, 2006 and 2005, respectively) 98,697 85,760 109,163 174,954 Amortization 3,201 4,283 6,402 8,567 ---------------- ---------------- ---------------- --------------- Total Expenses 175,445 534,008 156,202 757,259 ---------------- ---------------- ---------------- --------------- Income (Loss) before equity in income (losses) of Local Limited Partnerships (140,442) (509,090) 171,649 (629,801) Equity in income (losses) of Local Limited Partnerships (Note 1) (146,064) 42,399 (326,578) (287,528) Gain on sale of investments in Local Limited Partnerships 1,621,385 - 1,849,254 - ---------------- ---------------- ---------------- --------------- Net (Income) Loss $ 1,334,879 $ (466,691) $ 1,694,325 $ (917,329) ================ ================ ================ =============== Net Income (Loss) allocated: General Partners $ 13,349 $ (4,667) $ 16,943 $ (9,173) Limited Partners 1,321,530 (462,024) 1,677,382 (908,156) ---------------- ---------------- ---------------- --------------- $ 1,334,879 $ (466,691) $ 1,694,325 $ (917,329) ================ ================ ================ ============== Net Income (Loss) Per Limited Partner Unit (68,929 Units) $ 19.17 $ (6.70) $ 24.33 $ (13.18) ================ ================ ================ ============== The accompanying notes are an integral part of these financial statements. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) STATEMENT OF CHANGES IN PARTNERS' EQUITY For the Six Months Ended September 30, 2006 (Unaudited) Initial Investor Net General Limited Limited Unrealized Partners Partner Partners Losses Total Balance at March 31, 2006 $ 120,493 $ 5,000 $ 11,933,124 $ (9,338) $ 12,049,279 ============= ============== ============== ============= ============== Comprehensive Income: Change in net unrealized losses on investment securities available for sale - - - 5,593 5,5931,219 Net Income 16,943 - 1,677,382 - 1,694,325 ------------- -------------- -------------- ------------- -------------- Comprehensive Income 16,943 - 1,677,382 5,593 1,699,918 ------------- -------------- -------------- ------------- -------------- Balance at September 30, 2006 $ 137,436 $ 5,000 $ 13,610,506 $ (3,745) $ 13,749,197 ============= ============== ============== ============= ============== The accompanying notes are an integral part of these financial statements. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) STATEMENTS OF CASH FLOWS For the Six Months Ended September 30, 2006 and 2005 (Unaudited) 2006 2005 ------------- --------- Net cash provided by (used for) operating activities $ 80,197 $ (109,880) Net cash provided by (used for) investing activities 4,526,466 (1,276,183) ------------- -------------- Net increase (decrease) in cash and cash equivalents 4,606,663 (1,386,063) Cash and cash equivalents, beginning 3,567,799 2,422,481 ------------- -------------- Cash and cash equivalents, ending $ 8,174,462 $ 1,036,418 ============= ============== The accompanying notes are an integral part of these financial statements. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (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, 2006. 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 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 June 30, 2006 and 2005. 1. Investments in Local Limited Partnerships The Partnership has limited partnership interests in fourteen 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 generally 99%, except for Huguenot Park and Westgate where the Partnership's ownership interests are 88.55% and 49.5% respectively. The Partnership may have negotiated or may negotiate options with the Local General Partners to purchase or sell the Partnership's interests in the Local Limited Partnerships at the end of the Compliance Period at nominal prices. In the event that Local Limited Partnerships are sold to third parties or upon dissolution of the Local Limited Partnerships, 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 September 30, 2006: Capital contributions and advances paid to Local Limited Partnerships and purchase price paid to withdrawing partners of Local Limited Partnerships $ 34,938,322 Cumulative equity in losses of Local Limited Partnerships (excluding cumulative unrecognized losses of $3,545,211) (25,129,383) Cumulative cash distributions received from Local Limited Partnerships (3,099,284) --------------- Investments in Local Limited Partnerships before adjustments 6,709,655 Excess investment costs over the underlying assets acquired: Acquisition fees and expenses 639,017 Cumulative amortization of acquisition fees and expenses (242,945) --------------- Investments in Local Limited Partnerships before valuation allowance 7,105,727 Valuation allowance on investments in Local Limited Partnerships (1,625,096) --------------- Investments in Local Limited Partnerships $ 5,480,631 =============== BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) NOTES TO THE FINANCIAL STATEMENTS (continued) (Unaudited) 1. Investments in Local Limited Partnerships (continued) For the six months ended September 30, 2006, the Partnership advanced $25,539 to one of the Local Limited Partnerships, all of which was reimbursed. In addition, $106,457 was also reimbursed from a Local Limited Partnership relating to advances made in previous years. The Partnership has also recorded a valuation allowance for its investments in certain Local Limited Partnerships in order to appropriately reflect the estimated net realizable value of these investments. The Partnership's share of the net losses of the Local Limited Partnerships for the six months ended September 30, 2006 is $1,043,427. For the six months ended September 30, 2006, the Partnership has not recognized $723,566 of equity in losses relating to Local Limited Partnerships where cumulative equity in losses and distributions exceeded its total investment in these Local Limited Partnerships. Previously unrecognized losses of $6,717 were included in losses recognized for the six months ended September 30, 2006. 