CRI III-6.30.13 10Q

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.

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

The units of limited partner interest of the Registrant are not traded in any market. Therefore, the units of limited partner interest had neither a market selling price nor an average bid or asked price. As of August 14, 2013, the issuer had 59,882 outstanding units of limited partner interest.



	June 30,		December 31,
	2013		2012
Investments in partnerships	$	2,592,509	$	2,582,473
Cash and cash equivalents	1,725,364		2,079,580
Acquisition fees, principally paid to related parties,
net of accumulated amortization of $21,281 and $20,922, respectively	249		608
Property purchase costs,
net of accumulated amortization of $28,119 and $27,630, respectively	1,245		1,734
Total assets	$	4,319,367	$	4,664,395



Due on investments in partnerships	$	119,544		$	119,544
Accrued interest payable	33,976			33,976
Accounts payable and accrued expenses	53,286			36,063
Total liabilities	206,806			189,583
Partners' capital
Capital paid-in:
General Partners	2,000			2,000
Limited Partners	60,001,500			60,001,500
	60,003,500			60,003,500
Less:
Accumulated distributions to partners	(31,184,819		)	(31,184,819		)
Offering costs	(6,156,933		)	(6,156,933		)
Accumulated losses	(18,549,187		)	(18,186,936		)
Total partners' capital	4,112,561			4,474,812
Total liabilities and partners' capital	$	4,319,367		$	4,664,395



	For the three months ended June 30,						For the six months ended June 30,
	2013			2012			2013			2012
Share of (loss) income from partnerships	$	(7,276	)	$	67,637		$	51,245		$	117,306
Other revenue and expenses
Revenue:
Gain on disposition of properties	—			—			—			2,744,452
Interest and other	731			2,809			2,049			6,395
	731			2,809			2,049			2,750,847
Expenses:
General and administrative	90,816			77,682			162,400			149,763
Management fee	75,000			75,000			150,000			150,000
Professional fees	49,088			45,413			61,088			93,813
Amortization of deferred costs	424			424			848			848
Impairment loss	—			—			41,209			433,190
	215,328			198,519			415,545			827,614

Total other revenue and expenses	(214,597		)	(195,710		)	(413,496		)	1,923,233

Net (loss) income	(221,873		)	(128,073		)	(362,251		)	2,040,539

Accumulated losses, beginning of period	(18,334,591		)	(19,180,068		)	(18,186,936		)	(21,348,680		)
Accumulated losses, end of period	$	(18,549,187	)	$	(19,308,141	)	$	(18,549,187	)	$	(19,308,141	)

Net (loss) income allocated to General Partners (1.51%)	$	(3,351	)	$	(1,934	)	$	(5,470	)	$	30,812

Net (loss) income allocated to Initial and
Special Limited Partners (1.49%)	$	(3,306	)	$	(1,908	)	$	(5,398	)	$	30,404

Net (loss) income allocated to Additional Limited Partners (97%)	$	(215,217	)	$	(124,231	)	$	(351,383	)	$	1,979,323

Net (loss) income per unit of Additional Limited Partner Interest based on 59,882 units outstanding	$	(3.59	)	$	(2.07	)	$	(5.87	)	$	33.05



	For the six months ended June30,
	2013			2012
Cash flows from operating activities:
Net (loss) income	$	(362,251	)	$	2,040,539
Adjustments to reconcile net (loss) income to net cash
used in operating activities:
Share of income from partnerships	(51,245		)	(117,306		)
Amortization of deferred costs	848			848
Gain on disposition of property	—			(2,744,452		)
Impairment loss	41,209			433,190
Changes in assets and liabilities:
Increase in accounts payable and accrued expenses	17,223			26,327
Net cash used in operating activities	(354,216		)	(360,854		)

Cash flows from investing activities:
Proceeds from disposition of investment in partnerships	—			3,611,288
Disposition fee paid	—			(946,000		)
Advance to Local Partnership	—			(20,000		)
Net cash provided by investing activities	—			2,645,288

Net (decrease) increase in cash and cash equivalents	(354,216		)	2,284,434
Cash and cash equivalents, beginning of period	2,079,580			2,172,240
Cash and cash equivalents, end of period	$	1,725,364		$	4,456,674

