10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2012

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: 000-28370

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2

California	33-0596399
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

17782 Sky Park Circle, Irvine, CA92614

( Address of principle executive offices )

(714) 622-5565

( Telephone Number )

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

Yes [X] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [  ] Accelerated filer [  ] Non-accelerated filer [X] Smaller reporting company [  ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [  ] No [X]

 WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2

(A California Limited Partnership)

INDEX TO FORM 10-Q

For the Quarterly Period Ended September 30, 2012

PART I. FINANCIAL INFORMATION
	Item 1. Financial Statements
	Condensed Balance Sheets As of September 30, 2012 and March 31, 2012	F-1
	Condensed Statements of Operations For the Three and Six Months Ended September 30, 2012 and 2011	F-2
	Condensed Statement of Partners’ Equity (Deficit) For the Six Months Ended September 30, 2012	F-3
	Condensed Statements of Cash Flows For the Six Months Ended September 30, 2012 and 2011	F-4
	Notes to Condensed Financial Statements	F-5
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	3
	Item 3. Quantitative and Qualitative Disclosures about Market Risks	5
	Item 4. Controls and Procedures	5
PART II. OTHER INFORMATION
	Item 1. Legal Proceedings	6
	Item 1A. Risk Factors	6
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	6
	Item 3. Defaults Upon Senior Securities	6
	Item 4. Mine Safety Disclosures	6
	Item 5. Other Information	6
	Item 6. Exhibits	6
	Signatures	7

2

 WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2

(A California Limited Partnership)

CONDENSED BALANCE SHEETS

(Unaudited)

	September 30, 2012			March 31, 2012
ASSETS
Cash	$	71,188		$	44,664
Investments in Local Limited Partnerships, net (Note 2)		-			-
Other assets		5,251			34,109
Total Assets	$	76,439		$	78,773
LIABILITIES AND PARTNERS’ EQUITY (DEFICIT)
Liabilities:
Accrued fees and expenses due to General Partner and affiliates (Note 3)	$	314,187		$	532,918
Total Liabilities		314,187			532,918
Partners’ Equity (Deficit):
General Partner		163,966			161,802
Limited Partners (20,000 Partnership Units authorized; 15,600 Partnership Units issued and outstanding)		(401,714	)		(615,947	)
Total Partners’ Equity (Deficit)		(237,748	)		(454,145	)
Total Liabilities and Partners’ Equity (Deficit)	$	76,439		$	78,773

See accompanying notes to condensed financial statements

F - 3

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2

(A California Limited Partnership)

CONDENSED STATEMENTS OF OPERATIONS

For the Three and Six Months Ended September 30, 2012 and 2011

(Unaudited)

	2012						2011
	Three Months			Six Months			Three Months			Six Months
Reporting fees	$	2,000		$	4,517		$	-		$	2,850
Distribution income		-			-			5,905			5,905
Total operating income		2,000			4,517			5,905			8,755
Operating expenses:
Asset management fees (Note 3)		8,814			19,539			10,725			21,450
Legal and accounting fees		7,631			89,379			3,251			16,435
Outsourcing expenses		4,555			6,379			4,660			4,660
Write off of other assets		6,950			6,950			-			-
Other		1,110			2,201			2,793			4,607
Total operating expenses		29,060			124,448			21,429			47,152
Loss from operations		(27,060	)		(119,931	)		(15,524	)		(38,397	)
Gain on sale of Local Limited Partnerships		59,017			336,321			-			74,633
Interest income		5			7			3			5
Net income (loss)	$	31,962		$	216,397		$	(15,521	)	$	36,241
Net income (loss) allocated to:
General Partner	$	320		$	2,164		$	(155	)	$	362
Limited Partners	$	31,642		$	214,233		$	(15,366	)	$	35,879
Net income (loss) per Partnership Unit	$	2		$	14		$	(1	)	$	2
Outstanding weighted Partnership Units		15,600			15,600			15,600			15,600

See accompanying notes to condensed financial statements

F - 4

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2

(A California Limited Partnership)

CONDENSED STATEMENT OF PARTNERS’ EQUITY (DEFICIT)

For the Six Months Ended September 30, 2012

(Unaudited)

	General		Limited
	Partner		Partners			Total
Partners’ equity (deficit) at March 31, 2012	$	161,802	$	(615,947	)	$	(454,145	)
Net income		2,164		214,233			216,397
Partners’ equity (deficit) at September 30, 2012	$	163,966		(401,714	)		(237,748	)

See accompanying notes to condensed financial statements

F - 5

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2

(A California Limited Partnership)

CONDENSED STATEMENTS OF CASH FLOWS

For the Six Months Ended September 30, 2012 and 2011

(Unaudited)

	2012			2011
Cash flows from operating activities:
Net income	$	216,397		$	36,241
Adjustments to reconcile net income to net cash used in operating activities:
Increase (decrease) in accrued fees and expenses due to General Partner and affiliates		54,413			(15,801	)
Increase in other assets		(3,916	)		(14,236	)
Write off of other assets		6,950			-
Increase in due from affiliate		-			(17,294	)
Gain on sale of Local Limited Partnerships		(336,321	)		(74,633	)
Net cash used in operating activities		(62,477	)		(85,723	)
Cash flows from investing activities:
Proceeds from sale of Local Limited Partnerships		89,001			78,261
Net cash provided by investing activities		89,001			78,261
Net increase (decrease) in cash		26,524			(7,462	)
Cash, beginning of period		44,664			42,250
Cash, end of period	$	71,188		$	34,788
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Taxes paid	$	-		$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES
Gain on sale of Local Limited Partnerships was increased and accrued fees and expenses due to the General Partner and affiliates was decreased for sales proceeds paid directly to Associates	$	273,144		$	-

See accompanying notes to condensed financial statements

F - 6

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2

(A California Limited Partnership)

NOTES TO CONDENSED FINANCIAL STATEMENTS

For the Quarterly Period Ended September 30, 2012

(Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General

The accompanying condensed unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q for quarterly reports under Section 13 or 15(d) of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2013. For further information, refer to the financial statements and footnotes thereto included in the Partnership’s annual report on Form 10-K for the fiscal year ended March 31, 2012.

Organization

WNC Housing Tax Credit Fund IV, L.P., Series 2 (the “Partnership”) is a California Limited Partnership formed under the laws of the State of California on September 27, 1993. The Partnership was formed to acquire limited partnership interests in other limited partnerships (“Local Limited Partnerships”) which own multi-family housing complexes (“Housing Complexes”) that are eligible for Federal low income housing tax credits (“Low Income Housing Tax Credits”). The local general partners (the “Local General Partners”) of each Local Limited Partnership retain responsibility for maintaining, operating and managing the Housing Complex. Each Local Limited Partnership is governed by its agreement of limited partnership (the “Local Limited Partnership Agreement”).

The general partner of the Partnership is WNC Tax Credit Partners IV, L.P. (the “General Partner”). The general partner of the General Partner is WNC & Associates, Inc. (“Associates”). The chairman and the president of Associates own all of the outstanding stock of Associates. The business of the Partnership is conducted primarily through the General Partner, as the Partnership has no employees of its own.

The Partnership shall continue in full force and effect until December 31, 2050, unless terminated prior to that date, pursuant to the partnership agreement or law.

The financial statements include only activity relating to the business of the Partnership, and do not give effect to any assets that the partners may have outside of their interests in the Partnership, or to any obligations, including income taxes, of the partners.

The Partnership Agreement authorized the sale of up to 20,000 units of limited partnership interest (“Partnership Units”) at $1,000 per Partnership Unit. The offering of Partnership Units has concluded, and 15,600 Partnership Units representing subscriptions in the amount of $15,241,000, net of volume discounts of $359,000, had been accepted. The General Partner has a 1% interest in operating profits and losses, taxable income and losses, cash available for distribution from the Partnership and Low Income Housing Tax Credits of the Partnership. The investors (the “Limited Partners”) in the Partnership will be allocated the remaining 99% of these items in proportion to their respective investments.

F - 7

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2

(A California Limited Partnership)

NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED

For the Quarterly Period Ended September 30, 2012

(Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

The proceeds from the disposition of any of the Local Limited Partnership Housing Complexes will be used first to pay debts and other obligations per the respective Local Limited Partnership Agreement. Any remaining proceeds will then be paid to the Partnership. The sale of a Housing Complex may be subject to other restrictions and obligations. Accordingly, there can be no assurance that a Local Limited Partnership will be able to sell its Housing Complex. Even if it does so, there can be no assurance that any significant amounts of cash will be distributed to the Partnership. Should such distributions occur, the Limited Partners will be entitled to receive distributions equal to their capital contributions and their return on investment (as defined in the Partnership Agreement) and the General Partner would then be entitled to receive proceeds equal to their capital contributions from the remainder. Any additional sale or refinancing proceeds will be distributed 90% to the Limited Partners (in proportion to their respective investments) and 10% to the General Partner.

Risks and Uncertainties

An investment in the Partnership and the Partnership’s investments in Local Limited Partnerships and their Housing Complexes are subject to risks. These risks may impact the tax benefits of an investment in the Partnership, and the amount of proceeds available for distribution to the Limited Partners, if any, on liquidation of the Partnership’s investments. Some of those risks include the following:

The Low Income Housing Tax Credits rules are extremely complicated. Noncompliance with these rules results in the loss of future Low Income Housing Tax Credits and the fractional recapture of Low Income Housing Tax Credits already taken. In most cases the annual amount of Low Income Housing Tax Credits that an individual can use is limited to the tax liability due on the person’s last $25,000 of taxable income. The Local Limited Partnerships may be unable to sell the Housing Complexes at a price which would result in the Partnership realizing cash distributions or proceeds from the transaction. Accordingly, the Partnership may be unable to distribute any cash to its Limited Partners. Low Income Housing Tax Credits may be the only benefit from an investment in the Partnership.

The Partnership has invested in a limited number of Local Limited Partnerships. Such limited diversity means that the results of operation of each single Housing Complex will have a greater impact on the Partnership. With limited diversity, poor performance of one Housing Complex could impair the Partnership’s ability to satisfy its investment objectives. Each Housing Complex is subject to mortgage indebtedness. If a Local Limited Partnership failed to pay its mortgage, it could lose its Housing Complex in foreclosure. If foreclosure were to occur during the first 15 years (the “Compliance Period”), the loss of any remaining future Low Income Housing Tax Credits, a fractional recapture of prior Low Income Housing Tax Credits, and a loss of the Partnership’s investment in the Housing Complex would occur. The Partnership is a limited partner or a non-managing member of each Local Limited Partnership. Accordingly, the Partnership will have very limited rights with respect to management of the Local Limited Partnerships. The Partnership will rely totally on the Local General Partners. Neither the Partnership’s investments in Local Limited Partnerships, nor the Local Limited Partnerships’ investments in Housing Complexes, are readily marketable. To the extent the Housing Complexes receive government financing or operating subsidies, they may be subject to one or more of the following risks: difficulties in obtaining tenants for the Housing Complexes; difficulties in obtaining rent increases; limitations on cash distributions; limitations on sales or refinancing of Housing Complexes; limitations on transfers of interests in Local Limited Partnerships; limitations on removal of Local General Partners; limitations on subsidy programs; and possible changes in applicable regulations. Uninsured casualties could result in loss of property and Low Income Housing Tax Credits and recapture of Low Income Housing Tax Credits previously taken. The value of real estate is subject to risks from fluctuating economic conditions, including employment rates, inflation, tax, environmental, land use and zoning policies, supply and demand of similar Housing Complexes, and neighborhood conditions, among others.

F - 8

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2

(A California Limited Partnership)

NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED

For the Quarterly Period Ended September 30, 2012

(Unaudited)

NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

The ability of Limited Partners to claim tax losses from the Partnership is limited. The IRS may audit the Partnership or a Local Limited Partnership and challenge the tax treatment of tax items. The amount of Low Income Housing Tax Credits and tax losses allocable to Limited Partners could be reduced if the IRS were successful in such a challenge. The alternative minimum tax could reduce tax benefits from an investment in the Partnership. Changes in tax laws could also impact the tax benefits from an investment in the Partnership and/or the value of the Housing Complexes.

