UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 2009 ------------------------------------------ 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) Massachusetts 04-3054464 - --------------------------------- ---------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 101 Arch Street, Boston, Massachusetts 02110-1106 - --------------------------------------------- ----------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (617) 439-3911 -------------------- Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered None None Securities registered pursuant to Section 12(g) of the Act: UNITS OF LIMITED PARTNERSHIP INTEREST (Title of Class) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. |_| Yes |X| No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. |_| Yes |X| No 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. |X| Yes |_| No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss. 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). |_| Yes |_| No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Subsection 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. |X| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b -2 of the Exchange Act. Large accelerated filer |_| Accelerated Filer |_| Non-accelerated filer |_| Smaller reporting company |X| (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12 b-2 of the Exchange Act). |_| Yes |X|No State the aggregate sales price of Fund units held by nonaffiliates of the registrant: $60,904,650 as of March 31, 2009. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH 31, 2009 TABLE OF CONTENTS Page No. PART I Item 1 Business K-4 Item 2 Properties K-7 Item 3 Legal Proceedings K-9 Item 4 Submission of Matters to a Vote of Security Holders K-9 PART II Item 5 Market for the Registrant's Units and Related Security Holder Matters K-9 Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations K-9 Item 8 Financial Statements and Supplementary Data K-14 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure K-14 Item 9A Controls and Procedures K-14 Item 9B Other Information K-15 PART III Item 10 Directors and Executive Officers of the Registrant K-15 Item 11 Management Remuneration K-16 Item 12 Security Ownership of Certain Beneficial Owners and Management K-16 Item 13 Certain Relationships and Related Transactions K-16 Item 14 Principal Accountant Fees and Services K-18 Item 15 Exhibits, Financial Statement Schedules, and Director Independence K-18 SIGNATURES K-19 - ---------- CERTIFICATIONS K-20 - -------------- PART I Item 1. Business Boston Financial Qualified Housing Tax Credits L.P. V (the "Partnership") is a Massachusetts limited partnership formed on June 16, 1989 under the laws of the State of Massachusetts. The Partnership's partnership agreement ("Partnership Agreement") authorized the sale of up to 100,000 units of Limited Partnership Interest ("Units") at $1,000 per Unit, adjusted for certain discounts. The Partnership raised $68,928,650 ("Gross Proceeds"), net of discounts of $350, through the sale of 68,929 Units. Such amounts exclude five unregistered Units previously acquired for $5,000 by the Initial Limited Partner, which is also one of the General Partners. The offering of Units terminated on August 31, 1991. No further sale of Units is expected. The Partnership is engaged solely in the business of real estate investment. Accordingly, a presentation of information about industry segments is not applicable and would not be material to an understanding of the Partnership's business taken as a whole. The Partnership originally invested as a limited partner in twenty-eight limited partnerships ("Local Limited Partnerships") which own and operate residential apartment complexes ("Properties") some of which benefit from some form of federal, state or local assistance programs and all of which qualify for the low-income housing tax credits ("Tax Credits") that were added to the Internal Revenue Code (the "Code") by the Tax Reform Act of 1986. The investment objectives of the Partnership include the following: (i) to provide current tax benefits in the form of Tax Credits which qualified limited partners may use to offset their federal income tax liability; (ii) to preserve and protect the Partnership's capital; (iii) to provide limited cash distributions from Property operations which are not expected to constitute taxable income during the expected duration of the Partnership's operations; and (iv) to provide cash distributions from sale or refinancing transactions. There cannot be any assurance that the Partnership will attain any or all of these investment objectives. A more detailed discussion of these investment objectives, along with the risks in achieving them, is contained in the section of the prospectus entitled "Investment Objectives and Policies - Principal Investment Policies" which is herein incorporated by this reference. Table A on the following page lists the Properties originally acquired by the Local Limited Partnerships in which the Partnership has invested. Item 7 of this Report contains other significant information with respect to the Local Limited Partnerships. As required by applicable rules, the terms of the acquisition of each Local Limited Partnership interest have been described in supplements to the Prospectus and collected in the post-effective amendments to the Registration Statement (collectively, the "Acquisition Reports"); such descriptions are incorporated herein by this reference. TABLE A SELECTED LOCAL LIMITED PARTNERSHIP DATA Date Properties owned by Interest Local Limited Partnerships Location Acquired ___________________________ ____________ ___________ Strathern Park/Lorne Park (1) (2) Los Angeles, CA 07/05/90 Park Caton (2) Catonsville, MD 08/17/90 Cedar Lane I (2) London, KY 09/10/90 Silver Creek II (2) Berea, KY 08/15/90 Rosecliff (2) Sanford, FL 09/18/90 Brookwood (2) Ypsilanti, MI 10/01/90 Oaks of Dunlop (2) Colonial Heights, VA 01/01/91 Water Oak (2) Orange City, FL 01/01/91 Yester Oaks (2) Lafayette, GA 01/01/91 Ocean View (2) Fernandina Beach, FL 01/01/91 Wheeler House (2) Nashua, NH 01/01/91 Archer Village (2) Archer, FL 01/01/91 Timothy House (2) Towson, MD 03/05/91 Westover Station (2) Newport News, VA 03/30/91 Carib III (2) St. Croix, VI 03/21/91 Carib II (2) St. Croix, VI 03/01/91 Whispering Trace (2) Woodstock, GA 05/01/91 New Center (2) Detroit, MI 06/27/91 Huguenot Park (2) New Paltz, NY 06/26/91 Hillwood Pointe (2) Jacksonville, FL 07/19/91 Pinewood Pointe (2) Jacksonville, FL 07/31/91 Westgate (2) Bismark, ND 07/25/91 Woodlake Hills (2) Pontiac, MI 08/01/91 Bixel House (2) Los Angeles, CA 07/31/91 Magnolia Villas (2) North Hollywood, CA 07/31/91 Schumaker Place (2) Salisbury, MD 09/20/91 Circle Terrace Lansdowne, MD 12/06/91 (1) On January 1, 1994, Lorne Park merged into Strathern Park in a business combination accounted for as a pooling of interests. Lorne Park's total assets, liabilities and partners' equity were combined with Strathern Park at their existing book value, and neither partnership recognized a gain or loss on the merger. (2) The Partnership no longer has an interest in the Local Limited Partnership which owns this Property. Although the Partnership's investments in Local Limited Partnerships are not subject to seasonal fluctuations, the Partnership's equity in losses of Local Limited Partnerships, to the extent it reflects the operations of individual Properties, may vary from quarter to quarter based upon changes in occupancy and operating expenses as a result of seasonal factors. The remaining Local Limited Partnership has, as its general partners ("Local General Partners"), one or more individuals or entities not affiliated with the Partnership or its General Partners. In accordance with the partnership agreement under which such entity is organized ("Local Limited Partnership Agreement"), the Partnership depends on the Local General Partners for the management of the Local Limited Partnership. As of March 31, 2009, no Local Limited Partnerships have a common Local General Partner or affiliated group of Local General Partners. The Local General Partners of the remaining Local Limited Partnership is identified in the Acquisition Reports, which are incorporated herein by this reference. The Property owned by the Local Limited Partnership in which the Partnership currently has invested is, and will continue to be, subject to competition from existing and future apartment complexes in the same area. The continued success of the Partnership will depend on many outside factors, most of which are beyond the control of the Partnership and cannot be predicted at this time. Such factors include general economic and real estate market conditions, both on a national basis and in the area where the Property is located, the availability and cost of borrowed funds, real estate tax rates, operating expenses, energy costs and government regulations. In addition, other risks inherent in real estate investment may influence the ultimate success of the Partnership, including: (i) possible reduction in rental income due to an inability to maintain high occupancy levels or adequate rental levels; (ii) possible adverse changes in general economic conditions and local conditions, such as competitive over-building or a decrease in employment or adverse changes in real estate laws, including building codes; and (iii) the possible future adoption of rent control legislation which would not permit increased costs to be passed on to the tenants in the form of rent increases or which suppress the ability of the Local Limited Partnership to generate operating cash flow. Since the Property benefits from some form of government assistance, the Partnership is subject to the risks inherent in that area including decreased subsidies, difficulties in finding suitable tenants and obtaining permission for rent increases. In addition, any Tax Credits allocated to investors with respect to a Property are subject to recapture to the extent that the Property or any portion thereof ceases to qualify for the Tax Credits. Other future changes in federal