Capital Realty Investors-III Limited Partnership (the Partnership) was formed under the Maryland Revised Uniform Limited Partnership Act on June 27, 1983, and shall continue until December 31, 2037, unless sooner dissolved in accordance with the terms of the Partnership Agreement. The Partnership was formed to invest in real estate by acquiring and holding limited partner interests in limited partnerships (Local Partnerships) that own and operate federal or state government-assisted apartment properties, which provide housing principally to the elderly or to individuals and families of low or moderate income, or conventionally financed apartment properties, located throughout the United States. The Partnership originally made investments in thirty-seven Local Partnerships. As of June 30, 2013, the Partnership retained investment in one Local Partnership, owning one apartment complex.

The General Partners of the Partnership are C.R.I., Inc. (CRI), which is the Managing General Partner, and current and former shareholders of CRI. The Initial Limited Partner was Rockville Pike Associates Limited Partnership-III, a limited partnership which includes certain current officers and former employees of CRI or its affiliates. The Special Limited Partner had been Two Broadway Associates II, a limited partnership comprised of an affiliate and employees of Merrill Lynch, Pierce, Fenner & Smith, Incorporated. Effective January 1, 2002, Two Broadway Associates II transferred its interest to MLH Merger Corporation and three individuals.

The accompanying unaudited condensed financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (US GAAP) and with the instructions to Form 10-Q. Certain information and accounting policies and footnote disclosures normally included in financial statements prepared in conformity with US GAAP have been condensed or omitted pursuant to such instructions. These condensed financial statements should be read in conjunction with the financial statements and notes thereto included in the Partnership's Annual Report on Form 10-K at December 31, 2012. The balance sheet amounts at December 31, 2012 are compiled from the Partnership's Annual Report on Form 10-K at December 31, 2012.

In the opinion of CRI, the Managing General Partner of the Partnership, the accompanying unaudited condensed financial statements reflect all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the financial position of the Partnership as of June 30, 2013, and the results of its operations and its cash flows for the three and six month periods ended June 30, 2013 and 2012. The results of operations for the interim period ended June 30, 2013 are not necessarily indicative of the results to be expected for the full year.

On November 21, 2005, the General Partners recommended that the limited partners approve a plan of liquidation and dissolution for the partnership, or the "Plan". The Plan was approved by the limited partners on January 20, 2006. Currently, the one remaining Property in which the Partnership is invested through its investments in the Local Partnerships is under contract for sale. There can be no assurance as to when the liquidation and dissolution of the partnership will be completed, but it is anticipated that the process will be completed prior to December 31, 2013. Liquidation is not imminent, and as such, we have not prepared these financial statements under the liquidation basis of accounting. Because the liquidation of the Partnership was not imminent as of June 30, 2013, the condensed financial statements are presented assuming the Partnership will continue as a going concern.

On June 18, 2012, the Local Partnership entered into a purchase and sale agreement to sell Meadow Lanes Apartments for $2,900,000. It is expected that the sale will be consummated during the third quarter of 2013. It is anticipated that all sale proceeds will be used to satisfy Local Partnership obligations and any remaining funds available will be distributed to partners in accordance with the Meadow Lanes - II Associates Limited Dividend Housing Association Limited Partnership Agreement. There can be no assurance that the sale transaction contemplated will be consummated upon the terms and conditions anticipated or at all. The Partnership's investment basis in this Local Partnership at June 30, 2013 and December 31, 2012 was $2,633,718 and $2,582,473. The Partnership expects to received $2,592,509 as a result of the sale. The difference between the investment basis at June 30, 2013 and expected proceeds is $41,209. This amount represents the impairment loss on the condensed statements of operations and accumulated losses.

Under the terms of the Partnership's investment in each Local Partnership, the Partnership was required to make capital contributions to the Local Partnerships. These contributions were payable in installments upon each Local Partnership achieving specified levels of construction and/or operations. At June 30, 2013 and 2012, all such capital contributions had been paid to the Local Partnerships.

