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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K
(Mark One)

X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ---------
EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2003

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --------- EXCHANGE ACT OF 1934

Commission File Number 33-89968

INDEPENDENCE TAX CREDIT PLUS L.P. IV
------------------------------------
(Exact name of registrant as specified in its charter)

Delaware 13-3809869
- ------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

625 Madison Avenue, New York, New York 10022
- ---------------------------------------- ------------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (212) 421-5333

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Limited Partnership Interests and Beneficial Assignment Certificates

(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----- -----

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes No X
----- -----

The approximate aggregate book value of the voting and non-voting common
equity held by non-affiliates of the Registrant as of September 30, 2002 was
$27,611,000, based on Limited Partner equity as of such date.


DOCUMENTS INCORPORATED BY REFERENCE
None





CAUTIONARY STATEMENT FOR PURPOSES OF
THE "SAFE HARBOR" PROVISIONS OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995



WHEN USED IN THIS ANNUAL REPORT ON FORM 10-K, THE WORDS "BELIEVES,"
"ANTICIPATES," "EXPECTS" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY
FORWARD-LOOKING STATEMENTS. STATEMENTS LOOKING FORWARD IN TIME ARE INCLUDED IN
THIS ANNUAL REPORT ON FORM 10-K PURSUANT TO THE "SAFE HARBOR" PROVISION OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH STATEMENTS ARE SUBJECT TO
CERTAIN RISKS AND UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY, INCLUDING, BUT NOT LIMITED TO, THOSE SET FORTH IN "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS."
READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING
STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF.


2



PART I

Item 1. Business.

General
- -------

Independence Tax Credit Plus L.P. IV (the "Partnership") is a limited
partnership which was formed under the laws of the State of Delaware on February
22, 1995. The general partner of the Partnership is Related Independence L.L.C.,
a Delaware limited liability company (the "General Partner").

On July 6, 1995, the Partnership commenced a public offering (the "Offering") of
Beneficial Assignment Certificates ("BACs") representing assignments of limited
partnership interests in the Partnership ("Limited Partnership Interests"),
managed by Related Equities Corporation (the "Dealer Manager"), pursuant to a
prospectus dated July 6, 1995 (the "Prospectus").

The Partnership has received $45,844,000 of Gross Proceeds of the Offering from
2,759 investors ("BACs holders"). The solicitation for the subscription of BACs
was terminated as of May 22, 1996 and the final closing occurred on August 15,
1996.

The Partnership's business is primarily to invest in other partnerships ("Local
Partnerships") owning apartment complexes ("Apartment Complexes" or
"Properties") that are eligible for the low-income housing tax credit ("Housing
Tax Credit") enacted in the Tax Reform Act of 1986, some of which may also be
eligible for the historic rehabilitation tax credit ("Historic Tax Credit";
together with Housing Tax Credits, "Tax Credits"). As of March 31, 2003, the
Partnership has acquired an interest in fourteen Local Partnerships, all of
which have been consolidated. The Partnership's investments in Local
Partnerships represent from 98.99% to 99.89% interests except for one investment
which is a 58.12% interest. As of March 31, 2003, the Partnership has invested
approximately $37,814,000 (including approximately $1,161,000 classified as a
loan repayable from sale/refinancing proceeds in accordance with the
Contribution Agreement and not including acquisition fees of approximately
$1,771,000) of net proceeds in fourteen Local Partnerships of which
approximately $1,593,000 remains to be paid to the Local Partnerships (including
approximately $615,000 being held in escrow) as certain benchmarks, such as
occupancy level, are attained prior to the release of the funds. The Partnership
does not anticipate acquiring additional properties, but the Partnership may be
required to fund potential purchase price adjustments based on tax credit
adjustor clauses. See Item 2, Properties, below.

The investment objectives of the Partnership are described below:

1. Entitle qualified BACs holders to Housing Tax Credits over the period of the
Partnership's entitlement to claim Tax Credits (for each Property, generally ten
years from the date of investment or, if later, the date the Property is leased
to qualified tenants; referred to herein as the "Credit Period") with respect to
each Apartment Complex.

2. Preserve and protect the Partnership's capital.

3. Participate in any capital appreciation in the value of the Properties and
provide distributions of Sale or Refinancing Proceeds upon the disposition of
the Properties.

4. Allocate passive losses to individual BACs holders to offset passive income
that they may realize from rental real estate investments and other passive
activities, and allocate passive losses to corporate BACs holders to offset
business income.

One of the Partnership's objectives is to entitle qualified BACs holders to
Housing Tax Credits over the Credit Period. Each of the Local Partnerships in

3


which the Partnership has acquired an interest has been allocated by the
relevant state credit agencies the authority to recognize Tax Credits during the
Credit Period provided that the Local Partnership satisfies the rent
restriction, minimum set-aside and other requirements for recognition of the Tax
Credits at all times during such period. Once a Local Partnership has become
eligible to recognize Tax Credits, it may lose such eligibility and suffer an
event of "recapture" if its Property fails to remain in compliance with the Tax
Credit requirements. None of the Local Partnerships in which the Partnership has
acquired an interest has suffered an event of recapture.

There can be no assurance that the Partnership will achieve its investment
objectives as described above.

The Partnership is subject to the risks incident to potential losses arising
from the management and ownership of improved real estate and poor economic
conditions.

Segments
- --------

The Partnership operates in one segment, which is the investment in multi-family
residential property.

Competition
- -----------

The real estate business is highly competitive and substantially all of the
properties acquired by the Partnership are expected to have active competition
from similar properties in their respective vicinities. In addition, various
other limited partnerships may, in the future, be formed by the General Partner
and/or its affiliates to engage in businesses which may be competitive with the
Partnership.

Employees
- ---------

The Partnership does not have any direct employees. All services are performed
for the Partnership by the General Partner and its affiliates. The General
Partner receives compensation in the connection with such activities as set
forth in Items 11 and 13. In addition, the Partnership reimburses the General
Partner and certain of its affiliates from expenses incurred in connection with
the performance by their employees of services for the Partnership in accordance
with the Partnership's Amended and Restated Agreement of Limited Partnership
(the "Partnership Agreement").

Item 2. Properties.

As of March 31, 2003, the Partnership has acquired an interest in fourteen Local
Partnerships, all of which have been consolidated. Except for the interest in
New Zion Apartments, L.P. ("New Zion"), the Partnership's investment in each
Local Partnership represents 98.99% or 99.89% of the partnership interests in
the Local Partnership. The Partnership's investment in New Zion represents
58.12% of the partnership interest in the subsidiary partnership (the other
41.86% limited partnership interest is owned by an affiliate of the Partnership,
with the same management). Through the rights of the Partnership and/or an
affiliate of the General Partner, which affiliate has a contractual obligation
to act on behalf of the Partnership, to remove the general partner and to
approve certain major operating and financial decisions, the Partnership has a
controlling financial interest in all of the Local Partnerships it has invested.
Set forth below is a schedule of the Local Partnerships including certain
information concerning their respective Apartment Complexes (the "Local
Partnership Schedule"). Further information concerning the Local Partnerships
and their properties, including any encumbrances affecting the properties may be
found in Item 15. Schedule III .

4





Local Partnership Schedule
--------------------------

Percentage of Units
Occupied at May 1,
Name and Location ----------------
(Number of Units) Date Acquired 2003 2002 2001 2000 1999
- ----------------- ------------- ---- ---- ---- ---- ----


BX-8A Team Associates, L.P. October 1995 93% 100% 95% 95% 98%
Bronx, NY (41)

Westminster Park Plaza
(a California Limited Partnership) June 1996 98% 99% 98% 96%
99%
Los Angeles, CA (130)

Fawcett Street Limited Partnership June 1996 100% 98% 98% 98% 95%
Tacoma, WA (60)

Figueroa Senior Housing November 1996 98% 100% 99% 99% 97%
Limited Partnership
Los Angeles, CA (66)

NNPHI Senior Housing December 1996 99% 100% 99% 100% 99%
Limited Partnership
Los Angeles, CA (75)

Belmont/McBride Apartments January 1997 98% 95% 100% 98% 93%
Limited Partnership
Paterson, NJ (42)

Sojourner Douglass, L.P. February 1997 100% 100% 95% 100% 100%
Paterson, NJ (20)

New Zion Apartments October 1997 95% 88% 100% 99% 98%
Limited Partnership
Shreveport, LA (100)

Bakery Village Urban Renewal December 1997 99% 100% 99% 100% 99%
Associates, L.P.
Montclair, NJ (125)

Marlton Housing Partnership, L.P. May 1998 92% 100% 100% 100% 0%*
(a Pennsylvania limited partnership)
Philadelphia, PA (25)

GP Kaneohe Limited Partnership July 1999 100% 98% 100% 0%**
Kaneohe, HI (44)

KSD Village Apartments, Phase II, Ltd. July 1999 94% 88% 88% 75%
Danville, KY (16)

Kanisa Apartments, Ltd. October 1999 88% 86% 92% 92%
Fayette County, KY (59)

Guymon Housing Partners, L.P. December 1999 100% 100% 100% 92%
Guymon, OK (92)



* Property still in construction phase.
** Project substantially completed but no certificate of occupancy received.


5


Leases are generally for periods not greater than one to two years and no tenant
occupies more than 10% of the rentable square footage.

Management continuously reviews the physical state of the properties and
suggests to the respective Local General Partners budget improvements which are
generally funded from cash flow from operations or release of replacement
reserve escrows.

Management annually reviews the insurance coverage of the properties and
believes such coverage is adequate.

See Item 1, Business, above for the general competitive conditions to which the
properties described above are subject.

Real estate taxes are calculated using rates and assessed valuations determined
by the township or city in which the property is located. Such taxes have
approximated less than 1% of the aggregate cost of the properties as shown in
Schedule III to the financial statements included herein.

