-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Jd2m2NVBVD7Ni7Uv/Sao81ge3VO7zuzBSgGkXEv7/98ilEBvPzGPVekkIF5gZvYB GhyLbs+/9SQR7K5u4NDEBw== 0000810663-06-000062.txt : 20060905 0000810663-06-000062.hdr.sgml : 20060904 20060905125834 ACCESSION NUMBER: 0000810663-06-000062 CONFORMED SUBMISSION TYPE: 10KSB/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040331 FILED AS OF DATE: 20060905 DATE AS OF CHANGE: 20060905 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L P IV CENTRAL INDEX KEY: 0000845035 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF APARTMENT BUILDINGS [6513] IRS NUMBER: 043044617 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10KSB/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-19765 FILM NUMBER: 061073277 BUSINESS ADDRESS: STREET 1: 101 ARCH ST 16TH FLR CITY: BOSTON STATE: MA ZIP: 02110-1106 BUSINESS PHONE: 6174393911 MAIL ADDRESS: STREET 2: 101 ARCH STREET 16TH FL CITY: BOSTON STATE: MA ZIP: 021101106 10KSB/A 1 qh410krev.txt QH410KREV Microsoft Word 11.0.6502; September 5, 2006 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Boston Financial Qualified Housing Tax Credits L.P. IV Annual Report on Form 10-KSB/A for Year Ended March 31, 2004 File Number 0-19765 Dear Sir/Madam: Pursuant to the requirements of section 15(d) of the Securities Exchange Act of 1934, filed herewith is one copy of subject report. Very truly yours, /s/Stephen Guilmette Stephen Guilmette Assistant Controller QH410K-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-KSB/A (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, 2004 ------------------------------------------------------- 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 0-19765 Boston Financial Qualified Housing Tax Credits L.P. IV - --------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Massachusetts 04-3044617 (State or other jurisdiction of (I.R.S.Employer 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: Name of each exchange on Title of each class which registered ------------------- --------------------------- None None Securities registered pursuant to Section 12(g) of the Act: UNITS OF LIMITED PARTNERSHIP INTEREST (Title of Class) 100,000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No 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-KSB/A or any amendment to this Form 10-KSB/A. [ X ] State the aggregate sales price of partnership units held by nonaffiliates of the registrant. $67,653,000 as of March 31, 2004 -------------------------------- K-28 DOCUMENTS INCORPORATED BY REFERENCE: LIST THE FOLLOWING DOCUMENTS IF INCORPORATED BY REFERENCE AND THE PART OF THE FORM 10-KSB/A INTO WHICH THE DOCUMENT IS INCORPORATED: (1) ANY ANNUAL REPORT TO SECURITY HOLDERS: (2) ANY PROXY OR INFORMATION STATEMENT: AND (3) ANY PROSPECTUS FILED PURSUANT TO RULE 424(b) OR (c) UNDER THE SECURITIES ACT OF 1933.
Part of Report on Form 10-KSB/A into Which the Document Documents incorporated by reference is Incorporated - ----------------------------------- ----------------------------------------- Post-effective Amendments No. 1 through 3 to the Registration Statement, File # 33-26394 Part I, Item 1 Acquisition Reports Part I, Item 1 Prospectus - Sections Entitled: "Investment Objectives and Policies - Principal Investment Policies" Part I, Item 1 "Estimated Use of Proceeds" Part III, Item 12 "Management Compensation and Fees" Part III, Item 12 "Profits and Losses for Tax Purposes, Tax Credits and Cash Distributions" Part III, Item 12
Explanatory Note On June 30, 2004, Boston Financial Qualified Housing Tax Credits L.P. IV (the "Partnership") filed its annual report on Form 10-KSB for its fiscal year ended March 31, 2004. The Partnership hereby amends the 2004 Form 10-KSB to include the name of its Registered Public Accounting Firm as well as the city and state of the office that performed the audit, to disclose the fees paid and types of services rendered by the principal accountant and to include current certifications pursuant to sections 302 and 906 of the Sarbanes-Oxley Act of 2002. This form 10-KSB/A does not reflect events occurring after the June 30, 2004 filing of the Annual Report or modify or update the disclosure contained in the Annual Report in any way other than as required to reflect the amendments discussed above. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) ANNUAL REPORT ON FORM 10-KSB/A FOR THE YEAR ENDED MARCH 31, 2004 TABLE OF CONTENTS
PART I Page No. Item 1 Business K-3 Item 2 Properties K-6 Item 3 Legal Proceedings K-13 Item 4 Submission of Matters to a Vote of Security Holders K-14 PART II Item 5 Market for the Registrant's Units and Related Security Holder Matters K-14 Item 6 Management's Discussion and Analysis of Financial Condition and Results of Operations K-14 Item 7 Financial Statements and Supplementary Data K-20 Item 8 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure K-20 PART III Item 9 Directors and Executive Officers of the Registrant K-20 Item 10 Management Remuneration K-21 Item 11 Security Ownership of Certain Beneficial Owners and Management K-21 Item 12 Certain Relationships and Related Transactions K-21 Item 13 Exhibits, Financial Statement Schedules and Reports on Form 8-K K-23 Item 14 Principal Accountant Fees and Services K-23 CONTROLS AND PROCEDURES K-24 - ----------------------- SIGNATURES K-25 - ---------- CERTIFICATIONS K-26 - --------------
PART I Item 1. Business Boston Financial Qualified Housing Tax Credits L.P. IV (the "Partnership") is a limited partnership formed on March 30, 1989 under the Revised Uniform Limited Partnership Act of the Commonwealth 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 $67,653,000 ("Gross Proceeds"), net of discounts of $390,000, through the sale of 68,043 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 January 31, 1990. No further sale of Units is expected. The Partnership is engaged solely in the business of real estate investment. Therefore, 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 has invested as a limited partner in other limited partnerships ("Local Limited Partnerships") which own and operate residential apartment complexes ("Properties"), most 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") 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 6 of this Report contains other significant information with respect to such Local Limited Partnerships. As required by applicable rules, the terms of the acquisition of Local Limited Partnership interests have been described in supplements to the Prospectus and collected in three 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 Properties Owned by Local Limited Partnerships Date Interest Location Acquired ----------------------------- --------------------- --------------- Brookscrossing Atlanta, GA 06/30/89 Dorsett Apartments Philadelphia, PA 10/20/89 Willow Ridge Prescott, AZ 08/28/89 Town House Apartments Allentown, PA 12/26/89 Lancaster House North Lancaster, PA 03/13/89 Sencit Towne House Shillington, PA 12/26/89 Pinewood Terrace (1) Rusk, TX 12/27/89 Justin Place (1) Justin, TX 12/27/89 Grandview (1) Grandview, TX 12/27/89 Hampton Lane Buena Vista, GA 12/20/89 Audobon (1) Boston, MA 12/22/89 Bent Tree (1) Jackson, TX 12/27/89 Royal Crest (1) Bowie, TX 12/27/89 Nocona Terrace (1) Nocona, TX 12/27/89 Pine Manor (1) Jacksboro, TX 12/27/89 Hilltop (1) Rhome, TX 12/27/89 Valley View (1) Valley View, TX 12/27/89 Bentley Court Columbia, SC 12/26/89 Orocovix IV Orocovix, PR 12/30/89 Leawood Manor Leawood, KS 12/29/89 Pecan Hill (1) Bryson, TX 12/28/89 Carolina Woods Greensboro, NC 01/31/90 Mayfair Mansions Washington, DC 03/21/90 Oakview Square Chesterfield, MI 03/22/89 Whitehills II Howell, MI 04/21/90 Orchard View Gobles, MI 04/29/90 Lakeside Square Chicago, IL 05/17/90 Lincoln Green Old Town, ME 03/21/90 Brown Kaplan (1) Boston, MA 07/01/90 Green Tree Village Greenville, GA 07/06/90 Canfield Crossing Milan, MI 08/20/90 Findlay Market (1) Cincinnati, OH 08/15/90 Seagraves (1) Seagraves, TX 11/28/90 West Pine Findlay, PA 12/31/90 BK Apartments Jamestown, ND 12/01/90 46th & Vincennes Chicago, IL 03/29/91 Gateway Village Garden (1) Azle, TX 06/24/91
(1) 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 they reflect 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. With the exception of Leawood Manor, each 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 agreements under which such entities are organized ("Local Limited Partnership Agreements"), the Partnership depends on the Local General Partners for the management of each Local Limited Partnership. As of March 31, 2004, the following Local Limited Partnerships have a common Local General Partner or affiliated group of Local General Partners accounting for the specified percentage of the capital contributions to Local Limited Partnerships: Sencit Towne House, L.P., Allentown Towne House, L.P. and Prince Street Towers, L.P., representing 12.83%, have AIMCO Properties as Local General Partner; Green Tree Village, L.P. and Buena Vista, L.P., representing 0.69%, have Boyd Management, Inc. as Local General Partner; and Whitehills II Apartments Co., L.P., Milan Apartments Co., L.P. and Gobles LDHA, L.P., representing 1.29%, have First Centrum as Local General Partner. The Local General Partners of the remaining Local Limited Partnerships are identified in the Acquisition Reports, which are incorporated herein by reference. The Properties owned by Local Limited Partnerships in which the Partnership has invested are and will continue to be subject to competition from existing and future apartment complexes in the same areas. The continued success of the Partnership will depend on many outside factors, most of which are beyond the control of the Partnership and which cannot be predicted at this time. Such factors include general economic and real estate market conditions, both on a national basis and in those areas where the Properties are 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 adverse local conditions, such as competitive overbuilding, 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 would suppress the ability of the Local Limited Partnerships to generate operating cash flow. Since most of the Properties benefit 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 affect 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 IV Limited Partnership. The Partnership, which does not have any employees, reimburses MMA Financial, LLC ("MMA"), an affiliate of the General Partner, for certain expenses and overhead costs. A complete discussion of the management of the Partnership is set forth in Item 9 of this Report. Item 2. Properties The Partnership owns limited partnership interests in twenty-two Local Limited Partnerships which own and operate Properties, some of which benefit from some form of federal, state or local assistance programs and all of which qualify for the Tax Credits added to the Code by the Tax Reform Act of 1986. The Partnership's ownership interest in each Local Limited Partnership is 99% with the exception of Leawood Manor, which is 89%. Each of the Local Limited Partnerships has received an allocation of Tax Credits by its relevant state tax credit agency. In general, the Tax Credit runs 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 Internal Revenue Service, in order to maintain eligibility for the Tax Credit 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. To date, none of the Local Limited Partnerships have suffered an event of recapture of Tax Credits. 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) repayment terms that are based on a percentage of cash flow. The schedule on the following pages provide certain key information on the Local Limited Partnership interests acquired by the Partnership.