Combined statements of operations for the Local Partnership in which the Partnership was invested as of June 30, 2013 and the four Local Partnerships in which the Partnership was invested as of June 30, 2012 follow. The combined statements are compiled from information supplied by the management agent of the Local Partnership properties and are unaudited. The information for each of the periods is presented separately for those Local Partnerships which have investment basis (equity method), and for those Local Partnerships which have cumulative losses in excess of the amount of the Partnership's investments in those local Partnerships (equity method suspended). Appended after the combined statements is information concerning the Partnership's share of income from partnerships related to cash distributions recorded as income, and related to the partnership's share of income from Local Partnerships.



	For the six months ended
	June 30,
	2013						2012
	Equity Method				Suspended		Equity Method			Suspended
Number of Local Partnerships	1			(a)	—		2		(b)	2			(c)

Revenue:
Rental	$	405,110			$	—	$	699,356		$	494,302
Other	7,557				—		12,218			19,087

Total revenue	412,667				—		711,574			513,389

Expenses:
Operating and other	265,669				—		448,390			259,728
Interest (income) expense	(38,168		)		—		16,984			100,698
Depreciation and amortization	132,874				—		119,856			39,653

Total expenses	360,375				—		585,230			400,079

Net income	$	52,292			$	—	$	126,344		$	113,310

Partnership’s share of Local Partnership net income	$	51,245			$	—	$	127,306		$	—
Advances to Local Partnerships	—				—		—			(10,000		)
Share of income from partnerships	$51,245						$127,306



	For the three months ended
	June 30,
	2013						2012
	Equity Method				Suspended		Equity Method				Suspended
Number of Local Partnerships	1			(a)	—		2			(b)	2		(c)

Revenue:
Rental	$	201,342			$	—	$	356,113			$	130,182
Other	(45,078		)		—		(39,519		)		378

Total revenue	156,264				—		316,594				130,560

Expenses:
Operating and other	116,335				—		182,717				24,341
Interest (income) expense	(19,084		)		—		8,492				22,345
Depreciation and amortization	66,437				—		59,928				582

Total expenses	163,688				—		251,137				47,268

Net (loss) income	$	(7,424	)		$	—	$	65,457			$	83,292

Partnership’s share of Local Partnership net (loss) income	$	(7,276	)		$	—	$	67,637			$	—
Share of (loss) income from partnerships	$(7,276)						$67,637

Cash distributions received from Local Partnerships which have investment basis (equity method) are recorded as a reduction of investments in partnerships and as cash receipts on the respective balance sheets. Cash distributions received from Local Partnerships which have cumulative losses in excess of the amount of the Partnership's investments in those Local Partnerships (equity method suspended) are recorded as share of income from partnerships on the respective statements of operations and as cash receipts on the respective balance sheets. As of June 30, 2012, the Partnership's share of cumulative losses to date for two of four Local Partnerships exceeded amount of the Partnership's investments in and advances to those Local Partnerships by $8,961,364. As of June 30, 2013, the remaining Local Partnership did not have cumulative losses in excess of the Partnership's investment. As the Partnership has no further obligation to advance funds or provide financing to these Local Partnerships, the excess losses have not been reflected in the accompanying financial statements.

Due on investment in partnership includes $119,544 due to a previous owner related to Meadow Lanes Apartments at both June 30, 2013 and December 31, 2012; accrued interest payable thereon was $33,976 at both June 30, 2013 and December 31, 2012. These amounts are scheduled to be paid upon the occurrence of certain specific events, as outlined in the note agreement. At June 30, 2013 and December 31, 2012, the Partnership is in dispute with the previous owner regarding amounts owed under the note agreement. Management cannot determine the outcome of the dispute at this time. Accordingly, the condensed financial statements do not reflect any adjustment due to the uncertainty.

On November 15, 2011, the general partners of Villa Mirage I, a California limited partnership, and Villa Mirage II, a California limited partnership, entered into a contract with an unaffiliated third party to sell their properties for an aggregate sale price of $6,500,000. On September 27, 2012, the sale of the properties closed. The investment balance in the Local Partnerships at the time of sale was $195,662. Of the $1,903,349 of proceeds received as a result of the sale, a disposition fee was paid to the managing general partner in the amount of $325,000. The disposition fee was netted against the related gain on disposition of property.