Housing Tax Credits with respect to a given Apartment Complex are available for
a ten-year period that commences when the property is rented to qualified
tenants. However, the annual Tax Credits available in the year in which the
Apartment Complex is placed in service must be prorated based upon the months
remaining in the year. The amount of the annual Tax Credit not available in the
first year will be available in the eleventh year. In certain cases, the
Partnership acquired its interest in a Local Partnership after the Local
Partnership had placed its Apartment Complex in service. In these cases, the
Partnership may be allocated Tax Credits only beginning in the month following
the month in which it acquired its interest and Tax Credits allocated in any
prior period are not available to the Partnership.

Item 3. Legal Proceedings.

None

Item 4. Submission of Matters to a Vote of Security Holders.

None.
PART II

Item 5. Market for the Registrant's Common Equity and Related Security Holder
Matters.

As of March 31, 2003, the Partnership had issued and outstanding 45,844 Limited
Partnership Interests, each representing a $1,000 capital contribution to the
Partnership, or an aggregate capital contribution of $45,844,000. All of the
issued and outstanding Limited Partnership Interests have been issued to
Independence Assignor Inc. (the "Assignor Limited Partner"), which has in turn
issued 45,844 BACs to the purchasers thereof for an aggregate purchase price of
$45,844,000. Each BAC represents all of the economic and virtually all of the
ownership rights attributable to a Limited Partnership Interest held by the
Assignor Limited Partner. BACs may be converted into Limited Partnership
Interests at no cost to the holder (other than the payment of transfer costs not
to exceed $100), but Limited Partnership Interests so acquired are not
thereafter convertible into BACs.

Neither the BACs nor the Limited Partnership Interests are traded on any
established trading market. The Partnership does not intend to include the BACs
for quotation on NASDAQ or for listing on any national or regional stock
exchange or any other established securities market. The Revenue Act of 1987
contained provisions which have an adverse impact on investors in "publicly
traded partnerships." Accordingly, the General Partner plans to impose limited

6


restrictions on the transferability of the BACs and the Limited Partnership
Interests in secondary market transactions. Implementation of the restrictions
should prevent a public trading market from developing and may adversely affect
the ability of an investor to liquidate his or her investment quickly. It is
expected that such procedures will remain in effect until such time, if ever, as
further revision of the Revenue Act of 1987 may permit the Partnership to lessen
the scope of the restrictions.

As of May 5, 2003, the Partnership has approximately 2,511 registered holders of
an aggregate of 45,844 BACs.

All of the Partnership's general partnership interests, representing an
aggregate capital contribution of $1,000, are held by the General Partner.

There are no material legal restrictions in the Partnership Agreement on the
ability of the Partnership to make distributions.

The Partnership has made no distributions to the BACs holders as of March 31,
2003. The Partnership does not anticipate providing cash distributions to its
BACs holders other than from net refinancing or sales proceeds.

In January 2001, affiliates of Everest Properties, Inc. ("Everest") conducted a
tender offer for up to 1,336.16 BACs. In connection with a prior tender offer
for BACs, an affiliate of the General Partner entered into a standstill
agreement dated as of April 23, 1997 (The "Standstill"), which precluded Everest
from independently soliciting BACs (by tender offer or otherwise). At Everest's
request, the General Partner caused its affiliate to release Everest from the
Standstill for the limited purpose of permitting Everest to make its tender
offer. In connection with such arrangements, Everest agreed to cover all of the
Partnership's expenses with respect to processing the tender offer including
mailing costs, legal fees and other administrative costs incurred by the
Partnership. These reimbursements resulted in aggregate payments to the
Partnership of $41,344 which are reflected as "other income" on the financial
statements for Fiscal Year 2000.

7


Item 6. Selected Financial Data.

The information set forth below presents selected financial data of the
Partnership. Additional financial information is set forth in the audited
financial statements in Item 8 hereof.




Year Ended March 31,
-----------------------------------------------------------------------
OPERATIONS 2003 2002 2001 2000 1999
- ---------- ----------- ----------- ----------- ----------- -----------

Revenues $ 5,814,209 $ 5,691,878 $ 5,848,287 $ 5,318,859 $ 3,435,562


Operating expenses (9,227,715) (9,032,990) (9,641,822) (8,505,735) (4,682,110)
----------- ----------- ----------- ----------- -----------

Loss before minority
interest (3,413,506) (3,341,112) (3,793,535) (3,186,876) (1,246,548)

Minority interest
in loss (income)
of subsidiary
partnership 34,355 34,650 19,869 6,438 (21,185)
----------- ----------- ----------- ----------- -----------

Net loss $(3,379,151) $(3,306,462) $(3,773,666) $(3,180,438) $(1,267,733)
=========== =========== =========== =========== ===========

Net loss per weighted
average BAC (72.97) (71.40) (81.49) (68.68) (27.38)
=========== =========== =========== =========== ===========




Year Ended March 31,
-----------------------------------------------------------------------
FINANCIAL POSITION 2003 2002 2001 2000 1999
- ------------------ ----------- ----------- ----------- ----------- -----------

Total assets $75,661,500 $78,765,789 $80,941,604 $86,387,370 $79,501,249
=========== =========== =========== =========== ===========

Total liabilities $48,094,142 $47,526,993 $46,542,781 $48,314,082 $39,394,161
=========== =========== =========== =========== ===========

Minority interest $ 1,951,864 $ 2,244,151 $ 2,097,716 $ 1,998,515 $ 851,877
=========== =========== =========== =========== ===========

Total partners'
capital (deficit) $25,615,494 $28,994,645 $32,301,107 $36,074,773 $39,255,211
=========== =========== =========== =========== ===========



During the years ended March 31, 2003, 2002 and 2001, total assets decreased
approximately $3,104,000, $2,176,000 and $5,446,000 due to depreciation and
amortization and a reduction in cash and cash equivalents. During the years
ended March 31, 2000 and 1999 total assets increased primarily due to the
proceeds from mortgage and construction loans which were utilized in the
investment of Local Partnerships amounting to approximately $10,500,000 and
$3,400,000, respectively. For the years ended March 31, 2000 and 1999 total
assets and liabilities increased primarily due to the continued acquisition of
Local Partnerships. For the year ended March 31, 2003, 2002 and 2001, property
and equipment decreased approximately $2,532,000, $1,376,000 and $1,152,000
primarily due to depreciation expense, and for the years ended March 31, 2000
and 1999 property and equipment increased approximately $28,900,000 and
$12,100,000, respectively. During the year ended March 31, 2003, mortgage notes
decreased $339,000. During the year ended March 31, mortgage notes decreased
$339,000. During the years ended March 31, 2002, 2001, 2000 and 1999 mortgage
notes increased approximately $79,000, $1,100,000, $5,000,000 and $1,400,000,
respectively.

8





Selected Quarterly financial Data (Unaudited)

Quarter Ended
----------------------------------------------------------------
OPERATIONS June 30, September 30, December 31, March 31,
2003 2002 2001 2000
- ---------- ------------- ------------- ------------- -------------

Revenues $ 1,437,589 $ 1,447,703 $ 1,458,348 $ 1,470,569

Operating
expenses 2,207,677 2,209,901 2,192,489 2,617,648
------------- ------------- ------------- -------------

Loss before
minority
interest (770,088) (762,198) (734,141) (1,147,079)

Minority interest
in loss of
subsidiaries 8,216 7,722 2,572 15,845
------------- ------------- ------------- -------------

Net loss $ (761,872) $ (754,476) $ (731,569) $ (1,131,234)
============= ============= ============= =============

Net loss per
weighted
average BAC $ (16.45) $ (16.29) $ (15.79) $ (24.44)
============= ============= ============= =============



Quarter Ended
----------------------------------------------------------------
OPERATIONS June 30, September 30, December 31, March 31,
2001 2001 2001* 2002*
- ---------- ------------- ------------- ------------- -------------


Revenues $ 1,460,073 $ 1,427,665 $ 1,407,158 $ 1,396,982

Operating
expenses 2,379,005 2,422,995 2,166,497 2,064,493
------------- ------------- ------------- -------------

Loss before
minority
interest (918,932) (995,330) (759,339) (667,511)

Minority interest
in loss of
subsidiaries 7,566 5,759 6,463 14,862
------------- ------------- ------------- -------------

Net loss $ (911,366) $ (989,571) $ (752,876) $ (652,649)
============= ============= ============= =============

Net loss per
weighted
average BAC $ (19.68) $ (21.37) $ (16.26) $ (14.09)
============= ============= ============= =============



* Reclassified for comparative purposes.

Cash Distributions
- ------------------

The Partnership has made no distributions to the BACs holders as of March 31,
2003.

9


Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.

Liquidity and Capital Resources
- -------------------------------

The Partnership's primary source of funds include (i) interest earned on Gross
Proceeds which are invested in tax-exempt money market instruments pending
purchase price adjustments of Local Partnerships and (ii) working capital
reserve and interest thereon. All these sources are available to meet
obligations of the Partnership.

The Partnership has received $45,844,000 in gross proceeds for BACs pursuant to
a public offering, resulting in net proceeds available for investment of
approximately $36,446,000 after volume discounts, payment of sales commissions,
acquisition fees and expenses, organization and offering expenses and
establishment of a working capital reserve.

As of March 31, 2003, the Partnership has invested approximately $37,814,000
(including approximately $1,161,000 classified as a loan repayable from
sale/refinancing proceeds in accordance with the Contribution Agreement and not
including acquisition fees of approximately $1,771,000) of net proceeds in
fourteen Local Partnerships of which approximately $1,593,000 remains to be paid
to the Local Partnerships (including approximately $615,000 being held in
escrow) as certain benchmarks, such as occupancy level, are attained prior to
the release of the funds. During the year ended March 31, 2003, approximately
$236,000 was paid to Local Partnerships, including purchase price adjustments.
The Partnership does not anticipate acquiring additional properties, but the
Partnership may be required to fund potential purchase price adjustments based
on tax credit adjustor clauses. There were no such adjustments made during the
year ended March 31, 2003.