Capital Contributions Total Total Paid Mtge. Loans Local Limited Partnership Number of Committed at through payable at Occupancy at Property Name Apt. Units March 31, 2004 March 31, December 31, Type of March 31, 2004 Property Location 2004 2003 Subsidy* - -------------------------- ------------ ---------------- -------------- ---------------- ----------- --------------- Brookscrossing Apartments, L.P. A Limited Partnership Brookscrossing Atlanta, GA 224 $3,363,776 $3,363,776 $5,686,170 None 86% Willow Ridge Development Co. Limited Partnership Willow Ridge Prescott, AZ 134 2,125,000 2,125,000 2,898,471 None 95% Leawood Associates, L.P. A Limited Partnership Leawood Manor Leawood, KS 254 7,497,810 7,497,810 7,850,979 None 83% Dorsett Limited Partnership Dorsett Apartments Philadelphia, PA 58 2,482,107 2,482,107 Not Available Section 8 79% Allentown Towne House, L.P. Towne House Apartments Allentown, PA 160 1,589,403 1,589,403 6,015,315 Section 8 100% Prince Street Towers L.P. A Limited Partnership Lancaster House North Lancaster, PA 201 1,996,687 1,996,687 6,994,957 Section 8 98% Sencit Towne House L.P. Sencit Towne House Shillington, PA 201 1,996,687 1,996,687 4,392,663 Section 8 100%
Capital Contributions Total Total Paid Mtge. Loans Local Limited Partnership Number of Committed at through payable at Occupancy at Property Name Apt. Units March 31, 2004 March 31, December 31, Type of March 31, 2004 Property Location 2004 2003 Subsidy* - -------------------------- ------------ ---------------- -------------- ---------------- ----------- --------------- East Rusk Housing Associates, LTD (1) Pinewood Terrace Apartments Rusk, TX Gateway Housing Associates, LTD (1) Gateway Village Garden Apts. Azle, TX Justin Housing Associates, LTD (1) Justin Place Justin, TX Grandview Housing Associates, LTD (1) Grandview Grandview, TX Buena Vista Limited Partnership Hampton Lane (Buena Vista) Buena Vista, GA 24 153,474 153,474 705,693 None 100% Audobon Group, L.P. A Massachusetts Limited Partnership (1) Audobon Boston, MA Bent Tree Housing Associates (1) Bent Tree Jacksboro, TX Bowie Housing Associates, LTD (1) Royal Crest (Bowie) Bowie, TX
Capital Contributions Total Total Paid Mtge. Loans Local Limited Partnership Number of Committed at through payable at Occupancy at Property Name Apt. Units March 31, 2004 March 31, December 31, Type of March 31, 2004 Property Location 2004 2003 Subsidy* - -------------------------- ------------ ---------------- -------------- ---------------- ----------- --------------- Nocona Terrace Housing Associates, LTD (1) Nocona Terrace Nocona, TX Pine Manor Housing Associates (1) Pine Manor Jacksboro, TX Rhome Housing Associates, LTD (1) Hilltop Apartments Rhome, TX Valley View Housing Associates, LTD (1) Valley View Valley View, TX Bentley Court II Limited Partnership Bentley Court Columbia, SC 273 5,000,000 5,000,000 6,637,722 None 95% Bryson Housing Associates, LTD (1) Pecan Hill Apartments Bryson, TX Orocovix Limited Dividend Partnership, S.E. Orocovix IV Orocovix, PR 40 361,444 361,444 1,620,934 FmHA 100% Carolina Woods Associates, L.P. Carolina Woods Greensboro, NC 48 1,000,000 1,000,000 870,471 None 65%
Capital Contributions Total Total Paid Mtge. Loans Local Limited Partnership Number of Committed at through payable at Occupancy at Property Name Apt. Units March 31, 2004 March 31, December 31, Type of March 31, 2004 Property Location 2004 2003 Subsidy* - -------------------------- ------------ ---------------- -------------- ---------------- ----------- --------------- Kenilworth Associates LTD A Limited Partnership Mayfair Mansions Washington, DC 569 4,250,000 4,250,000 17,630,367 Section 8 97% Oakview Square Limited Partnership A Michigan Limited Partnership Oakview Square Chesterfield, MI 192 5,299,652 5,299,652 5,747,018 None 91% Whitehills II Apartments Company Limited Partnership Whitehills II Howell, MI 24 169,276 169,276 743,078 FmHA 92% Gobles Limited Dividend Housing Associates Orchard View Gobles, MI 24 162,022 162,022 726,327 FmHA 92% Lakeside Square Limited Partnership An Illinois Limited Partnership Lakeside Square Chicago, IL 308 3,978,813 3,978,813 4,879,420 Section 8 100% Lincoln Green Associates, A Limited Partnership Lincoln Green Old Towne, ME 30 352,575 352,575 1,640,205 Section 8 100% Brown Kaplan Limited Partnership (1) Brown Kaplan Boston, MA
Capital Contributions Total Total Paid Mtge. Loans Local Limited Partnership Number of Committed at through payable at Occupancy at Property Name Apt. Units March 31, 2004 March 31, December 31, Type of March 31, 2004 Property Location 2004 2003 Subsidy* - -------------------------- ------------ ---------------- -------------- ---------------- ----------- --------------- Green Tree Village Limited Partnership A Limited Partnership Green Tree Village Greenville, GA 24 145,437 145,437 645,659 FmHA 100% Milan Apartments Company Limited Partnership Canfield Crossing Milan, MI 32 230,500 230,500 1,000,424 FmHA 100% Findlay Market Limited Partnership (1) Findlay Market Cincinnati, OH Seagraves Housing Associates, LTD. (1) Seagraves Seagraves, TX West Pine Associates West Pine Findlay, PA 38 313,445 313,445 1,651,961 FmHA 87% B-K Apartments Limited Partnership BK Apartments Jamestowne, ND 48 290,000 290,000 735,290 Section 8 83% 46th and Vincennes Limited Partnership 46th and Vincennes Chicago, IL 28 751,120 751,120 1,314,029 Section 8 79% ------ ------------- -------------- -------------- 2,934 $ 43,509,228 $ 43,509,228 $ 80,387,153 ====== ============= ============== ============= * FmHA This subsidy, which is authorized under Section 515 of the Housing Act of 1949, can be one or a combination of many different types. For instance, FmHA may provide: 1) direct below-market-rate mortgage loans for rural rental housing; 2) mortgage interest subsidies which effectively lower the interest rate of the loan to 1%; 3) rental assistance subsidies to tenants which allow them to pay no more than 30% of their monthly income as rent with the balance paid by the federal government; or 4) a combination of any of the above. 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. Also includes comparable state subsidies. (1) The Partnership no longer has an interest in this Local Limited Partnership.