All of the Low Income Housing Tax Credits anticipated to be realized from the Local Limited Partnerships have been realized. The Partnership does not anticipate being allocated any Low Income Housing Tax Credits from the Local Limited Partnerships in the future. Until the Local Limited Partnerships have completed the Compliance Period, risks exist for potential recapture of prior Low Income Housing Tax Credits received.

No trading market for the Partnership Units exists or is expected to develop. Limited Partners may be unable to sell their Partnership Units except at a discount and should consider their Partnership Units to be a long-term investment. Individual Limited Partners will have no recourse if they disagree with actions authorized by a vote of the majority of Limited Partners.

The Partnership currently has insufficient working capital to fund its operations. Associates has agreed to continue providing advances sufficient enough to fund the operations and working capital requirements of the Partnership through November 30, 2013.

Anticipated future and existing cash resources of the Partnership are not sufficient to pay existing liabilities of the Partnership. However, substantially all of the existing liabilities of the Partnership are payable to the General Partner and/or its affiliates. Though the amounts payable to the General Partner and/or its affiliates are contractually currently payable, the Partnership anticipates that the General Partner and/or its affiliates will not require the payment of these contractual obligations until capital reserves are in excess of the aggregate of then existing contractual obligations and then anticipated future foreseeable obligations of the Partnership. The Partnership would be adversely affected should the General Partner and/or its affiliates demand current payment of the existing contractual obligations and or suspend services for this or any other reason.

Exit Strategy

The Compliance Period for a Housing Complex is generally 15 years following construction or rehabilitation completion. Associates was one of the first in the industry to offer syndicated investments in Low Income Housing Tax Credits. The initial programs have completed their Compliance Periods.

Upon the sale of a Local Limited Partnership Interest or Housing Complex after the end of the Compliance Period, there would be no recapture of Low Income Housing Tax Credits. A sale prior to the end of the Compliance Period could result in recapture if certain conditions are not met. Nine of the Housing Complexes have completed their 15-year Compliance Period.

With that in mind, the General Partner is continuing its review of the Housing Complexes. The review considers many factors, including extended use requirements (such as those due to mortgage restrictions or state compliance agreements), the condition of the Housing Complexes, and the tax consequences to the Limited Partners from the sale of the Housing Complexes.

F - 9

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2

(A California Limited Partnership)

NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED

For the Quarterly Period Ended September 30, 2012

(Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

Upon identifying those Housing Complexes with the highest potential for a successful sale, refinancing or syndication, the Partnership expects to proceed with efforts to liquidate them. The objective is to maximize the Limited Partners’ return wherever possible and, ultimately, to wind down the Partnership. Local Limited Partnership interests may be disposed of any time by the General Partner in its discretion. While liquidation of the Housing Complexes continues to be evaluated, the dissolution of the Partnership was not imminent as of September 30, 2012.

Upon management of the Partnership identifying a Local Limited Partnership for disposition, costs incurred by the Partnership in preparation for the disposition are deferred. Upon the sale of the Local Limited Partnership interest, the Partnership nets the costs that had been deferred against the proceeds from the sale in determining the gain or loss on sale of the Local Limited Partnership. Deferred disposition costs are included in other assets on the balance sheets.

On February 24, 2012, the Partnership filed preliminary consent solicitation materials with the Securities and Exchange Commission (“SEC”) regarding the adoption of a plan of liquidation. Definitive materials were filed with the SEC and disseminated to Limited Partners on March 12, 2012. The Partnership sought approval to have a formal plan of liquidation of selling its limited partnership interests or selling the underlying Housing Complexes of each of the Local Limited Partnerships. On May 8, 2012, the Partnership received the majority vote in favor of the plan for dissolution. Therefore, the Partnership is engaging third party appraisers to appraise several or all of the Local Limited Partnerships in this Partnership. The appraisal is one of the preliminary steps that need to be completed in order to move forward with the approved liquidation plan. The expense incurred for the appraisals, or any other disposition related expenses the Partnership incurs, are being capitalized and will remain on the balance sheet until the respective Local Limited Partnership is sold. At the time of disposition the capitalized costs will be netted with any cash proceeds that are received in order to calculate the gain or loss on the disposition.

As of March 31, 2012, the Partnership sold its Local Limited Partnership Interest in E. W., Crossing II Limited Dividend Housing Association LP, Comanche Retirement Village Ltd, Apartment of Waukee L. P. II, Mountain view Apartments, LP, Chadwick Limited Partnership, Broken Bow Apartments I, L.P. and Sidney Apartments I, L.P.

F - 10

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2

(A California Limited Partnership)

NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED

For the Quarterly Period Ended September 30, 2012

(Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

The following table reflects the 10 Local Limited Partnership interests that were sold during the six months ended September 30, 2012:

Local Limited Partnership	Debt at 12/31/11		Appraisal Value		Date of sale		Proceeds from sale		Sales related expenses		Gain on sale
Autumn Trace Associates	$	1,102,000	$	1,300,000		6/1/2012	$	197,764	$	2,953	$	194,811
Hickory Lane Associates		568,000		355,000		6/1/2012		22,450		2,297		20,153
Honeysuckle Court Associates		1,111,000		670,000		6/1/2012		22,450		2,963		19,487
Walnut Turn Associates, Ltd		658,000		480,000		6/1/2012		22,450		2,297		20,153
Southcove Associates		1,421,000		1,000,000		6/30/2012		25,000		2,300		22,700
Hereford Seniors Community, Ltd		751,000		405,000		8/24/2012		9,375		2,369		7,006
Palestine Seniors Community, Ltd		1,053,000		475,000		8/24/2012		9,375		3,119		6,256
Garland Street, LP		647,000		320,000		8/31/2012		21,953		3,303		18,650
Pecan Grove, LP		1,033,000		500,000		8/31/2012		21,953		1,854		20,099
Lamesa Seniors Community, Ltd		635,000		455,000		8/24/2012		9,375		2,369		7,006

All Local Limited Partnerships sold during the six months ended September 30, 2012 had reached the end of the Compliance Period. Therefore, no risk of credit recapture exists.

F - 11

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2

(A California Limited Partnership)

NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED

For the Quarterly Period Ended September 30, 2012

(Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

The following table represents the anticipated use of the cash proceeds from the disposition of the 10 Local Limited Partnerships that were disposed of during the six months ended September 30, 2012.

Local Limited Partnership	Sale Proceeds		Payment of accrued asset management fees		Reimburse GP or affiliates for expenses		Remaining cash to remain in reserve for future expenses
Autumn Trace Associates	$	197,764	$	129,235	$	65,529	$	3,000
Hickory Lane  Associates		22,450		19,450		-		3,000
Honeysuckle Court Associates		22,450		19,450		-		3,000
Walnut Turn  Associates, Ltd		22,450		19,450		-		3,000
Southcove  Associates		25,000		20,000		-		5,000
Hereford Seniors Community, Ltd		9,375		8,375		-		1,000
Palestine Seniors Community, Ltd		9,375		8,375		-		1,000
Garland Street, LP		21,953		8,476		12,477		1,000
Pecan Grove, LP		21,953		8,477		12,476		1,000
Lamesa Seniors Community, Ltd		9,375		8,375		-		1,000

No distributions will be made to the Limited Partners as a result of these dispositions. Each of the Local Limited Partnerships had completed its Compliance Period so there is no risk of recapture to the investors in the Partnership.

F - 12

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2

(A California Limited Partnership)

NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED

For the Quarterly Period Ended September 30, 2012

(Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

Method of Accounting for Investments in Local Limited Partnerships

The Partnership accounts for its investments in Local Limited Partnerships using the equity method of accounting, whereby the Partnership adjusts its investment balance for its share of the Local Limited Partnerships’ results of operations and for any contributions made and distributions received. The Partnership reviews the carrying amount of an individual investment in a Local Limited Partnership for possible impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of such investment may not be recoverable. Recoverability of such investment is measured by the estimated value derived by management, generally consisting of the sum of the remaining future Low Income Housing Tax Credits estimated to be allocable to the Partnership and the estimated residual value to the Partnership. If an investment is considered to be impaired, the Partnership reduces the carrying value of its investment in any such Local Limited Partnership. The accounting policies of the Local Limited Partnerships, generally, are expected to be consistent with those of the Partnership. Costs incurred by the Partnership in acquiring the investments are capitalized as part of the investment account and were amortized over 30 years (see Note 2).

“Equity in losses of Local Limited Partnerships” for the periods ended September 30, 2012 and 2011 has been recorded by the Partnership. Management’s estimate for the three and six-month periods is based on either actual unaudited results reported by the Local Limited Partnerships or historical trends in the operations of the Local Limited Partnerships. Equity in losses of Local Limited Partnerships allocated to the Partnership are not recognized to the extent that the investment balance would be adjusted below zero. If the Local Limited Partnerships report net income in future years, the Partnership will resume applying the equity method only after its share of such net income equals the share of net losses not recognized during the period(s) the equity method was suspended (see Note 2).

In accordance with the accounting guidance for the consolidation of variable interest entities, the Partnership determines when it should include the assets, liabilities, and activities of a variable interest entity (VIE) in its financial statements, and when it should disclose information about its relationship with a VIE. The analysis that must be performed to determine which entity should consolidate a VIE focuses on control and economic factors. A VIE is a legal structure used to conduct activities or hold assets, which must be consolidated by a company if it is the primary beneficiary because it has (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (2) the obligation to absorb losses or receive benefits that could potentially be significant to the VIE. If multiple unrelated parties share such power, as defined, no party will be required to consolidate the VIE. Further, the guidance requires continual reconsideration of the primary beneficiary of a VIE.

Based on this guidance, the Local Limited Partnerships in which the Partnership invests meet the definition of a VIE because the owners of the equity at risk in these entities do not have the power to direct their operations. However, management does not consolidate the Partnership’s interests in these VIEs, as it is not considered to be the primary beneficiary since it does not have the power to direct the activities that are considered most significant to the economic performance of these entities. The Partnership currently records the amount of its investment in these Local Limited Partnerships as an asset on its balance sheets, recognizes its share of partnership income or losses in the statements of operations, and discloses how it accounts for material types of these investments in its financial statements. The Partnership’s balance in investment in Local Limited Partnerships, plus the risk of recapture of tax credits previously recognized on these investments, represents its maximum exposure to loss. The Partnership’s exposure to loss on these Local Limited Partnerships is mitigated by the condition and financial performance of the underlying Housing Complexes as well as the strength of the Local General Partners and their guarantee against credit recapture to the investors in the Partnership.

F - 13

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2

(A California Limited Partnership)

NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED

For the Quarterly Period Ended September 30, 2012

(Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

Distributions received by the Partnership are accounted for as a reduction of the investment balance. Distributions received after the investment has reached zero are recognized as income. As of September 30, 2012 and March 31, 2012, all of the investment balances had reached zero.

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 and 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 materially differ from those estimates.

Cash and Cash Equivalents

The Partnership considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. As of September 30, 2012 and March 31, 2012, the Partnership had no cash equivalents.

Reporting Comprehensive Income

The Partnership had no items of other comprehensive income for all periods presented.

Income Taxes

The Partnership has elected to be treated as a pass-through entity for income tax purposes and, as such, is not subject to income taxes. Rather, all items of taxable income, deductions and tax credits are passed through to and are reported by its owners on their respective income tax returns. The Partnership’s federal tax status as a pass-through entity is based on its legal status as a partnership. Accordingly, the Partnership is not required to take any tax positions in order to qualify as a pass-through entity. The Partnership is required to file and does file tax returns with the Internal Revenue Service and other taxing authorities. Accordingly, these financial statements do not reflect a provision for income taxes and the Partnership has no other tax positions which must be considered for disclosure.