For the year ended March 31, 2003, cash and cash equivalents of the Partnership
and its fourteen consolidated Local Partnerships decreased approximately
($423,000) due to cash used in operating activities ($310,000), repayments of
mortgage loans ($339,000) a decrease in capitalization of consolidated
subsidiaries attributable to minority interest ($258,000) and a net decrease is
due to local general partners and affiliated relating to investing activities
($163,000), which exceeded a decrease in escrow deposits relating to investing
activities ($647,000). Included in the adjustments to reconcile the net loss to
cash used in operations is depreciation and amortization of approximately
$2,547,000.

A working capital reserve has been established from the Partnership's funds
available for investment, which includes amounts which may be required for
potential purchase price adjustments based on tax credit adjustor clauses. At
March 31, 2003, approximately $237,000 of this reserve remained unused. The
General Partner believes that these reserves, plus any cash distributions
received from the operations of the Local Partnerships, will be sufficient to
fund the Partnership's ongoing operations for the foreseeable future. During the
year ended March 31, 2003, there were no distributions from Local Partnerships.
Management anticipates receiving distributions in the future, although not to a
level sufficient to permit providing cash distributions to the BACs holders.

The Partnership had negotiated Operating Deficit Guaranty Agreements with the
development stage Local Partnerships by which the general partners of such Local
Partnerships and/or their affiliates have agreed to fund operating deficits for
a specified period of time. The terms of the Operating Deficit Guaranty
Agreements vary for each of these Local Partnerships, with maximum dollar
amounts to be funded for a specified period of time, generally three years,
commencing on the break-even date. As of March 31, 2003 and 2002, the gross
amounts of the Operating Deficit Guarantees aggregate approximately $2,159,000
and $2,659,000, respectively. All current Operating Deficit Guarantees expire
within the next two years. As of March 31, 2003, $0 has been funded under the
Operating Deficit Guaranty Agreements. Amounts funded under such agreements will

10


be treated as non-interest bearing loans, which will be paid only out of 50% of
available cash flow or out of available net sale or refinancing proceeds.

Partnership management fees owed to the General Partner amounting to
approximately $1,292,000 and $955,000 were accrued and unpaid as of March 31,
2003 and 2002, respectively.

The Partnership has invested all of the net proceeds available for investment in
fourteen Local Partnerships, of which all will generate tax credits in 2003. Due
to increased market demand for investments in properties that were eligible to
receive tax credits at the time the Partnership was investing its capital and
limitations on the types of investments which may be obtained by the Partnership
the purchase price for interests in Local Partnerships which are qualified for
purchase by the Partnership have increased. As a result of these changes,
management does not believe that the Partnership has been able to invest the
proceeds available for investment in a manner which will enable the Partnership
to achieve tax credits in the range of $140-150 for each $1,000 BAC each year in
which the Partnership is receiving its full entitlement of tax credits.

Management is not aware of any trends or events, commitments or uncertainties,
which have not otherwise been disclosed that will or are likely to impact
liquidity in a material way. Management believes the only impact would be from
laws that have not yet been adopted. The portfolio will be diversified by the
location of the properties around the United States so that if one area of the
country is experiencing downturns in the economy, the remaining properties in
the portfolio may be experiencing upswings. However the geographic
diversification of the portfolio may not protect against a general downturn in
the national economy. The tax credits will be attached to the project for a
period of ten years, and will be transferable with the property during the
remainder of such ten-year period. If the General Partner determines that a sale
of a property is warranted, the remaining tax credits would transfer to the new
owner; thereby adding significant value to the property on the market, which
potential increase in value is not included in the financial statement carrying
amount.

Results of Operations
- ---------------------

Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, construction period interest
and any other costs incurred in acquiring the properties. The cost of property
and equipment is depreciated over their estimated useful lives using accelerated
and straight-line methods. Expenditures for repairs and maintenance are charged
to expense as incurred; major renewals and betterments are capitalized. At the
time property and equipment are retired or otherwise disposed of, the cost and
accumulated depreciation are eliminated from the assets and accumulated
depreciation accounts and the profit or loss on such disposition is reflected in
earnings. A loss on impairment of assets is recorded when management estimates
amounts recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. At that time property investments
themselves are reduced to estimated fair value (generally using discounted cash
flows) when the property is considered to be impaired and the depreciated cost
exceeds estimated fair value.

Through March 31, 2003, the Partnership has not recorded any loss on impairment
of assets or reductions to estimated fair value.

The net loss for the years ended March 31, 2003, 2002, 2001 totaled $3,379,151,
$3,306,462 and $3,773,666, respectively.

The Partnership and BACs holders began recognizing Housing Tax Credits with
respect to a property when the credit period for such property commenced.
Because of the time required for the acquisition, completion and rent-up of
properties, the amount of Tax Credits per BAC has gradually increased over the

11


first three years of the Partnership. Housing Tax Credits not recognized in the
first three years will be recognized in the 11th through 13th years. The
Partnership generated $5,356,758, $5,356,758 and $5,506,354 of Housing Tax
Credits during the 2002, 2001 and 2000 tax years, respectively.

The Partnership's results of operations for the years ended March 31, 2003, 2002
and 2001 consisted primarily of the results of the Partnership's investment in
fourteen consolidated Local Partnerships. The majority of Local Partnership
income continues to be in the form of rental income with the corresponding
expenses being divided among operations, depreciation and mortgage interest.

2003 vs. 2002
- -------------

Rental income increased approximately 3% for the year ended March 31, 2003 as
compared to the corresponding period ended March 31, 2002, primarily due to
rental rate increases.

Other income decreased approximately $37,000 for the year ended March 31, 2003
as compared to the corresponding period ended March 31, 2002, primarily due to a
decrease in interest earned on cash and equivalents due to lower interest rates
and smaller balances at the Local Partnerships and at the Partnership level.

Total expenses, excluding general and administrative, repairs and maintenance
and taxes and insurance, remained fairly consistent with a decrease of
approximately 1% for the year ended March 31, 2003 as compared to the
corresponding period ended March 31, 2002.

General and administrative increased approximately $293,000 for the year ended
March 31, 2003 as compared to the corresponding period ended March 31, 2002,
primarily due to one-time administrative incentive fees at two local
partnerships.

Repairs and maintenance decreased approximately $124,000, for the year ended
March 31, 2003 as compared to the corresponding period ended March 31, 2002,
primarily due to a decrease in security and exterminating costs at one Local
Partnership.

Taxes increased approximately $44,000 for the year ended March 31, 2003 as
compared to the corresponding period ended March 31, 2002, primarily due to a
payment of back property taxes by one Local Partnership.

Insurance increased approximately $71,000, for the year ended March 31, 2003 as
compared to the corresponding period ended March 31, 2002, primarily due to an
increase in liability insurance premiums at the local partnerships.

2002 vs. 2001
- -------------

Rental income increased approximately 4% for the year ended March 31, 2002 as
compared to the corresponding period ended March 31, 2001, primarily due to
rental rate increases.

Other income decreased approximately $373,000 for the year ended March 31, 2002
as compared to the corresponding period ended March 31, 2001, primarily due to
the abatement of prior year's real estate tax at two Local Partnerships and a
decrease in interest earned on cash and cash equivalents due to smaller balances
at the Partnership level.

Total expenses, excluding general and administrative, repairs and maintenance,
operating and interest, remained fairly consistent with an increase of
approximately 1% for the year ended March 31, 2002 as compared to the
corresponding period ended March 31, 2001.

General and administrative decreased approximately $449,000 for the year ended
March 31, 2002 as compared to the corresponding period ended March 31, 2001,
primarily due to the elimination of development fees due to the completion of
the rehabilitation phase at one Local Partnership, reduced management fees at a

12


second Local Partnership and the reduction of legal expense due to no properties
being purchased at the Partnership level.

Repairs and maintenance increased approximately $164,000 for the year ended
March 31, 2002 as compared to the corresponding period ended March 31, 2001,
primarily due to an increase in security at one Local Partnership, interior
painting and leak repairs at a second Local Partnership and exterminating costs
at a third Local Partnership.

Operating increased approximately $82,000 for the year ended March 31, 2002 as
compared to the corresponding period ended March 31, 2001, primarily due to an
increase in utility cost and usage at three Local Partnerships and an
underaccrual in 2000 at a forth Local Partnership.

Interest decreased approximately $459,000 for the year ended March 31, 2002 as
compared to the corresponding period ended March 31, 2001, primarily due to the
conversion of construction loans to mortgages at two Local Partnerships,
underaccruals in 1999 at a third and fourth Local Partnership and a rate
reduction at a fifth Local Partnership.

Critical Accounting Estimates
- -----------------------------

The preparation of consolidated financial statements requires management to make
estimates and assumptions. These estimates and assumptions affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the
reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates. The following accounting estimate is
considered critical by the Partnership.

The Partnership is required to assess potential impairments to its long-lived
assets, which is primarily property and equipment. If impairment indicators are
present, the Partnership must measure the fair value of the assets to determine
if adjustments are to be recorded.

Other
- -----

The Partnership's investment as a limited partner in the Local Partnerships is
subject to the risks of potential losses arising from management and ownership
of improved real estate. The Partnership's investments also could be adversely
affected by poor economic conditions generally, which could increase vacancy
levels and rental payment defaults and by increased operating expenses, any or
all of which could threaten the financial viability of one or more of the Local
Partnerships.