2. Significant Subsidiaries The following Local Limited Partnerships invested in by the Partnership represent more than 20% of the Partnership's total assets or equity as of September 30, 2006 or 2005 or net income or losses for the three months ended either September 30, 2006 or 2005. The following financial information represents the performance of these Local Limited Partnerships for the three months ended June 30, 2006 and 2005: 2006 2005 -------------- --------- Bixel House, A California Limited Partnership (1) Revenue $ N/A $ 89,102 Net Loss $ N/A $ (4,789) Brookwood L.D.H.A Revenue $ 127,441 $ 181,401 Net Income (Loss) $ (71,492) $ 24,345 Circle Terrace Associates Limited Partnership Revenue $ 621,099 $ 556,621 Net Loss $ (9,966) $ (61,399) Kensington Place Townhomes, A Limited Partnership Revenue $ 327,546 $ 326,450 Net Income (Loss) $ (59,879) $ 76,411 Woodlake Hills Limited Partnership Revenue $ 270,302 $ 272,814 Net Loss $ (79,684) $ (10,899) (1) The Partnership no longer has an interest in this Local Limited Partnership. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (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. Critical 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 Local Limited Partnerships in which the Partnership invests are Variable Interest Entities ("VIE"s). The Partnership is involved with the VIEs as a non-controlling limited partner equity holder. Because the Partnership is not the primary beneficiary of these VIEs, it accounts for its investments in the Local Limited Partnerships using the equity method of accounting. As a result of its involvement with the VIEs, the Partnership's exposure to economic and financial statement losses is limited to its investments in the VIEs ($5,480,631 at September 30, 2006). The Partnership may be subject to additional losses to the extent of any financial support that the Partnership voluntarily provides in the future. 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 other-than-temporary declines in values of its investments in Local Limited Partnerships. Periodically, the carrying values of the investments are compared to their respective fair values. If an other-than-temporary decline in carrying value exists, a provision to reduce the asset to fair value, as calculated based primarily on remaining tax benefits, will be recorded in the Partnership's financial statements. Generally, the carrying values of most Local Limited Partnerships will decline through losses and distributions in amounts sufficient to prevent other-than-temporary impairments. However, the Partnership may record similar impairment losses in the future if the expiration of tax credits outpaces losses and distributions from any of the Local Limited Partnerships. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Liquidity and Capital Resources At September 30, 2006, the Partnership had cash and cash equivalents of $8,174,462, compared with $3,567,799 at March 31, 2006. The increase is primarily attributable to proceeds received from the sale of investments in Local Limited Partnerships, the maturity of investment securities, cash distributions received from Local Limited Partnerships, and the reimbursement of advances to Local Limited Partnerships. The Managing General Partner initially 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 September 30, 2006, approximately $1,865,000 of cash and cash equivalents has been designated as Reserves. To date, professional fees relating to various Property issues totaling approximately $276,000 have been paid from Reserves. To date, Reserve funds in the amount of approximately $128,000 have also 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 Partnership's management might deem it in its best interest to voluntarily provide such funds in order to protect its investment. As of September 30, 2006, the Partnership has advanced approximately $489,000 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. Since the Partnership invests as a limited partner, the Partnership has no contractual duty to provide additional funds to Local Limited Partnerships beyond its specified investment. Thus, at September 30, 2006, 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 six months ended September 30, 2006. Results of Operations Three Month Period The Partnership's results of operations for the three months ended September 30, 2006 resulted in net income of $1,334,879 as compared to a net loss of $466,691 for the same period in 2005. The increase in net income is primarily attributable to an increase in gain on sale of investments in Local Limited Partnerships, a decrease in provision for valuation allowance on investments in Local Limited Partnerships, and an increase in investment revenue. These effects were partially offset by an increase in equity in losses