Net Loss Per Partnership Unit

Net loss per Partnership Unit includes no dilution and is computed by dividing loss allocated to Limited Partners by the weighted average number of Partnership Units outstanding during the period. Calculation of diluted net loss per Partnership Unit is not required.

Revenue Recognition

The Partnership is entitled to receive reporting fees from the Local Limited Partnerships. The intent of the reporting fees is to offset (in part) administrative costs incurred by the Partnership in corresponding with the Local Limited Partnerships. Due to the uncertainty of the collection of these fees, the Partnership recognizes reporting fees as collections are made.

F - 14

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2

(A California Limited Partnership)

NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED

For the Quarterly Period Ended September 30, 2012

(Unaudited)

NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS

As of September 30, 2012 and March 31, 2012, the Partnership owns Local Limited Partnership interests in 4 and 14 Local Limited Partnerships, respectively. As of September 30, 2012 and March 31, 2012, these Local Limited Partnership’s own one Housing Complex consisting of an aggregate of 277 and 653 apartment units, respectively. The Local General Partners of the Local Limited Partnerships manage the day to day operations of the entities. Significant Local Limited Partnership business decisions require approval from the Partnership. The Partnership, as a Limited Partner, is generally entitled to 99%, as specified in the Local Limited Partnership governing agreements, of the operating profits and losses, taxable income and losses, and Low Income Housing Tax Credits of the Local Limited Partnerships.

Selected financial information for the six months ended September 30, 2012 and 2011 from the unaudited combined condensed financial statements of the Local Limited Partnerships in which the partnership has invested is as follows:

COMBINED CONDENSED STATEMENTS OF OPERATIONS
	2012			2011
Revenue	$	832,000		$	1,969,000
Expenses:
Interest expense		124,000			304,000
Depreciation and amortization		190,000			524,000
Operating expenses		541,000			1,440,000
Total expenses		855,000			2,268,000
Net loss	$	(23,000	)		(299,000	)
Net loss allocable to the Partnership	$	(23,000	)	$	(296,000	)
Net loss recorded by the Partnership	$	-		$	-

F - 15

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2

(A California Limited Partnership)

NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED

For the Quarterly Period Ended September 30, 2012

(Unaudited)

NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS, continued

Certain Local Limited Partnerships have incurred significant operating losses and/or have working capital deficiencies. In the event these Local Limited Partnerships continue to incur significant operating losses, additional capital contributions by the Partnership may be require to sustain operations of such Local Limited Partnerships. If additional capital contributions are not made when they are required, the Partnership’s investments in certain of such Local Limited Partnerships could be impaired, and the loss and recapture of the related Low Income Housing Tax Credits could occur.

NOTE 3 - RELATED PARTY TRANSACTIONS

Under the terms of the Partnership Agreement, the Partnership has paid or is obligated to the General Partner or its affiliates for the following items:

(a) An annual asset management fee equal to the greater amount of (i) $2,000 for each apartment complex, or (ii) 0.275% of gross proceeds. In either case, the fee will be decreased or increased annually based on changes to the Consumer Price Index. However, in no event will the maximum amount exceed 0.2% of the Invested Assets of the Partnership, as defined. “Invested Assets” means the sum of the Partnership’s investment in Local Limited Partnership interests and the Partnership’s allocable share of mortgage loans on and other debt related to the Housing Complexes owned by such Local Limited Partnerships. Fees of $19,539 and $21,450 were incurred during the six months ended September 30, 2012 and 2011, respectively. The Partnership paid the General Partner and its affiliates $249,663 and $35,131 of those fees during the six months ended September 30, 2012 and 2011, respectively.

(b) Subordinated Disposition Fee. A subordinated disposition fee is an amount equal to 1% of the sales price of real estate sold. Payment of this fee is subordinated to the Limited Partners receiving a preferred return of 16% through December 31, 2003 and 6% thereafter (as defined in the Partnership Agreement) and is payable only if the General Partner or its affiliates render services in the sales effort. No such fees were earned during the periods presented.

(c) The Partnership reimburses the General Partner or its affiliates for operating expenses incurred by the Partnership and paid for by the General Partner or its affiliates on behalf of the Partnership. Operating expense reimbursements were $90,482 and $59,352 during the six months ended September 30, 2012 and 2011, respectively.

The accrued fees and expenses due to the General Partner and affiliates consist of the following at:

	September 30, 2012		March 31, 2012
Expenses paid by the General Partner or affiliates on behalf of the Partnership	$	12,716	$	1,322
Asset management fee payable		301,471		531,596
Total	$	314,187	$	532,918

The General Partner and/or its affiliates do not anticipate that these accrued fees will be paid until such time as capital reserves are in excess of future foreseeable working capital requirements of the Partnership.

F - 16

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

Forward-Looking Statements

With the exception of the discussion regarding historical information, this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other discussions elsewhere in this Form 10-Q contain forward looking statements. Such statements are based on current expectations subject to uncertainties and other factors which may involve known and unknown risks that could cause actual results of operations to differ materially from those projected or implied. Further, certain forward-looking statements are based upon assumptions about future events which may not prove to be accurate.

Risks and uncertainties inherent in forward looking statements include, but are not limited to, the Partnership’s future cash flows and ability to obtain sufficient financing, level of operating expenses, conditions in the Low Income Housing Tax Credit property market and the economy in general, as well as legal proceedings. Historical results are not necessarily indicative of the operating results for any future period.

Subsequent written and oral forward looking statements attributable to the Partnership or persons acting on its behalf are expressly qualified in their entirety by cautionary statements in this Form 10-Q and in other reports filed with the SEC.

The following discussion and analysis compares the results of operations for the three and six months ended September 30, 2012 and 2011, and should be read in conjunction with the condensed unaudited financial statements and accompanying notes included within this report.

Financial Condition

The Partnership’s assets at September 30, 2012 consisted of $71,000 in cash, $5,000 in other assets. Liabilities at September 30, 2012 consisted of $314,000 of accrued fees and expenses due to General Partner and affiliates.

Results of Operations

Three Months Ended September 30, 2012 Compared to Three Months Ended September 30, 2011. The Partnership’s net income for the three months ended September 30, 2012 was $32,000, reflecting an increase of $48,000 from the $(16,000) net loss for the three months ended September 30, 2011. The change was primarily due to an increase of $59,000 in gain on sale of Local Limited Partnerships for the three months ended September 30, 2012. The Partnership is in the disposition phase but the number of dispositions and gains recorded will vary from period to period depending on the economic conditions and the market for the properties in the specific locations. There was a $(4,000) increase in accounting and legal fees for the three months ended September 30, 2012 due to the timing of the accounting work performed. There was a $2,000 decrease of asset management fees for the three months ended September 30, 2012. These fees are calculated based on the invested assets. As Local Limited Partnerships are sold, the invested assets decrease, thereby decreasing the asset management fees. The reporting fees increased by $2,000 and distribution income decreased by $(6,000) for the three months ended September 30, 2012. Local Limited Partnerships pay reporting fees and distribution to the Partnership when the Local Limited Partnerships’ cash flow will allow for the payment. There was a $(7,000) increase in write off of other assets for the three months ended September 30, 2012. Capitalized costs from the potential disposition of Local Limited Partnership were expensed due to the length of time it has taken to dispose of the properties.

Six Months Ended September 30, 2012 Compared to Six Months Ended September 30, 2011. The Partnership’s net income for the six months ended September 30, 2012 was $216,000, reflecting an increase of $180,000 from the $36,000 net income for the six months ended September 30, 2011. The increase in net income was partially due to a$261,000 increase in gain on sale of Local Limited Partnerships for the six months ended September 30, 2012. The Partnership is in the disposition phase but the number of dispositions and gains recorded will vary from period to period depending on the economic conditions and the market for the properties in the specific locations. There was a $(73,000) increase in legal and accounting fees due to the timing of the accounting work performed. There was a $2,000 decrease of asset management fees for the six months ended September 30, 2012. These fees are calculated based on the invested assets. As Local Limited Partnerships are sold, the invested assets decrease, thereby decreasing the asset management fees. The reporting fees increased by $2,000 and the distribution income decreased by $(6,000) for the six months ended September 30, 2012. Local Limited Partnerships pay reporting fees and distributions to the Partnership when the Local Limited Partnerships’ cash flow will allow for the payment. The outsourcing expenses increased by $(2,000) for the six months ended September 30, 2012 due to the fact that the Partnership outsourced a portion of the data entry management to increase efficiency. There was a $(7,000) increase in write off of other assets for the six month ended September 30, 2012. Capitalized costs from the potential disposition of Local Limited Partnership were expensed due to the length of time it has taken to dispose of the properties.

3

Liquidity and Capital Resources

Six Months Ended September 30, 2012 Compared to Six Months Ended September 30, 2011. The net cash provided during the six months ended September 30, 2012 was $27,000 compared to net cash used during the six months ended September 30, 2011 of $(7,000). There was an increase of $(27,000) in cash paid for accrued asset management fees in addition to an decrease of $34,000 in cash paid to the General Partner or an affiliate for reimbursements of operating expenses which were paid on behalf of the Partnership. During the six months ended September 30, 2012, the Partnership received $89,000 in proceeds from the disposition of its Local Limited Partnerships compared to $78,000 of sales proceeds received during the six months ended September 30, 2011.

During the six months ended September 30, 2012 accrued payables, which consist primarily of asset management fees to the General Partner or affiliates, decreased by $219,000. The General Partner does not anticipate that these accrued fees will be paid in full until such time as capital reserves are in excess of future foreseeable working capital requirements of the Partnership.

The Partnership expects its future cash flows, together with its net available assets at September 30, 2012, to be insufficient to meet all currently foreseeable future cash requirements. Associates has agreed to continue providing advances sufficient enough to fund the operations and working capital requirements of the Partnership through November 30, 2013.

Recent Accounting Changes

In June 2009, the Financial Accounting Standards Board (“FASB”) issued an amendment to the accounting and disclosure requirements for the consolidation of VIEs. The amended guidance modified the consolidation model to one based on control and economics, and replaced quantitative primary beneficiary analysis with a qualitative analysis. The primary beneficiary of a VIE will be the entity that has (1) the power to direct the activities of the VIE that most significantly impact the VIEs economic performance and (2) the obligation to absorb losses or receive benefits that could potentially be significant to the VIE. If multiple unrelated parties share such power, as defined, no party will be required to consolidate the VIE. Further, the amended guidance requires continual reconsideration of the primary beneficiary of a VIE and adds an additional reconsideration event for determination of whether an entity is a VIE. Additionally, the amendment requires enhanced and expanded disclosures around VIEs. This amendment was effective for fiscal years beginning after November 15, 2009. The adoption of this guidance on April 1, 2010 did not have a material effect on the Partnership’s financial statements.

In May 2011, the FASB issued an update to existing guidance related to fair value measurements on how to measure fair value and what disclosures to provide about fair value measurements. For fair value measurements categorized as level 3, a reporting entity should disclose quantitative information of the unobservable inputs and assumptions, a description of the valuation processes and annual periods beginning after December 15, 2011. The adoption of this update did not materially affect the Partnership’s condensed financial statements.

4

Item 3.  Quantitative and Qualitative Disclosures About Market Risks

NOT APPLICABLE

Item 4.  Controls and Procedures

(a) Disclosure controls and procedures

As of the end of the period covered by this report, the Partnership’s General Partner, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer of Associates, carried out an evaluation of the effectiveness of the Partnership’s “disclosure controls and procedures” as defined in Securities Exchange Act of 1934 Rule 13a-15 and 15d-15. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, the Partnership’s disclosure controls and procedures were not effective to ensure that material information required to be disclosed in the Partnership’s periodic report filings with SEC is recorded, processed, summarized and reported within the time period specified by the SEC’s rules and forms, consistent with the definition of “disclosure controls and procedures” under the Securities Exchange Act of 1934.