There also are substantial risks associated with the operation of Apartment
Complexes receiving government assistance. These include governmental
regulations concerning tenant eligibility, which may make it more difficult to
rent apartments in the complexes; difficulties in obtaining government approval
for rent increases; limitations on the percentage of income which low and
moderate income tenants may pay as rent; the possibility that Congress may not
appropriate funds to enable HUD to make the rental assistance payments it has
contracted to make; and that when the rental assistance contracts expire there
may not be market demand for apartments at full market rents in a Local
Partnership's Apartment Complex.

The Local Partnerships are impacted by inflation in several ways. Inflation
allows for increases in rental rates generally to reflect the impact of higher
operating and replacement costs. Inflation also affects the Local Partnerships
adversely by increasing operating costs as, for example, for such items as fuel,
utilities and labor. However, continued inflation should allow for appreciated
values of the Local Partnerships' Apartment Complexes over a period of time as
rental revenues and replacement costs continue to increase.

13


Item 7A. Quantitative and Qualitative Disclosures About Market Risk
- -------------------------------------------------------------------

None.

14


Item 8. Financial Statements and Supplementary Data.



Sequential
Page
----------

(a) 1. Consolidated Financial Statements

Independent Auditors' Report 16

Consolidated Balance Sheets at March 31, 2003 and 2002 49

Consolidated Statements of Operations for the Years Ended
March 31, 2003, 2002 and 2001 50

Consolidated Statements of Changes in Partners' Capital (Deficit)
for the Years Ended March 31, 2003, 2002 and 2001 51

Consolidated Statements of Cash Flows for the Years Ended
March 31, 2003, 2002 and 2001 52

Notes to Consolidated Financial Statements 54



15


INDEPENDENT AUDITORS' REPORT
----------------------------



TO THE PARTNERS OF
INDEPENDENCE TAX CREDIT PLUS L.P. IV AND SUBSIDIARIES


We have audited the accompanying consolidated balance sheets of
INDEPENDENCE TAX CREDIT PLUS L.P. IV AND SUBSIDIARIES (a Delaware limited
partnership) as of March 31, 2003 and 2002, and the related consolidated
statements of operations, changes in partners' capital (deficit) and cash flows
for the years ended March 31, 2003, 2002 and 2001. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits. We did not
audit the financial statements of thirteen, thirteen and twelve subsidiary
partnerships, whose losses aggregated $2,801,465, $2,718,128 and $3,049,692 for
the years ended March 31, 2003, 2002 and 2001, respectively, and whose assets
constituted 97% and 92% of consolidated assets at March 31, 2003 and 2002,
respectively. Those statements were audited by other auditors whose reports have
been furnished to us, and our opinion, insofar as it relates to the amounts
included for these subsidiary partnerships, is based solely on the reports of
the other auditors.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits and the reports of
the other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the reports of the other auditors,
the consolidated financial statements referred to above present fairly, in all
material respects, the financial position of INDEPENDENCE TAX CREDIT PLUS L.P.
IV AND SUBSIDIARIES as of March 31, 2003 and 2002, and the results of their
operations and their cash flows for the years ended March 31, 2003, 2002 and
2001 in conformity with accounting principles generally accepted in the United
States of America.



/s/ Friedman Alpren & Green LLP
Friedman Alpren & Green LLP
New York, New York
May 12, 2003

16


[LETTERHEAD OF REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners BX 8A Team Associates, L.P.

We have audited the accompanying balance sheet of BX 8A Team Associates, L.P.
for the years ended December 31, 2002 and 2001, and the related statements of
operations, changes in partners' equity (deficit) and cash flows for the year
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of BX 8A Team Associates, L.P. as
of December 31, 2002 and 2001, and the results of its operations and its cash
flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on page 16
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.

/s/ Reznick Fedder & Silverman
Atlanta, Georgia
February 8, 2003

17


[LETTERHEAD OF REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners BX 8A Team Associates, L.P.

We have audited the accompanying balance sheet of BX 8A Team Associates, L.P.
for the year ended December 31, 2001, and the related statements of operations,
statements of partners' equity (deficit) and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits. The financial statements of BX 8A Team
Associates, L.P. as of December 31, 2000 were audited by other auditors whose
report dated February 9, 2001 expressed an unqualified opinion on those
financial statements.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of BX 8A Team Associates, L.P. as
of December 31, 2001, and the results of its operations, the changes in its
partners' equity (deficit) and its cash flows for the year then ended, in
conformity with accounting principles generally accepted in the United States of
America.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on page 16 is
presented for purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.

/s/ Reznick Fedder & Silverman
Atlanta, Georgia
February 7, 2002

18


[LETTERHEAD OF REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Westminster Park Plaza

We have audited the accompanying balance sheets of Westminster Park Plaza, L.P.
as of December 31, 2002 and 2001, and the related statements of operations,
partners' deficit and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Westminster Park Plaza, L.P. as
of December 31, 2002 and 2001, and the results of its operations, the changes in
partners' deficit and its cash flows for the years then ended, in conformity
with accounting principles generally accepted in the United States of America.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information is presented
for purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.

/s/ Reznick Fedder & Silverman
Atlanta, Georgia
January 16, 2003

19


[LETTERHEAD OF REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Westminster Park Plaza

We have audited the accompanying balance sheets of Westminster Park Plaza, L.P.
as of December 31, 2001 and 2000, and the related statements of operations,
partners' equity (deficit) and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Westminster Park Plaza, L.P. as
of December 31, 2001 and 2000, and the results of its operations, partners'
equity (deficit) and its cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States of America.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information is presented
for purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.

/s/ Reznick Fedder & Silverman
Atlanta, Georgia
January 30, 2002

20


[LETTERHEAD OF MCDANIEL & HALLSTROM]

To the Partners
FAWCETT STREET LIMITED PARTNERSHIP
Tacoma, Washington

INDEPENDENT AUDITOR'S REPORT

We have audited the accompanying balance sheets of FAWCETT STREET LIMITED
PARTNERSHIP as of December 31, 2002 and 2001, and the related statements of
operations, partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of FAWCETT STREET LIMITED
PARTNERSHIP as of December 31, 2002 and 2001, and the results of its operations
and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.

/s/ McDaniel & Hallstrom, CPA's
Belfair, Washington
February 1, 2003

21


[LETTERHEAD OF MCDANIEL & HALLSTROM]

To the Partners
FAWCETT STREET LIMITED PARTNERSHIP
Tacoma, Washington

INDEPENDENT AUDITOR'S REPORT

We have audited the accompanying balance sheets of FAWCETT STREET LIMITED
PARTNERSHIP as of December 31, 2001 and 2000, and the related statements of
operations, partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of FAWCETT STREET LIMITED
PARTNERSHIP as of December 31, 2001 and 2000, and the results of its operations
and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.

/s/ McDaniel & Hallstrom, CPA's
Belfair, Washington
February 4, 2002

22


[LETTERHEAD OF CLIFFORD R. BENN]

INDEPENDENT AUDITOR'S REPORT

General Partner
Figueroa Senior Housing Limited Partnership
Los Angeles, California

I have audited the balance sheet of Figueroa Senior Housing Limited Partnership
at December 31, 2002, and the related statements of loss, changes in partners'
capital, and cash flow for the year then ended. These financial statements are
the responsibility of Figueroa Senior Housing Limited Partnership's management.
My responsibility is to express an opinion on these financial statements based
on my audit.

I conducted my audit in accordance with generally accepted auditing standards
used in the United States of America. Those standards require that I plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatements. An audit includes examining on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audit provides a reasonable
basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Figueroa Senior Housing Limited
Partnership at December 31, 2002, and the results of its operations for the year
then ended in conformity with generally accepted accounting principles used in
the United States of America.

/s/ Clifford Benn, CPA
March 3, 2003
Carson, California

23


[LETTERHEAD OF CLIFFORD R. BENN]

INDEPENDENT AUDITOR'S REPORT

General Partner
Figueroa Senior Housing Limited Partnership
Los Angeles, California

I have audited the balance sheet of Figueroa Senior Housing Limited Partnership
at December 31, 2001, and the related statements of loss, changes in partners'
capital, and cash flow for the year then ended. These financial statements are
the responsibility of Figueroa Senior Housing Limited Partnership's management.
My responsibility is to express an opinion on these financial statements based
on my audit.

I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Figueroa Senior Housing Limited
Partnership at December 31, 2001 and the results of its operations for the year
then ended in conformity with generally accepted accounting principles.

/s/ Clifford Benn, CPA
February 27, 2002
Carson, California

24


[LETTERHEAD OF CLIFFORD R. BENN]

INDEPENDENT AUDITOR'S REPORT

General Partner
Figueroa Senior Housing Limited Partnership
Los Angeles, California

I have audited the balance sheet of Figueroa Senior Housing Limited Partnership
at December 31, 2000, and the related statements of loss, changes in partners'
capital, and cash flow for the year then ended. These financial statements are
the responsibility of Figueroa Senior Housing Limited Partnership's management.
My responsibility is to express an opinion on these financial statements based
on my audit.

I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also include
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Figueroa Senior Housing Limited
Partnership at December 31, 2000 and the results of its operations for the year
then ended in conformity with generally accepted accounting principles.

/s/ Clifford Benn, CPA
Carson, California
February 9, 2001

25


[LETTERHEAD OF CLIFFORD R. BENN]

INDEPENDENT AUDITOR'S REPORT

General Partner
NNPHI Senior Housing, L.P.
Los Angeles, California

I have audited the balance sheet of NNPHI Senior Housing, L.P. at December 31,
2002, and the related statements of loss, changes in partners' capital, and cash
flow for the year then ended. These financial statements are the responsibility
of NNPHI Senior Housing, L.P.'s management. My responsibility is to express an
opinion on these financial statements based on my audit.