Three Local Limited Partnerships invested in by the Partnership, Leawood Associates, L.P., A Limited Partnership, Oakview Square Limited Partnership, A Michigan Limited Partnership and Bentley Court II Limited Partnership, represent more than 10% of the total capital contributions made to Local Limited Partnerships by the Partnership. The Partnership does not guarantee any of the mortgages or other debt of the Local Limited Partnerships. Duration of leases for occupancy in the Properties described above is generally six to twelve months. The Managing General Partner believes the Properties described herein are adequately covered by insurance. Additional information required under this Item, as it pertains to the Partnership, is contained in Items 1, 6 and 7 of this Report. Item 3. Legal Proceedings As previously reported, Audobon Apartments, located in Boston, Massachusetts, and Brown Kaplan, located in Dorchester, Massachusetts, previously received a subsidy under the State Housing Assistance Rental Program ("SHARP"), which is an important part of their annual income. As originally conceived, the SHARP subsidy was scheduled to decline over time to match increases in net operating income. However, increases in net operating income failed to keep pace with the decline in the SHARP subsidy. Many of the SHARP properties (including Audobon Apartments and Brown Kaplan) structured workouts that included additional subsidies in the form of Operating Deficit Loans ("ODL's"). Effective October 1, 1997, the Massachusetts Housing Finance Agency ("MHFA"), which provided the SHARP subsidies, withdrew funding of the ODL's from its portfolio of seventy-seven subsidized properties. Properties unable to make full debt service payments were declared in default by MHFA. The Managing General Partner has joined a group of SHARP property owners called the Responsible SHARP Owners, Inc. ("RSO") and is negotiating with MHFA and the Local General Partners of Audobon Apartments and Brown Kaplan to find a solution to the problems that will result from the withdrawn subsidies. On September 16, 1998, the Partnership joined with the RSO and about twenty other SHARP property owners and filed suit against the MHFA (Mass. Sup. Court Civil Action #98-4720). Among other things, the suit seeks to enforce the MHFA's previous financial commitments to the SHARP properties. The lawsuit is complex, so no predications can be made at this time as to the ultimate outcome. In the meantime, the Managing General Partner intends to continue to participate in the RSO's efforts to negotiate a resolution of this matter with MHFA. Due to the existing operating deficits and the dependence on these subsidies, Audobon Apartments and Brown Kaplan were declared in default on their mortgage obligations. As a result of the existing operating deficits, Audobon Apartments was foreclosed on March 30, 2000. Due to concerns regarding the long-term viability of Brown Kaplan, the Managing General Partner negotiated a plan with the Local General Partner that ultimately transferred the Partnership's interest in the Property to the Local General Partner. The plan included provisions to minimize the risk of recapture. Effective November 30, 1999, the Managing General Partner consummated the transfer of 49.5% of the Partnership's capital and profits in the properties to the Local General Partner. Effective December 5, 2000, the Managing General Partner excercised its right to transfer the Partnership's remaining interest in the Property to the Local General Partner. In June of 1998, the Managing General Partner was informed that the Local General Partner of Bentley Court, located in Columbia, South Carolina, was indicted on various criminal charges and pled guilty on certain counts. The Managing General Partner has replaced the Local General Partner and replaced the site management company. Furthermore, an IRS audit of the 1993 tax return for the Local Limited Partnership questioned the treatment of certain items and had findings of non-compliance in 1993. The IRS then expanded the scope of the audit to include the 1994 and 1995 tax returns. As a result, the IRS disallowed the Property's Tax Credits for each of these years. On behalf of the Partnership, the Managing General Partner retained counsel to appeal the IRS's findings in order to minimize the loss of Tax Credits. In the opinion of the Managing General Partner, there is a substantial risk that the Property and, consequently, the Partnership will suffer significant Tax Credit recapture and/or Tax Credit disallowance. However, it is not possible to quantify the risk at this time. As a result of the continuing tax issues at this Property, the Managing General Partner has decided to fully reserve the Partnership's investment in Bentley Court. On April 28, 2000, the Managing General Partner, on behalf of the Partnership, filed suit against the former Local General Partners of Bentley Court and certain affiliates of the former Local General Partner alleging mismanagement of the Local Limited Partnership. During May 2001, the former Local General Partner authorized the release of funds held in escrow in the amount of approximately $640,000 to the Partnership which was used to reimburse the Partnership for advances made in previous years. The Partnership is not a party to any other 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, 2004, there were 3,538 record holders of Units of the Partnership. Cash distributions, when made, are paid annually. No cash distributions were paid for the years ended March 31, 2004 and 2003. Item 6. Management's Discussion and Analysis of Financial Condition and Results of Operations - ----------------------------------------------------------------------------- Executive Level Overview Boston Financial Qualified Housing Tax Credits L.P. IV was formed on March 30, 1989 under the laws of the Commonwealth of Massachusetts for the primary purpose of investing, as a limited partner, in other limited partnerships which own and operate apartment complexes, most of which benefit from some form of federal, state or local assistance program 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., which serves as the Managing General Partner, and Arch Street IV L.P., which also serves as the Initial Limited Partner. The Partnership's investment portfolio consists of limited partnership interests in twenty-two Local Limited Partnerships, each of which owns and operates a multi-family apartment complex and each of which has generated Tax Credits. Since inception, the Partnership has generated Tax Credits, net of recapture, of approximately $1,287 per Limited Partnership Unit with an immaterial amount of Tax Credits expected to be generated during 2004 and 2005. Properties that receive low income housing Tax Credits must remain in compliance with rent restriction and set-aside requirements for at least 15 years from the date the property is completed. Failure to do so would result in recapture of a portion of the Property's Tax Credits. Between 2003 and continuing through 2006, the Compliance Period of the twenty-two Properties in which the Partnership has an interest will expire. The Managing General Partner has negotiated agreements that will ultimately allow the Partnership to dispose of its interest in eight Local Limited Partnerships. It is unlikely that the disposition of any of these Local Limited Partnership interests will generate any material cash distributions to the Partnership. The Managing General Partner will continue to closely monitor the operations of the Properties during the Compliance Period and will formulate disposition strategies with respect to the Partnership's remaining Local Limited Partnership interests. It is unlikely that the Managing General Partner's efforts will result in the Partnership disposing of all of its remaining Local Limited Partnership interests concurrently with the expiration of each Property's Compliance Period. The Partnership shall dissolve and its affairs shall be wound up upon the disposition of the final Local Limited Partnership interest and other assets of the Partnership. Investors will continue to be Limited Partners, receiving K-1s and quarterly and annual reports, until the Partnership is dissolved. Certain matters discussed herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Partnership intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements and are including this statement for purposes of complying with these safe harbor provisions. Although the Partnership believes the forward-looking statements are based on reasonable assumptions, the Partnership can give no assurance that their 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. Other Development During the year ended March 31, 2004, Lend Lease Real Estate Investments, Inc. sold its interest in, and association with, the General Partner and its affiliated business unit, Housing and Community Investing ("HCI"), to Municipal Mortgage and Equity, LLC ("Muni Mae"). Muni Mae is in the business of originating, servicing and investing in multi-family housing. HCI was combined with Muni Mae's Midland subsidiary to operate under the name MMA Financial, LLC. 