and state income tax laws affecting real estate ownership or limited partnerships could have a material and adverse effect on the business of the Partnership. The Partnership is managed by Arch Street VIII, Inc., the Managing General Partner of the Partnership. The other General Partner of the Partnership is Arch Street V Limited Partnership. The Partnership, which does not have any employees, reimburses MMA Financial, Inc. ("MMA"), an affiliate of the General Partners, for certain expenses and overhead costs. A complete discussion of the management of the Partnership is set forth in Item 10 of this Report. On June 26, 2009, Municipal Mortgage & Equity, LLC (the parent company of MMA Financial, Inc.) entered into a purchase and sale agreement with JEN I, L.P. for the sale of substantially all of its low-income housing tax credit business, including the Partnership and its General Partners. Upon the consummation of the sale transaction (expected to occur on or before August 31, 2009), the General Partners will be owned or controlled by JEN I, L.P. The sale is not expected to impact the Limited Partners of the Partnership. Item 2. Properties The Partnership currently owns limited partnership interests in one Local Limited Partnership which owns and operates a Property, that benefits from some form of federal, state or local assistance programs and all of which qualifies for the Tax Credits added to the Code by the Tax Reform Act of 1986. The Partnership's ownership interest in the Local Limited Partnership is 99%. Each of the Local Limited Partnerships has received an allocation of Tax Credits from its relevant state tax credit agency. In general, the Tax Credits run for ten years from the date the Property is placed in service. The required holding period (the "Compliance Period") of the Properties is fifteen years. During these fifteen years, the Properties must satisfy rent restrictions, tenant income limitations and other requirements, as promulgated by the Code, in order to maintain eligibility for the Tax Credits at all times during the Compliance Period. Once a Local Limited Partnership has become eligible for the Tax Credits, it may lose such eligibility and suffer an event of recapture if its Property fails to remain in compliance with the requirements. In addition, some of the Local Limited Partnerships have obtained one or a combination of different types of loans such as: (i) below market rate interest loans; (ii) loans provided by a redevelopment agency of the town or city in which the Property is located at favorable terms; and (iii) loans that have repayment terms that are based on a percentage of cash flow. The schedule on the following pages provides certain key information on the Local Limited Partnership interests currently invested in by the Partnership. Capital Contributions Local Limited Partnership Total Paid Mtge. Loans Occupancy at Property Name Number of Committed at Through Payable at Type of March 31, Property Location Apts Units March 31, 2009 March 31, 2009 December 31, 2008 Subsidy * 2009 - ----------------------- ------------ ------------- ---------------- ----------------- -------------- ----------- Circle Terrace Associates Limited Partnership Circle Terrace Lansdowne, MD 303 5,811,236 5,811,236 4,652,457 Section 8 100% ------ -------------- ------------- --------------- 303 $ 5,811,236 $ 5,811,236 $ 4,652,457 ====== ============== ============= =============== Section 8 This subsidy, which is authorized under Section 8 of Title II of the Housing and Community Development Act of 1974, allows qualified low-income tenants to pay 30% of their monthly income as rent with the balance paid by the federal government. The Partnership does not guarantee any of the mortgages or other debt of the Local Limited Partnerships. Duration of leases for occupancy in the Property described above is generally six to twelve months. The Managing General Partner believes the Property described herein is adequately covered by insurance. Additional information required under this Item, as it pertains to the Partnership, is contained in Items 1, 7 and 8 of this Report. Item 3. Legal Proceedings The Partnership is not a party to any pending legal or administrative proceeding, and to the best of its knowledge, no legal or administrative proceeding is threatened or contemplated against it. Item 4. Submission of Matters to a Vote of Security Holders - ------------------------------------------------------------ None. PART II Item 5. Market for the Registrant's Units and Related Security Holder Matters There is no public market for the Units, and it is not expected that a public market will develop. If a Limited Partner desires to sell Units, the buyer of those Units will be required to comply with the minimum purchase and retention requirements and investor suitability standards imposed by applicable federal or state securities laws and the minimum purchase and retention requirements imposed by the Partnership. The price to be paid for the Units, as well as the commissions to be received by any participating broker-dealers, will be subject to negotiation by the Limited Partner seeking to sell his Units. Units will not be redeemed or repurchased by the Partnership. The Partnership Agreement does not impose on the Partnership or its General Partners any obligation to obtain periodic appraisals of assets or to provide Limited Partners with any estimates of the current value of Units. As of March 31, 2009, there were 2,840 record holders of Units of the Partnership. Cash distributions, when made, are paid annually. During the year ended March 31, 2008 a cash distribution of $10,850,000 was paid. During the year ended March 31, 2009, no cash distribution was paid. Item 7. 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 use of words like "anticipate," "estimate," "intend," "project", "plan," "expect," "believe," "could," and similar expressions are intended to identify such forward looking statements. 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 and current expectations, 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. Executive Level Overview 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 March 31, 2009, the Partnership's investment portfolio consisted of a limited partnership interest in one Local Limited Partnership, which owns and operates a multi-family apartment complex and has generated Tax Credits. Since inception, the Partnership generated Tax Credits, net of recapture, of approximately $1,514 per Limited Partner Unit. The aggregate amount of Tax Credits generated by the Partnership is consistent with the objectives specified in the Partnership's prospectus. In September 2007, the Partnership distributed $10,741,500 or $155.83 per unit to Limited Partners. The source of this distribution was primarily from sale proceeds of previously reported dispositions of the Partnership's interest in four Local Limited Partnerships. In December 2006, the Partnership distributed $5,353,027, or $77.66 per Unit to Limited Partners. The source of this distribution is from sale or refinancing proceeds of previously reported dispositions of the Partnership's interest in eleven Local Limited Partnerships and the refinancing of debt on one Property. 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. The Compliance Period of the remaining Property in which the Partnership has an interest expired on December 31, 2007. The Partnership disposed of three Local Limited Partnership interests during the year ending March 31, 2009. The Managing General Partner will continue to closely monitor the operations of the remaining Property and continues to explore a disposition strategy with respect to the Partnership's remaining Local Limited Partnership interest. 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. 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. The investments in the Local Limited Partnerships are made primarily to obtain tax credits on behalf of the Partnership's investors. The general partners of the Local Limited Partnerships, who are considered to be the primary beneficiaries, control the day-to-day operations of the Local Limited Partnerships. The general partners are also responsible for maintaining compliance with the tax credit program and for providing subordinated financial support in the event operations cannot support debt and property tax payments. The Partnership, through its ownership percentages, may participate in property disposition proceeds. The timing and amounts of these proceeds are unknown but can impact the Partnership's financial position, results of operations or cash flows. 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 ($1,223,551 and $3,470,288 at March 31, 2009 and 2008, respectively). 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. A liability is recorded for delayed equity capital contributions to Local Limited Partnerships. 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 the values of its investments in Local Limited Partnerships. Periodically, the carrying values of the investments are tested for other-than-temporary impairment. If an other-than-temporary decline in carrying value exists, a provision to reduce the investment to the sum of the estimated remaining benefits will be recorded in the Partnership's financial statements. The estimated remaining benefits for each Local Limited Partnership consist of estimated future tax losses and tax credits over the estimated life of the investment and estimated residual proceeds at disposition. Included in the estimated residual proceeds calculation is current net operating income capitalized at a regional rate specific to each Local Limited Partnership less the debt of the Local Limited Partnership. During the year ended March 31, 2009, the Partnership concluded that Circle Terrace Associates, L.P. had experienced an other-than-temporary decline in its carrying value and impairment losses of $2,364,000. 