I conducted my audit in accordance with generally accepted auditing standards
used in the United States of America. Those standards require that I plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatements. An audit includes examining on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audit provides a reasonable
basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of NNPHI Senior Housing, L.P. at
December 31, 2002 and the results of its operations for the year then ended in
conformity with generally accepted accounting principles used in the United
States of America.

/s/ Clifford Benn, CPA
February 17, 2003
Carson, California

26


[LETTERHEAD OF CLIFFORD R. BENN]

INDEPENDENT AUDITOR'S REPORT

General Partner
NNPHI Senior Housing, L.P.
Los Angeles, California

I have audited the balance sheet of NNPHI Senior Housing, L.P. at December 31,
2001, and the related statements of loss, changes in partners' capital, and cash
flow for the year then ended. These financial statements are the responsibility
of NNPHI Senior Housing, L.P.'s management. My responsibility is to express an
opinion on these financial statements based on my audit.

I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of NNPHI Senior Housing, L.P. at
December 31, 2001 and the results of its operations for the year then ended in
conformity with generally accepted accounting principles.

/s/ Clifford Benn, CPA
January 31, 2002
Carson, California

27


[LETTERHEAD OF CLIFFORD R. BENN]

INDEPENDENT AUDITOR'S REPORT

General Partner
NNPHI Senior Housing, L.P.
Los Angeles, California

I have audited the balance sheet of NNPHI Senior Housing, L.P. at December 31,
2000, and the related statements of loss, changes in partners' capital, and cash
flow for the year then ended. These financial statements are the responsibility
of NNPHI Senior Housing, L.P.'s management. My responsibility is to express an
opinion on these financial statements based on my audit.

I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also include
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of NNPHI Senior Housing, L.P. at
December 31, 2000 and the results of its operations for the year then ended in
conformity with generally accepted accounting principles.

/s/ Clifford Benn, CPA
Carson, California
February 14, 2001

28


[LETTERHEAD OF REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Belmont/McBride Apartments
Urban Renewal Associates Limited Partnership

We have audited the accompanying balance sheets of Belmont/McBride Apartments
Urban Renewal Associates Limited Partnership as of December 31, 2002 and 2001,
and the related statements of operations, partners' equity (deficit) and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Belmont/McBride Apartments
Urban Renewal Associates Limited Partnership as of December 31, 2002 and 2001,
and the results of its operations, the changes in partners' equity (deficit) and
cash flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.

/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 24, 2003

29


[LETTERHEAD OF REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Belmont/McBride Apartments
Urban Renewal Associates Limited Partnership

We have audited the accompanying balance sheets of Belmont/McBride Apartments
Urban Renewal Associates Limited Partnership as of December 31, 2001 and 2000,
and the related statements of operations, partners' equity (deficit) and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Belmont/McBride Apartments
Urban Renewal Associates Limited Partnership as of December 31, 2001 and 2000,
and the results of its operations, the changes in partners' equity (deficit) and
cash flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.

/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 19, 2002

30


[LETTERHEAD OF COLE, EVANS & PETERSON]

INDEPENDENT AUDITORS' REPORT ON THE BASIC FINANCIAL
STATEMENTS AND SUPPLEMENTAL INFORMATION

To the Partners
New Zion Apartments Limited Partnership
Shreveport, Louisiana

We have audited the accompanying balance sheet of New Zion Apartments Limited
Partnership, HUD Project No. LA48E000011, at December 31, 2002, and the related
statements of income, partners' capital and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements referred to in the first paragraph
above present fairly, in all material respects, the financial position of New
Zion Apartments Limited Partnership, HUD Project No. LA48E000011, at December
31, 2002 and the results of its operations, changes in capital, and cash flows
for the year then ended in conformity with U.S. generally accepted accounting
principles.

Our audit was made primarily for the purpose of forming an opinion on the basic
financial statements for the year ended December 31, 2002 taken as a whole. The
supplementary Schedules 1, 2 and 3 are presented for purposes of additional
analysis and are not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards, we have also issued a report
dated February 10, 2003 on our consideration of New Zion Apartments Limited
Partnership's internal control, and on its compliance with certain provisions of
laws, regulations, contracts, and grants. Those reports are an integral part of
an audit performed in accordance with Government Auditing Standards and should
be read in conjunction with this report in considering the results of our audit.

/s/ Cole, Evans & Peterson
Shreveport, Louisiana
Federal ID No. 72-0506596
Lead Auditor: Steven W. Hedgepeth
February 10, 2003

31


[LETTERHEAD OF COLE, EVANS & PETERSON]

INDEPENDENT AUDITORS' REPORT ON THE BASIC FINANCIAL
STATEMENTS AND SUPPLEMENTAL INFORMATION

To the Partners
New Zion Apartments Limited Partnership
Shreveport, Louisiana

We have audited the accompanying balance sheet of New Zion Apartments Limited
Partnership, HUD Project No. LA48E000011, at December 31, 2001, and the related
statements of income, partners' capital and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements referred to in the first paragraph
above present fairly, in all material respects, the financial position of New
Zion Apartments Limited Partnership, HUD Project No. LA48E000011, at December
31, 2001 and the results of its operations, changes in capital, and cash flows
for the year then ended in conformity with U.S. generally accepted accounting
principles.

Our audit was made primarily for the purpose of forming an opinion on the basic
financial statements for the year ended December 31, 2001 taken as a whole. The
supplementary Schedules 1, 2 and 3 are presented for purposes of additional
analysis and are not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated February 8, 2002 on our
consideration of New Zion Apartments Limited Partnership's internal control, and
reports dated February 8, 2002, on its compliance with laws and regulations,
compliance with specific requirements applicable to Fair Housing and
Non-Discrimination, and compliance with specific requirements applicable to
major HUD-assisted programs. Those reports are an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.

/s/ Cole, Evans & Peterson
Shreveport, Louisiana
Federal ID No. 72-0506596
Lead Auditor: Steven W. Hedgepeth
February 8, 2002

32



[LETTERHEAD OF COLE, EVANS & PETERSON]

INDEPENDENT AUDITORS' REPORT ON THE BASIC FINANCIAL
STATEMENTS AND SUPPLEMENTAL INFORMATION

To the Partners
New Zion Apartments Limited Partnership
Shreveport, Louisiana

We have audited the accompanying balance sheet of New Zion Apartments Limited
Partnership, HUD Project No. LA48E000011, at December 31, 2000, and the related
statements of income, partners' capital and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements referred to in the first paragraph
above present fairly, in all material respects, the financial position of New
Zion Apartments Limited Partnership, HUD Project No. LA48E000011, at December
31, 2000 and the results of its operations, changes in capital, and cash flows
for the year then ended in conformity with generally accepted accounting
principles.

Our audit was made primarily for the purpose of forming an opinion on the basic
financial statements for the year ended December 31, 2000 taken as a whole. The
supplementary Schedules 1, 2 and 3 are presented for purposes of additional
analysis and are not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated February 16, 2001 on our
consideration of New Zion Apartments Limited Partnership's internal control, and
reports dated February 16, 2001, on its compliance with laws and regulations,
compliance with specific requirements applicable to Fair Housing and
Non-Discrimination, and compliance with specific requirements applicable to
major HUD-assisted programs. Those reports are an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.

/s/ Cole, Evans & Peterson
Federal ID No. 72-0506596
Lead Auditor: Steven W. Hedgepeth
February 16, 2001
Shreveport, Louisiana

33


[LETTERHEAD OF REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Bakery Village Urban Renewal Associates, L.P.

We have audited the accompanying balance sheet of Bakery Village Urban Renewal
Associates, L.P. as of December 31, 2002, and the related statements of
operations, partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bakery Village Urban Renewal
Associates, L.P. as of December 31, 2002, and the results of its operations, the
changes in partners' equity and its cash flows for the year then ended, in
conformity with accounting principles generally accepted in the United States of
America.

/s/ Reznick Fedder & Silverman
Baltimore, Maryland
January 31, 2003

34


[LETTERHEAD OF REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Bakery Village Urban Renewal Associates, L.P.

We have audited the accompanying balance sheet of Bakery Village Urban Renewal
Associates, L.P. as of December 31, 2001, and the related statements of
operations, partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bakery Village Urban Renewal
Associates, L.P. as of December 31, 2001, and the results of its operations, the
changes in partners' equity and its cash flows for the year then ended, in
conformity with accounting principles generally accepted in the United States of
America.

/s/ Reznick Fedder & Silverman
Baltimore, Maryland
January, 17, 2002

35


[LETTERHEAD OF REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Bakery Village Urban Renewal Associates, L.P.

We have audited the accompanying balance sheet of Bakery Village Urban Renewal
Associates, L.P. as of December 31, 2000, and the related statements of
operations, partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bakery Village Urban Renewal
Associates, L.P. as of December 31, 2000, and the results of its operations, the
changes in partners' equity and its cash flows for the year then ended, in
conformity with generally accepted accounting principles.

/s/ Reznick Fedder & Silverman
Baltimore, Maryland
January, 12, 2001

36


[LETTERHEAD OF REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Marlton Housing Partnership, L.P.

We have audited the accompanying balance sheets of Marlton Housing Partnership,
L.P. as of December 31, 2002 and 2001, and the related statements of operations,
changes in partners' equity (deficit) and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by the management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Marlton Housing Partnership,
L.P. at December 31, 2002 and 2001, and the results of its operations, the
changes in its partners' equity (deficit) and its cash flows for the years then
ended in conformity with accounting principles generally accepted in the United
States of America.

/s/ Reznick Fedder & Silverman
Baltimore, Maryland
January 24, 2003

37


[LETTERHEAD OF REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Marlton Housing Partnership, L.P.