of Local Limited Partnerships. The increase in gain on sale of investments in Local Limited Partnerships is the result of a gain on sale related to the sale of one Local Limited Partnership during the current quarter. The decrease in provision for valuation allowance on investments is due to the Partnership recording an impairment allowance for its investments in certain Local Limited Partnerships during the three months ending September 30, 2005. The increase in investment revenue is primarily <page> BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Results of Operations (continued) Three Month Period (continued) attributable to an increase in invested balances between the two periods arising from the Partnership's sale of properties subsequent to September 30, 2005. Equity in losses of Local Limited Partnerships increased due to an increase in losses of Local Limited Partnerships actually recognized by the Partnership. Six Month Period The Partnership's results of operations for the six months ended September 30, 2006 resulted in net income of $1,694,325 as compared to a net loss of $917,329 for the same period in 2005. The increase in net income is primarily attributable to an increase in gain on sale of investments in Local Limited Partnerships, a decrease in provision for valuation of investments in Local Limited Partnerships, a decrease in provision for valuation of advances to Local Limited Partnerships, and an increase in investment revenue. The increase in gain on sale of investments in Local Limited Partnerships is the result of a gain on sale related to the sale of two Local Limited Partnerships during the six months ended September 30, 2006. The decrease in provision for valuation allowance on investments is due to the Partnership recording an impairment allowance for its investments in certain Local Limited Partnerships during the six months ended September 30, 2005. The decrease in provision for valuation of advances to Local Limited Partnerships is the result of an increase in reimbursements of advances made to Local Limited Partnerships during the six months ended September 30, 2006. The increase in investment revenue is primarily attributable to an increase in invested balances arising from the Partnership's sale of properties subsequent to September 30, 2005. Portfolio Update The Partnership was formed on June 16, 1989 under the laws of the State of Massachusetts for the primary purpose of investing, as a limited partner, in Local Limited Partnerships, some of which own and operate apartment complexes benefiting from some form of federal, state or local assistance, and each of which qualifies for low-income housing tax credits. The Partnership's objectives are to: (i) provide current tax benefits in the form of tax credits which qualified investors may use to offset their federal income tax liability; (ii) preserve and protect the Partnership's capital; (iii) provide limited cash distributions which are not expected to constitute taxable income during Partnership operations; and (iv) provide cash distributions from sale or refinancing transactions. The General Partners of the Partnership are Arch Street VIII, Inc., a Massachusetts corporation, which serves as the Managing General Partner, and Arch Street V Limited Partnership, a Massachusetts Limited Partnership whose general partner consists of Arch Street V, Inc., which also serves as the Initial Limited Partner. Both of the General Partners are affiliates of MMA. The fiscal year of the Partnership ends on March 31. As of September 30, 2006, the Partnership's investment portfolio consisted of limited partnership interests in fourteen 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 $1,513 per Limited Partner Unit, with an immaterial amount of Tax Credits expected to be generated from 2006 through 2008. The aggregate amount of Tax Credits generated by the Partnership is consistent with the objectives specified in the Partnership's prospectus. Properties that receive low income housing Tax Credits must remain in compliance with rent restriction and set-aside requirements for at least 15 calendar years from the date the property is placed in service. Failure to do so would result in the recapture of a portion of the property's Tax Credits. Between 2006 and continuing through 2008, the Compliance Periods of the fourteen 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 six Local Limited Partnerships. It is unlikely that the disposition of any of these six Local Limited Partnership interests BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Portfolio Update (continued) will generate any material cash distributions to the Partnership. Two of the Local Limited Partnerships in which the Partnership had an interest was disposed of during the six months ended September 30, 2006. The Managing General Partner will continue to closely monitor the operations of the Properties during the Compliance Periods 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. On or about July 13, 2004, Park G.P., Inc. ("Park") commenced litigation against Boston Financial Qualified Housing Tax Credits L.P. IV ("QH IV") and its purported general partners (collectively, the "Defendants") in Clay County, Missouri, claiming that the Defendants breached QH IV's partnership agreement and their fiduciary duties owed to Park by, among other things, failing to permit inspection of