The Partnership must rely on the Local Limited Partnerships to provide the Partnership with certain information necessary to the timely filing of the Partnership’s periodic reports. Factors in the accounting at the Local Limited Partnerships have caused delays in the provision of such information during past reporting periods, and resulted in the Partnership’s inability to file its periodic reports in a timely manner.

Once the Partnership has received the necessary information from the Local Limited Partnerships, the Chief Executive Officer and the Chief Financial Officer of Associates believe that the material information required to be disclosed in the Partnership’s periodic report filings with SEC is effectively recorded, processed, summarized and reported, albeit not in a timely manner. Going forward, the Partnership will use the means reasonably within its power to impose procedures designed to obtain from the Local Limited Partnerships the information necessary to the timely filing of the Partnership’s periodic reports.

(b) Changes in internal controls

There were no changes in the Partnership’s internal control over financial reporting that occurred during the quarter ended September 30, 2012 that materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

5

Part II.	Other Information
Item 1.	Legal Proceedings
Item 1A.	Risk Factors
	No material changes in risk factors as previously disclosed in the Partnership’s Form 10-K.
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds
	NONE
Item 3	Defaults Upon Senior Securities
	NONE
Item 4.	Mine Safety Disclosures
	NOT APPLICABLE
Item 5	Other Information
	NONE
Item 6.	Exhibits

31.1	Certification of the Principal Executive Officer pursuant to Rule 13a-14 and 15d-14, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith)
31.2	Certification of the Principal Financial Officer pursuant to Rule 13a-14 and 15d-14, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith)
32.1	Section 1350 Certification of the Chief Executive Officer. (filed herewith)
32.2	Section 1350 Certification of the Chief Financial Officer. (filed herewith)
101	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Condensed Balance Sheets at September 30, 2012 and March 31, 2012, (ii) the Condensed Statements of Operations for the three-month and six-months periods ended September 30, 2012 and September 30, 2011, (iii) the Condensed Statements of Cash Flows for the six months ended September 30, 2012 and September 30, 2011 and (iv) the Notes to Condensed Financial Statements.
	Exhibits 32.1, 32.2 and 101 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. Such exhibits shall not be deemed incorporated by reference into any filing under the Securities Act of 1933 or Securities Exchange Act of 1934.

6

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
By:	WNC Tax Credit Partners IV, L.P. General Partner
By:	/s/ Wilfred N. Cooper, Jr.
	Wilfred N. Cooper, Jr.
	President and Chief Executive Officer of WNC & Associates, Inc.
	Date: November 13, 2012
By:	/s/ Melanie R. Wenk
	Melanie R. Wenk
	Vice-President - Chief Financial Officer of WNC & Associates, Inc.
	Date: November 13, 2012

7

EX-31.1

EXHIBIT 31-1

CERTIFICATIONS

I, Wilfred N. Cooper, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of WNC Housing Tax Credit Fund IV, L.P., Series 2;

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 registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant 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 registrant, 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’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

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent 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 registrant’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 registrant’s internal control over financial reporting.

Date: November 13, 2012

/s/ Wilfred N. Cooper, Jr.

President and Chief Executive Officer of WNC & Associates, Inc.

EX-31.2

EXHIBIT 31-2

CERTIFICATIONS

I, Melanie R. Wenk, certify that:

1. I have reviewed this quarterly report on Form 10-Q of WNC Housing Tax Credit Fund IV, L.P., Series 2;

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 registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant 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 registrant, 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’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

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent 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 registrant’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 registrant’s internal control over financial reporting.

Date: November 13, 2012

/s/ Melanie R. Wenk

Vice-President - Chief Financial Officer of WNC & Associates, Inc.

EX-32.1

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 Quarterly Report on Form 10-Q of WNC Housing Tax Credit Fund IV L.P., Series 2(the “Partnership”) for the quarter ended September 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), and pursuant to 18 U.S.C., section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, I, Wilfred N. Cooper, Jr., President and Chief Executive Officer of WNC & Associates, Inc., general partner of the Partnership’s general partner, hereby certify 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 result of operations of the Partnership.

/s/ WILFRED N. COOPER, JR.

Wilfred N. Cooper, Jr.

President and Chief Executive Officer of WNC & Associates, Inc.

Date: November 13, 2012

EX-32.2

EXHIBIT 32-2

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 Quarterly Report on Form 10-Q of WNC Housing Tax Credit Fund IV L.P., Series 2 (the “Partnership”) for the quarter ended September 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), and pursuant to 18 U.S.C., section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, I, Melanie R. Wenk , Vice President-Chief Financial Officer of WNC & Associates, Inc., general partner of the Partnership’s general partner, hereby certify 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 result of operations of the Partnership.

/s/ MELANIE R. WENK

Melanie R. Wenk

Vice President-Chief Financial Officer of WNC & Associates, Inc.

Date: November 13, 2012

XML

Related Party Transactions

6 Months Ended

Sep. 30, 2012

Related Party Transactions [Abstract]

Related Party Transactions

NOTE 3 - RELATED PARTY TRANSACTIONS

Under the terms of the Partnership Agreement, the Partnership has paid or is obligated to the General Partner or its affiliates for the following items:

(a) An annual asset management fee equal to the greater amount of (i) $2,000 for each apartment complex, or (ii) 0.275% of gross proceeds. In either case, the fee will be decreased or increased annually based on changes to the Consumer Price Index. However, in no event will the maximum amount exceed 0.2% of the Invested Assets of the Partnership, as defined. “Invested Assets” means the sum of the Partnership’s investment in Local Limited Partnership interests and the Partnership’s allocable share of mortgage loans on and other debt related to the Housing Complexes owned by such Local Limited Partnerships. Fees of $19,539 and $21,450 were incurred during the six months ended September 30, 2012 and 2011, respectively. The Partnership paid the General Partner and its affiliates $249,663 and $35,131 of those fees during the six months ended September 30, 2012 and 2011, respectively.

(b) Subordinated Disposition Fee. A subordinated disposition fee is an amount equal to 1% of the sales price of real estate sold. Payment of this fee is subordinated to the Limited Partners receiving a preferred return of 16% through December 31, 2003 and 6% thereafter (as defined in the Partnership Agreement) and is payable only if the General Partner or its affiliates render services in the sales effort. No such fees were earned during the periods presented.

(c) The Partnership reimburses the General Partner or its affiliates for operating expenses incurred by the Partnership and paid for by the General Partner or its affiliates on behalf of the Partnership. Operating expense reimbursements were $90,482 and $59,352 during the six months ended September 30, 2012 and 2011, respectively.

The accrued fees and expenses due to the General Partner and affiliates consist of the following at:

	September 30, 2012		March 31, 2012
Expenses paid by the General Partner or affiliates on behalf of the Partnership	$	12,716	$	1,322
Asset management fee payable		301,471		531,596
Total	$	314,187	$	532,918

The General Partner and/or its affiliates do not anticipate that these accrued fees will be paid until such time as capital reserves are in excess of future foreseeable working capital requirements of the Partnership.

XML

Investments in Local Limited Partnerships

6 Months Ended

Sep. 30, 2012

Investments [Abstract]

Investments In Local Limited Partnerships

NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS

As of September 30, 2012 and March 31, 2012, the Partnership owns Local Limited Partnership interests in 4 and 14 Local Limited Partnerships, respectively. As of September 30, 2012 and March 31, 2012, these Local Limited Partnership’s own one Housing Complex consisting of an aggregate of 277 and 653 apartment units, respectively. The Local General Partners of the Local Limited Partnerships manage the day to day operations of the entities. Significant Local Limited Partnership business decisions require approval from the Partnership. The Partnership, as a Limited Partner, is generally entitled to 99%, as specified in the Local Limited Partnership governing agreements, of the operating profits and losses, taxable income and losses, and Low Income Housing Tax Credits of the Local Limited Partnerships.

Selected financial information for the six months ended September 30, 2012 and 2011 from the unaudited combined condensed financial statements of the Local Limited Partnerships in which the partnership has invested is as follows:

COMBINED CONDENSED STATEMENTS OF OPERATIONS
	2012			2011
Revenue	$	832,000		$	1,969,000
Expenses:
Interest expense		124,000			304,000
Depreciation and amortization		190,000			524,000
Operating expenses		541,000			1,440,000
Total expenses		855,000			2,268,000
Net loss	$	(23,000	)		(299,000	)
Net loss allocable to the Partnership	$	(23,000	)	$	(296,000	)
Net loss recorded by the Partnership	$	-		$	-

Certain Local Limited Partnerships have incurred significant operating losses and/or have working capital deficiencies. In the event these Local Limited Partnerships continue to incur significant operating losses, additional capital contributions by the Partnership may be require to sustain operations of such Local Limited Partnerships. If additional capital contributions are not made when they are required, the Partnership’s investments in certain of such Local Limited Partnerships could be impaired, and the loss and recapture of the related Low Income Housing Tax Credits could occur.

XML

Condensed Balance Sheets (Unaudited) (USD $)	Sep. 30, 2012	Mar. 31, 2012
ASSETS
Cash	$ 71,188	$ 44,664
Investments in Local Limited Partnerships, net (Notes 2)
Other assets	5,251	34,109
Total Assets	76,439	78,773
Liabilities
Accrued fees and expenses due to General Partner and affiliates (Note 3)	314,187	532,918
Total Liabilities	314,187	532,918
Partners' Equity (Deficit)
General Partner	163,966	161,802
Limited Partners (20,000 Partnership Units authorized; 15,600 Partnership Units issued and outstanding)	(401,714)	(615,947)
Total Partners' Equity (Deficit)	(237,748)	(454,145)
Total Liabilities and Partners' Equity (Deficit)	$ 76,439	$ 78,773

XML

Condensed Statements of Cash Flows (Unaudited) (USD $)	6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash flows from operating activities:
Net income	$ 216,397	$ 36,241
Adjustments to reconcile net income to net cash used in operating activities:
Increase (decrease) in accrued fees and expenses due to General Partner and affiliates	54,413	(15,801)
Increase in other assets	(3,916)	(14,236)
Write off of other assets	6,950
Increase in due from affiliate		(17,294)
Gain on sale of Local Limited Partnerships	(336,321)	(74,633)
Net cash used in operating activities	(62,477)	(85,723)
Cash flows from investing activities:
Proceeds from sale of Local Limited Partnerships	89,001	78,261
Net cash provided by investing activities	89,001	78,261
Net increase (decrease) in cash	26,524	(7,462)
Cash, beginning of period	44,664	42,250
Cash, end of period	71,188	34,788
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Taxes paid
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Gain on sale of Local Limited Partnerships was increased and accrued fees and expenses due to the General Partner and affiliates was decreased for sales proceeds paid directly to Associates	$ 273,114

XML

Summary of Significant Accounting Policies

6 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General

The accompanying condensed unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q for quarterly reports under Section 13 or 15(d) of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2013. For further information, refer to the financial statements and footnotes thereto included in the Partnership’s annual report on Form 10-K for the fiscal year ended March 31, 2012.

Organization

WNC Housing Tax Credit Fund IV, L.P., Series 2 (the “Partnership”) is a California Limited Partnership formed under the laws of the State of California on September 27, 1993. The Partnership was formed to acquire limited partnership interests in other limited partnerships (“Local Limited Partnerships”) which own multi-family housing complexes (“Housing Complexes”) that are eligible for Federal low income housing tax credits (“Low Income Housing Tax Credits”). The local general partners (the “Local General Partners”) of each Local Limited Partnership retain responsibility for maintaining, operating and managing the Housing Complex. Each Local Limited Partnership is governed by its agreement of limited partnership (the “Local Limited Partnership Agreement”).

The general partner of the Partnership is WNC Tax Credit Partners IV, L.P. (the “General Partner”). The general partner of the General Partner is WNC & Associates, Inc. (“Associates”). The chairman and the president of Associates own all of the outstanding stock of Associates. The business of the Partnership is conducted primarily through the General Partner, as the Partnership has no employees of its own.

The Partnership shall continue in full force and effect until December 31, 2050, unless terminated prior to that date, pursuant to the partnership agreement or law.