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 Partnership accounts for its investments in Local Limited Partnerships using the equity method of accounting because the Partnership does not have control over the major operating and financial policies of the Local Limited Partnerships in which it invests. Under the equity method, the investment is carried at cost, adjusted for the Partnership's share of net income or loss and for cash distributions from the Local Limited Partnerships; equity in income or loss of the Local Limited Partnerships is included currently in the Partnership's operations. Under the equity method, a Local Limited Partnership investment will not be carried below zero. To the extent that equity in losses are incurred when the Partnership's carrying value of the respective Local Limited Partnership has been reduced to a zero balance, the losses will be suspended and offset against future income. Income from Local Limited Partnerships, where cumulative equity in losses plus cumulative distributions have exceeded the total investment in Local Limited Partnerships, will not be recorded until all of the related unrecorded losses have been offset. To the extent that a Local Limited Partnership, with a carrying value of zero distributes cash to the Partnership, that distribution is recorded as income on the books of the Partnership and is included in "Other Revenue" in the accompanying financial statements. The Partnership has implemented policies and practices for assessing potential impairment of its investments in Local Limited Partnerships. Real estate experts analyze the investments to determine if impairment indicators exist. If so, the investment is analyzed to consider the Partnership's ability to recover its carrying value. If an other than temporary impairment in carrying value exists, a provision to write down the asset to fair value will be recorded in the Partnership's financial statements. Accounting Standard Update In January 2003, the FASB issued Interpretation No. 46 ("Interpretation"), "Consolidation of Variable Interest Entities", which provides new criteria for determining whether or not consolidation accounting is required. The Interpretation, which was modified in December 2003 by FIN46R in order to address certain technical and implementation issues, requires the Partnership to consider consolidation or provide additional disclosures of financial information for Local Limited Partnerships meeting the definition of a Variable Interest Entity ("VIE"). The Partnership is required to apply the Interpretation to the Local Limited Partnerships meeting the definition of a VIE on December 31, 2004. This Interpretation would require consolidation by the Partnership of certain Local Limited Partnerships' assets and liabilities and results of operations if the Partnership determined that the Local Limited Partnership was a VIE and that the Partnership was the "Primary Beneficiary". Minority interests may be recorded for the Local Limited Partnerships' ownership share attributable to other investors. Where consolidation of Local Limited Partnerships is not required, additional financial information disclosures of Local Limited Partnerships may be required. The Partnership has assessed the potential consolidation effects of the Interpretation and preliminarily concluded that it is not the Primary Beneficiary of any of the Local Limited Partnerships that meet the definition of a VIE. Prior to the effective date of FIN 46, the Partnership is required to disclose its maximum exposure to economic and financial statement losses as a result of its involvement with the VIEs. The Partnership's exposure to economic and financial statement losses from the VIEs is limited to its investment in the VIEs ($11,964,398 at March 31, 2004). Liquidity and capital resources The Partnership had a decrease in cash and cash equivalents of $29,069 from $589,683 at March 31, 2003 to $560,614 at March 31, 2004. The decrease is mainly attributable to cash used for operations and advances to one Local Limited Partnership. These decreases are partially offset by proceeds from sales and maturities of marketable securities and cash distributions received from Local Limited Partnerships. The Managing General Partner originally designated 4% of the Gross Proceeds as Reserves, as defined in the Partnership Agreement. The Reserves were established to be used for working capital of the Partnership and contingencies related to the ownership of Local Limited Partnership interests. The Managing General Partner may increase or decrease such Reserves from time to time, as it deems appropriate. At March 31, 2004, $560,614 of cash and cash equivalents has been designated as Reserves. To date, professional fees relating to various Property issues totaling approximately $1,438,000 have been paid from Reserves. To date, Reserve funds in the amount of approximately $304,000 also have been used to make additional capital contributions to one Local Limited Partnership. In the event a Local Limited Partnership encounters operating difficulties requiring additional funds, the 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, 2004, the Partnership has advanced approximately $1,299,000 to Local Limited Partnerships to fund operating deficits. The Managing General Partner believes that the investment income earned on the Reserves, along with cash distributions received from Local Limited Partnerships, to the extent available, will be sufficient to fund the Partnership's ongoing operations. Reserves may be used to fund Partnership operating deficits, if the Managing General Partner deems funding appropriate. If Reserves are not adequate to cover the Partnership's operations, the Partnership will seek other financing sources including, but not limited to, the deferral of Asset Management Fees paid to an affiliate of the Managing General Partner or working with Local Limited Partnerships to increase cash distributions. To date, the Partnership has used approximately $880,000 of operating funds to replenish Reserves. 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, 2004, the Partnership had no contractual or other obligation to any Local Limited Partnership which had not been paid or provided for. Cash distributions No cash distributions were made to Limited Partners in the two years ended March 31, 2004. It is not expected that cash available for distribution, if any, will be significant during the 2004 calendar year. Based on the results of 2003 Property operations, the Local Limited Partnerships are not expected to distribute significant amounts of cash to the Partnership because such amounts will 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 fiscal year ended March 31, 2004 resulted in a net loss of $1,356,972, as compared to a net loss of $1,663,528 for the same period in 2003. The decrease in net loss is primarily attributable to a decrease in provision for valuation of advances to Local Limited Partnerships, a decrease in provision for valuation of investments in Local Limited Partnerships, and a decrease in general and administrative expenses, partially offset by a decrease in revenue and an increase in equity in losses of Local Limited Partnerships. The decrease in provision for valuation of advances to Local Limited Partnerships is the result of a decrease in advances made to one Local Limited Partnership. The decrease in general and administrative expenses is primarily due to decreased charges from an affiliate of the General Partner for administrative expenses necessary for the operation of the Partnership. The decrease in revenue is primarily attributable to decreased distributions from Local Limited Partnerships with carrying values of zero. The increase in equity in losses of Local Limited Partnerships is primarily due to an increase in operating expenses at several Local Limited Partnerships. Low-income housing tax credits The 2003 and 2002 Tax Credits per Unit were $1.13 and $1.27, respectively, for individual investors. The Tax Credits per Limited Partner stabilized in 1992. The credits have decreased significantly as a number of Properties have reached the end of the ten year credit period. However, because the Compliance Periods extend significantly beyond the Tax Credit periods, the Partnership intends to hold its Local Limited Partnership investments for the foreseeable future. Property discussions Many of the Properties in which the Partnership has an interest have stabilized operations and operate above break-even. Some Properties generate cash flow deficits that the Local General Partners of those Properties fund through project expense loans, subordinated loans or operating escrows. However, some Properties have had persistent operating difficulties that could either: i) have an adverse impact on the Partnership's liquidity; ii) result in their foreclosure; or iii) result in the Managing General Partner deeming it appropriate for the Partnership to dispose of its interest in the Local Limited Partnership prior to the expiration of the Compliance Period. Also, the Managing General Partner, in the normal course of the Partnership's business, may arrange for the future disposition of its interest in certain Local Limited Partnerships. The following Property discussions focus only on such Properties. As previously reported, the Local General Partner of Hampton Lane, located in Buena Vista, Georgia, and Green Tree Village, located in Greenville, Georgia, expressed to the Managing General Partner some concerns over the long-term financial health of these Properties. In response to these concerns and to reduce possible future risk, the Managing General Partner reached agreement with the Local General Partner on a plan that will ultimately transfer ownership of the Local Limited Partnerships to the Local General Partner. The plan includes provisions to minimize the risk of recapture. The Properties have generated all of their total Tax Credits. The Managing General Partner has not yet transferred any of the Partnership's interest in these Local Limited Partnerships. As previously reported, the Managing General Partner negotiated an agreement with an unaffiliated entity to have the ability to transfer its interest to an unaffiliated entity or its designee with respect to the following Local Limited Partnerships: Orocovix IV, located in Orocovix, Puerto Rico, Canfield Crossing, located in Milan, Michigan, Orchard View, located in Gobles, Michigan and Whitehills II, located in Howell, Michigan. Although these Properties do not share a common Local General Partner, they are all Rural Housing Section 515 ("FMHA") properties. The Managing General Partner has the right to put its interest in any of the Local Limited Partnerships at any time in exchange for a contingent note that grants the Partnership 50% of all future net cash receipts from such Local Limited Partnership interest. As previously reported, in June of 1998, the Managing General Partner was informed that the Local General Partner of Bentley Court, located in Columbia, South Carolina was indicted on various criminal charges and pled guilty on certain counts. The Managing General Partner replaced the Local General Partner and the site management company. Furthermore, an IRS audit of the 1993 tax return for the Local Limited Partnership questioned the treatment of certain items and had findings of non-compliance in 1993. The IRS then expanded the scope of the audit to include the 1994 and 1995 tax returns. As a result, the IRS disallowed the Property's Tax Credits for each of these years. On behalf of the Partnership, the Managing General Partner retained counsel to appeal the IRS's findings in order to minimize the loss of Tax Credits. This administrative