certain alleged "books and records" of QH IV. On or about October 7, 2004, Park sought leave of the court to amend its Petition to include claims for inspection of the alleged "books and records" against the Partnership, Boston Financial Qualified Housing Limited Partnership, Boston Financial Qualified Housing Tax Credits L.P. II, Boston Financial Qualified Housing Tax Credits L.P. III, Boston Financial Tax Credit Fund Plus, A Limited Partnership, Boston Financial Tax Credit Fund VII, A Limited Partnership, and their purported general partners (collectively, the "New Defendants"). On or about October 8, 2004, Park moved the court for entry of a temporary restraining order compelling the Defendants and the New Defendants to turn over the alleged "books and records" in conjunction with a transaction Park was proposing entering into. On October 12, 2004, the court denied Park's request for a temporary restraining order, and on November 15, 2004 it granted the request to amend the Petition. In October, 2005, Park again sought leave of the court in the Missouri action to amend its Petition, claiming that the Defendants were in violation of the Partnership Agreement by disposing of interests in Local Limited Partnerships following expiration of the Compliance Period(s) without first obtaining Limited Partner consent. On or about October 11, 2005, Park moved the court for a temporary restraining order prohibiting the Defendants from entering into any agreement to sell, transfer, or otherwise convey any interest in Local Limited Partnerships. On October 14, 2005, the court denied Park's request for a temporary restraining order. In December 2005, the court granted Park's request to amend its Petition to include the alleged claim regarding disposition of Local Limited Partnership interests. The Defendants and New Defendants have filed a motion to dismiss the second amended petition. The motion to dismiss has not yet been decided. The originally scheduled final hearings in August and October 2006 were adjourned at the request of the parties as discussions concerning a possible negotiated resolution of the matter are ongoing. If a settlement is not reached, the final hearing likely will take place in December 2006 or January 2007. The Defendants and the New Defendants maintain that Park is not entitled to review the materials requested and/or use the materials in secondary market transactions because, among other things: (i) they are not "books and records" of the Partnerships; (ii) Park does not seek to review them for a proper purpose; and (iii) selective disclosure of the information to Park would give it an unfair informational advantage in secondary market transactions and may violate federal and/or state securities laws. The Defendants and New Defendants accordingly intend on defending against the claims vigorously. The Defendants and New Defendants have not formed an opinion that an unfavorable outcome is either probable or remote, and their counsel refrains from expressing an opinion as to the likely outcome of the case or the range of any loss. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Portfolio Update (continued) On August 24, 2004, the Partnership, Boston Financial Qualified Housing Limited Partnership, Boston Financial Qualified Housing Tax Credits L.P. II, Boston Financial Qualified Housing Tax Credits L.P. III, Boston Financial Qualified Housing Tax Credits L.P. IV, Boston Financial Tax Credit Fund Plus, A Limited Partnership, Boston Financial Tax Credit Fund VII, A Limited Partnership, and Boston Financial Tax Credit Fund VIII, A Limited Partnership (collectively, the "Partnerships"), and their general partners commenced litigation against Everest Housing Investors 2, LLC ("Everest 2") and several other Everest-related entities (collectively, the "Everest Entities") in Massachusetts state court, seeking a declaratory judgment that certain materials the Everest Entities sought to inspect are not "books and records" of the Partnerships and that the Everest Entities are in any case not entitled to inspect said information under applicable partnership agreements, partnership law or otherwise. On October 7, 2004, the Everest Entities filed an answer and counterclaim against the Partnerships and their purported general partners, claiming that they breached applicable partnership agreements, partnership law and their fiduciary duties to the Everest Entities by failing to make the purported "books and records" available. On January 12, 2005, the Partnerships and the general partners moved to amend their complaint to, among other things, add a claim based on Everest 2's breach of a November 24, 2003 letter agreement which compelled Everest 2 to keep confidential certain information contemporaneously disseminated by four of the Partnerships to Everest 2. The Court granted this Motion. Discovery is continuing in this matter, but no activity has taken place in recent months as the parties have been discussing whether a negotiated resolution of the matter is possible. The Partnerships and their general partners maintain that the Everest Entities are not entitled to review the materials requested and/or use the materials in secondary market transactions because, among other things: (i) they are not "books and records" of the Partnerships; (ii) the Everest Entities do not seek to review them for a proper purpose; and (iii) selective disclosure