The financial statements include only activity relating to the business of the Partnership, and do not give effect to any assets that the partners may have outside of their interests in the Partnership, or to any obligations, including income taxes, of the partners.

The Partnership Agreement authorized the sale of up to 20,000 units of limited partnership interest (“Partnership Units”) at $1,000 per Partnership Unit. The offering of Partnership Units has concluded, and 15,600 Partnership Units representing subscriptions in the amount of $15,241,000, net of volume discounts of $359,000, had been accepted. The General Partner has a 1% interest in operating profits and losses, taxable income and losses, cash available for distribution from the Partnership and Low Income Housing Tax Credits of the Partnership. The investors (the “Limited Partners”) in the Partnership will be allocated the remaining 99% of these items in proportion to their respective investments.

The proceeds from the disposition of any of the Local Limited Partnership Housing Complexes will be used first to pay debts and other obligations per the respective Local Limited Partnership Agreement. Any remaining proceeds will then be paid to the Partnership. The sale of a Housing Complex may be subject to other restrictions and obligations. Accordingly, there can be no assurance that a Local Limited Partnership will be able to sell its Housing Complex. Even if it does so, there can be no assurance that any significant amounts of cash will be distributed to the Partnership. Should such distributions occur, the Limited Partners will be entitled to receive distributions equal to their capital contributions and their return on investment (as defined in the Partnership Agreement) and the General Partner would then be entitled to receive proceeds equal to their capital contributions from the remainder. Any additional sale or refinancing proceeds will be distributed 90% to the Limited Partners (in proportion to their respective investments) and 10% to the General Partner.

Risks and Uncertainties

An investment in the Partnership and the Partnership’s investments in Local Limited Partnerships and their Housing Complexes are subject to risks. These risks may impact the tax benefits of an investment in the Partnership, and the amount of proceeds available for distribution to the Limited Partners, if any, on liquidation of the Partnership’s investments. Some of those risks include the following:

The Low Income Housing Tax Credits rules are extremely complicated. Noncompliance with these rules results in the loss of future Low Income Housing Tax Credits and the fractional recapture of Low Income Housing Tax Credits already taken. In most cases the annual amount of Low Income Housing Tax Credits that an individual can use is limited to the tax liability due on the person’s last $25,000 of taxable income. The Local Limited Partnerships may be unable to sell the Housing Complexes at a price which would result in the Partnership realizing cash distributions or proceeds from the transaction. Accordingly, the Partnership may be unable to distribute any cash to its Limited Partners. Low Income Housing Tax Credits may be the only benefit from an investment in the Partnership.

The Partnership has invested in a limited number of Local Limited Partnerships. Such limited diversity means that the results of operation of each single Housing Complex will have a greater impact on the Partnership. With limited diversity, poor performance of one Housing Complex could impair the Partnership’s ability to satisfy its investment objectives. Each Housing Complex is subject to mortgage indebtedness. If a Local Limited Partnership failed to pay its mortgage, it could lose its Housing Complex in foreclosure. If foreclosure were to occur during the first 15 years (the “Compliance Period”), the loss of any remaining future Low Income Housing Tax Credits, a fractional recapture of prior Low Income Housing Tax Credits, and a loss of the Partnership’s investment in the Housing Complex would occur. The Partnership is a limited partner or a non-managing member of each Local Limited Partnership. Accordingly, the Partnership will have very limited rights with respect to management of the Local Limited Partnerships. The Partnership will rely totally on the Local General Partners. Neither the Partnership’s investments in Local Limited Partnerships, nor the Local Limited Partnerships’ investments in Housing Complexes, are readily marketable. To the extent the Housing Complexes receive government financing or operating subsidies, they may be subject to one or more of the following risks: difficulties in obtaining tenants for the Housing Complexes; difficulties in obtaining rent increases; limitations on cash distributions; limitations on sales or refinancing of Housing Complexes; limitations on transfers of interests in Local Limited Partnerships; limitations on removal of Local General Partners; limitations on subsidy programs; and possible changes in applicable regulations. Uninsured casualties could result in loss of property and Low Income Housing Tax Credits and recapture of Low Income Housing Tax Credits previously taken. The value of real estate is subject to risks from fluctuating economic conditions, including employment rates, inflation, tax, environmental, land use and zoning policies, supply and demand of similar Housing Complexes, and neighborhood conditions, among others.

The ability of Limited Partners to claim tax losses from the Partnership is limited. The IRS may audit the Partnership or a Local Limited Partnership and challenge the tax treatment of tax items. The amount of Low Income Housing Tax Credits and tax losses allocable to Limited Partners could be reduced if the IRS were successful in such a challenge. The alternative minimum tax could reduce tax benefits from an investment in the Partnership. Changes in tax laws could also impact the tax benefits from an investment in the Partnership and/or the value of the Housing Complexes.

All of the Low Income Housing Tax Credits anticipated to be realized from the Local Limited Partnerships have been realized. The Partnership does not anticipate being allocated any Low Income Housing Tax Credits from the Local Limited Partnerships in the future. Until the Local Limited Partnerships have completed the Compliance Period, risks exist for potential recapture of prior Low Income Housing Tax Credits received.

No trading market for the Partnership Units exists or is expected to develop. Limited Partners may be unable to sell their Partnership Units except at a discount and should consider their Partnership Units to be a long-term investment. Individual Limited Partners will have no recourse if they disagree with actions authorized by a vote of the majority of Limited Partners.

The Partnership currently has insufficient working capital to fund its operations. Associates has agreed to continue providing advances sufficient enough to fund the operations and working capital requirements of the Partnership through November 30, 2013.

Anticipated future and existing cash resources of the Partnership are not sufficient to pay existing liabilities of the Partnership. However, substantially all of the existing liabilities of the Partnership are payable to the General Partner and/or its affiliates. Though the amounts payable to the General Partner and/or its affiliates are contractually currently payable, the Partnership anticipates that the General Partner and/or its affiliates will not require the payment of these contractual obligations until capital reserves are in excess of the aggregate of then existing contractual obligations and then anticipated future foreseeable obligations of the Partnership. The Partnership would be adversely affected should the General Partner and/or its affiliates demand current payment of the existing contractual obligations and or suspend services for this or any other reason.

Exit Strategy

The Compliance Period for a Housing Complex is generally 15 years following construction or rehabilitation completion. Associates was one of the first in the industry to offer syndicated investments in Low Income Housing Tax Credits. The initial programs have completed their Compliance Periods.

Upon the sale of a Local Limited Partnership Interest or Housing Complex after the end of the Compliance Period, there would be no recapture of Low Income Housing Tax Credits. A sale prior to the end of the Compliance Period could result in recapture if certain conditions are not met. Nine of the Housing Complexes have completed their 15-year Compliance Period.

With that in mind, the General Partner is continuing its review of the Housing Complexes. The review considers many factors, including extended use requirements (such as those due to mortgage restrictions or state compliance agreements), the condition of the Housing Complexes, and the tax consequences to the Limited Partners from the sale of the Housing Complexes.

Upon identifying those Housing Complexes with the highest potential for a successful sale, refinancing or syndication, the Partnership expects to proceed with efforts to liquidate them. The objective is to maximize the Limited Partners’ return wherever possible and, ultimately, to wind down the Partnership. Local Limited Partnership interests may be disposed of any time by the General Partner in its discretion. While liquidation of the Housing Complexes continues to be evaluated, the dissolution of the Partnership was not imminent as of September 30, 2012.

Upon management of the Partnership identifying a Local Limited Partnership for disposition, costs incurred by the Partnership in preparation for the disposition are deferred. Upon the sale of the Local Limited Partnership interest, the Partnership nets the costs that had been deferred against the proceeds from the sale in determining the gain or loss on sale of the Local Limited Partnership. Deferred disposition costs are included in other assets on the balance sheets.

On February 24, 2012, the Partnership filed preliminary consent solicitation materials with the Securities and Exchange Commission (“SEC”) regarding the adoption of a plan of liquidation. Definitive materials were filed with the SEC and disseminated to Limited Partners on March 12, 2012. The Partnership sought approval to have a formal plan of liquidation of selling its limited partnership interests or selling the underlying Housing Complexes of each of the Local Limited Partnerships. On May 8, 2012, the Partnership received the majority vote in favor of the plan for dissolution. Therefore, the Partnership is engaging third party appraisers to appraise several or all of the Local Limited Partnerships in this Partnership. The appraisal is one of the preliminary steps that need to be completed in order to move forward with the approved liquidation plan. The expense incurred for the appraisals, or any other disposition related expenses the Partnership incurs, are being capitalized and will remain on the balance sheet until the respective Local Limited Partnership is sold. At the time of disposition the capitalized costs will be netted with any cash proceeds that are received in order to calculate the gain or loss on the disposition.

As of March 31, 2012, the Partnership sold its Local Limited Partnership Interest in E. W., Crossing II Limited Dividend Housing Association LP, Comanche Retirement Village Ltd, Apartment of Waukee L. P. II, Mountain view Apartments, LP, Chadwick Limited Partnership, Broken Bow Apartments I, L.P. and Sidney Apartments I, L.P.

 The following table reflects the 10 Local Limited Partnership interests that were sold during the six months ended September 30, 2012:

Local Limited Partnership	Debt at 12/31/11		Appraisal Value		Date of sale		Proceeds from sale		Sales related expenses		Gain on sale
Autumn Trace Associates	$	1,102,000	$	1,300,000		6/1/2012	$	197,764	$	2,953	$	194,811
Hickory Lane Associates		568,000		355,000		6/1/2012		22,450		2,297		20,153
Honeysuckle Court Associates		1,111,000		670,000		6/1/2012		22,450		2,963		19,487
Walnut Turn Associates, Ltd		658,000		480,000		6/1/2012		22,450		2,297		20,153
Southcove Associates		1,421,000		1,000,000		6/30/2012		25,000		2,300		22,700
Hereford Seniors Community, Ltd		751,000		405,000		8/24/2012		9,375		2,369		7,006
Palestine Seniors Community, Ltd		1,053,000		475,000		8/24/2012		9,375		3,119		6,256
Garland Street, LP		647,000		320,000		8/31/2012		21,953		3,303		18,650
Pecan Grove, LP		1,033,000		500,000		8/31/2012		21,953		1,854		20,099
Lamesa Seniors Community, Ltd		635,000		455,000		8/24/2012		9,375		2,369		7,006

 All Local Limited Partnerships sold during the six months ended September 30, 2012 had reached the end of the Compliance Period. Therefore, no risk of credit recapture exists.

The following table represents the anticipated use of the cash proceeds from the disposition of the 10 Local Limited Partnerships that were disposed of during the six months ended September 30, 2012.

Local Limited Partnership	Sale Proceeds		Payment of accrued asset management fees		Reimburse GP or affiliates for expenses		Remaining cash to remain in reserve for future expenses
Autumn Trace Associates	$	197,764	$	129,235	$	65,529	$	3,000
Hickory Lane  Associates		22,450		19,450		-		3,000
Honeysuckle Court Associates		22,450		19,450		-		3,000
Walnut Turn  Associates, Ltd		22,450		19,450		-		3,000
Southcove  Associates		25,000		20,000		-		5,000
Hereford Seniors Community, Ltd		9,375		8,375		-		1,000
Palestine Seniors Community, Ltd		9,375		8,375		-		1,000
Garland Street, LP		21,953		8,476		12,477		1,000
Pecan Grove, LP		21,953		8,477		12,476		1,000
Lamesa Seniors Community, Ltd		9,375		8,375		-		1,000

No distributions will be made to the Limited Partners as a result of these dispositions. Each of the Local Limited Partnerships had completed its Compliance Period so there is no risk of recapture to the investors in the Partnership.