appeal has been unsuccessful to date and the IRS continues to take the position of disallowing Tax Credits for 1993, 1994 and 1995, a total of approximately $2,562,000, or $38 per Unit, not including interest. In addition, the Local General Partner received formal notification that the IRS was expanding its claims to recapturing approximately $500,000 of Tax Credits deducted in 1990, 1991 and 1992, or $7 per Unit, not including interest. It is possible that the IRS will further expand its claims for additional amounts with respect to other years. The Managing General Partner is currently considering its options including an appeal in Federal Court and possible settlement with the IRS. Absent further litigation or a settlement, it is anticipated that the IRS will contact Limited Partners directly for any adjustments that need to be made to returns for those years. It is possible that the Managing General Partner may decide to sell the Bentley Court property to generate proceeds that may be used in connection with the tax liabilities described above. On April 28, 2000, the Managing General Partner, on behalf of the Partnership, filed suit against the former Local General Partner of Bentley Court and certain affiliates of the former Local General Partner alleging mismanagement of the Local Limited Partnership. During May 2001, the former Local General Partner authorized the release of funds held in escrow in the amount of approximately $640,000 to the Partnership that was used to reimburse the Partnership for advances made in previous years. Previously, weak market conditions had caused Bentley Court to be unable to establish a stabilized occupancy. However, recent strong occupancy has enabled the Property to operate above breakeven during 2003 with appropriate debt service coverage and working capital levels. Previously, both the Local General Partner and the Managing General Partner had advanced the Property funds to enable it to stay current on its financial obligations. As previously reported, in February 1997, due to concerns about the Property's long-term viability, the Managing General Partner consummated a transfer of 50% of the Partnership's interest in capital and profits of BK Apartments, located in Jamestown, North Dakota, to the Local General Partner. The Property generated its final year of Tax Credits in 2001 and the Partnership retained its full share of the Property's Tax Credits through such time period. The Local General Partner subsequently transferred its general partner interest to a new, nonprofit general partner. The Managing General Partner also has the right to put the Partnership's remaining interest to the new Local General Partner any time after December 1, 2001. In addition, the new Local General Partner has the right to call the remaining interest after the Compliance Period has expired. The Property currently operates above break-even. As previously reported, although the neighborhood in which 46th & Vincennes (Chicago, Illinois) is located has improved in the last few years, potential tenants are reluctant to occupy the Property due to its location and curb appeal. As a result, maintaining occupancy, and therefore revenues, continues to be an issue and debt service coverage and working capital are below appropriate levels. A site visit by the Managing General Partner found the Property in need of some minor improvements but in overall fair condition. However, the Managing General Partner believes that the Local General Partner and its affiliated management company are not adequately performing their responsibilities with respect to the Property. The Managing General Partner has expressed these concerns to the Local General Partner and will continue to closely monitor the Property's operations. Advances from the Local General Partner's Developer Escrow have enabled the Property to stay current on its loan obligations. As previously reported, during 1994, the Local General Partner of Dorsett Apartments, located in Philadelphia, Pennsylvania, transferred its interest in the Local Limited Partnership. The IRS subsequently conducted a compliance audit of the Property and took the position that the Property is subject to recapture due to non-compliance issues. The Managing General Partner disagrees with the IRS and is working to resolve the matter. In the opinion of the Managing General Partner, there is a risk that the Property and the Partnership could suffer significant Tax Credit recapture or Tax Credit disallowance. However, it is not possible to quantify the potential amount at this time. Further, the Property suffers from poor location and security issues. Vandalism caused an increase in maintenance and repair expenses and negatively affected the Property's occupancy levels and tenant profile. In addition, debt service coverage and working capital are below appropriate levels. The Managing General Partner and the Local General Partner have had discussions concerning a put option agreement that would allow the Partnership to transfer its interest in the Local Partnership to the Local General Partner for a nominal interest. The Managing General Partner has determined that there is little likelihood of any realizable cash distributable to the Partnership from a sale of the property As previously reported, the Managing General Partner negotiated an agreement to transfer the Local General Partner interest in West Pine, located in Findlay, Pennsylvania, to an affiliate of the Allegheny County Housing Authority ("ACHA") contingent upon receiving approval from the U.S. Department of Housing and Urban Development ("HUD"). HUD approval was received and the Local General Partner interest was transferred on October 17, 2003. In addition, the ACHA had informed the Managing General Partner of its interest in acquiring the Partnership's interest in the Local Limited Partnership, pending their assumption of the Local General Partner interest. Concurrent with the replacement of the Local General Partner, another ACHA affiliate acquired 30% of the Partnership's Limited Partner interest in the Local Limited Partnership. As part of this transaction, the Partnership acquired a put option for the remaining 70% exercisable for $1 upon the expiration of the Compliance Period, December 31, 2006. West Pine generated its final year of Tax Credits in 2001. 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, 2004 and 2003. Since most of the Properties benefit from some sort 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 Tax Credits. Certain properties in which the Partnership has invested are located in areas suffering from poor economic conditions. Such conditions could have an adverse effect on the rent or occupancy levels at such Properties. Nevertheless, the Managing General Partner believes that the generally high demand for below-market rate housing will tend to negate such factors. However, no assurance can be given in this regard. Item 7. 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 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure - ---------------------------------------------------------------------------- None. PART III Item 9. 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 Financial, LLC. The Managing General Partner was incorporated in December 1988. 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 Jenny Netzer Executive Vice President, Tax Credit Equity Group Michael H. Gladstone Principal, Member The other General Partner of the Partnership is Arch Street IV Limited Partnership, a Massachusetts Limited Partnership ("Arch Street IV L.P.") that was organized in December 1988. Arch Street VIII, Inc. is the managing general partner of Arch Street IV L.P. The Managing General Partner provides day-to-day management of the Partnership. Compensation is discussed in Item 10 of this Report. Such day-to-day management does not include the management of the Properties. 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. Jenny Netzer, age 48, Executive Vice President, Tax Credit Equity Group - Ms. Netzer is responsible for tax credit investment programs to institutional clients. She joined MMA Financial, LLC as a result of the Boston Financial and subsequent Lend Lease HCI acquisitions, starting with Boston Financial in 1987 and leading Boston Financial's new business initiatives and managing the firm's Asset Management division. Prior to joining Boston Financial, Ms. Netzer served as Deputy Budget Director for the Commonwealth of Massachusetts where she was responsible for the Commonwealth's health care and public pension program's budgets. Ms. Netzer also served as Assistant Controller at Yale University, was a former member of Watertown Zoning Board of Appeals, the Officer of Affordable Housing Tax Credit Coalition and a frequent speaker on affordable housing and tax credit industry issues. Ms. Netzer is a graduate of Harvard University (BA) and Harvard's Kennedy School of Government (MPP). Michael H. Gladstone, age 47, Principal, Member - Mr. Gladstone is responsible for capital transactions work in the Asset Management group of MMA Financial, LLC. He joined MMA Financial, LLC 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 lectured at Harvard University on affordable housing matters and is a member of the National Realty Committee, Cornell Real Estate Council, National Association of Real Estate Investment Managers and Massachusetts Bar. Mr. Gladstone is a graduate of Emory University (BA) and Cornell University (J.D. & MBA). Item 10. Management Remuneration Neither the directors nor officers of Arch Street VIII, Inc., nor the partners of Arch Street IV 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 11. Security Ownership of Certain Beneficial Owners and Management As of March 31, 2004, the following is the only entity known to the Partnership to be the beneficial owner of more than 5% of the Units outstanding:
Amount Title of Name and Address of Beneficially Class Beneficial Owner Owned Percent of Class - ---------- ------------------------ -------------------- -------------------- Limited AMP, Incorporated 10,000 Units 14.70% Partner P.O. Box 3608 Harrisburg, PA