On September 29, 2011, the general partners of Pebble Valley Housing Partners Limited Partnership, a Wisconsin limited partnership, entered into a contract with an unaffiliated third party to sell its property (Monterey/Hillcrest) and the transaction closed on January 31, 2012. The sales price was $18,920,000 and total expected proceeds amounted to $3,694,108. Proceeds received in February 2012 totaled $3,611,288. The investment balance in the Local Partnership was $0 at December 31, 2011. Net unamortized acquisition costs and property purchase costs of $3,656 were written off and netted against the gain on sale of property. A disposition fee of $946,000 was paid to the managing general partner. The disposition fee was netted against the related gain on disposition of property.

On June 18, 2012, the Local Partnership entered into a purchase and sale agreement to sell Meadow Lanes Apartments for $2,900,000. It is expected that the sale will be consummated during the third quarter of 2013. It is anticipated that all sale proceeds will be used to satisfy Local Partnership obligations and any remaining funds available will be distributed to partners in accordance with the Meadow Lanes–II Associates Limited Dividend Housing Association Limited Partnership Agreement. There can be no assurance that the sale transaction contemplated will be consummated upon the terms and conditions anticipated or at all. The Partnership's investment basis in this Local Partnership at June 30, 2013 and December 31, 2012 was $2,633,718 and $2,582,473. The Partnership expects to receive $2,592,509 as a result of the sale. The difference between the investment basis at June 30, 2013 and expected proceeds is $41,209. This amount represents the impairment loss on the statements of operations.

On February 8, 2012, the Partnership advanced $10,000 to Villa Mirage I and $10,000 to Villa Mirage II Limited Partnerships for the issuance of a prepayment letter, as required by CalHFA. For financial statement purposes the advance to Villa Mirage II was charged off by the Partnership as a result of losses at the Local Partnership level during prior years.

In accordance with the terms of the Partnership Agreement, the Partnership is obligated to reimburse the Managing General Partner or its affiliates for certain direct expenses and payroll expenses in connection with managing the Partnership. Payroll expenses are reimbursed at a factor of 1.75 times base salary. For the three and six month periods ended June 30, 2013, the Partnership paid $20,229 and $45,775, respectively, and $28,905 and $55,540 for the three and six month periods ended June 30, 2012, respectively, to the Managing General Partner or its affiliates as direct reimbursement of expenses incurred on behalf of the Partnership. In addition, certain employees of the Managing General Partner provided legal and tax accounting services to the Partnership. These are reimbursed comparable to third party service charges. For the three and six month periods ended June 30, 2013, the Partnership paid $39,188 and $76,768, respectively, and $36,729 and $70,941 for the three and six month periods ended June 30, 2012 to the Managing General Partner or its affiliates for these services. Such reimbursed expenses are included in the accompanying condensed statements of operations and accumulated losses as general and administrative expenses.

In accordance with the terms of the Partnership Agreement, the Partnership is obligated to pay the Managing General Partner an annual incentive management fee (“Management Fee”) after all other expenses of the Partnership are paid. The Partnership paid the Managing General Partner a Management Fee of $75,000 for each of the three month periods ended June 30, 2013 and 2012.

In accordance with the terms of the Partnership agreement, the managing general partner and/or its affiliates may receive a fee of not more than five percent of the sale price of an investment in a Local Partnership or the property it owns, payable under certain conditions upon the sale of an investment in a Local Partnership or the property it owns. The payment of the fee is subject to certain

restrictions including the achievement of a certain level of sales proceeds and making certain distributions to limited partners. In accordance with the terms of the Partnership agreement, in February 2012, the managing general partner was paid a disposition fee of $946,000 related to sale of Monterey/Hillcrest, which was netted against the related gain on the disposition of the property.

For the six month period ended June 30, 2012, the Partnership received a distribution totaling $3,611,288 related to the sale of the Monterey/Hillcrest properties. This amount is included in gain on disposition of investment in partnerships on the condensed statements of operations and accumulated losses.

The following Local Partnership invested in by the Partnership represents more than 20% of the Partnership's total assets or equity as of June 30, 2013 and 2012 or net income (loss) for the three-month periods then ended. The following financial information represents the performance of this Local Partnership for the six-month periods ended June 30, 2013 and 2012. The financial information consists of estimates based on the audited financial statements of the Local Partnerships at December 31, 2012 and these estimates are unaudited.