We have audited the accompanying balance sheet of Marlton Housing Partnership,
L.P. as of December 31, 2001, and the related statements of operations, changes
in partners' equity (deficit) and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by the management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the 2001 financial statements referred to above present fairly,
in all material respects, the financial position of Marlton Housing Partnership,
L.P. at December 31, 2001, and the results of its operations, the changes in its
partners' equity (deficit) and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.

/s/ Reznick Fedder & Silverman
Baltimore, Maryland
January 25, 2002

38


[LETTERHEAD OF ZINER, KENNEDY & LEHAN LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Marlton Housing Partnership, L.P.

We have audited the accompanying balance sheets of Marlton Housing Partnership,
L.P. (a Pennsylvania limited partnership) as of December 31, 2000 and 1999, and
the related statements of operations, changes in partners' equity and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's general partners. Our responsibility is to express an opinion
on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's general partners, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Marlton Housing Partnership,
L.P. at December 31, 2000 and 1999, and the results of its operations, the
changes in its partners' equity and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

/s/ Ziner, Kennedy, &Lehan LLP
January 26, 2001
Boston, Massachusetts

39


[LETTERHEAD OF FAVORS & ASSOCIATES, CPA's, P.S.]

INDEPENDENT AUDITORS' REPORT

To the Partners
GP Kaneohe Limited Partnership

We have audited the accompanying balance sheet of GP Kaneohe Limited
Partnership, as of December 31, 2002, and the related statements of operations,
changes in partners' capital (deficit), and cash flows for the year then ended.
These financial statements are the responsibility of the entity's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of GP Kaneohe Limited Partnership
as of December 31, 2002, and the results of its operations, the changes in its
partners' capital (deficit) and cash flows for the year then ended in conformity
with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued a report
dated March 13, 2003, on our consideration of GP Kaneohe Limited Partnership's
internal control, and our test of its compliance with certain provisions of
laws, regulations, contractors and grants. Those reports are an integral part of
an audit performed in accordance with Government Auditing Standards and should
be read in conjunction with this report in considering the results of our audit.

Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data required by HUD shown
on pages 10 and 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements of the Partnership. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

/s/ Favors & Associates, CPA's, P.S.
Fircrest, Washington
March 13, 2003

40



[LETTERHEAD OF DWYER PEMBERTON AND COULSON, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
GP Kaneohe Limited Partnership

We have audited the accompanying balance sheet of GP Kaneohe Limited
Partnership, as of December 31, 2001 and the related statements of operations,
changes in partners' capital (deficit), and cash flows for the year then ended.
These financial statements are the responsibility of the entity's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of GP Kaneohe Limited Partnership
as of December 31, 2001, and the results of its operations, the changes in its
partners' capital (deficit) and cash flows for the year then ended in conformity
with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs, issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 18, 2002, on our
consideration of GP Kaneohe Limited Partnership's internal control, and reports
dated January 18, 2002, on its compliance specific requirements applicable to
major HUD programs and specific requirements applicable to Fair Housing and
Non-Discrimination. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.

Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data required by HUD shown
on pages 10 and 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements of the Partnership. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

/s/ Dwyer, Pemberton & Coulson
Tacoma, Washington
January 18, 2002

41


[LETTERHEAD OF DWYER PEMBERTON AND COULSON, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners of
GP Kaneohe Limited Partnership

We have audited the accompanying balance sheet of GP Kaneohe Limited
Partnership, as of December 31, 2000 and the related statements of operations,
changes in partners' capital, and cash flows for the year then ended. These
financial statements are the responsibility of the entity's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of GP Kaneohe Limited Partnership
as of December 31, 2000, and the results of its operations, the changes in its
partners' capital and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs, issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 10, 2001, on our
consideration of GP Kaneohe Limited Partnership's internal control, and reports
dated January 10, 2001, on its compliance specific requirements applicable to
major HUD programs and specific requirements applicable to Fair Housing and
Non-Discrimination. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.

Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included in
this report on page 9 is presented for purposes of additional analysis and is
not a required part of the basic financial statements for GP Kaneohe Limited
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.

/s/ Dwyer, Pemberton & Coulson
Tacoma, Washington
January 10, 2001

42



[LETTERHEAD OF MILLER, MAYER, SULLIVAN, & STEVENS, LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners
KSD Village Apartments, Phase II, Ltd,

We have audited the accompanying balance sheets of KSD Village Apartments, Phase
II, Ltd. as of December 31, 2002 and 2001, and the related statements of
operations, partners' equity (deficit), and cash flows for the years then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of KSD Village Apartments, Phase
II, Ltd. as of December 31, 2002 and 2001, and the results of its operations,
changes in partners' equity (deficit) and its cash flows for the years then
ended, in conformity with accounting principles generally accepted in the United
States of America.

/s/ Miller, Mayer, Sullivan, & LLP
Lexington, Kentucky
January 13, 2003

43


[LETTERHEAD OF MILLER, MAYER, SULLIVAN, & STEVENS, LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners
KSD Village Apartments, Phase II, Ltd,

We have audited the accompanying balance sheets of KSD Village Apartments, Phase
II, Ltd. as of December 31, 2001 and 2000, and the related statements of
operations, partners' equity (deficit), and cash flows for the years then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of KSD Village Apartments, Phase
II, Ltd. as of December 31, 2001 and 2000, and the results of its operations,
changes in partners' equity (deficit) and its cash flows for the years then
ended, in conformity with accounting principles generally accepted in the United
States of America.

/s/ Miller, Mayer, Sullivan, & LLP
Lexington, Kentucky
January 21, 2002

44


[LETTERHEAD OF MILLER, MAYER, SULLIVAN, & STEVENS, LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners
Kanisa Apartments Ltd.

We have audited the accompanying balance sheets of Kanisa Apartments, Ltd.,
complex no. 083-98017-YHA, as of December 31, 2002 and 2001, and the related
statements of operations, changes in partners' equity (deficit), and cash flows
for the years then ended. These financial statements are the responsibility of
the partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Kanisa Apartments, Ltd., as of
December 31, 2002 and 2001, and the results of its operations, changes in
partners' equity (deficit), and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.

In accordance with Government Auditing Standards, we have also issued a report
dated February 10, 2003, on our consideration of Kanisa Apartments, Ltd.'s
internal controls and our on our tests of its compliance with certain provisions
of laws, regulations, contracts, and grants. Those reports are an integral part
of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audits.

Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental data
included in this report is presented for purposes of additional analysis and is
not a required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated, in all material
respects, in relation to the basic financial statements taken as a whole.

/s/ Miller, Mayer, Sullivan, & Stevens, LLP
Lexington, Kentucky
February 10, 2003
EIN: 61-0866166
Lead Auditor: Darren C. Johnson, CPA
Audit Principal: John T. Miller, CPA

45


[LETTERHEAD OF MILLER, MAYER, SULLIVAN, & STEVENS, LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners
Kanisa Apartments Ltd.

We have audited the accompanying balance sheets of Kanisa Apartments, Ltd.,
complex no. 083-98017-YHA, as of December 31, 2001 and 2000, and the related
statements of operations, changes in partners' equity (deficit), and cash flows
for the years then ended. These financial statements are the responsibility of
the partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and Government Auditing Standards issued by the
Comptroller General of the United States. Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Kanisa Apartments, Ltd., as of
December 31, 2001 and 2000, and the results of its operations, changes in
partners' equity (deficit), and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs, issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 29, 2002, on our
consideration of Kanisa Apartments, Ltd.'s internal controls and reports dated
January 29, 2002, on its compliance with specific requirements applicable to
major HUD programs and specific requirements applicable to Fair Housing and
Non-Discrimination. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audits.

Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental data
included in this report is presented for purposes of additional analysis and is
not a required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated, in all material
respects, in relation to the basic financial statements taken as a whole.

/s/ Miller, Mayer, Sullivan, & Stevens, LLP
Lexington, Kentucky
February 2, 2001
EIN: 61-0866166
Lead Auditor: Darren C. Johnson, CPA
Audit Principal: John T. Miller, CPA

46



[LETTERHEAD OF THOMAS HANKINS]

INDEPENDENT ACCOUNTANT'S REPORT

Partners
Guymon Housing Partners Limited Partnership
d/b/a Blue Quail Apartments

I have audited the accompanying balance sheets of Guymon Housing Partners
Limited Partnership, d/b/a Blue Quail Apartments as of December 31, 2002 and
2001, and the related statements of operations, changes in partners' capital and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. My responsibility is to express
an opinion on these financial statements based on my audit.

I conducted my audit in accordance with auditing standards generally accepted in
the United States of America. Those standards require that I plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit provides a reasonable basis for
my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Guymon Housing Partners Limited
Partnership, d/b/a Blue Quail Apartments as of December 31, 2002 and 2001, and
the results of its operations and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.

/s/ Thomas Hankins
February 17, 2003
Fort Smith, Arkansas

47


[LETTERHEAD OF THOMAS HANKINS]

INDEPENDENT ACCOUNTANT'S REPORT

Partners
Guymon Housing Partners Limited Partnership
d/b/a Blue Quail Apartments

I have audited the accompanying balance sheets of Guymon Housing Partners
Limited Partnership, d/b/a Blue Quail Apartments as of December 31, 2001 and
2000, and the related statements of operations, changes in partners' capital and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. My responsibility is to express
an opinion on these financial statements based on my audit.

I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Guymon Housing Partners Limited
Partnership, d/b/a Blue Quail Apartments as of December 31, 2001 and 2000, and
the results of its operations and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.