The equity securities registered by the Partnership under Section 12(g) of the Act of 1934 consist of 100,000 Units, of which 68,043 were sold to the public. The remaining Units were deregistered in Post-Effective Amendment No. 3, dated February 21, 1990. 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 IV L.P. owns five (unregistered) Units not included in the 68,043 Units sold to the public. Except as described in the preceding paragraph, neither Arch Street VIII, Inc., Arch Street IV L.P., MMA Financial, LLC nor any of their executive officers, directors, principals or affiliates is the beneficial owner of any Units. None of the foregoing persons possess 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 12. 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 transaction. All such fees and distributions are more fully described in the sections entitled "Estimated Use of Proceeds", "Management Compensation and Fees" and "Profits and Losses for Tax Purposes, Tax Credits and Cash Distributions" of the Prospectus. 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 expense reimbursements made in the two years ending March 31, 2004 is presented as follows: Organizational fees and expenses In accordance with the Partnership Agreement, affiliates of the General Partner are to be reimbursed by the Partnership for organizational, offering and selling expenses advanced on behalf of the Partnership for salaries and direct expenses of certain employees of the Managing General Partner and its affiliates in connection with the registration and organization of the Partnership. Such expenses include printing expenses and legal, accounting, escrow agent and depository fees and expenses. Such expenses also include a non-accountable expense allowance for marketing expenses equal to 1% of gross offering proceeds. From inception through March 31, 2004, $8,351,601 of organization and offering fees and expenses incurred on behalf of the Partnership were paid and reimbursed to an affiliate of the Managing General Partner. Total organization and offering expenses did not exceed 5.50% of the gross offering proceeds. No payments were made or expenses reimbursed in each of two years ended March 31, 2004. Acquisition fees and expenses In accordance with the Partnership Agreement, the Partnership is 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 7.50% of the Gross Proceeds. Acquisition expenses, which included such expenses as legal fees and expenses, travel and communications expenses, costs of appraisals, accounting fees and expenses, did not exceed 1.75% of the Gross Proceeds. Acquisition fees totaling $5,080,756 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 $974,240 were incurred and have been reimbursed to an affiliate of the Managing General Partner. No payments were made or expenses reimbursed in each of the two years ended March 31, 2004. Asset management fees In accordance with the Partnership Agreement, an affiliate of the Managing General Partner is paid an annual fee for services in connection with the administration of the affairs of the Partnership. The affiliate receives $5,500 (annually adjusted by the CPI factor) per Local Limited Partnership as the annual Asset Management Fee. Fees earned in each of the two years ended March 31, 2004 are as follows:
2004 2003 ------------- ---------- - Asset management fees $ 181,341 $ 177,311
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, 2004 are as follows:
2004 2003 ------------- ---------- Salaries and benefits expense reimbursements $ 190,026 $ 243,162
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 IV Limited Partnership, receive 1% of cash distributions paid to partners. No cash distributions were paid to the General Partners in either of the two years ended March 31, 2004. 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 Financial, LLC and its affiliates during each of the two years ended March 31, 2004 is presented in Note 4 to the Financial Statements. Item 13. Exhibits, Financial Statement Schedules and Reports on Form 8-K (a) Documents filed as a part of this Report In response to this portion of Item 13, the financial statements and the auditors' reports 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 pursuant to section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification of 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 (c) Reports on Form 8-K No Reports on Form 8-K were filed during the year ended March 31, 2004. Item 14. Principal Accountant Fees and Services The Partnership paid fees for services rendered by the principal accountant for the two years end March 31, 2004 as follows:
2004 2003 --------- -------- Audit fees $ 24,605 $ 23,059 Tax fees $ 1,850 $ 2,111
No other fees were paid to the principal accountants during the two years ended March 31, 2004. CONTROLS AND PROCEDURES Controls and Procedures Based on the Partnership's evaluation within 120 days prior to filing this Form 10-KSB/A, the Partnership's director has concluded that the Partnership's disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that the Partnership files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. There have been no significant changes in the Partnership's internal controls or in other factors that could significantly affect those controls subsequent to the date of their evaluation. 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. IV By: Arch Street VIII, Inc. its Managing General Partner By: /s/Jenny Netzer Date: September 5, 2006 --------------------------------------- ----------------- Jenny Netzer Executive Vice President MMA Financial, LLC 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/Jenny Netzer Date: September 5, 2006 --------------------------------------- ----------------- Jenny Netzer Executive Vice President MMA Financial, LLC By: /s/Michael H. Gladstone Date: September 5, 2006 ----------------------------- ----------------- Michael H. Gladstone Principal MMA Financial, LLC BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) Annual Report on Form 10-KSB/A For the Year Ended March 31, 2004 Index
Page No. Report of Independent Registered Public Accounting Firm For the years ended March 31, 2004 and 2003 F-2 Financial Statements Balance Sheet - March 31, 2004 F-3 Statements of Operations - For the years ended March 31, 2004 and 2003 F-4 Statements of Changes in Partners' Equity (Deficiency) - For the years ended March 31, 2004 and 2003 F-5 Statements of Cash Flows - For the years ended March 31, 2004 and 2003 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. IV: In our opinion, the accompanying balance sheet and the related statements of operations, changes in partners' equity (deficiency) and cash flows present fairly, in all material respects, the financial position of Boston Financial Qualified Housing L.P. IV (the "Partnership") at March 31, 2004, and the results of its operations and its cash flows for each of the two years in the period ended March 31, 2004 in conformity with accounting principles generally accepted in the United States of America. 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 audits. We conducted our audits of these statements 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. An audit 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, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our previously issued report on the Partnership's balance sheet and the related statements of operations, changes in partners' equity (deficiency) and cash flows at March 31, 2004 and the results of its operations and its cash flows for each of the two years in the period ended March 31, 2004, we made reference to the reports of other auditors with respect to the financial statements of Leawood Associates, L.P. (A Limited Partnership), Oakview Square Limited Partnership, Brookscrossing Apartments, L.P., Willow Ridge Development Co. Limited Partnership, TownHouse Apartments (Allentown), Prince Street Towers L.P. (A Limited Partnership), Sencit Towne House L.P., Carolina Woods Associates L.P., and Lakeside Square Limited Partnership (An Illinois Limited Partnership) as of and for the year ended March 31, 2004 and Leawood Associates, L.P. (A Limited Partnership), Oakview Square Limited Parntership, Brookscrossing Apartments, L.P., Willow Ridge Development Co. Limited Partnership, Dorsett Limited Partnership, TownHouse Apartments (Allentown), Prince Street Towers L.P. (A Limited Partnership), Sencit Towne House L.P., Carolina Woods Associates L.P., and Lakeside Square Limited Partnership (An Illinois Limited Partnership) as of and for the year ended March 31, 2003. Those statements were audited by other auditors, whose reports thereon had been furnished to us, and our previous opinion expressed, insofar as it related to the Partnership's financial statement amounts for these entities, was based solely on the reports of the other auditors. Our current report no longer includes a reference to other auditors. /s/PricewaterhouseCoopers LLP Boston, Massachusetts June 24, 2004, except for the reference to other auditors described in the second paragraph above, as to which the date is May 18, 2006 BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) BALANCE SHEET March 31, 2004
Assets Cash and cash equivalents $ 560,614 Investments in Local Limited Partnership (Note 3) 11,964,398 Other assets 119 Total Assets ------------- $ 12,525,131 ============ Liabilities and Partners' Equity Due to affiliate (Note 4) $ 569,738 Accrued expenses 67,841 ------------- Total Liabilities 637,579 General, Initial and Investor Limited Partners' Equity 11,887,552 ------------- Total Liabilities and Partners' Equity $ 12,525,131 ============= The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) STATEMENTS OF OPERATIONS For the Years Ended March 31, 2004 and 2003
2004 2003 ------------- ------------- Revenue: Investment $ 7,931 $ 22,151 Other 82,389 109,958 ------------- ------------- Total Revenue 90,320 132,109 ------------- ------------- Expenses: Asset management fees, affiliate (Note 4) 181,341 177,311 Provision for valuation of advances to Local Limited Partnerships (Note 3) 8,720 189,671 Provision for valuation of investments in Local Limited Partnerships (Note 3) 14,349 312,911 General and administrative (includes reimbursements to affiliate in the amounts of $190,026 and $243,162 in 2004 and 2003, respectively) (Note 4) 310,150 396,108 Amortization 40,679 65,603 ------------- ------------- Total Expenses 555,239 1,141,604 ------------- ------------- Loss before equity in losses of Local Limited Partnerships (464,919) (1,009,495) Equity in losses of Local Limited Partnerships (Note 3) (892,053) (654,033) ------------- ------------- Net Loss $ (1,356,972) $ (1,663,528) ============= ============= Net Loss allocated: General Partners $ (13,570) $ (16,635) Limited Partners (1,343,402) (1,646,893) ------------- ------------- $ (1,356,972) $ (1,663,528) ============= ============= Net Loss per Limited Partner Unit (68,043 Units) $ (19.74) $ (24.20) ============= ============= The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY) For the Years Ended March 31, 2004 and 2003