of the information to the Everest Entities would give them an unfair informational advantage in secondary market transactions and may violate federal and/or state securities laws. The Partnerships and their general partners have not formed an opinion that an unfavorable outcome is either probable or remote, and their counsel refrains from expressing an opinion as to the likely outcome of the case or the range of any loss. Property Discussions Many of the Properties in which the Partnership has an interest have stabilized operations and operated at above breakeven as of June 30, 2006. A few 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, a property adjacent to Whispering Trace, located in Woodstock, Georgia, began operations during 2001. That property's superior amenities and curb appeal provided a competitive advantage. Other Tax Credit properties as well as entry-level homes in the area further increased competition for tenants. In addition, local employers implemented work force reductions, forcing some tenants to leave the area in search of employment. As a result, occupancy at the Property initially suffered, although occupancy had reached 93% as of March 31, 2006. The Property had incurred significant capital expenditures in order to remain competitive in the marketplace. As a result, debt service coverage remained below an appropriate level as of December 31, 2005. Advances from the Local General Partner and Partnership Reserves allowed the Property to remain current on its debt obligations. As a result of a prior agreement, the Property was sold on June 23, 2006. This sale resulted in net proceeds to the Partnership of $334,262, or $4.85 per Unit, and is expected to generate 2006 taxable income of approximately $294,000, or $4.27 BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Property Discussions (continued) per Unit. The Partnership may receive an immaterial amount of additional proceeds upon a final accounting of this transaction. The Managing General Partner, in accordance with and as permitted by the Partnership Agreement, retained the entire amount of net proceeds in Reserves. The Partnership no longer has an interest in this Local Limited Partnership. As previously reported, the Managing General Partner negotiated an agreement with an unaffiliated entity to have the ability to transfer the Partnership's interest to the unaffiliated entity or its designee with respect to Cedar Lane I, located in London, Kentucky, and Silver Creek II, located in Berea, Kentucky. These Properties share a common Local General Partner. The Managing General Partner had the right to put its interest in either of the Local Limited Partnerships at any time in exchange for a Contingent Note that granted the Partnership 50% of all future net cash receipts from such Local Limited Partnership interest. Effective January 1, 2006, the Partnership put its interest in both Properties to an unaffiliated entity for approximately $2,100 each in lieu of the Partnership carrying a remaining interest in the form of a Contingent Note. The Managing General Partner, in accordance with and as permitted by the Partnership Agreement, retained the entire amount of net proceeds from the sale in Reserves. These transfers are projected to result in 2006 taxable income of approximately $223,000 and $196,000 for Cedar Lane I and Silver Creek II, respectively, or a combined $6 per Unit. The Partnership no longer has an interest in these two Local Limited Partnerships. As previously reported, Bixel House, located in Los Angeles, California, had experienced weak occupancy and operations for a number of quarters, and the Property had suffered from deferred maintenance for a number of years. In an effort to reduce the Partnership's risk and develop an exit strategy, a put option agreement was entered into between the Managing General Partner and an unaffiliated entity. The Partnership transferred its interest in this Local Limited Partnership in June 2005, initially retaining a contingent receivable in the amount of $100,000. The Partnership subsequently received $100,000 in July 2006. This transfer will result in a 2006 taxable loss projected to be approximately $633,000, or $9 per Unit. The Partnership no longer has an interest in this Local Limited Partnership. As previously reported, Hillwood Pointe, located in Jacksonville, Florida, was sold in October 2005, with the Partnership receiving net proceeds of $1,707,382, or approximately $25 per Unit. The sale resulted in 2005 taxable income of $1,707,458, or $24.77 per Unit. The Managing General Partner, in accordance with and as permitted by the Partnership Agreement, retained the entire amount of net proceeds from the sale in Reserves. The Managing General Partner had posted a Recapture Bond as this Property's Compliance Period expired on December 31, 2005. The Partnership no longer has an interest in this Local Limited Partnership. As previously reported, Rosecliff, located in Sanford, Florida, was sold on March 15, 2006, resulting in net proceeds to the Partnership of $899,193, or $13 per Unit. This sale will result in 2006 taxable income projected to be approximately $2,400,000, or $35 per Unit. The Managing General Partner, in accordance with and as permitted by the Partnership Agreement, retained the entire amount of net proceeds from the sale in Reserves. The Compliance Period for this Property expired on December 31, 2005. The Partnership no longer has an interest in this Local Limited Partnership. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Property Discussions (continued) As previously reported, effective January 1, 2006, the Partnership put its interest to an unaffiliated party in Archer Village, located in Archer, Florida, Ocean View, located in Fernandina Beach, Florida, Water Oak, located in Orange City, Florida and Yester Oaks, located in Lafayette, Georgia, for approximately $2,100 each. The Managing General Partner determined that these four Properties had no residual value in excess of the Properties' debt and putting the Partnership's interests in the Local Limited Partnerships was in the best interest of the Partnership. The Managing General Partner, in accordance with and as permitted by the Partnership Agreement, retained the entire amount of net proceeds from the sale in Reserves. These transfers are expected to result in 2006 taxable income projected to be approximately $211,000, $303,000, $251,000 and $331,000 for Archer Village, Ocean View, Water Oak and Yester Oaks, respectively, or a combined $16 per Unit. The Partnership no longer has an interest in these Local Limited Partnerships. As previously reported, the Partnership's interest in the Local Limited Partnership that owned Magnolia Villas, located in North Hollywood, California, was disposed of on March 21, 2006, upon the sale of this Property. The Partnership received net proceeds of $938,637, or $13.62 per Unit. The Managing General Partner, in accordance with and as permitted by the Partnership Agreement, retained the entire amount of net proceeds from the sale in Reserves. This sale will result in 2006 taxable income projected to be approximately $1,500,000, or $22 per Unit. The Partnership no longer has an interest in this Local Limited Partnership. As previously reported, the Local General Partner of Westover Station, located in Newport News, Virginia, reached an agreement with the Property's lender to refinance the debt on the Property. As part of the refinancing, which closed on February 1, 2002, the Partnership received Sale or Refinancing Proceeds, as defined in the Local Limited Partnership Agreement, of approximately $668,000. The Managing General Partner, in accordance with and as permitted by the Partnership Agreement, retained the entire amount of net proceeds in Reserves. The Managing General Partner, on behalf of the Partnership, also negotiated an agreement with the Local General Partner that will allow the Partnership to dispose of its interest in the Property after the end of its Compliance Period, which is December 31, 2006. As previously reported, New Center, located in Detroit, Michigan, has experienced operating difficulties for several years. The Property suffers from poor location and security issues. Vandalism has caused an increase in maintenance and repair expenses and has negatively affected the Property's occupancy levels and tenant profile. Occupancy was 11% at June 30, 2006. Efforts to increase curb appeal and increase qualified tenant traffic have not improved occupancy. Advances from the former Local General Partner and the Partnership have enabled the Property to remain current on its mortgage obligations. The Managing General Partner will continue to closely monitor the site manager's efforts to improve Property operations. However, due to the Property's continuing struggles, the Managing General Partner was concerned about its long-term viability. Due to these concerns, the Managing General Partner believed it was in the best interest of the Property to replace the Local General Partner. Accordingly, the Managing General Partner worked with the Local General Partner to identify an acceptable replacement. A replacement was identified and admitted to the Local Limited Partnership during the first quarter of 2005. As of June 30, 2006, the replacement Local General Partner has contributed in excess of $300,000 toward capital improvements and has an obligation to fund an unlimited amount of future capital improvement needs. Effective February 2005, a put option agreement was in place on the Local Limited Partnership that would allow for the transfer of the Partnership's interest to the replacement Local General Partner for a nominal amount any time after the Property's Compliance Period ends on December 31, 2006. The Managing General Partner presently plans to transfer the Partnership's interest in early 2007. Although Partnership Reserves have been utilized in the past to fund the Property's debt service obligations, no such advances were made during the six months ended September 30, 2006. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Property Discussions (continued) As previously reported regarding Westgate, located in Bismark, North Dakota, in order to protect the remaining Tax Credits generated by the Property, the Managing General Partner consummated the transfer of 50% of the Partnership's capital and profits in the Local Limited Partnership to an affiliate of the Local General Partner in November 1997. The Managing General Partner also had the right to transfer the Partnership's remaining interest to the Local General Partner any time after one year from the initial transfer. Due to subsequent transfers by the Local General Partner of its interest in the Local Limited Partnership, the date on which the Managing General Partner had the right to transfer the remaining interest did not occur until December 1, 2001. The agreement allowed the Partnership to retain its full share of the Property's Tax Credits until such time as the remaining interest was put to the replacement Local General Partner. The Property generated its last Tax Credits during 2001. The replacement Local General Partner also has the right to call the remaining interest after the Property's Compliance Period expires on December 31, 2006. As previously reported, in April 2000, due to poor operations, the site management company for Carib II and Carib III, located in St. Croix, Virgin Islands, was replaced. However, operations continued to suffer. Despite high occupancy, the Properties experienced operating deficits that were funded from working capital or replacement reserves. In addition, despite several capital improvements, the Properties are still in need of additional capital expenditures. However, due to consistently high occupancy levels, Carib II operated at above breakeven while Carib III operated at slightly below breakeven for the six months ending June 30, 2006. In 2000, the replacement site management company stated its desire to purchase the Local General Partner and Partnership interests in the Local Limited Partnerships and, effective January 1, 2001, assumed the Local General Partner interest in the Local Limited Partnerships. As part of this transaction, the Managing General Partner negotiated a put agreement that ultimately would transfer the Partnership's interest in the Local Limited Partnerships to the new Local General Partner after the expiration of the Properties' Compliance Periods on December 31, 2006. The plan includes provisions to minimize the risk of recapture. As previously reported, Schumaker Place, located in Salisbury, Maryland, continues to operate at above breakeven as a result of strong occupancy levels and the effect of reduced interest expense resulting from the Local General Partner's refinancing of the Property in July 2004. In connection with the Partnership's approval of this refinancing, the Partnership and the Local General Partner entered into a put agreement whereby the Partnership can transfer its interest in the Local Limited Partnership to the Local General Partner for a nominal amount any time after the Property's Compliance Period ends on December 31, 2007. As previously reported, although an agreement has not yet been reached, the Managing General Partner continues to work with the Local General Partner of Oaks of Dunlop, located in Colonial Heights, Virginia, on the sale of the Partnership's interest. As previously reported, the Managing General Partner and Local General Partner were exploring an exit strategy that would allow for the Partnership's sale of its interest in the Local Limited Partnership that owns and operates Strathern Park, located in Los Angeles, California. In September 2006, the Partnership assigned its interest to the Local General Partner in exchange for net sales proceeds of $1,600,000 or $23.21 per Unit. This disposition is projected to result in 2006 taxable income of approximately $10,800,000 or $157 per Unit. The Partnership no longer has an interest in this Local Limited Partnership. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Property Discussions (continued) As previously reported, the Managing General Partner and Local General Partner of Pinewood Pointe, located in Jacksonville, Florida have reached an agreement that could result in the early 2007 sale of this Property. Under the current terms, this sale is expected to result in net proceeds to the Partnership of approximately $4,000,000 or $58 per Unit. This sale would result in 2007 taxable income projected to be approximately $3,900,000, or $57 per Unit. As previously reported, the Managing General Partner anticipates that the Partnership's interest in the Local Limited Partnership that owns Timothy House, located in Towson, Maryland, will be terminated upon the sale of the Property in 2007. Under the current terms, this sale is expected to result in net proceeds to the Partnership of approximately $1,500,000 or $22 per Unit. This sale would result in 2007 taxable income projected to be approximately $230,000, or $3 per Unit. The Managing General Partner anticipates that the Partnership's interest in the Local Limited Partnership that owns Park Caton, located in Catonsville, Maryland, will be terminated upon the sale of the Property in 2007. Under the current terms, this sale is expected to result in net proceeds to the Partnership of approximately $1,500,000 or $22 per Unit. This sale would result in 2007 taxable income projected to be approximately $2,600,000, or $38 per Unit. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (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 Principal Executive Officer and Principal Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certification of Principal Executive Officer and Principal Financial Officer 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 September 30, 2006 BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (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: November 14, 2006 BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V By: Arch Street VIII, Inc., its Managing General Partner /s/Gary Mentesana Gary Mentesana President Arch Street VIII, Inc.