/s/ Thomas Hankins
February 15, 2002
Fort Smith, Arkansas

48



INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS



ASSETS

March 31,
----------------------------
2003 2002
------------ ------------

Property and equipment - at cost, less accumulated
depreciation (Notes 2 and 4) $ 69,391,714 $ 71,923,788
Cash and cash equivalents (Notes 2 and 10) 2,037,966 2,461,056
Cash held in escrow (Note 5) 2,961,291 3,087,693
Deferred costs, less accumulated amortization (Notes 2
and 6) 777,593 867,766
Other assets 492,936 425,486
------------ ------------

Total assets $ 75,661,500 $ 78,765,789
============ ============


LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)

Liabilities:
Mortgage notes payable (Note 7) $ 36,401,006 $ 36,739,830
Accounts payable and other liabilities 7,429,413 6,663,234
Due to local general partners and affiliates (Note 8) 2,583,149 2,777,814
Due to general partner and affiliates (Note 8) 1,680,574 1,346,115
------------ ------------

Total liabilities 48,094,142 47,526,993
------------ ------------

Minority interest 1,951,864 2,244,151
------------ ------------

Commitments and contingencies (Note 10)

Partners' capital (deficit):
Limited partners (100,000 BACs authorized;
45,844 issued and outstanding) (Note 1) 25,766,873 29,112,232
General partner (151,379) (117,587)
------------ ------------

Total partners' capital (deficit) 25,615,494 28,994,645
------------ ------------

Total liabilities and partners' capital (deficit) $ 75,661,500 $ 78,765,789
============ ============



The accompanying notes are an integral part of these consolidated financial
statements.

49



INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS




Year Ended March 31,
-----------------------------------------
2003 2002 2001
----------- ----------- -----------

Revenues

Rental income $ 5,520,414 $ 5,360,801 $ 5,144,150
Other income (principally interest income) 293,795 331,077 704,137
----------- ----------- -----------

5,814,209 5,691,878 5,848,287
----------- ----------- -----------

Expenses
General and administrative 1,776,031 1,483,724 1,933,018
General and administrative-related parties
(Note 8) 618,694 603,949 615,973
Repairs and maintenance 910,719 1,035,059 870,657
Operating and other 734,157 777,930 695,761
Taxes 221,980 177,907 161,939
Insurance 312,659 241,264 227,947
Interest 2,106,166 2,165,378 2,624,336
Depreciation and amortization 2,547,309 2,547,779 2,512,191
----------- ----------- -----------

Total expenses 9,227,715 9,032,990 9,641,822
----------- ----------- -----------

Net loss before minority interest (3,413,506) (3,341,112) (3,793,535)

Minority interest in loss of subsidiary
partnerships 34,355 34,650 19,869
----------- ----------- -----------

Net loss $(3,379,151) $(3,306,462) $(3,773,666)
=========== =========== ===========

Net loss - limited partners $(3,345,359) $(3,273,397) $(3,735,929)
=========== =========== ===========

Number of BACs outstanding 45,844 45,844 45,844
=========== =========== ===========

Net loss per weighted average BAC $ (72.97) $ (71.40) $ (81.49)
=========== =========== ===========



The accompanying notes are an integral part of these consolidated financial
statements.

50


INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
(DEFICIT) FOR THE YEARS ENDED MARCH 31, 2003, 2002 and 2001



Limited General
Total Partners Partner
------------ ------------ ------------

Partners' capital (deficit) - April 1, 2000 $ 36,074,773 $ 36,121,558 $ (46,785)


Net loss (3,773,666) (3,735,929) (37,737)
------------ ------------ ------------

Partners' capital (deficit) - March 31, 2001 32,301,107 32,385,629 (84,522)


Net loss (3,306,462) (3,273,397) (33,065)
------------ ------------ ------------

Partners' capital (deficit) - March 31, 2002 28,994,645 29,112,232 (117,587)


Net loss (3,379,151) (3,345,359) (33,792)
------------ ------------ ------------

Partners' capital (deficit) - March 31, 2003 $ 25,615,494 $ 25,766,873 $ (151,379)
============ ============ ============



The accompanying notes are an integral part of these consolidated financial
statements.

51



INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS




Year Ended March 31,
-----------------------------------------
2003 2002* 2001*
----------- ----------- -----------

Cash flows from operating activities:
Net loss $(3,379,151) $(3,306,462) $(3,773,666)
----------- ----------- -----------
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities:
Depreciation and amortization 2,547,309 2,547,779 2,512,191
Adjustment to property and equipment 74,938 0 0
Minority interest in loss of subsidiary
partnerships (34,355) (34,650) 19,869
Increase in cash held in escrow (520,897) (49,315) (195,143)
(Increase) decrease in other assets (67,450) (35,315) 382,600
Increase in accounts payable and other
liabilities 766,179 978,875 835,064
Increase in due from local general partners
and affiliates 28,077 17,679 5,604
Decrease in due from local general partners
and affiliates (59,574) (237,396) (165)
Increase in due to general partner and
affiliates 334,459 174,368 381,092
----------- ----------- -----------
Total adjustments 3,068,686 3,362,025 3,941,112
----------- ----------- -----------

Net cash (used in) provided by operating
activities (310,465) 55,563 167,446
----------- ----------- -----------

Cash flows from investing activities:
Acquisition of property and equipment 0 (1,082,120) (290,772)
Decrease (increase) in cash held in escrow 647,299 (449,161) (723,903)
Decrease in accounts payable and other
liabilities 0 0 (93,237)
Increase in due to local general partners
and affiliates 5,789 638,692 176,512
Decrease in due to local general partners
and affiliates (168,957) (121,446) (1,524,293)
Decrease in investments available-for-sale 0 0 3,100,000
Increase in deferred costs 0 0 (18,681)
----------- ----------- -----------

Net cash provided by (used in) investing activities 484,131 (1,014,035) 625,626
----------- ----------- -----------


52



INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued)




Year Ended March 31,
-----------------------------------------
2003 2002* 2001*
----------- ----------- -----------

Cash flows from financing activities:
Proceeds from mortgage notes 0 0 1,311,309
Repayments of mortgage notes (338,824) (466,560) (243,027)
Repayments of construction loans 0 0 (2,620,160)
(Decrease) increase in capitalization of consolidated
subsidiaries attributable to minority interest (257,932) 181,085 79,332
----------- ----------- -----------

Net cash used in financing activities (596,756) (285,475) (1,472,546)
----------- ----------- -----------

Net decrease in cash and cash equivalents (423,090) (1,243,947) (679,474)

Cash and cash equivalents at beginning of year 2,461,056 3,705,003 4,384,477
----------- ----------- -----------

Cash and cash equivalents at end of year $ 2,037,966 $ 2,461,056 $ 3,705,003
=========== =========== ===========

Supplemental disclosure of cash flow
information:
Cash paid during the year for interest $ 1,321,322 $ 1,422,179 $ 1,500,022
=========== =========== ===========

Supplemental disclosures of noncash
investing and financing activities:

Property and equipment reclassified from
deferred costs $ 0 $ 0 $ 979,963

Construction loans converted to mortgage loans 0 545,374 77,700



* Reclassified for comparative purposes.

The accompanying notes are an integral part of these consolidated financial
statements.


53



INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003

NOTE 1 - General

Independence Tax Credit Plus L.P. IV (a Delaware limited partnership) (the
"Partnership") was organized on February 22, 1995 and commenced a public
offering on July 6, 1995. The general partner of the Partnership is Related
Independence L.L.C., a Delaware limited liability company (the "General
Partner").

The Partnership's business is to invest in other partnerships ("Local
Partnerships," "subsidiaries" or "subsidiary partnerships") owning apartment
complexes that are eligible for the low-income housing tax credit ("Housing Tax
Credit") enacted in the Tax Reform Act of 1986, some complexes may also be
eligible for the historic rehabilitation tax credit ("Historic Tax Credit";
together with Housing Tax Credits, "Tax Credits").

As of March 31, 2003, the Partnership has acquired limited partnership interests
in fourteen subsidiary partnerships, all of which have been consolidated. The
Partnership does not anticipate acquiring limited partnership interests in
additional subsidiary partnerships. The Partnership's investments in Local
Partnerships represent from 98.99% to 99.89% interests, except for one
investment which is a 58.12% interest.

The Partnership was authorized to issue a total of 100,000 ($100,000,000)
Beneficial Assignment Certificates ("BACs") which have been registered with the
Securities and Exchange Commission for sale to the public. Each BAC represents
all of the economic and virtually all of the ownership rights attributable to a
limited partnership interest. The solicitation for the subscription of BAC's was
terminated as of May 22, 1996 and the final closing occurred on August 15, 1996.
The Partnership had raised a total of $45,844,000 representing 45,844 BACs.

NOTE 2 - Summary of Significant Accounting Policies

a) Basis of Accounting

For financial reporting purposes, the Partnership's fiscal year ends on March
31. All subsidiaries have fiscal years ending December 31. Accounts of the
subsidiaries have been adjusted for intercompany transactions from January 1
through March 31. The Partnership's fiscal year ends March 31 in order to allow
adequate time for the subsidiaries' financial statements to be prepared and
consolidated. The books and records of the Partnership are maintained on the
accrual basis of accounting, in accordance with generally accepted accounting
principles.

b) Basis of Consolidation

The consolidated financial statements include the accounts of the Partnership
and fourteen subsidiary partnerships for the years ended March 31, 2003, 2002
and 2001, respectively, in which the Partnership is a limited partner. Through
the rights of the Partnership and/or an affiliate of the General Partner, which
affiliate has a contractual obligation to act on behalf of the Partnership, to
remove the general partner of the subsidiary local partnerships and to approve
certain major operating and financial decisions, the Partnership has a
controlling financial interest in the subsidiary partnerships. All intercompany
accounts and transactions with the subsidiary partnerships have been eliminated
in consolidation.