Initial Investor Net General Limited Limited Unrealized Partners Partners Partners Gains Total ----------- -------- ------------- ----------- -------------- Balance at March 31, 2002 $ (442,006) $ 5,000 $ 15,345,058 $ 7,398 $ 14,915,450 ----------- --------- ------------- ----------- -------------- Comprehensive Loss: Change in net unrealized gains on marketable securities available for sale - - - (4,401) (4,401) Net Loss (16,635) - (1,646,893) - (1,663,528) ----------- --------- ------------- ----------- -------------- Comprehensive Loss (16,635) - (1,646,893) (4,401) (1,667,929) ----------- --------- ------------- ----------- -------------- Balance at March 31, 2003 (458,641) 5,000 13,698,165 2,997 13,247,521 ----------- --------- ------------- ----------- -------------- Comprehensive Loss: Change in net unrealized gains on marketable securities available for sale - - - (2,997) (2,997) Net Loss (13,570) - (1,343,402) - (1,356,972) ----------- --------- ------------- ----------- -------------- Comprehensive Loss (13,570) - (1,343,402) (2,997) (1,359,969) ----------- --------- ------------- ----------- -------------- Balance at March 31, 2004 $ (472,211) $ 5,000 $ 12,354,763 $ - $ 11,887,552 =========== ========= ============= =========== ============== The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) STATEMENTS OF CASH FLOWS For the Years Ended March 31, 2004 and 2003
2004 2003 ------------ ------------ Cash flows from operating activities: Net Loss $ (1,356,972) $ (1,663,528) Adjustments to reconcile net loss to net cash used for operating activities: Equity in losses of Local Limited Partnerships 892,053 654,033 Provision for valuation of advances to Local Limited Partnerships 8,720 189,671 Provision for valuation of investments in Local Limited Partnerships 14,349 312,911 Amortization 40,679 65,603 Net (gain) loss on sales of marketable securities (809) 459 Cash distributions included in net loss (82,379) (105,140) Increase (decrease) in cash arising from changes in operating assets and liabilities: Other assets 1,737 2,529 Due to affiliate 146,368 (136,085) Accrued expenses (1,474) (35,504) ------------ ------------ Net cash used for operating activities (337,728) (715,051) ------------ ------------ Cash flows from investing activities: Proceeds from sales and maturities of marketable securities 100,000 313,848 Advances to Local Limited Partnerships (8,720) (189,671) Cash distributions received from Local Limited Partnerships 217,379 432,643 ------------ ------------ Net cash provided by investing activities 308,659 556,820 ------------ ------------ Net decrease in cash and cash equivalents (29,069) (158,231) Cash and cash equivalents, beginning 589,683 747,914 ------------ ------------ Cash and cash equivalents, ending $ 560,614 $ 589,683 ============ ============ The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) NOTES TO THE FINANCIAL STATEMENTS 1. Organization Boston Financial Qualified Housing Tax Credits L.P. IV (the "Partnership") was formed on March 30, 1989 under the laws of the Commonwealth of Massachusetts for the primary purpose of investing, as a limited partner, in other limited partnerships ("Local Limited Partnerships") which own and operate apartment complexes, most of which benefit from some form of federal, state or local assistance program 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., which serves as the Managing General Partner, and Arch Street IV L.P., which also serves as the Initial Limited Partner. Both of the General Partners are affiliates of MMA Financial, LLC ("MMA"). The fiscal year of the Partnership ends on March 31. During the year ended March 31, 2004, Lend Lease Real Estate Investments, Inc. sold its interest in, and association with, the General Partner and its affiliated business unit, Housing and Community Investing ("HCI"), to Municipal Mortgage and Equity, LLC ("Muni Mae"). Muni Mae is in the business of originating, servicing and investing in multi-family housing. HCI was combined with Muni Mae's Midland subsidiary to operate under the name MMA Financial, LLC. 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 $67,653,000 ("Gross Proceeds"), net of discounts of $390,000, through the sale of 68,043 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 January 31, 1990. Under the terms of the Partnership Agreement, the Partnership originally designated 4.00% 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, 2004, the Managing General Partner has designated $560,614 of cash and cash equivalents 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 Partner has an obligation to fund deficits in its capital account, subject to limits set forth in 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. At times, cash and cash equivalents exceed federally insurable limits. The Partnership mitigates this risk by investing in major financial institutions. Investments in Local Limited Partnerships The Partnership accounts for its investments in Local Limited Partnerships using the equity method of accounting because the Partnership does not have control over the major operating and financial policies of the Local Limited Partnerships in which it invests. Under the equity method, the investment is carried at cost, adjusted for the BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) NOTES TO THE FINANCIAL STATEMENTS (continued) 2. Significant Accounting Policies (continued) Investments in Local Limited Partnerships (continued) Partnership's share of net income or loss and for cash distributions from the Local Limited Partnerships; equity in income or loss of the Local Limited Partnerships is included currently in the Partnership's operations. Under the equity method, a Local Limited Partnership investment will not be carried below zero. To the extent that equity in losses are incurred when the Partnership's carrying value of the respective Local Limited Partnership has been reduced to a zero balance, the losses will be suspended and offset against future income. Income from Local Limited Partnerships, where cumulative equity in losses plus cumulative distributions have exceeded the total investment in Local Limited Partnerships, will not be recorded until all of the related unrecorded losses have been offset. To the extent that a Local Limited Partnership, with a carrying value of zero distributes cash to the Partnership, that distribution is recorded as income on the books of the Partnership and is included in "Other Revenue" in the accompanying financial statements. The 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 elected to report results of the Local Limited Partnerships on a 90 day lag basis, because the Local Limited Partnerships report their results on a calendar year basis. Accordingly, the financial information of the Local Limited Partnerships included in the accompanying financial statements is as of December 31, 2003 and 2002. The Partnership, as a limited partner in the Local Limited Partnerships, is subject to risks inherent in the ownership of property, which is 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. The Partnership has implemented policies and practices for assessing potential impairment of its investments in Local Limited Partnerships. Real estate experts analyze the investments to determine if impairment indicators exist. If so, the investment is analyzed to consider the Partnership's ability to recover its carrying value. If an other than temporary impairment in carrying value exists, a provision to write down the asset to fair value will be recorded in the Partnership's financial statements. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) NOTES TO THE FINANCIAL STATEMENTS (continued) 2. Significant Accounting Policies (continued) 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 the obligation of the partners of the Partnership. 3. Investments in Local Limited Partnerships The Partnership has limited partnership interests in twenty-two Local Limited Partnerships, which were organized for the purpose of owning and operating multi-family housing complexes, all of which are government-assisted. The Partnership's ownership interest in each Local Limited Partnership is 99% with the exception of Leawood Manor, which is 89%. The Partnership may have negotiated or may negotiate options with the local general partners to purchase or sell the Partnership's interests in the Properties at the end of the tax credit compliance periods at nominal prices. In the event that Properties are sold to third parties, proceeds will be distributed according to the terms of each Local Limited Partnership agreement. The following is a summary of investments in Local Limited Partnerships at March 31, 2004:
Capital contributions and advances paid to Local Limited Partnerships and purchase price paid to withdrawing partners of Local Limited Partnerships $ 43,948,728 Cumulative equity in losses of Local Limited Partnerships (excluding cumulative unrecognized losses of $12,072,037) (26,783,739) Cumulative cash distributions received from Local Limited Partnerships (4,015,490) ------------- Investments in Local Limited Partnerships before adjustments 13,149,499 Excess investment cost over the underlying assets acquired: Acquisition fees and expenses 3,613,837 Cumulative amortization of acquisition fees and expenses (1,145,592) ------------- Investments in Local Limited Partnerships before impairment allowance 15,617,744 Impairment allowance on investments in Local Limited Partnerships (3,653,346) ------------- Investments in Local Limited Partnerships $ 11,964,398 =============