Method of Accounting for Investments in Local Limited Partnerships

The Partnership accounts for its investments in Local Limited Partnerships using the equity method of accounting, whereby the Partnership adjusts its investment balance for its share of the Local Limited Partnerships’ results of operations and for any contributions made and distributions received. The Partnership reviews the carrying amount of an individual investment in a Local Limited Partnership for possible impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of such investment may not be recoverable. Recoverability of such investment is measured by the estimated value derived by management, generally consisting of the sum of the remaining future Low Income Housing Tax Credits estimated to be allocable to the Partnership and the estimated residual value to the Partnership. If an investment is considered to be impaired, the Partnership reduces the carrying value of its investment in any such Local Limited Partnership. The accounting policies of the Local Limited Partnerships, generally, are expected to be consistent with those of the Partnership. Costs incurred by the Partnership in acquiring the investments are capitalized as part of the investment account and were amortized over 30 years (see Note 2).

“Equity in losses of Local Limited Partnerships” for the periods ended September 30, 2012 and 2011 has been recorded by the Partnership. Management’s estimate for the three and six-month periods is based on either actual unaudited results reported by the Local Limited Partnerships or historical trends in the operations of the Local Limited Partnerships. Equity in losses of Local Limited Partnerships allocated to the Partnership are not recognized to the extent that the investment balance would be adjusted below zero. If the Local Limited Partnerships report net income in future years, the Partnership will resume applying the equity method only after its share of such net income equals the share of net losses not recognized during the period(s) the equity method was suspended (see Note 2).

In accordance with the accounting guidance for the consolidation of variable interest entities, the Partnership determines when it should include the assets, liabilities, and activities of a variable interest entity (VIE) in its financial statements, and when it should disclose information about its relationship with a VIE. The analysis that must be performed to determine which entity should consolidate a VIE focuses on control and economic factors. A VIE is a legal structure used to conduct activities or hold assets, which must be consolidated by a company if it is the primary beneficiary because it has (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (2) the obligation to absorb losses or receive benefits that could potentially be significant to the VIE. If multiple unrelated parties share such power, as defined, no party will be required to consolidate the VIE. Further, the guidance requires continual reconsideration of the primary beneficiary of a VIE.

Based on this guidance, the Local Limited Partnerships in which the Partnership invests meet the definition of a VIE because the owners of the equity at risk in these entities do not have the power to direct their operations. However, management does not consolidate the Partnership’s interests in these VIEs, as it is not considered to be the primary beneficiary since it does not have the power to direct the activities that are considered most significant to the economic performance of these entities. The Partnership currently records the amount of its investment in these Local Limited Partnerships as an asset on its balance sheets, recognizes its share of partnership income or losses in the statements of operations, and discloses how it accounts for material types of these investments in its financial statements. The Partnership’s balance in investment in Local Limited Partnerships, plus the risk of recapture of tax credits previously recognized on these investments, represents its maximum exposure to loss. The Partnership’s exposure to loss on these Local Limited Partnerships is mitigated by the condition and financial performance of the underlying Housing Complexes as well as the strength of the Local General Partners and their guarantee against credit recapture to the investors in the Partnership.

Distributions received by the Partnership are accounted for as a reduction of the investment balance. Distributions received after the investment has reached zero are recognized as income. As of September 30, 2012 and March 31, 2012, all of the investment balances had reached zero.

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 and 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 materially differ from those estimates.

Cash and Cash Equivalents

The Partnership considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. As of September 30, 2012 and March 31, 2012, the Partnership had no cash equivalents.

Reporting Comprehensive Income

The Partnership had no items of other comprehensive income for all periods presented.

Income Taxes

The Partnership has elected to be treated as a pass-through entity for income tax purposes and, as such, is not subject to income taxes. Rather, all items of taxable income, deductions and tax credits are passed through to and are reported by its owners on their respective income tax returns. The Partnership’s federal tax status as a pass-through entity is based on its legal status as a partnership. Accordingly, the Partnership is not required to take any tax positions in order to qualify as a pass-through entity. The Partnership is required to file and does file tax returns with the Internal Revenue Service and other taxing authorities. Accordingly, these financial statements do not reflect a provision for income taxes and the Partnership has no other tax positions which must be considered for disclosure.

Net Loss Per Partnership Unit

Net loss per Partnership Unit includes no dilution and is computed by dividing loss allocated to Limited Partners by the weighted average number of Partnership Units outstanding during the period. Calculation of diluted net loss per Partnership Unit is not required.

Revenue Recognition

The Partnership is entitled to receive reporting fees from the Local Limited Partnerships. The intent of the reporting fees is to offset (in part) administrative costs incurred by the Partnership in corresponding with the Local Limited Partnerships. Due to the uncertainty of the collection of these fees, the Partnership recognizes reporting fees as collections are made.

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Condensed Balance Sheets (Parenthetical)	Sep. 30, 2012	Mar. 31, 2012
Statement of Financial Position [Abstract]
Limited partners, units authorized	20,000	20,000
Limited partners, units issued	15,600	15,600
Limited partners, units outstanding	15,600	15,600

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Investments in Local Limited Partnerships (Details Narrative)	6 Months Ended	12 Months Ended
	Sep. 30, 2012 Years	Mar. 31, 2011	Mar. 31, 2012 Years
Investments [Abstract]
Partnership interests in local limited partnerships, number	4	14
Aggregate apartment units, number	277		653
Percentage of interests in local limited partnership	99.00%		99.00%

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Document and Entity Information	3 Months Ended
	Sep. 30, 2012
Document And Entity Information
Entity Registrant Name	WNC HOUSING TAX CREDIT FUND IV L P SERIES 2
Entity Central Index Key	0000913497
Document Type	10-Q
Document Period End Date	Sep. 30, 2012
Amendment Flag	false
Current Fiscal Year End Date	--03-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding	0
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2013

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Schedule of Proceeds From Investments in Local Limited Partnerships (Details) (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012 General And Limited Partners [Member]	Sep. 30, 2011 General And Limited Partners [Member]
Revenue					$ 832,000	$ 1,969,000
Interest expense					124,000	304,000
Depreciation and amortization					190,000	524,000
Operating expenses	29,060	21,429	124,448	47,152	541,000	1,440,000
Total expenses					855,000	2,268,000
Net loss					(23,000)	(299,000)
Net loss allocable to the Partnership					(23,000)	(296,000)
Net loss recorded by the Partnership

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Condensed Statements of Operations (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Income Statement [Abstract]
Reporting fees	$ 2,000		$ 4,517	$ 2,850
Distribution income		5,905		5,905
Total operating income	2,000	5,905	4,517	8,755
Operating expenses:
Asset management fees (Note 3)	8,814	10,725	19,539	21,450
Legal and accounting fees	7,631	3,251	89,379	16,435
Outsourcing expenses	4,555	4,660	6,379	4,660
Write off of other assets	6,950		6,950
Other	1,110	2,793	2,201	4,607
Total operating expenses	29,060	21,429	124,448	47,152
Loss from operations	(27,060)	(15,524)	(119,931)	(38,397)
Gain on sale of Local Limited Partnerships	59,017		336,321	74,633
Interest income	5	3	7	5
Net income (loss)	31,962	(15,521)	216,397	36,241
General Partner	320	(155)	2,164	362
Limited Partners	$ 31,642	$ (15,366)	$ 214,233	$ 35,879
Net income (loss) per Partnership Unit	$ 2	$ (1)	$ 14	$ 2
Outstanding weighted Partnership Units	15,600	15,600	15,600	15,600

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Investments in Local Limited Partnerships (Tables)

6 Months Ended

Sep. 30, 2012

Investments [Abstract]

Schedule Of Proceeds From Investments In Local Limited Partnerships

Selected financial information for the six months ended September 30, 2012 and 2011 from the unaudited combined condensed financial statements of the Local Limited Partnerships in which the partnership has invested is as follows:

COMBINED CONDENSED STATEMENTS OF OPERATIONS
	2012			2011
Revenue	$	832,000		$	1,969,000
Expenses:
Interest expense		124,000			304,000
Depreciation and amortization		190,000			524,000
Operating expenses		541,000			1,440,000
Total expenses		855,000			2,268,000
Net loss	$	(23,000	)		(299,000	)
Net loss allocable to the Partnership	$	(23,000	)	$	(296,000	)
Net loss recorded by the Partnership	$	-		$	-

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Schedule of Sale or Disposal of Equity Method Investments in Local Limited Partnership

The following table reflects the 10 Local Limited Partnership interests that were sold during the six months ended September 30, 2012:

Local Limited Partnership	Debt at 12/31/11		Appraisal Value		Date of sale		Proceeds from sale		Sales related expenses		Gain on sale
Autumn Trace Associates	$	1,102,000	$	1,300,000		6/1/2012	$	197,764	$	2,953	$	194,811
Hickory Lane Associates		568,000		355,000		6/1/2012		22,450		2,297		20,153
Honeysuckle Court Associates		1,111,000		670,000		6/1/2012		22,450		2,963		19,487
Walnut Turn Associates, Ltd		658,000		480,000		6/1/2012		22,450		2,297		20,153
Southcove Associates		1,421,000		1,000,000		6/30/2012		25,000		2,300		22,700
Hereford Seniors Community, Ltd		751,000		405,000		8/24/2012		9,375		2,369		7,006
Palestine Seniors Community, Ltd		1,053,000		475,000		8/24/2012		9,375		3,119		6,256
Garland Street, LP		647,000		320,000		8/31/2012		21,953		3,303		18,650
Pecan Grove, LP		1,033,000		500,000		8/31/2012		21,953		1,854		20,099
Lamesa Seniors Community, Ltd		635,000		455,000		8/24/2012		9,375		2,369		7,006

Schedule of Anticipated Use of Cash Proceeds from Disposal of Local Limited Partnerships

The following table represents the anticipated use of the cash proceeds from the disposition of the 10 Local Limited Partnerships that were disposed of during the six months ended September 30, 2012.

Local Limited Partnership	Sale Proceeds		Payment of accrued asset management fees		Reimburse GP or affiliates for expenses		Remaining cash to remain in reserve for future expenses
Autumn Trace Associates	$	197,764	$	129,235	$	65,529	$	3,000
Hickory Lane  Associates		22,450		19,450		-		3,000
Honeysuckle Court Associates		22,450		19,450		-		3,000
Walnut Turn  Associates, Ltd		22,450		19,450		-		3,000
Southcove  Associates		25,000		20,000		-		5,000
Hereford Seniors Community, Ltd		9,375		8,375		-		1,000
Palestine Seniors Community, Ltd		9,375		8,375		-		1,000
Garland Street, LP		21,953		8,476		12,477		1,000
Pecan Grove, LP		21,953		8,477		12,476		1,000
Lamesa Seniors Community, Ltd		9,375		8,375		-		1,000

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Related Party Transactions (Details Narrative) (USD $)	6 Months Ended		12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2003
Asset management fees	$ 2,000
Asset management fees equal to percentage of gross proceeds	0.275%
Percentage of maximum asset management fees on invested assets	0.20%
Local limited partnership fees during period	19,539	21,450
Subordinated disposition fees is equal to percentage of sale price of real estate sold	1.00%
Percentage of preferred return from payment of subordinated disposition fee to limited partner			16.00%
Percentage of preferred return payable to general partner and affiliates on sales effort	6.00%
Proceeds from operating expenses reimbursements during period	90,482	59,352
General And Affiliate Partner [Member]
Asset management fees	$ 249,663	$ 35,131