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 the Local Limited Partnership. Liquidity and Capital Resources At March 31, 2009, the Partnership had cash and cash equivalents of $2,097,247 compared with $2,185,265 at March 31, 2008. The decrease is attributable net cash used for operations, partially offset by proceeds from the sale of investments in Local Limited Partnerships, and the reimbursement of advances made to one Local Limited Partnership. Cash used for operations includes $313,904 paid to the Managing General Partner for accrued asset management fees. 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 March 31, 2009 and 2008, approximately $2,030,000 and $2,185,000, respectively, has been designated as Reserves. To date, professional fees relating to various Property issues totaling approximately $304,000 have been paid from Reserves. To date, Reserve funds in the amount of approximately $128,000 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 Partnership's management might deem it in its best interest to voluntarily provide such funds in order to protect its investment. As of March 31, 2009, the Partnership has advanced approximately $529,000 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, as of March 31, 2009, the Partnership had no contractual or other obligation to any Local Limited Partnership which had not been paid or provided for. Cash Distributions Cash distributions of $10,850,000 were made during the year ended March 31, 2008. The Partnership is currently working on disposing of its interest in its Local Limited Partnership during the next twelve months. This disposition may result in cash available for distribution, but due to the uncertainty of the sale, no guarantee can be made as to the extent of its outcome on distributions. Based on the results of 2008 Property operations, the Local Limited Partnership is not expected to distribute significant amounts of cash to the Partnership because such amounts may be needed to fund Property operating costs. In addition, many of the Properties benefit from some type of federal or state subsidy and, as a consequence, are subject to restrictions on cash distributions. Results of Operations The Partnership's results of operations for the year ended March 31, 2009 resulted in net loss of $2,259,375 as compared to net income of $8,463,939 for the same period in 2008. The decrease in net income is primarily attributable to a decrease in equity in income in Local Limited Partnerships, a decrease in gain on sale of investments in Local Limited Partnerships, and an increase in impairment on investments in Local Limited Partnerships, partially offset by a decrease in provision for valuation allowance on advances to Local Limited Partnerships. The decrease in equity in income is primarily due to capital gains recorded by the Local Limited Partnerships associated with the sale of their investments during the year ended December 31, 2007 that are included in the Partnership's share of equity in income for the year ended March 31, 2008. The decrease in gain on sale of investments in Local Limited Partnerships is the result of the sale of eight Local Limited Partnerships five of which generated large sale proceeds during the fiscal year ended March 31, 2008. The increase in impairment on investments in Local Limited Partnerships is the result of the Partnership recording a valuation allowance for its investments in one Local Limited Partnership during the year ended March 31, 2009. The decrease in provision for valuation on advances to Local Limited Partnerships results from the reimbursement of advances made from one Local Limited Partnership during the year ended March 31, 2009. Low-Income Housing Tax Credits The Tax Credit per Limited Partner stabilized in 1993. The credits have ended as all Properties have reached the end of the ten year credit period. Property Discussions The remaining Property, Circle Terrace, in which the Partnership has an interest, operated above breakeven for the quarter ended December 31, 2008. The Managing General Partner and Local General Partner of Circle Terrace Associates, L.P., located in Lansdowne, MD, have begun exploring an exit strategy that could result in a December 2009 disposition of the Partnership's interest in this Local Limited Partnership. Net sales proceeds, if any, as well as taxable income, are unknown at this time. As previously reported, Pinewood Pointe, located in Jacksonville, Florida, was sold on June 15, 2007, resulting in net proceeds to the Partnership of $4,162,299, or $60.39 per Unit. This sale resulted in 2007 taxable income of $4,128,027, or $59.89 per Unit. The Managing General Partner, in accordance with and as permitted by the Partnership Agreement, initially retained the entire amount of net proceeds from the sale in Reserves, and subsequently distributed the proceeds, as noted in the Cash Distributions section above, in September 2007. The Partnership no longer has an interest in this Local Limited Partnership. As previously reported, in February 2007, the Managing General Partner received notification from the Local General Partner of Westover Station, located in Newport News, Virginia, of its intent to exercise their right of first refusal to purchase the Partnership's interest in the Local Limited Partnership. On June 30, 2007, the Local General Partner exercised their right to purchase the Property. This transaction resulted in net sales proceeds to the Partnership of $329,374, or $4.78 per Unit. This sale resulted in 2007 taxable income of $1,178,311, or $17.09 per Unit. The Managing General Partner, in accordance with and as permitted by the Partnership Agreement, initially retained the entire amount of net proceeds from the sale in Reserves, and subsequently distributed the proceeds, as noted in the Cash Distributions section above, in September 2007. The Partnership no longer has an interest in this Local Limited Partnership. As previously reported, in December 2006, the Local General Partner of Oaks of Dunlop, located in Colonial Heights, Virginia, agreed to the purchase of the Partnership's interest in this Local Limited Partnership. On August 9, 2007, the Partnership sold its Local Limited Partnership interest for $2,400,000, or $34.82 per Unit. This sale resulted in 2007 taxable income of $2,251,652, or $32.67 per Unit. The Managing General Partner, in accordance with and as permitted by the Partnership Agreement, initially retained the entire amount of net proceeds from the sale in Reserves, and subsequently distributed the proceeds, as noted in the Cash Distributions section above, in September 2007. The Partnership no longer has an interest in this Local Limited Partnership. As previously reported, the Managing General Partner anticipated that the Partnership's interest in the Local Limited Partnership that owned Timothy House, located in Towson, Maryland, would be terminated upon the sale of the Property in 2007. The Property was sold on September 1, 2007, effectively terminating the Partnership's interest in the Local Limited Partnership. This sale resulted in net proceeds to the Partnership of $1,849,083, or $26.83 per Unit. This sale resulted in 2007 taxable income of $791,519, or $11.48 per Unit. The Managing General Partner, in accordance with and as permitted by the Partnership Agreement, initially retained the entire amount of net proceeds from the sale in Reserves, and subsequently distributed the proceeds, as noted in the Cash Distributions section above, in September 2007. On April 9, 2008, $45,000, or $0.65 per unit, of the previously reported sales proceeds of $1,849,083, or $26.83 per Unit, was returned as a result of a state income tax obligation. This resulted in a 2008 capital loss is $45,000, or $0.65 per unit. The Partnership no longer has an interest in this Local Limited Partnership. As previously reported, the Managing General Partner anticipated a 2007 disposition of the Partnership's interest in the Local Limited Partnership that owns Park Caton, located in Catonsville, Maryland. On December 21, 2007, the property was sold, resulting in net sales proceeds to the Partnership of $1,818,305, or $26.38 per Unit. The Managing General Partner initially expected the Partnership to receive a nominal amount of additional proceeds, but due to the Partnership's obligation to pay Maryland State Income taxes resulting from this transaction, the Partnership will not receive additional proceeds. This sale resulted in 2007 taxable income of $2,893,026, or $41.97 per Unit. The Managing General Partner, in accordance with and as permitted by the Partnership Agreement, has initially retained the entire amount of net proceeds from the sale in Reserves. On April 9, 2008, $21,000, or $0.30 per unit, of the previously reported sales proceeds of $1,818,305, or $26.38 per Unit, was returned as a result of a state income tax obligation. This resulted in a 2008 capital loss is $21,000, or $0.30 per unit. The Partnership no longer has an interest in this Local Limited Partnership. As previously reported, in April 2000, due to poor operations, the site management company for Carib II and Carib III, located in St. Croix, U. S. 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 were still in need of additional capital expenditures. However, due to consistently high occupancy levels, Carib II and Carib III, operated at above breakeven for the nine month period ending September 30, 2007. 