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) NOTES TO THE FINANCIAL STATEMENTS (continued) 3. Investments in Local Limited Partnerships (continued) For the year ended March 31, 2004, the Partnership advanced $8,720 to one of the Local Limited Partnerships, all of which was impaired. The Partnership has recorded an impairment allowance for its investments in certain Local Limited Partnerships in order to appropriately reflect the estimated net realizable value of these investments. Summarized combined financial information of the Local Limited Partnerships in which the Partnership has invested as of December 31, 2003 and 2002 (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, 2003 2002 ---------------- --------------- Assets: Investment property, net $ 83,933,647 $ 92,273,782 Other assets 13,266,609 13,594,812 ---------------- --------------- Total Assets $ 97,200,256 $ 105,868,594 ================ =============== Liabilities and Partners' Equity: Mortgage notes payable $ 80,387,153 $ 84,118,540 Other liabilities 13,297,812 14,052,087 ---------------- --------------- Total Liabilities 93,684,965 98,170,627 ---------------- --------------- Partnership's equity (deficiency) (40,545) 3,170,362 Other partners' equity 3,555,836 4,527,605 ---------------- --------------- Total Partners' Equity 3,515,291 7,697,967 ---------------- --------------- Total Liabilities and Partners' Equity $ 97,200,256 $ 105,868,594 ================ =============== Summarized Income Statements - for the years ended December 31, Rental and other revenue $ 22,910,691 $ 22,639,831 ---------------- --------------- Expenses: Operating 13,605,883 13,300,991 Interest 5,801,253 5,711,939 Depreciation and amortization 5,188,853 5,199,828 ---------------- --------------- Total Expenses 24,595,989 24,212,758 ---------------- --------------- Net Loss $ (1,685,298) $ (1,572,927) ================ =============== = Partnership's share of Net Loss $ (2,327,304) $ (2,022,679) ================ =============== = Other partners' share of Net Loss $ 642,006 $ 449,752 ================ ===============
For the years ended March 31, 2004 and 2003, the Partnership has not recognized $1,438,042 and $1,368,646, respectively, 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 $2,791 were included in losses recognized in the year ended March 31, 2004. The Partnership's deficiency as reflected by the Local Limited Partnerships of ($40,545) differs from the Partnership's investments in Local Limited Partnerships before adjustments of $13,149,499 primarily because of cumulative unrecognized losses as described above, advances to Local Limited Partnerships which the Partnership included in investments in Local Limited Partnerships and differences in the accounting treatment of miscellaneous items. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) NOTES TO THE FINANCIAL STATEMENTS (continued) 4. Transactions with Affiliates An affiliate of the Managing General Partner receives the base amount of $5,500 (annually adjusted by the CPI factor) per Local Limited Partnership as the annual Asset Management Fee for administering the affairs of the Partnership. Included in the Statements of Operations are Asset Management Fees of $181,341 and $177,311 for the years ended March 31, 2004 and 2003, respectively. As of March 31, 2004, $277,307 is payable to an affiliate of the Managing General Partner for Asset Management Fees. During the years ended March 31, 2004 and 2003, Asset Management Fees of $125,000 and $443,656, respectively, were paid out of available cash flow. 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, 2004 and 2003 is $190,026 and $243,162, respectively that the Partnership has incurred for these expenses. As of March 31, 2004, $292,431 is payable to an affiliate of the Managing General Partner for salaries and benefits. 5. Federal Income Taxes The following schedule reconciles the reported financial statement net loss for the fiscal years ended March 31, 2004 and 2003 to the net loss reported on the Form 1065, U.S. Partnership Return of Income for the years ended December 31, 2003 and 2002:
2004 2003 ------------- ------------- Net Loss per financial statements $ (1,356,972) $ (1,663,528) Equity in losses of Local Limited Partnerships for tax purposes in excess of equity in losses for financial reporting purposes (553,730) (647,504) Equity in losses of Local Limited Partnerships not recognized for financial reporting purposes (1,435,251) (1,368,646) Adjustment to reflect March 31 fiscal year end to December 31 tax year end (4,618) 139,204 Amortization not deductible for tax purposes 40,679 65,603 Provision for valuation of advances to Local Limited Partnerships not deductible for tax purposes 8,720 189,671 Provision for valuation of investments in Local Limited Partnerships not deductible for tax purposes 14,349 312,911 Cash distributions included in net loss for financial reporting purposes (82,379) (174,567) ------------- ------------- Net Loss per tax return $ (3,369,202) $ (3,146,856) ============= =============
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) NOTES TO THE FINANCIAL STATEMENTS (continued) 5. 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, 2004 and December 31, 2003, respectively are as follows:
Financial Reporting Tax Purposes Purposes Differences Investments in Local Limited Partnerships $ 11,964,398 $ 3,056,509 $ 8,907,889 ============== ============= ============== Other assets $ 560,733 $ 8,849,604 $ (8,288,871) ============== ============= ============= Liabilities $ 637,579 $ 542,689 $ 94,890 ============== ============= =============
The differences in the assets and liabilities of the Partnership for financial reporting and tax purposes are primarily attributable to: (i) the cumulative equity in losses from Local Limited Partnerships for tax purposes is approximately $13,818,000 greater than for financial reporting purposes, including approximately $12,072,000 of losses the Partnership has not recognized relating to Local Limited Partnerships whose cumulative equity in losses exceeded its total investment; (ii) the Partnership has provided an impairment allowance of approximately $3,653,000 against its investments in Local Limited Partnerships for financial reporting purposes; (iii) approximately $1,146,000 of amortization has been deducted for financial reporting purposes only; and (iv) organizational and offering costs of approximately $8,352,000 have been capitalized for tax purposes and charged to Limited Partners' equity for financial reporting purposes. 6. Accounting Standard Update In January 2003, the FASB issued Interpretation No. 46 ("Interpretation"), "Consolidation of Variable Interest Entities", which provides new criteria for determining whether or not consolidation accounting is required. The Interpretation, which was modified in December 2003 by FIN46R in order to address certain technical and implementation issues, requires the Partnership to consider consolidation or provide additional disclosures of financial information for Local Limited Partnerships meeting the definition of a Variable Interest Entity ("VIE"). The Partnership is required to apply the Interpretation to the Local Limited Partnerships meeting the definition of a VIE on December 31, 2004. This Interpretation would require consolidation by the Partnership of certain Local Limited Partnerships' assets and liabilities and results of operations if the Partnership determined that the Local Limited Partnership was a VIE and that the Partnership was the "Primary Beneficiary". Minority interests may be recorded for the Local Limited Partnerships' ownership share attributable to other investors. Where consolidation of Local Limited Partnerships is not required, additional financial information disclosures of Local Limited Partnerships may be required. The Partnership has assessed the potential consolidation effects of the Interpretation and preliminarily concluded that it is not the Primary Beneficiary of any of the Local Limited Partnerships that meet the definition of a VIE. Prior to the effective date of FIN 46, the Partnership is required to disclose its maximum exposure to economic and financial statement losses as a result of its involvement with the VIEs. The Partnership's exposure to economic and financial statement losses from the VIEs is limited to its investment in the VIEs ($11,964,398 at March 31, 2004). EX-31 2 exh31qh4rev.txt EXH31QH4REV BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) EXHIBIT 31.1 I, Jenny Netzer, certify that: 1. I have reviewed this annual report on Form 10-KSB/A of Boston Financial Qualified Housing Tax Credits L.P. IV; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4. The small business issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act rules 13a-15(e) and 15d-15(e)) for the small business issuer and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of small business issuer's board of directors (or persons performing the equivalents functions): (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. Date: September 5, 2006 /s/Jenny Netzer ------------------------------------ Jenny Netzer Principal Executive Officer Arch Street VIII, Inc. as Managing General Partner of Boston Financial Qualified Housing Tax Credits L.P. IV BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) EXHIBIT 31.2 I, Jenny Netzer, certify that: 1. I have reviewed this annual report on Form 10-KSB/A of Boston Financial Qualified Housing Tax Credits L.P. IV; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4. The small business issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act rules 13a-15(e) and 15d-15(e)) for the small business issuer and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of small business issuer's board of directors (or persons performing the equivalents functions): (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. Date: September 5, 2006 /s/Jenny Netzer ------------------------------------ Jenny Netzer Principal Financial Officer Arch Street VIII, Inc. as Managing General Partner of Boston Financial Qualified Housing Tax Credits L.P. IV EX-32 3 exh32qh4rev.txt EXH32QH4REV BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Boston Financial Qualified Housing Tax Credits L.P. IV (the "Partnership") on Form 10-KSB/A for the year ended March 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, the Principal Executive Officer and Principal Financial Officer, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: 1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership. /s/Jenny Netzer ------------------------------------ Jenny Netzer Principal Executive Officer and Principal Financial Officer Arch Street VIII, Inc. as Managing General Partner of Boston Financial Qualified Housing Tax Credits L.P. IV Date: September 5, 2006 A signed original of this written statement required by section 906 has been provided to the Partnership and will be retained by the Partnership and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----