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Schedule of Sale or Disposal of Equity Method Investments in Local Limited Partnership (Details) (USD $)	6 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Autumn Trace Associates [Member]
Debt at 12/31/11		$ 1,102,000
Appraisal Value	1,300,000
Date of sale	Jun. 01, 2012
Sales related expenses	2,953
Gain on sale	194,811
Hickory Lane Associates [Member]
Debt at 12/31/11		568,000
Appraisal Value	355,000
Date of sale	Jun. 01, 2012
Sales related expenses	2,297
Gain on sale	20,153
Honeysuckle Court Associates [Member]
Debt at 12/31/11		1,111,000
Appraisal Value	670,000
Date of sale	Jun. 01, 2012
Sales related expenses	2,963
Gain on sale	19,487
Walnut Turn Associates, Ltd [Member]
Debt at 12/31/11		658,000
Appraisal Value	480,000
Date of sale	Jun. 01, 2012
Sales related expenses	2,297
Gain on sale	20,153
Southcove Associates [Member]
Debt at 12/31/11		1,421,000
Appraisal Value	1,000,000
Date of sale	Jun. 30, 2012
Sales related expenses	2,300
Gain on sale	22,700
Hereford Seniors Community Ltd [Member]
Debt at 12/31/11		751,000
Appraisal Value	405,000
Date of sale	Aug. 24, 2012
Sales related expenses	2,369
Gain on sale	7,006
Palestine Seniors Community Ltd [Member]
Debt at 12/31/11		1,053,000
Appraisal Value	475,000
Date of sale	Aug. 24, 2012
Sales related expenses	3,119
Gain on sale	6,256
Garland Street LP [Member]
Debt at 12/31/11		647,000
Appraisal Value	320,000
Date of sale	Aug. 31, 2012
Sales related expenses	3,303
Gain on sale	18,650
Pecan Grove LP [Member]
Debt at 12/31/11		1,033,000
Appraisal Value	500,000
Date of sale	Aug. 31, 2012
Sales related expenses	1,854
Gain on sale	20,099
Lamesa Seniors Community Ltd [Member]
Debt at 12/31/11		635,000
Appraisal Value	455,000
Date of sale	Aug. 24, 2012
Sales related expenses	2,369
Gain on sale	$ 7,006

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Related Party Transactions (Tables)

6 Months Ended

Sep. 30, 2012

Related Party Transactions [Abstract]

Schedule of Accrued Fees and Expenses Due to General Partner and Affiliates

The accrued fees and expenses due to the General Partner and affiliates consist of the following at:

	September 30, 2012		March 31, 2012
Expenses paid by the General Partner or affiliates on behalf of the Partnership	$	12,716	$	1,322
Asset management fee payable		301,471		531,596
Total	$	314,187	$	532,918

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Summary of Significant Accounting Policies (Details Narrative) (USD $)	6 Months Ended
	Sep. 30, 2012	Mar. 31, 2012
Accounting Policies [Abstract]
Limited partnership interest, units authorized	20,000	20,000
Limited partneship interest, price per unit	$ 1,000
Number of partnership units offered	15,600
Limited partenrship unit subsrcription amount	$ 15,241,000
Discounts on net limited partnership unit's volume	359,000
Percentage of general partner's interest in operating profit and losses	1.00%
Percentage of limited partner's investment interest in operating profit and losses	99.00%
Percentage of sale or refinancing proceeds distribution to limited partners	90.00%
Percentage of sale or refinancing proceeds distribution to general partners	10.00%
Maximum tax liability due on individual taxable income	$ 25,000
Compliance period	15 years
Amortized period of capitalized investments	30 years

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Schedule of Anticipated Use of Cash Proceeds from Disposal of Local Limited Partnerships (Details) (USD $)	6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Sale Price	$ 89,001	$ 78,261
Autumn Trace Associates [Member]
Sale Price	197,764
Payment of accrued asset management fees	129,235
Reimburse GP or affiliates for expenses	65,529
Remaining cash to remain in reserve for future expenses	3,000
Hickory Lane Associates [Member]
Sale Price	22,450
Payment of accrued asset management fees	19,450
Reimburse GP or affiliates for expenses
Remaining cash to remain in reserve for future expenses	3,000
Honeysuckle Court Associates [Member]
Sale Price	22,450
Payment of accrued asset management fees	19,450
Reimburse GP or affiliates for expenses
Remaining cash to remain in reserve for future expenses	3,000
Walnut Turn Associates, Ltd [Member]
Sale Price	22,450
Payment of accrued asset management fees	19,450
Reimburse GP or affiliates for expenses
Remaining cash to remain in reserve for future expenses	3,000
Southcove Associates [Member]
Sale Price	25,000
Payment of accrued asset management fees	20,000
Reimburse GP or affiliates for expenses
Remaining cash to remain in reserve for future expenses	3,000
Hereford Seniors Community Ltd [Member]
Sale Price	9,375
Payment of accrued asset management fees	8,375
Reimburse GP or affiliates for expenses
Remaining cash to remain in reserve for future expenses	5,000
Palestine Seniors Community Ltd [Member]
Sale Price	9,375
Payment of accrued asset management fees	8,375
Reimburse GP or affiliates for expenses
Remaining cash to remain in reserve for future expenses	1,000
Garland Street LP [Member]
Sale Price	21,953
Payment of accrued asset management fees	8,476
Reimburse GP or affiliates for expenses	12,477
Remaining cash to remain in reserve for future expenses	1,000
Pecan Grove LP [Member]
Sale Price	27,953
Payment of accrued asset management fees	8,477
Reimburse GP or affiliates for expenses	12,476
Remaining cash to remain in reserve for future expenses	1,000
Lamesa Seniors Community Ltd [Member]
Sale Price	9,375
Payment of accrued asset management fees	8,375
Reimburse GP or affiliates for expenses
Remaining cash to remain in reserve for future expenses	$ 1,000

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Condensed Statement of Partners’ Equity (Deficit) (Unaudited) (USD $)	General Partner [Member]	Limited Partner [Member]	Total
Partners' equity (deficit) at begining at Mar. 31, 2012	$ 161,802	$ (615,947)	$ (454,145)
Net income	2,164	214,233	216,397
Partners' equity (deficit) at end at Sep. 30, 2012	$ 163,966	$ (401,714)	$ (237,748)

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

General

General

The accompanying condensed unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q for quarterly reports under Section 13 or 15(d) of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2013. For further information, refer to the financial statements and footnotes thereto included in the Partnership’s annual report on Form 10-K for the fiscal year ended March 31, 2012.

Organization

Organization

WNC Housing Tax Credit Fund IV, L.P., Series 2 (the “Partnership”) is a California Limited Partnership formed under the laws of the State of California on September 27, 1993. The Partnership was formed to acquire limited partnership interests in other limited partnerships (“Local Limited Partnerships”) which own multi-family housing complexes (“Housing Complexes”) that are eligible for Federal low income housing tax credits (“Low Income Housing Tax Credits”). The local general partners (the “Local General Partners”) of each Local Limited Partnership retain responsibility for maintaining, operating and managing the Housing Complex. Each Local Limited Partnership is governed by its agreement of limited partnership (the “Local Limited Partnership Agreement”).

The general partner of the Partnership is WNC Tax Credit Partners IV, L.P. (the “General Partner”). The general partner of the General Partner is WNC & Associates, Inc. (“Associates”). The chairman and the president of Associates own all of the outstanding stock of Associates. The business of the Partnership is conducted primarily through the General Partner, as the Partnership has no employees of its own.

The Partnership shall continue in full force and effect until December 31, 2050, unless terminated prior to that date, pursuant to the partnership agreement or law.

The financial statements include only activity relating to the business of the Partnership, and do not give effect to any assets that the partners may have outside of their interests in the Partnership, or to any obligations, including income taxes, of the partners.

The Partnership Agreement authorized the sale of up to 20,000 units of limited partnership interest (“Partnership Units”) at $1,000 per Partnership Unit. The offering of Partnership Units has concluded, and 15,600 Partnership Units representing subscriptions in the amount of $15,241,000, net of volume discounts of $359,000, had been accepted. The General Partner has a 1% interest in operating profits and losses, taxable income and losses, cash available for distribution from the Partnership and Low Income Housing Tax Credits of the Partnership. The investors (the “Limited Partners”) in the Partnership will be allocated the remaining 99% of these items in proportion to their respective investments.

The proceeds from the disposition of any of the Local Limited Partnership Housing Complexes will be used first to pay debts and other obligations per the respective Local Limited Partnership Agreement. Any remaining proceeds will then be paid to the Partnership. The sale of a Housing Complex may be subject to other restrictions and obligations. Accordingly, there can be no assurance that a Local Limited Partnership will be able to sell its Housing Complex. Even if it does so, there can be no assurance that any significant amounts of cash will be distributed to the Partnership. Should such distributions occur, the Limited Partners will be entitled to receive distributions equal to their capital contributions and their return on investment (as defined in the Partnership Agreement) and the General Partner would then be entitled to receive proceeds equal to their capital contributions from the remainder. Any additional sale or refinancing proceeds will be distributed 90% to the Limited Partners (in proportion to their respective investments) and 10% to the General Partner.

Risks and Uncertainties

Risks and Uncertainties

An investment in the Partnership and the Partnership’s investments in Local Limited Partnerships and their Housing Complexes are subject to risks. These risks may impact the tax benefits of an investment in the Partnership, and the amount of proceeds available for distribution to the Limited Partners, if any, on liquidation of the Partnership’s investments. Some of those risks include the following:

The Low Income Housing Tax Credits rules are extremely complicated. Noncompliance with these rules results in the loss of future Low Income Housing Tax Credits and the fractional recapture of Low Income Housing Tax Credits already taken. In most cases the annual amount of Low Income Housing Tax Credits that an individual can use is limited to the tax liability due on the person’s last $25,000 of taxable income. The Local Limited Partnerships may be unable to sell the Housing Complexes at a price which would result in the Partnership realizing cash distributions or proceeds from the transaction. Accordingly, the Partnership may be unable to distribute any cash to its Limited Partners. Low Income Housing Tax Credits may be the only benefit from an investment in the Partnership.

The Partnership has invested in a limited number of Local Limited Partnerships. Such limited diversity means that the results of operation of each single Housing Complex will have a greater impact on the Partnership. With limited diversity, poor performance of one Housing Complex could impair the Partnership’s ability to satisfy its investment objectives. Each Housing Complex is subject to mortgage indebtedness. If a Local Limited Partnership failed to pay its mortgage, it could lose its Housing Complex in foreclosure. If foreclosure were to occur during the first 15 years (the “Compliance Period”), the loss of any remaining future Low Income Housing Tax Credits, a fractional recapture of prior Low Income Housing Tax Credits, and a loss of the Partnership’s investment in the Housing Complex would occur. The Partnership is a limited partner or a non-managing member of each Local Limited Partnership. Accordingly, the Partnership will have very limited rights with respect to management of the Local Limited Partnerships. The Partnership will rely totally on the Local General Partners. Neither the Partnership’s investments in Local Limited Partnerships, nor the Local Limited Partnerships’ investments in Housing Complexes, are readily marketable. To the extent the Housing Complexes receive government financing or operating subsidies, they may be subject to one or more of the following risks: difficulties in obtaining tenants for the Housing Complexes; difficulties in obtaining rent increases; limitations on cash distributions; limitations on sales or refinancing of Housing Complexes; limitations on transfers of interests in Local Limited Partnerships; limitations on removal of Local General Partners; limitations on subsidy programs; and possible changes in applicable regulations. Uninsured casualties could result in loss of property and Low Income Housing Tax Credits and recapture of Low Income Housing Tax Credits previously taken. The value of real estate is subject to risks from fluctuating economic conditions, including employment rates, inflation, tax, environmental, land use and zoning policies, supply and demand of similar Housing Complexes, and neighborhood conditions, among others.

The ability of Limited Partners to claim tax losses from the Partnership is limited. The IRS may audit the Partnership or a Local Limited Partnership and challenge the tax treatment of tax items. The amount of Low Income Housing Tax Credits and tax losses allocable to Limited Partners could be reduced if the IRS were successful in such a challenge. The alternative minimum tax could reduce tax benefits from an investment in the Partnership. Changes in tax laws could also impact the tax benefits from an investment in the Partnership and/or the value of the Housing Complexes.

All of the Low Income Housing Tax Credits anticipated to be realized from the Local Limited Partnerships have been realized. The Partnership does not anticipate being allocated any Low Income Housing Tax Credits from the Local Limited Partnerships in the future. Until the Local Limited Partnerships have completed the Compliance Period, risks exist for potential recapture of prior Low Income Housing Tax Credits received.