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 allow for the transfer of 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. As a result of this agreement, and the United States Department of Agriculture/Rural Development Services ("RD") approval allowing for the sale of the Property, the Partnership's interest in these two Local Limited Partnerships was transferred in December 2007. As expected, this transaction did not result in any net proceeds to the Partnership. These dispositions resulted in 2007 taxable income of $806,275, or $11.70 per Unit. The Partnership no longer has an interest in these two Local Limited Partnerships. As previously reported, the Managing General Partner estimated an early 2008 disposition of the Partnership's interest in the Local Limited Partnership that owned and operated Brookwood, located in Ypsilanti, Michigan. On December 31, 2007, the Partnership's interest in this Local Limited Partnership was effectively terminated. The Partnership did not receive any proceeds from this transaction, as the outstanding debt on the Property exceeded the realizable value of the Property. This disposition resulted in 2007 taxable income of $806,781, or $11.70 per Unit. The Partnership no longer has an interest in this Local Limited Partnership. As previously reported, Schumaker Place, located in Salisbury, Maryland, continued to operate 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 could transfer its interest in the Local Limited Partnership to the Local General Partner, for $75,000, or $1.09 per Unit, any time after the Property's Compliance Period, which expired on December 31, 2007. On April 18, 2008, the Managing General Partner exercised the Partnership's option to transfer its interest in Schumaker, for $75,000, or $1.90 per Unit. This disposition resulted in 2008 taxable income of $153,128, or $2.22 per Unit. The Managing General Partner, in accordance with and as permitted by the Partnership Agreement, has retained the entire amount of proceeds in Reserves. The Partnership no longer has an interest in this Local Limited Partnership. On June 19, 2008, Woodlake Hills, located in Pontiac, Michigan, was sold, effectively disposing of the Partnership's interest in the Local Limited Partnership that owned Woodlake Hills. The Partnership did not receive any net sales proceeds from this transaction as outstanding debt on the Property exceeded the sales price. This disposition resulted in a 2008 taxable loss of $459,844, or $6.67 per Unit. The Partnership no longer has an interest in this Local Limited Partnership. As previously reported the Managing General Partner and Local General Partner of Huguenot Park, located in New Paltz, New York, were exploring an exit strategy that would have resulted in the 2008 disposal of the Fund's interest in the Local Limited Partnership. Effective September 1, 2008, the Managing General Partner transferred the Partnership's interest in the Local Limited Partnership that owned Huguenot Park, for $68,000, or $0.99 per Unit. The Managing General Partner, in accordance with and as permitted by the Partnership Agreement, has retained the entire amount of proceeds in Reserves. This disposition resulted in a 2008 loss of $113,320, or $1.64 per Unit. The Partnership no longer has an interest in this Local Limited Partnership. Inflation and Other Economic Factors Inflation had no material impact on the operations or financial condition of the Partnership for the years ended March 31, 2009 and 2008. Since the Property benefits from some form of government assistance, the Partnership is subject to the risks inherent in that area including decreased subsidies, difficulties in finding suitable tenants and obtaining permission for rent increases. In addition, any Tax Credits allocated to investors with respect to the Property are subject to recapture to the extent that the Property or any portion thereof ceases to qualify for the Tax Credits. Item 8. Financial Statements and Supplementary Data Information required under this Item is submitted as a separate section of this Report. See Index on page F-1 hereof. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure - ---------------------------------------------------------------------- None. Item 9A. Controls and Procedures Disclosure Controls and Procedures We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities Exchange Commission's rules and forms, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to management to allow timely decisions regarding required disclosure. Based on that evaluation, management has concluded that as of March 31, 2009, our disclosure controls and procedures were effective. Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Our management conducted an assessment of the effectiveness of our internal control over financial reporting. This assessment was based upon the criteria for effective internal control over financial reporting established in Internal Control -- Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Partnership's internal control over financial reporting involves a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes the controls themselves, as well as monitoring of the controls and internal auditing practices and actions to correct deficiencies identified. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Management assessed the Partnership's internal control over financial reporting as of March 31, 2009. Based on this assessment, management concluded that, as of March 31, 2009, the Partnership's internal control over financial reporting were designed effectively. Item 9B. Other Information None. PART III Item 10. Directors and Executive Officers of the Registrant The Managing General Partner of the Partnership is Arch Street VIII, Inc., a Massachusetts corporation (the "Managing General Partner"), an affiliate of MMA. The Managing General Partner was incorporated in June 1989. The Investment Committee of the Managing General Partner approved all investments. The names and positions of the principal officers and the directors of the Managing General Partner are set forth below. Name Position ____________ ___________________ Greg Judge Executive Vice President Michael H. Gladstone Principal, Member The other General Partner of the Partnership is Arch Street V Limited Partnership, a Massachusetts limited partnership ("Arch Street L.P.") that was organized in June 1989. Arch Street VIII, Inc. is the managing general partner of Arch Street L.P. The Managing General Partner provides day-to-day management of the Partnership. Compensation is discussed in Item 11 of this Report. Such day-to-day management does not include the management of the Property. The business experience of each of the persons listed above is described below. There is no family relationship between any of the persons listed in this section. Greg Judge, age 44, Executive Vice President, Head of the Affordable Housing Group of MMA Financial since February 2008. As head of the Company's Affordable Housing Group, Mr. Judge is responsible for both the affordable tax exempt and taxable lending and equity businesses. Prior to his appointment as EVP, Mr. Judge was responsible for tax credit equity investments and underwriting of equity and debt investments for the Affordable Housing Group. Mr. Judge joined MMA as a result of the Boston Financial and Lend Lease HCI acquisitions, starting with Boston Financial in 1989 as an asset manager. Mr. Judge is a frequent speaker on affordable housing and tax credit industry issues. Mr. Judge is a graduate of Colorado College (BA) and Boston University (MBA). Michael H. Gladstone, age 52, Senior Vice President. Mr. Gladstone is responsible for capital transactions work in the Asset Management group of MMA Financial. He joined MMA as a result of the Boston Financial and Lend Lease HCI acquisitions, starting with Boston Financial in 1985 as the firm's General Counsel. Prior to joining Boston Financial, Mr. Gladstone was associated with the law firm of Herrick & Smith and served on the advisory board of the Housing and Development Reporter. Mr. Gladstone has lectured at Harvard University and Cornell University on affordable housing matters and is a member of the Cornell Real Estate Council and the Massachusetts Bar. Mr. Gladstone is a graduate of Emory University (BA) and Cornell University (J.D. & MBA). The Partnership is organized as a limited partnership solely for the purpose of real estate investment and does not have any employees. Therefore the Partnership has not adopted a Code of Ethics. The Partnership is structured as a limited partnership that was formed principally for real estate investment and is not a "listed" issuer as defined by Rule 10A-3 of the Securities Exchange Act of 1934. Accordingly, neither an audit committee nor a financial expert to serve on such a committee has been established by the Partnership. Item 11. Management Remuneration Neither the directors nor officers of Arch Street VIII, Inc., the partners of Arch Street L.P., nor any other individual with significant involvement in the business of the Partnership receives any current or proposed remuneration from the Partnership. Item 12. Security Ownership of Certain Beneficial Owners and Management As of March 31, 2009, the following is the only entity known to the Partnership to be the beneficial owner of more than 5% of the total number of Units outstanding: Amount Title of Name and Address of Beneficially Class Beneficial Owner Owned Percent of Class ___________ ____________________ _______________ ________________ Limited Oldham Institutional 8,024 Units 11.64% Partner Tax Credits LLC1 101 Arch Street Boston, MA Oldham Institutional Tax Credits LLC is an affiliate of Arch Street VIII, Inc., the Managing General Partner. The equity securities registered by the Partnership under Section 12(g) of the Act of 1934 consist of 100,000 Units, 68,929 of which had been sold to the public as of March 31, 2009. The remaining Units were deregistered in Post-Effective Amendment No. 6, dated January 21, 1992, and herein incorporated by this reference. Holders of Units are permitted to vote on matters affecting the Partnership only in certain unusual circumstances and do not generally have the right to vote on the operation or management of the Partnership. Arch Street L.P. owns five (unregistered) Units not included in the 68,929 Units sold to the public. Additionally, five registered Units were sold to an employee of an affiliate of the Managing General Partner of the Registrant. Such Units were sold at a discount of 7% of the Unit price for a total discount of $350 and a total purchase price of $4,650. Except as described in the preceding paragraphs, neither Arch Street VIII, Inc., Arch Street L.P., MMA, nor any of their executive officers, directors, partners or affiliates is the beneficial owner of any Units. None of the foregoing