Events that occur after the balance sheet date but before the financial statements were available to be issued must be evaluated for recognition or disclosure. The effects of subsequent events that provide evidence about conditions that existed at the balance sheet date are recognized in the accompanying financial statements. Subsequent events which provide evidence about conditions that existed after the balance sheet date require disclosure in the accompanying notes.

The Management's Discussion and Analysis of Financial Condition and Results of Operations section is based on the financial statements, and contains information that may be considered forward looking, including statements regarding the effect of governmental regulations. Actual results may differ materially from those described in the forward looking statements and will be affected by a variety of factors including national and local economic conditions, the general level of interest rates, governmental regulations affecting the Partnership and interpretations of those regulations, the competitive environment in which the Partnership operates, and the availability of working capital.

The Partnership has disclosed its selection and application of significant accounting policies in Note 1 of the notes to financial statements included in the Partnership's Annual Report on Form 10-K at December 31, 2012. The Partnership accounts for its investments in partnership (Local Partnership) by the equity method because the Partnership is a limited partner in the Local Partnership. As such, the Partnership has no control over the selection and application of accounting policies, or the use of estimates, by the Local Partnership. The Partnership reviews property assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. Recoverability is measured by a comparison of the carrying amount of an asset to the estimated future net cash flows expected to be generated by the asset. If an asset were determined to be impaired, its basis would be adjusted to fair value through the recognition of an impairment loss.

Generally accepted accounting principles (GAAP) in the United States provides guidance on when a company should include the assets, liabilities, and activities of a variable interest entity (VIE) in its financial statements and when it should disclose information about its relationship with a VIE. Generally, a variable interest entity, or VIE, is an entity with one or more of the following characteristics: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (b) as a group the holders of the equity investment at risk lack (i) the ability to make decisions about an entity's activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests and substantially all of the entity's activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. The primary beneficiary of a VIE is generally the entity that will receive a majority of the VIE's expected losses, receive a majority of a VIE's expected residual returns, or both.

The Partnership does not consolidate the Partnership's interest in this VIE under this guidance, as it is not considered to be the primary beneficiary. Accounting guidance requires continued reconsideration as to the consideration of the primary beneficiary. The Partnership currently records the amount of its investment in this partnership as an asset on its balance sheet, recognizes its share of partnership income or losses in the statements of operations, and discloses how it accounts for material types of these investments in its financial statements.

The Partnership's balance in investment in this Local Partnership represents its maximum exposure to loss. The Partnership's exposure to loss on this partnership is mitigated by the condition and financial performance of the underlying properties as well as the strength of the local general partners.

The Partnership's liquidity, with unrestricted cash resources of $1,725,364 as of June 30, 2013, along with anticipated future cash distributions from Local Partnerships, is expected to be adequate to meet its current and anticipated operating cash needs. As of August 14, 2013, there were no material commitments for capital expenditures.

The Partnership closely monitors its cash flow and liquidity position in an effort to ensure that sufficient cash is available for operating requirements. For the three and six month periods ended June 30, 2013, existing cash resources were adequate to support operating cash requirements. Cash and cash equivalents decreased $354,216 during the six month period ended June 30, 2013, primarily due to normal operating expenses.

For financial reporting purposes, the Partnership, as a limited partner in the Local Partnership, does not record losses from the Local Partnerships in excess of its investment to the extent that the Partnership has no further obligation to advance funds or provide financing to the Local Partnerships. As a result, the Partnership's share of income from partnerships for the three and six month periods ended June 30, 2012 did not include income of $81,806 and $111,224, respectively, compared to excluded losses of $0 for both the three and six month periods ended June 30, 2013.

On June 18, 2012, the Local Partnership entered into a purchase and sale agreement to sell Meadow Lanes Apartments for $2,900,000. The Partnership's investment basis in this Local Partnership at June 30, 2013 was $2,633,718. The Partnership expects to receive $2,592,509 as a result of the sale. The difference between the investment basis at June 30, 2013 and expected proceeds is $41,209. This amount represents the impairment loss on the condensed statements of operations.