No trading market for the Partnership Units exists or is expected to develop. Limited Partners may be unable to sell their Partnership Units except at a discount and should consider their Partnership Units to be a long-term investment. Individual Limited Partners will have no recourse if they disagree with actions authorized by a vote of the majority of Limited Partners.

The Partnership currently has insufficient working capital to fund its operations. Associates has agreed to continue providing advances sufficient enough to fund the operations and working capital requirements of the Partnership through November 30, 2013.

Anticipated future and existing cash resources of the Partnership are not sufficient to pay existing liabilities of the Partnership. However, substantially all of the existing liabilities of the Partnership are payable to the General Partner and/or its affiliates. Though the amounts payable to the General Partner and/or its affiliates are contractually currently payable, the Partnership anticipates that the General Partner and/or its affiliates will not require the payment of these contractual obligations until capital reserves are in excess of the aggregate of then existing contractual obligations and then anticipated future foreseeable obligations of the Partnership. The Partnership would be adversely affected should the General Partner and/or its affiliates demand current payment of the existing contractual obligations and or suspend services for this or any other reason.

Exit Strategy

Exit Strategy

The Compliance Period for a Housing Complex is generally 15 years following construction or rehabilitation completion. Associates was one of the first in the industry to offer syndicated investments in Low Income Housing Tax Credits. The initial programs have completed their Compliance Periods.

Upon the sale of a Local Limited Partnership Interest or Housing Complex after the end of the Compliance Period, there would be no recapture of Low Income Housing Tax Credits. A sale prior to the end of the Compliance Period could result in recapture if certain conditions are not met. Nine of the Housing Complexes have completed their 15-year Compliance Period.

With that in mind, the General Partner is continuing its review of the Housing Complexes. The review considers many factors, including extended use requirements (such as those due to mortgage restrictions or state compliance agreements), the condition of the Housing Complexes, and the tax consequences to the Limited Partners from the sale of the Housing Complexes.

Upon identifying those Housing Complexes with the highest potential for a successful sale, refinancing or syndication, the Partnership expects to proceed with efforts to liquidate them. The objective is to maximize the Limited Partners’ return wherever possible and, ultimately, to wind down the Partnership. Local Limited Partnership interests may be disposed of any time by the General Partner in its discretion. While liquidation of the Housing Complexes continues to be evaluated, the dissolution of the Partnership was not imminent as of September 30, 2012.

Upon management of the Partnership identifying a Local Limited Partnership for disposition, costs incurred by the Partnership in preparation for the disposition are deferred. Upon the sale of the Local Limited Partnership interest, the Partnership nets the costs that had been deferred against the proceeds from the sale in determining the gain or loss on sale of the Local Limited Partnership. Deferred disposition costs are included in other assets on the balance sheets.

On February 24, 2012, the Partnership filed preliminary consent solicitation materials with the Securities and Exchange Commission (“SEC”) regarding the adoption of a plan of liquidation. Definitive materials were filed with the SEC and disseminated to Limited Partners on March 12, 2012. The Partnership sought approval to have a formal plan of liquidation of selling its limited partnership interests or selling the underlying Housing Complexes of each of the Local Limited Partnerships. On May 8, 2012, the Partnership received the majority vote in favor of the plan for dissolution. Therefore, the Partnership is engaging third party appraisers to appraise several or all of the Local Limited Partnerships in this Partnership. The appraisal is one of the preliminary steps that need to be completed in order to move forward with the approved liquidation plan. The expense incurred for the appraisals, or any other disposition related expenses the Partnership incurs, are being capitalized and will remain on the balance sheet until the respective Local Limited Partnership is sold. At the time of disposition the capitalized costs will be netted with any cash proceeds that are received in order to calculate the gain or loss on the disposition.

As of March 31, 2012, the Partnership sold its Local Limited Partnership Interest in E. W., Crossing II Limited Dividend Housing Association LP, Comanche Retirement Village Ltd, Apartment of Waukee L. P. II, Mountain view Apartments, LP, Chadwick Limited Partnership, Broken Bow Apartments I, L.P. and Sidney Apartments I, L.P.

 The following table reflects the 10 Local Limited Partnership interests that were sold during the six months ended September 30, 2012:

Local Limited Partnership	Debt at 12/31/11		Appraisal Value		Date of sale		Proceeds from sale		Sales related expenses		Gain on sale
Autumn Trace Associates	$	1,102,000	$	1,300,000		6/1/2012	$	197,764	$	2,953	$	194,811
Hickory Lane Associates		568,000		355,000		6/1/2012		22,450		2,297		20,153
Honeysuckle Court Associates		1,111,000		670,000		6/1/2012		22,450		2,963		19,487
Walnut Turn Associates, Ltd		658,000		480,000		6/1/2012		22,450		2,297		20,153
Southcove Associates		1,421,000		1,000,000		6/30/2012		25,000		2,300		22,700
Hereford Seniors Community, Ltd		751,000		405,000		8/24/2012		9,375		2,369		7,006
Palestine Seniors Community, Ltd		1,053,000		475,000		8/24/2012		9,375		3,119		6,256
Garland Street, LP		647,000		320,000		8/31/2012		21,953		3,303		18,650
Pecan Grove, LP		1,033,000		500,000		8/31/2012		21,953		1,854		20,099
Lamesa Seniors Community, Ltd		635,000		455,000		8/24/2012		9,375		2,369		7,006

 All Local Limited Partnerships sold during the six months ended September 30, 2012 had reached the end of the Compliance Period. Therefore, no risk of credit recapture exists.

The following table represents the anticipated use of the cash proceeds from the disposition of the 10 Local Limited Partnerships that were disposed of during the six months ended September 30, 2012.

Local Limited Partnership	Sale Proceeds		Payment of accrued asset management fees		Reimburse GP or affiliates for expenses		Remaining cash to remain in reserve for future expenses
Autumn Trace Associates	$	197,764	$	129,235	$	65,529	$	3,000
Hickory Lane  Associates		22,450		19,450		-		3,000
Honeysuckle Court Associates		22,450		19,450		-		3,000
Walnut Turn  Associates, Ltd		22,450		19,450		-		3,000
Southcove  Associates		25,000		20,000		-		5,000
Hereford Seniors Community, Ltd		9,375		8,375		-		1,000
Palestine Seniors Community, Ltd		9,375		8,375		-		1,000
Garland Street, LP		21,953		8,476		12,477		1,000
Pecan Grove, LP		21,953		8,477		12,476		1,000
Lamesa Seniors Community, Ltd		9,375		8,375		-		1,000

No distributions will be made to the Limited Partners as a result of these dispositions. Each of the Local Limited Partnerships had completed its Compliance Period so there is no risk of recapture to the investors in the Partnership.

Method of Accounting for Investments in Local Limited Partnerships

Method of Accounting for Investments in Local Limited Partnerships

The Partnership accounts for its investments in Local Limited Partnerships using the equity method of accounting, whereby the Partnership adjusts its investment balance for its share of the Local Limited Partnerships’ results of operations and for any contributions made and distributions received. The Partnership reviews the carrying amount of an individual investment in a Local Limited Partnership for possible impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of such investment may not be recoverable. Recoverability of such investment is measured by the estimated value derived by management, generally consisting of the sum of the remaining future Low Income Housing Tax Credits estimated to be allocable to the Partnership and the estimated residual value to the Partnership. If an investment is considered to be impaired, the Partnership reduces the carrying value of its investment in any such Local Limited Partnership. The accounting policies of the Local Limited Partnerships, generally, are expected to be consistent with those of the Partnership. Costs incurred by the Partnership in acquiring the investments are capitalized as part of the investment account and were amortized over 30 years (see Note 2).

“Equity in losses of Local Limited Partnerships” for the periods ended September 30, 2012 and 2011 has been recorded by the Partnership. Management’s estimate for the three and six-month periods is based on either actual unaudited results reported by the Local Limited Partnerships or historical trends in the operations of the Local Limited Partnerships. Equity in losses of Local Limited Partnerships allocated to the Partnership are not recognized to the extent that the investment balance would be adjusted below zero. If the Local Limited Partnerships report net income in future years, the Partnership will resume applying the equity method only after its share of such net income equals the share of net losses not recognized during the period(s) the equity method was suspended (see Note 2).

In accordance with the accounting guidance for the consolidation of variable interest entities, the Partnership determines when it should include the assets, liabilities, and activities of a variable interest entity (VIE) in its financial statements, and when it should disclose information about its relationship with a VIE. The analysis that must be performed to determine which entity should consolidate a VIE focuses on control and economic factors. A VIE is a legal structure used to conduct activities or hold assets, which must be consolidated by a company if it is the primary beneficiary because it has (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (2) the obligation to absorb losses or receive benefits that could potentially be significant to the VIE. If multiple unrelated parties share such power, as defined, no party will be required to consolidate the VIE. Further, the guidance requires continual reconsideration of the primary beneficiary of a VIE.

Based on this guidance, the Local Limited Partnerships in which the Partnership invests meet the definition of a VIE because the owners of the equity at risk in these entities do not have the power to direct their operations. However, management does not consolidate the Partnership’s interests in these VIEs, as it is not considered to be the primary beneficiary since it does not have the power to direct the activities that are considered most significant to the economic performance of these entities. The Partnership currently records the amount of its investment in these Local Limited Partnerships as an asset on its balance sheets, recognizes its share of partnership income or losses in the statements of operations, and discloses how it accounts for material types of these investments in its financial statements. The Partnership’s balance in investment in Local Limited Partnerships, plus the risk of recapture of tax credits previously recognized on these investments, represents its maximum exposure to loss. The Partnership’s exposure to loss on these Local Limited Partnerships is mitigated by the condition and financial performance of the underlying Housing Complexes as well as the strength of the Local General Partners and their guarantee against credit recapture to the investors in the Partnership.

Distributions received by the Partnership are accounted for as a reduction of the investment balance. Distributions received after the investment has reached zero are recognized as income. As of September 30, 2012 and March 31, 2012, all of the investment balances had reached zero.

Use of Estimates

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 and 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 materially differ from those estimates.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Partnership considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. As of September 30, 2012 and March 31, 2012, the Partnership had no cash equivalents.

Reporting Comprehensive Income

Reporting Comprehensive Income

The Partnership had no items of other comprehensive income for all periods presented.

Income Taxes

Income Taxes

The Partnership has elected to be treated as a pass-through entity for income tax purposes and, as such, is not subject to income taxes. Rather, all items of taxable income, deductions and tax credits are passed through to and are reported by its owners on their respective income tax returns. The Partnership’s federal tax status as a pass-through entity is based on its legal status as a partnership. Accordingly, the Partnership is not required to take any tax positions in order to qualify as a pass-through entity. The Partnership is required to file and does file tax returns with the Internal Revenue Service and other taxing authorities. Accordingly, these financial statements do not reflect a provision for income taxes and the Partnership has no other tax positions which must be considered for disclosure.

Net Loss Per Partnership Unit

Net Loss Per Partnership Unit

Net loss per Partnership Unit includes no dilution and is computed by dividing loss allocated to Limited Partners by the weighted average number of Partnership Units outstanding during the period. Calculation of diluted net loss per Partnership Unit is not required.

Revenue Recognition

Revenue Recognition

The Partnership is entitled to receive reporting fees from the Local Limited Partnerships. The intent of the reporting fees is to offset (in part) administrative costs incurred by the Partnership in corresponding with the Local Limited Partnerships. Due to the uncertainty of the collection of these fees, the Partnership recognizes reporting fees as collections are made.

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Schedule of Accrued Fees and Expenses Due to General Partner and Affiliates (Details) (USD $)	Sep. 30, 2012	Mar. 31, 2012
Notes to Financial Statements
Expenses paid by the General Partner or affiliates on behalf of the Partnership	$ 12,716	$ 1,322
Asset management fees payable	301,471	531,596
Total	$ 314,187	$ 532,918