persons possesses a right to acquire beneficial ownership of Units. The Partnership does not know of any existing arrangement that might at a later date result in a change in control of the Partnership. Item 13. Certain Relationships and Related Transactions The Partnership paid certain fees to and reimbursed certain expenses of the Managing General Partner or its affiliates in connection with the organization of the Partnership and the offering of Units. The Partnership was also required to pay certain fees to and reimburse certain expenses of the Managing General Partner or its affiliates in connection with the administration of the Partnership and its acquisition and disposition of investments in Local Limited Partnerships. In addition, the General Partners are entitled to certain Partnership distributions under the terms of the Partnership Agreement. Also, an affiliate of the General Partners will receive up to $10,000 from the sale or refinancing proceeds of each Local Limited Partnership if it is still a limited partner at the time of such a transaction. All such fees, expenses and distributions are more fully described in the sections of the Prospectus entitled "Estimated Use of Proceeds", "Management Compensation and Fees" and "Profits and Losses for Tax Purposes, Tax Credits and Cash Distributions". Such sections are incorporated herein by reference. The Partnership is permitted to enter into transactions involving affiliates of the Managing General Partner, subject to certain limitations established in the Partnership Agreement. Information regarding the fees paid and expenses reimbursements made in the two years ended March 31, 2009 is presented as follows: Organizational Fees and Expenses In accordance with the Partnership Agreement, the Partnership was required to pay certain fees to and reimburse expenses of the General Partners and others in connection with the organization of the Partnership and the offering of its Limited Partnership Units. Selling commissions, fees and accountable expenses related to the sale of the Units totaling $9,499,985 have been charged directly to Limited Partners' equity. In connection therewith, $5,858,935 of selling expenses and $3,641,050 of offering expenses incurred on behalf of the Partnership have been paid to an affiliate of the General Partners. The Partnership was required to pay a non-accountable expense allowance for marketing expenses equal to a maximum of 1% of Gross Proceeds; this is included in total offering expenses. The Partnership has capitalized an additional $50,000 which was reimbursed to an affiliate of the General Partners. These costs are fully amortized as of March 31, 2009. Total organizational and offering expenses, exclusive of selling commissions, did not exceed 5.5% of Gross Proceeds and organizational and offering expenses, inclusive of selling commissions did not exceed 14.0% of the Gross Proceeds. No organizational fees, expenses or selling expenses were paid during the two years ended March 31, 2009. Acquisition Fees and Expenses In accordance with the Partnership Agreement, the Partnership was required to pay acquisition fees to and reimburse acquisition expenses of the Managing General Partner or its affiliates for selecting, evaluating, structuring, negotiating and closing the Partnership's investments in Local Limited Partnerships. Acquisition fees totaled 7% of the Gross Proceeds. Acquisition expenses, which include such expenses as legal fees and expenses, travel and communications expenses, costs of appraisals, accounting fees and expenses, were expected to total 1.5% of the Gross Proceeds. As of March 31, 2009, acquisition fees totaling $4,825,005 for the closing of the Partnership's Local Limited Partnership investments have been paid to an affiliate of the Managing General Partner. Acquisition expenses totaling $899,430 at March 31, 2009 were incurred and have been reimbursed to an affiliate of the Managing General Partner. No acquisition fees or expenses were paid during the two years ended March 31, 2009. Asset Management Fees In accordance with the Partnership Agreement, an affiliate of the Managing General Partner is paid an Asset Management Fee for services in connection with the administration of the affairs of the Partnership. The affiliate currently receives the base amount of 0.275% (as adjusted by the CPI factor) of Gross Proceeds annually as the Asset Management Fee. Asset Management Fees incurred in each of the two years ended March 31, 2009 are as follows: 2009 2008 -------------- --------------- Asset management fees $ 313,983 $ 304,634 Salaries and Benefits Expense Reimbursements An affiliate of the Managing General Partner is reimbursed for the cost of the Partnership's salaries and benefits expenses. The reimbursements are based upon the size and complexity of the Partnership's operations. Reimbursements paid or payable in each of the two years ended March 31, 2009 are as follows: 2009 2008 -------------- ---------------- Salaries and benefits expense reimbursements $ 25,056 $ 100,243 Cash distributions paid to the General Partners In accordance with the Partnership Agreement, the General Partners of the Partnership, Arch Street VIII, Inc. and Arch Street L.P., receive 1% of cash distributions paid to partners. The Partnership paid $108,500 to the General Partners in the year ended March 31, 2008. Additional information concerning cash distributions and other fees paid or payable to the Managing General Partner and its affiliates and the reimbursement of expenses paid or payable to MMA and its affiliates for the two years ended March 31, 2009 is presented in Note 4 to the Financial Statements. Item 14. Principal Accountant Fees and Services The Partnership paid or accrued fees for services rendered by the principal accountants for the two years ended March 31, 2009 as follows: 2009 2008 -------------- ------------- Audit fees $ 64,786 $ 73,276 Tax fees $ 2,500 $ 2,400 No other fees were paid or accrued to the principal accountants during the two years ended March 31, 2009. Item 15. Exhibits, Financial Statement Schedules and Director Independence (a) Documents filed as a part of this Report In response to this portion of Item 15, the financial statements and the auditors' report relating thereto are submitted as a separate section of this Report. See Index to the Financial Statements on page F-1 hereof. All other financial statement schedules and exhibits for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under related instructions or are inapplicable and therefore have been omitted. (b) Exhibits 31.1 Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 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. 32.2 Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V By: Arch Street VIII, Inc. its Managing General Partner By: /s/ Greg Judge Date: July 15, 2009 ---------------------------------- ------------- Greg Judge President Arch Street VIII, Inc. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Managing General Partner of the Partnership and in the capacities and on the dates indicated: By: /s/Greg Judge Date: July 15, 2009 --------------------------------- ------------- Greg Judge President Arch Street VIII, Inc. By: /s/Michael H. Gladstone Date: July 15, 2009 ----------------------------- ------------ Michael H. Gladstone Vice President Arch Street VIII, Inc. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) Annual Report on Form 10-K For The Year Ended March 31, 2009 Index Page No. Report of Independent Registered Public Accounting Firm for the years ended March 31, 2009 and 2008 F-2 Financial Statements Balance Sheets - March 31, 2009 and 2008 F-3 Statements of Operations - For the years ended March 31, 2009 and 2008 F-4 Statements of Changes in Partners' Equity For the years ended March 31, 2009 and 2008 F-5 Statements of Cash Flows - For the years ended March 31, 2009 and 2008 F-6 Notes to the Financial Statements F-7 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Partners of Boston Financial Qualified Housing Tax Credits L.P. V We have audited the accompanying balance sheets of Boston Financial Qualified Housing Tax Credits L.P. V as of March 31, 2009 and 2008, and the related statements of operations, changes in partners' equity and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. We did not audit the financial statements of one operating limited partnership as of and for the year ended March 31, 2008, in which the Partnership owns a limited partnership interest. The investment in such partnership is stated at $74,761 at March 31, 2008 and the Partnership's equity in loss in this operating limited partnership is stated at $36,618 for the year then ended. The financial statements of this operating limited partnership was audited by another auditor whose report has been furnished to us, and our opinion, insofar as it relates to information relating to this operating limited partnership, is based solely on the report of the other auditor. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, based on our audit and the report of the other auditor, the financial statements referred to above present fairly, in all material respects, the financial position of Boston Financial Qualified Housing Tax Credits L.P. V as of March 31, 2009 and 2008, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. /s/ Reznick Group, P.C. Vienna, Virginia July 15, 2009 BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) BALANCE SHEETS March 31, 2009 and 2008 2009 2008 ---------------- ---------------- Assets Cash and cash equivalents $ 2,097,247 $ 2,185,265 Restricted cash (Note 5) 19,639 19,435 Investment in Local Limited Partnership (Note 3) 1,223,551 3,470,288 ---------------- ---------------- Total Assets $ 3,340,437 $ 5,674,988 ================ ================ Liabilities and Partners' Equity Due to affiliate (Note 4) $ 92,361 $ 171,504 Accrued expenses 53,672 49,909 Deferred revenue (Note 5) 19,639 19,435 ---------------- ---------------- Total Liabilities 165,672 240,848 General, Initial and Investor Limited Partners' Equity 3,174,765 5,434,140 ---------------- ---------------- Total Liabilities and Partners' Equity $ 3,340,437 $ 5,674,988 ================ ================ 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 Years Ended March 31, 2009 and 2008 2009 2008 ---------------- ---------------- Revenue: Investment $ 37,977 $ 178,491 Cash distribution income 153,491 196,894 ---------------- ---------------- Total Revenue 191,468 375,385 ---------------- ---------------- Expense: Asset management fees, affiliate (Note 4) 313,983 304,634 Provision for (recovery of) valuation allowance on advances to Local Limited Partnerships (Note 3) (160,000) 200,000 Impairment on investments in Local Limited Partnerships (Note 3) 2,364,000 404,000 General and administrative (includes reimbursements to an affiliate in the amount of $25,056 and $100,243 in 2009 and 2008, respectively) (Note 4) 127,123 267,699 Amortization 5,361 7,496 -------- -------- Total Expense 2,650,467 1,183,829 ---------------- ---------------- Loss before equity in income of Local Limited Partnerships and gain (loss)on sale of investments in Local Limited Partnerships (2,458,999) (808,444) Equity in income of Local Limited Partnerships (Note 3) 267,571 6,430,232 Gain (Loss) on sale of investments in Local Limited Partnerships (Note 3) (67,947) 2,842,151 ----------------- ---------------- Net Income (Loss) $ (2,259,375) $ 8,463,939 ================= ================ Net Income (Loss) allocated: General Partners $ (22,594) $ 84,639 Limited Partners (2,236,781) 8,379,300 ----------------- ---------------- $ (2,259,375) $ 8,463,939 ================= ================ Net Income (Loss) per Limited Partner Unit (68,929 Units) $ (32.45) $ 121.56 ================ ================ 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 CHANGES IN PARTNERS' EQUITY For the Years Ended March 31, 2009 and 2008 Initial Investor Net General Limited Limited Unrealized Partners Partner Partners Losses Total Balance at March 31, 2007 $ 78,109 $ 5,000 $ 7,737,092 $ (124) $ 7,820,077 ------------- -------------- -------------- ------------- -------------- Cash distribution (108,500) - (10,741,500) - (10,850,000) ------------- -------------- -------------- ------------- -------------- Comprehensive Income: Change in net unrealized losses on investment securities available for sale - - - 124 124 Net Income 84,639 - 8,379,300 - 8,463,939 ------------- -------------- -------------- ------------- -------------- Comprehensive Income 84,639 - 8,379,300 124 8,464,063 ------------- -------------- -------------- ------------- -------------- Balance at March 31, 2008 54,248 5,000 5,374,892 - 5,434,140 Net Loss (22,594) - (2,236,781) - (2,259,375) ------------- -------------- --------------- ------------- --------------- Balance at March 31, 2009 $ 31,654 $ 5,000 $ 3,138,111 $ - $ 3,174,765 ============= ============== ============== ============= ============== 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 Years Ended March 31, 2009 and 2008 c 2009 2008 ---------------- ---------------- Cash flows from operating activities: Net Income (Loss) $ (2,259,375) $ 8,463,939 Adjustments to reconcile net income to net cash used for operating activities: Equity in income of Local Limited Partnerships (267,571) (6,430,232) Loss (Gain) on sale of investments in Local Limited Partnerships 67,947 (2,842,151) Provision for (recovery of) valuation allowance on advances to Local Limited Partnerships (160,000) 200,000 Impairment on investments in Local Limited Partnerships 2,364,000 404,000 Amortization 5,361 7,496 Accretion - (111) Cash distributions included in net income - (86,828) Increase (decrease) in cash arising from changes in operating assets and liabilities: Other assets - 3,166 Due to affiliate (79,143) 96,118 Accrued expenses 3,763 (5,448) ---------------- ----------------- Net cash used for operating activities (325,018) (190,051) ----------------- ---------------- Cash flows from investing activities: Proceeds from maturities of investment securities - 250,000 Advances to Local Limited Partnerships - (200,000) Reimbursement of advances to Local Limited Partnerships 160,000 - Cash distributions received from Local Limited Partnerships - 86,828 Proceeds received from sale of investments in Local Limited Partnerships 77,000 10,409,061 ---------------- ---------------- Net cash provided by investing activities 237,000 10,545,889 ---------------- ---------------- Cash flows from financing activities: Cash distribution - (10,850,000) ---------------- ---------------- Net cash used for financing activities - (10,850,000) ---------------- ---------------- Net decrease in cash and cash equivalents (88,018) (494,162) Cash and cash equivalents, beginning 2,185,265 2,679,427 ---------------- ---------------- Cash and cash equivalents, ending $ 2,097,247 $ 2,185,265 ================ ================ Non-cash investing and financing activities: Increase to Restricted Cash $ 204 $ 514 Increase to Deferred Revenue $ 204 $ 514 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 1. Organization Boston Financial Qualified Housing Tax Credits L.P. V (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 other limited partnerships ("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 Financial, Inc. ("MMA"). The fiscal year of the Partnership ends on March 31. On June 26, 2009, Municipal Mortgage & Equity, LLC (the parent company of MMA Financial, Inc.) entered into a purchase and sale agreement with JEN I, L.P. for the sale of substantially all of its low-income housing tax credit business, including the Partnership and its General Partners. Upon the consummation of the sale transaction (expected to occur on or before August 31, 2009), the General Partners will be owned or controlled by JEN I, L.P. The Partnership's partnership agreement (the "Partnership Agreement") authorized the sale of up to 100,000 units of Limited Partnership Interest ("Units") at $1,000 per Unit, adjusted for certain discounts. The Partnership raised $68,928,650 ("Gross Proceeds"), net of discounts, through the sale of 68,929 Units. The offering of Units terminated on August 31, 1991. Under the terms of the Partnership Agreement, the Partnership originally designated 4% of the Gross Proceeds from the sale of Units as a reserve for working capital of the Partnership and contingencies related to ownership of Local Limited Partnership Interests. The Managing General Partner may increase or decrease such amounts from time to time, as it deems appropriate. At March 31, 2009 and 2008, the Managing General Partner has designated approximately $2,030,000 and $2,185,000, respectively, as such Reserves. Generally, profits, losses, tax credits and cash flows from operations are allocated 99% to the Limited Partners and 1% to the General Partners. Net proceeds from a sale or refinancing will be allocated 95% to the Limited Partners and 5% to the General Partners after certain priority payments. The General Partners may have an obligation to fund deficits in their capital accounts, subject to limits set forth in the Partnership Agreement. However, to the extent that the General Partners' capital accounts are in a deficit position, certain items of net income may be allocated to the General Partners in accordance with the Partnership Agreement. 2. Significant Accounting Policies Cash Equivalents Cash equivalents represent short-term, highly liquid instruments with original maturities of 90 days or less. Concentration of Credit Risk The Partnership invests its cash primarily in money market funds with commercial banks. At times, cash balances at a limited number of banks and financial institutions may exceed federally insured amounts. Management believes it mitigates its credit risk by investing in major financial institutions. Investment Securities The Partnership's investment securities were classified as "Available for Sale" and were reported at fair value as reported by the brokerage firm at which the securities were held. Realized gains and losses from the sales of securities were based on the specific identification method. Unrealized gains and losses are excluded from earnings and reported as a separate component of partners' equity. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) 0 NOTES TO THE FINANCIAL STATEMENTS (continued) 2. Significant Accounting Policies (continued) Investments in Local Limited Partnerships 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. The investments in the Local Limited Partnerships are made primarily to obtain tax credits on behalf of the Partnership's investors. The general partners of the Local Limited Partnerships, who are considered to be the primary beneficiaries, control the day-to-day operations of the Local Limited Partnerships. The general partners are also responsible for maintaining compliance with the tax credit program and for providing subordinated financial support in the event operations cannot support debt and property tax payments. The Partnership, through its ownership percentages, may participate in property disposition proceeds. The timing and amounts of these proceeds are unknown but can impact the Partnership's financial position, results of operations or cash flows. 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 ($1,223,551 and $3,470,288 at March 31, 2009 and 2008, respectively). 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. A liability is recorded for delayed equity capital contributions to Local Limited Partnerships. 