Certain taxing authorities may assert claims against the Partnership for failure to withhold and remit income tax on operating profit or where the sale(s) of property in which the Partnership was invested failed to produce sufficient cash proceeds with which to pay the tax and/or to pay statutory partnership filing fees. The Partnership is unable to quantify the amount of such potential claims at this time. The Partnership has consistently advised its Partners that they should consult with their tax advisors as to the necessity of filing non-resident returns in such states with respect to their proportional taxes due.

On November 21, 2005, the General Partners recommended that the limited partners approve a plan of liquidation and dissolution for the Partnership. The plan of liquidation and dissolution was approved by the limited partners on January 20, 2006. Currently, the one remaining Property in which the Partnership is invested through its investments in the Local Partnerships is under contract for sale. The Villa Mirage I and Villa Mirage II property sales closed September 27, 2012. The Meadow Lanes property sale is anticipated to close in the third quarter of 2013. Following the successful closing of the Meadow Lanes property sale, the Local Partnership, in which the Partnership is invested, will be dissolved and terminated at which time the General Partner will commence the dissolution and termination of the Partnership. There can be no assurance as to when the liquidation and dissolution of the Partnership will be completed but it is anticipated that the process will be completed prior to December 31, 2013.

The Partnership's management, with the participation of the principal executive officer and principal financial officer of the Managing General Partner, who are the equivalent of the Partnership's principal executive officer and principal financial officer, respectively, has evaluated the effectiveness of the Partnership's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. A control system, no matter how well conceived and operated, can provide only reasonable assurance that the objectives of the control system are met. Based on such evaluation, the principal executive officer and principal financial officer of the Managing General Partner, who are the equivalent of the Partnership's principal executive officer and principal financial officer, respectively, have concluded that, as of the end of such period, the Partnership's disclosure controls and procedures are effective.

There has been no change in the Partnership's internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that has materially affected, or is reasonably likely to materially affect, the Partnership's internal control over financial reporting.

The Partnership is unaware of any pending or outstanding litigation involving it or the underlying investment property of the Local Partnerships in which the Partnership invests that are not of a routine nature arising in the ordinary course of business or that would have a material adverse effect on the business of the Partnership.



31.1		Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32		Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



Maryland	52-1311532
(State of Incorporation)	(I.R.S. Employer Identification No.)

11200 Rockville Pike
Rockville, MD	20852
(Address of Principal Executive Offices)	(ZIP Code)



	Page


Part I FINANCIAL INFORMATION

Item 1. Financial Statements
Condensed Balance Sheets as of June 30, 2013 and December 31, 2012	1

Condensed Statements of Operations and Accumulated Losses for the three and six months ended June 30, 2013 and 2012	2

Condensed Statements of Cash Flows for the six months ended June 30, 2013 and 2012	3

Notes to Condensed Financial Statements	4

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	10

Item 3. Quantitative and Qualitative Disclosure about Market Risk	11

Item 4. Controls and Procedures	11

Part II OTHER INFORMATION

Item 1. Legal Proceedings	11

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	11

Item 3. Defaults Upon Senior Securities	11

Item 4. Mine Safety Disclosures	11

Item 5. Other Information	12

Item 6. Exhibits	12

Signatures	14



Meadow Lanes	2013	2012
Total Assets	$3,888,464	$3,574,383
Total Liabilities	262,557	433,329
Revenue	412,667	253,636
Net Income	52,292	51,518



	CAPITAL REALTY INVESTORS-III
		LIMITED PARTNERSHIP
	(Registrant)

August 14, 2013	by:		/s/ William B. Dockser
DATE			William B. Dockser,
			Director, Chairman of the Board
				and Treasurer
			Principal Executive Officer



August 14, 2013	by:	/s/ H. William Willoughby
DATE		H. William Willoughby
		Director, President, Secretary,
		Principal Financial Officer and
			Principal Accounting Officer



Investments in partnerships at December 31, 2012:	$	2,582,473

Share of income from partnership	51,245
Impairment loss	(41,209		)

Investments in partnership at June 30, 2013:	$	2,592,509



ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


2.	BASIS OF PRESENTATION


3.	PLAN OF LIQUIDATION


Exhibit No.	Description