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. The Tax Credits generated by Local Limited Partnerships are not reflected on the books of the Partnership as such credits are allocated to partners for use in offsetting their Federal income tax liability. Excess investment costs over the underlying net assets acquired have arisen from acquisition fees paid and expenses reimbursed to an affiliate of the Partnership. These fees and expenses are included in the Partnership's investments in Local Limited Partnerships and are being amortized on a straight-line basis over 35 years until a Local Limited Partnership's respective investment balance has been reduced to zero. The Partnership may provide advances to the Local Limited Partnerships to finance operations or to make debt service payments. The Partnership assesses the collectibility of any advances at the time the advance is made and records a reserve if collectibility is not reasonably assured. The Partnership does not guarantee any of the mortgages or other debt of the Local Limited Partnerships. The Managing General Partner has decided to report the 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 December 31, 2008 and 2007 and for the years then ended. The Partnership, as a limited partner in the Local Limited Partnerships, is subject to risks inherent in the ownership of property which are beyond its control, such as fluctuations in occupancy rates and operating expenses, variations in rental schedules, proper maintenance and continued eligibility for tax credits. If the cost of operating a Property exceeds the rental income earned thereon, the Partnership may deem it in its best interest to voluntarily provide funds in order to protect its investment. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) NOTES TO THE FINANCIAL STATEMENTS (continued) 2. Significant Accounting Policies (continued) The Partnership has implemented policies and practices for assessing other-than-temporary declines in the values of its investments in Local Limited Partnerships. Periodically, the carrying values of the investments are tested for other-than-temporary impairment. If an other-than-temporary decline in carrying value exists, a provision to reduce the investment to the sum of the estimated remaining benefits will be recorded in the Partnership's financial statements. The estimated remaining benefits for each Local Limited Partnership consist of estimated future tax losses and tax credits over the estimated life of the investment and estimated residual proceeds at disposition. Included in the estimated residual proceeds calculation is current net operating income capitalized at a regional rate specific to each Local Limited Partnership less the debt of the Local Limited Partnership. 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. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Fair Value of Financial Instruments Statements of Financial Accounting Standards No. 107 ("SFAS No. 107"), Disclosures About Fair Value of Financial Instruments, requires disclosure for the fair value of most on- and off-balance sheet financial instruments for which it is practicable to estimate that value. The scope of SFAS No. 107 excludes certain financial instruments, such as trade receivables and payables when the carrying value approximates the fair value and investments accounted for under the equity method, and all nonfinancial assets, such as real property. Unless otherwise described, the fair values of the Partnership's assets and liabilities which qualify as financial instruments under SFAS No. 107 approximate their carrying amounts in the accompanying balance sheets. Income Taxes No provision for income taxes has been made as the liability for such taxes is an obligation of the partners of the Partnership. In December 2008, the Financial Accounting Standards Board (`FASB") issued Interpretation No. 48-3 "Effective Date of FASB Interpretation No. 48 for Certain Nonpublic Enterprises" ("FIN48-3"). FIN48-3 deferred the effective date of FIN48 for certain nonpublic organizations. The deferred effective date is intended to give the FASB additional time to develop guidance on the application of FIN48 by pass-through and not-for-profit entities. The General Partner may modify the Partnership's disclosures if the FASB's guidance regarding the application of FIN48 to pass-through entities changes. Effect of New Accounting Principles SFAS No. 157 In September 2006, the Financial Accounting Standards Board ("FASB") issued SFAS No. 157, "Fair Value Measurements" ("SFAS No. 157"), which provides enhanced guidance for using fair value to measure assets and liabilities. SFAS No. 157 establishes a common definition of fair value, provides a framework for measuring fair value under U.S. generally accepted accounting principles and expands disclosure requirements about fair value measurements. SFAS No. 157 is effective for financial statements issued in fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. In February 2008, the FASB issued FASB Staff Position 157-2, "Effective Date of FASB Statement No. 157", which delays the effective date of SFAS No. 157 for all nonfinancial assets and liabilities except those that are recognized or disclosed at fair value in the financial statements on at least an annual basis until November 15, 2008. The Partnership adopted the provisions of SFAS BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) NOTES TO THE FINANCIAL STATEMENTS (continued) 2. Significant Accounting Policies (continued) Effect of New Accounting Principles (continued) No. 157 for financial assets and liabilities recognized at fair value on a recurring basis effective April 1, 2008. The partial adoption of SFAS No. 157 did not have a material impact on the Partnership's Financial Statements. The Partnership does not expect the adoption of the remaining provisions of SFAS No. 157 to have a material effect on the Partnership's financial position, operations or cash flow. This standard requires that a Partnership measure its financial assets and liabilities using inputs from the three levels of the fair value hierarchy. A financial asset or liability classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The three levels are as follows: Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Partnership has the ability to access at the measurement date. Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from r corroborated by observable market data by correlation or other means (market corroborated inputs). Level 3 - Unobservable inputs reflect the Partnership's judgments about the assumptions market participants would use in pricing the asset or liability since limited market data exists. The Partnership develops these inputs based on the best information available, including the Partnership's own data. Financial assets accounted for at fair value on a recurring basis at March 31, 2009 include cash equivalents of $2,097,247. SFAS No. 159 In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" ("SFAS No. 159"), which permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Partnership has not elected to measure any financial assets and financial liabilities at fair value under the provisions of SFAS No. 159. Reclassifications Certain reclassifications regarding provision for valuation of advances to Local Limited Partnerships have been made to prior period financial statements to conform to the current period presentation. 3. Investments in Local Limited Partnerships The Partnership currently owns limited partnership interests in one Local Limited Partnership which was organized for the purpose of owning and operating multi-family housing complexes, and is government-assisted. The Partnership's ownership interest in the Local Limited Partnership is 99%. The Partnership may have negotiated or may negotiate options with the Local General Partner to purchase or sell the Partnership's interests in the Local Limited Partnership at the end of the Compliance Period at nominal prices. In the event that Local Limited Partnership is sold to third parties or upon dissolution of the Local Limited Partnership, proceeds will be distributed according to the terms of each Local Limited Partnership agreement. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) NOTES TO THE FINANCIAL STATEMENTS (continued) 3. Investments in Local Limited Partnerships (continued) The following is a summary of investments in Local Limited Partnerships at March 31, 2009 and 2008: 2009 2008 ---------------- ---------------- Capital contributions paid to Local Limited Partnership and purchase price paid to withdrawing partners of Local Limited Partnerships $ 5,811,236 $ 14,058,713 Cumulative equity in losses of Local Limited Partnership (2,298,368) (9,985,736) Cumulative cash distributions received from Local Limited Partnership (19,610) (172,525) ----------------- ---------------- Investment in Local Limited Partnership before adjustments 3,493,258 3,900,452 Excess investment costs over the underlying assets acquired: Acquisition fees and expenses 178,600 308,970 Cumulative amortization of acquisition fees and expenses (84,307) (135,134) ---------------- ---------------- Investment in Local Limited Partnership before valuation allowance 3,587,551 4,074,288 Valuation allowance on investment in Local Limited Partnership (2,364,000) (604,000) ---------------- ---------------- Investment in Local Limited Partnership $ 1,223,551 $ 3,470,288 ================ ================ During the year ended March 31, 2009, the Partnership was reimbursed $160,000 from one of the Local Limited Partnerships for advances made and reserved for in prior 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. Summarized combined financial information of the Local Limited Partnerships in which the Partnership has invested as of December 31, 2008 and 2007 (due to the Partnership's policy of reporting the financial information of its Local Limited Partnership interests on a 90 day lag basis) is as follows: Summarized Balance Sheets - as of December 31, 2008 2007 ---------------- ---------------- Assets: Investment property, net $ 7,587,083 $ 17,481,195 Other assets 1,451,273 2,189,272 ---------------- ---------------- Total Assets $ 9,038,356 $ 19,670,467 ================ ================ Liabilities and Partners' Equity: Mortgage notes payable $ 4,652,457 $ 12,541,592 Other liabilities 1,089,307 2,903,752 ---------------- ---------------- Total Liabilities 5,741,764 15,445,344 ---------------- ---------------- Partnership's equity 3,297,258 3,375,645 Other partners' equity (deficiency) (666) 849,478 ----------------- ---------------- Total Partners' Equity 3,296,592 4,225,123 ---------------- ---------------- Total Liabilities and Partners' Equity $ 9,038,356 $ 19,670,467 ================ ================ BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) NOTES TO THE FINANCIAL STATEMENTS (continued) 3. Investments in Local Limited Partnerships (continued) Summarized Statements of Operations - for the years ended December 31, 2008 2007 ---------------- ---------------- Rental and other income $ 4,165,907 $ 17,040,855 ---------------- ---------------- Expenses: Operating 4,318,993 6,892,857 Interest 475,240 1,869,703 Depreciation and amortization 957,242 1,961,145 ---------------- ---------------- Total Expenses 5,751,475 10,723,705 ---------------- ---------------- Net Income (Loss) $ (1,585,568) $ 6,317,150 ================= ================ Partnership's share of Net Income (Loss) (includes $207,685 from prior year) $ 409,460 $ 6,782,201 ================ ================ Other partners' share of Net Income (Loss) $ (1,787,343) $ (465,051) ================ ================ For the year ended March 31, 2008, the Partnership did not recognize $297,881 of equity in losses relating to certain Local Limited Partnerships in which cumulative equity in losses and distributions exceeded its total investment in these Local Limited Partnerships. Previously unrecognized losses of $141,889 and $649,850 were included in losses recognized in the year ended March 31, 2009 and 2008, respectively. The Partnership's equity as reflected by the Local Limited Partnerships of $3,375,645 and $3,297,258 at March 31, 2009 and 2008, respectively, differs from the Partnership's investments in Local Limited Partnerships before adjustments of $3,900,452 and $3,493,258 at March 31, 2008 and 2007, respectively, primarily due to: (i) cumulative unrecognized losses as discussed above; (ii) advances to Local Limited Partnerships that the Partnership included in investments in Local Limited Partnerships; and (iii) differences in the accounting treatment of miscellaneous items. The Partnership's interests in three of its investments in Local Limited Partnerships were sold during the year ended March 31, 2009, resulting in sale proceeds of $143,000 and losses totaling $1,947. Additionally, $66,000 of proceeds received from the sale of two Local Limited Partnerships during the year ended March 31, 2008 were returned resulting in additional losses of $66,000. 4. Transactions with Affiliates An affiliate of the Managing General Partner receives the base amount of 0.275% (annually adjusted by the CPI factor) of Gross Proceeds due as the annual Asset Management Fee for administering the affairs of the Partnership. Asset Management Fees for the years ended March 31, 2009 and 2008 were $313,983 and $304,634, respectively. During the years ended March 31, 2009 and 2008, $313,904 and $301,544, respectively, were paid out of available cash flow for Asset Management Fees. Included in due to affiliate at March 31, 2009 and 2008 were $78,555 and $78,476, respectively, of Asset Management Fees. An affiliate of the Managing General Partner is reimbursed for the cost of the Partnership's salaries and benefits expenses. Included in general and administrative expenses for the years ended March 31, 2009 and 2008 are $25,056 and $100,243, respectively, that the Partnership incurred for these expenses. During the years ended March 31, 2009 and 2008, $54,909 and $66,858, respectively, were paid for these expenses. As of March 31, 2009 and 2008, $3,532 and $33,385, respectively, of these reimbursements remains unpaid. An affiliate of the General Partner is reimbursed for the actual cost of the Partnership's operating expenses. As of March 31, 2009 and 2008, $10,274 and $59,643, respectively, were reimbursable to the affiliate. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) NOTES TO THE FINANCIAL STATEMENTS (continued) 5. Deferred Revenue Under the terms of a Local Limited Partnership agreement, the Partnership was required to fund a Supplemental Reserve in the amount of $196,000. The original purpose of the contribution was to fund the development expenses of the Local Limited Partnership. In lieu of transferring the Supplemental Reserve to the Local Limited Partnership, the Partnership designated $196,000 as restricted cash for this purpose. Since the funds were not needed, the Local Limited Partnership agreement allows that the established Supplemental Reserve, along with the interest earned thereon, is available to pay the Partnership its annual priority distribution. As of March 31, 2009, $253,000 has been released to the Partnership. The remaining balance, along with the accrued interest thereon, has also been accounted for as deferred revenue, as it represents the future annual priority distributions to be released to the Partnership from this Supplemental Reserve. 6. Federal Income Taxes The following schedule reconciles the reported financial statement net income (loss) for the fiscal years ended March 31, 2009 and 2008 to the net income reported on Form 1065, U.S. Partnership Return of Income for the years ended December 31, 2008 and 2007: 2008 2007 -------------- -------------- Net Income (Loss) per financial statements $ (2,259,375) $ 8,463,939 Equity in income of Local Limited Partnerships for tax purposes in excess of equity in losses for financial reporting purposes 474,000 1,903,431 Recognition of previously unrecognized equity in losses of Local Limited Partnerships for financial reporting purposes, net of current year unrecognized losses 141,889 351,969 Adjustment to reflect March 31 fiscal year end to December 31 taxable year end (18,442) (55,666) Amortization for tax purposes in excess of amortization for financial reporting purposes (1,134) (10,816) Provision for valuation allowance on advances to Local Limited Partnerships not deductible for tax purposes - 200,000 Recovery of prior year's provision for valuation allowance on advances to Local Limited Partnerships not reportable for tax purposes (160,000) - Impairment on investments in Local Limited Partnerships not deductible for tax purposes 2,364,000 404,000 Gain on sale of investments in Local Limited Partnerships for tax purposes in excess of gain on sale for financial reporting purposes (418,089) 619,221 Cash distributions included in net income for financial reporting purposes - (86,828) Other (75,000) - --------------- -------------- Net Income per tax return $ 47,849 $ 11,789,250 ============== ============== BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) NOTES TO THE FINANCIAL STATEMENTS (continued) 6. Federal Income Taxes (continued) The differences in the assets and liabilities of the Partnership for financial reporting purposes and tax purposes as of March 31, 2009 and December 31, 2008, respectively, are as follows: Financial Reporting Tax Purposes Purposes Differences Investment in Local Limited Partnership $ 1,223,551 $ 1,850,116 $ (626,565) ============== ============== =============== Other assets $ 2,116,886 $ 11,935,427 $ (9,818,541) ============== ============== =============== Liabilities $ 165,672 $ 150,391 $ 15,281 ============== ============== ============== The differences in assets and liabilities of the Partnership for financial reporting and tax purposes are primarily attributable to: (i) the cumulative equity in losses of Local Limited Partnerships for tax reporting purposes is approximately $1,711,000 greater than for financial reporting purposes; (ii) the cumulative amortization of acquisition fees for tax purposes exceeds financial reporting purposes by approximately $26,000; (iii) the Partnership has provided a valuation allowance of approximately $2,364,000 against its investments in Local Limited Partnerships for financial reporting purposes; and (iv) organizational and offering costs of approximately $9,500,000 that have been capitalized for tax purposes are charged to Limited Partners' equity for financial reporting purposes. The differences in the assets and liabilities of the Partnership for financial reporting purposes and tax purposes as of March 31, 2008 and December 31, 2007, respectively, are as follows: Financial Reporting Tax Purposes Purposes Differences Investments in Local Limited Partnerships $ 3,470,288 $ 1,696,187 $ 1,774,101 ============== ============== ============== Other assets $ 2,204,700 $ 12,307,404 $ (10,102,704) ============== ============== ============== Liabilities $ 240,848 $ 416,288 $ (175,440) ============== ============== ============== The differences in assets and liabilities of the Partnership for financial reporting and tax purposes are primarily attributable to: (i) the cumulative equity in losses of Local Limited Partnerships for tax reporting purposes is approximately $1,308,011 greater than for financial reporting purposes, including approximately $142,000 of losses the Partnership has not recognized relating to certain Local Limited Partnerships whose cumulative equity in losses exceeded their total investment; (ii) the cumulative amortization of acquisition fees for tax purposes exceeds financial reporting purposes by approximately $48,000; (iii) the Partnership has provided a valuation allowance of approximately $604,000 against its investments in Local Limited Partnerships for financial reporting purposes; and (iv) organizational and offering costs of approximately $9,500,000 that have been capitalized for tax purposes are charged to Limited Partners' equity for financial reporting purposes. 7. Significant Subsidiaries The following Local Limited Partnership invested in by the Partnership represents more than 20% of the Partnership's total assets or equity as of March 31, 2009 or 2008, or net income or losses for the years ended either March 31, 2009 or 2008. The following financial information represents the performance of this Local Limited Partnership for the years ended December 31, 2008 and 2007: Circle Terrace Associates Limited Partnership 2008 2007 - --------------------------------------------- -------------- -------------- Total Assets $ 9,038,356 $ 9,391,317 Total Liabilities $ 5,741,764 $ 6,361,597 Revenue $ 2,828,096 $ 2,721,926 Net Income (Loss) $ 57,089 $ (274,388)