54



INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003

Increases (decreases) in the capitalization of the consolidated subsidiaries
attributable to minority interests arise from cash contributions from and cash
distributions to the minority interest partners.

Losses attributable to minority interests which exceed the minority interests'
investment in a subsidiary have been charged to the Partnership. Such losses
aggregated approximately $7,000, $79,000 and $46,000 for the years ended March
31, 2003, 2002 and 2001, respectively. The Partnership's investment in each
subsidiary is equal to the respective subsidiary's partners' equity less
minority interest capital, if any. In consolidation, all subsidiary partnership
losses are included in the Partnership's capital account except for losses
allocated to minority interest capital.

c) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, cash in banks, and investments
in short-term highly liquid investments purchased with original maturities of
three months or less.

d) Property and Equipment

Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, construction period interest
and any other costs incurred in acquiring the properties. The cost of property
and equipment is depreciated over their estimated useful lives using accelerated
and straight-line methods. Expenditures for repairs and maintenance are charged
to expense as incurred; major renewals and betterments are capitalized. At the
time property and equipment are retired or otherwise disposed of, the cost and
accumulated depreciation are eliminated from the assets and accumulated
depreciation accounts and the profit or loss on such disposition is reflected in
earnings. A loss on impairment of assets is recorded when management estimates
amounts recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. At that time property investments
themselves are reduced to estimated fair value (generally using estimated future
discounted net cash flows) when the property is considered to be impaired and
the depreciated cost exceeds estimated fair value.

At the time management commits to a plan to dispose of assets, said assets are
adjusted to the lower of carrying amount or fair value less costs to sell. These
assets are classified as property and equipment-held for sale and are not
depreciated. There are no assets classified as property and equipment-held for
sale through March 31, 2003. In August 2001, the FASB issued SFAS No. 144,
"Accounting for the Impairment of Disposal of Long-Lived Assets" ("SFAS 144"),
which supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of". SFAS 144 applies to all
long-lived assets. It is effective for financial statements issued for fiscal
years beginning after December 15, 2001, and was adopted by the Partnership, as
required, on January 1, 2002.

Through March 31, 2003, the Partnership has not recorded any loss on impairment
of assets or reductions to estimated fair value.

e) Income Taxes

The Partnership is not required to provide for, or pay, any federal income
taxes. Net income or loss generated by the Partnership is passed through to the

55



INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003

partners and is required to be reported by them. The Partnership may be subject
to state and local taxes in jurisdictions in which it operates. For income tax
purposes, the Partnership has a fiscal year ending December 31 (Note 9).

f) Organization and Offering Costs

Costs incurred to organize the Partnership, including but not limited to legal,
accounting and registration fees, are considered organization expenses. These
costs are expensed as incurred, pursuant to the provisions of Statement of
Position No. 98-5, "Reporting on the Cost of Start-Up Activities", issued by the
American Institute of Certified Public Accountants.

Costs incurred in connection with obtaining permanent mortgage financing are
amortized over the lives of the related mortgage notes. Costs incurred to sell
BACs, including brokerage fees and the nonaccountable expense allowance, are
considered selling and offering expenses. These costs are charged directly to
limited partners' capital.

g) Deferred Acquisition Costs

Acquisition costs and fees incurred in connection with the purchase of interests
in certain subsidiary partnerships have been capitalized as property costs.

h) Loss Contingencies

The Partnership records loss contingencies as a charge to income when
information becomes available which indicates that it is probable that an asset
has been impaired or a liability has been incurred as of the date of the
financial statements and the amount of loss can be reasonably estimated.

i) Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.

NOTE 3 - Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate that
value:

Cash and Cash Equivalents and Cash Held in Escrow
- ---------------------------------------------------------
The carrying amount approximates fair value due to the short-term maturity of
the instruments.

Mortgage Notes Payable
- ----------------------
The fair value of mortgage notes payable and construction loans payable is
estimated, where practicable, based on the borrowing rate currently available
for similar loans.

56



INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003

The estimated fair values of the Partnership's mortgage notes payable and
construction loans payable are as follows:




March 31, 2003 March 31, 2002
------------------------- -------------------------
Carrying Carrying
Amount Fair Value Amount Fair Value
----------- ----------- ----------- -----------

Mortgage notes payable for
which it is:
Practicable to estimate fair value $25,582,250 $26,018,413 $25,909,398 $27,022,238
Not practicable $10,818,756 (a) $10,830,432 (a)




(a) Management believes it is not practicable to estimate the fair value of
certain mortgage notes payable because mortgage programs with similar
characteristics are not currently available to each of the subsidiary
partnerships.

The carrying amount of other assets and liabilities reported on the consolidated
balance sheets that require such disclosure approximates fair value.

Due to General Partner and Affiliates and Due to Local General Partners and
- --------------------------------------------------------------------------------
Affiliates
- ----------
Management believes it is not practical to estimate the fair value of due to
general partner and affiliates and due to local general partners and affiliates
because market information on such unique loans are not currently available.

NOTE 4 - Property and Equipment

The components of property and equipment and their estimated useful lives are as
follows:




March 31, Estimated
---------------------------- Useful Lives
2003 2002 (Years)
------------ ------------ -----------

Land $ 3,307,496 $ 3,307,496
Building and improvements 76,888,418 76,979,431 27.5
Furniture and fixtures 1,110,999 1,094,924 5-7
------------ -------------

81,306,913 81,381,851
Less: Accumulated depreciation (11,915,199) (9,458,063)
------------ -------------

$ 69,391,714 $ 71,923,788
============ =============



Included in property and equipment at March 31, 2003 and 2002, was $2,750,640 of
acquisition fees paid to the General Partner and $708,031 of third party
acquisition expenses. In addition, as of March 31, 2003 and 2002, building and
improvements includes $343,161 of capitalized interest. No interest was
capitalized during the years ended March 31, 2003, 2002 and 2001.

In connection with the rehabilitation of the properties, the subsidiary
partnerships have incurred developer's fees of $4,235,495 to the local general
partners and affiliates as of both March 31, 2003 and 2002. Such fees have been
included in the cost of property and equipment.

57



INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003

Depreciation expense for the years ended March 31, 2003, 2002 and 2001 amounted
to $2,457,136, $2,457,711and $2,422,698, respectively.

NOTE 5 - Cash Held in Escrow

Cash held in escrow consists of the following:




March 31,
-----------------------
2003 2002
---------- ----------

Purchase price payments* $ 615,135 $ 741,459
Real estate taxes, insurance and other 2,346,156 2,346,234
---------- ----------

$2,961,291 $3,087,693
========== ==========


* Represents amounts to be paid to seller upon completion of properties under
construction and upon meeting specified rental achievement criteria.

NOTE 6 - Deferred Costs

The components of deferred costs and their periods of amortization are as
follows:


March 31,
--------------------------
2003 2002 Period
----------- ----------- ---------

Financing costs $ 1,001,424 $ 1,001,424 *
Other deferred costs 177,692 177,692
----------- -----------
1,179,116 1,179,116
Less: Accumulated amortization (401,523) (311,350)
----------- -----------

$ 777,593 $ 867,766
=========== ===========


*Over the life of the related mortgage note.

Amortization expense for the years ended March 31, 2003, 2002 and 2001 amounted
to $90,173, $90,068 and $89,493, respectively.

NOTE 7 - Mortgage Loans Payable

The mortgage loans are payable in aggregate monthly installments of
approximately $113,000 including principal and interest with rates varying from
0% to 9.11% per annum and have maturity dates ranging from 2004 through 2051.
The loans are collateralized by the land and buildings of the subsidiary
partnerships, the assignment of certain subsidiary partnerships' rents and
leases, and are without further recourse.

58



INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003

Annual principal payment on the permanent debt requirements for mortgage notes
payable for each of the next five fiscal years and thereafter are as follows:




Fiscal Year Amount
- ----------- ------------

2003 $ 2,077,650
2004 400,909
2005 442,050
2006 388,131
2007 354,781
Thereafter 32,737,485
------------

$ 36,401,006
============


The mortgage agreements generally require monthly deposits to replacement
reserves and monthly deposits to escrow accounts for real estate taxes, hazard
and mortgage insurance and other expenses (Note 5).

NOTE 8 - Related Party Transactions

An affiliate of the General Partner has a .01% interest as a special limited
partner in each of the Local Partnerships.

Pursuant to the Partnership Agreement and the Local Partnership Agreements, the
General Partner and affiliate receive their pro-rata share of profits, losses
and tax credits.

The General Partner and its affiliates perform services for the Partnership. The
costs incurred for the years ended March 31, 2003, 2002 and 2001 are as follows:

A) Guarantees

In November 2002, FASB Interpretation No. 45, "Guarantor's Accounting and
Disclosure Requirement for Guarantees, Including Indirect Guarantees of
Indebtedness of Others" ("FASB Interpretation No. 45"), was issued. The
accounting recognition provisions of FASB Interpretation No. 45 are effective
January 1, 2003 on a prospective basis. They require that a guarantor recognize,
at the inception of a guarantee, a liability for the fair value of the
obligation undertaken in issuing or modifying any guarantee after December 31,
2002. Under prior accounting principles, a guarantee would not have been
recognized as a liability until a loss was probable and reasonably estimated. At
May 12, 2003, the Partnership has not issued or modified any existing guarantees
and has not determined the impact, if any, that adoption of the accounting
recognition provision of FASB Interpretation No. 45 would have on the
Partnership's future financial position or results of operations.

The Partnership had negotiated Operating Deficit Guaranty Agreements with the
development stage Local Partnerships by which the general partners of such Local
Partnerships and/or their affiliates have agreed to fund operating deficits for
a specified period of time. The terms of the Operating Deficit Guaranty
Agreements vary for each of these Local Partnerships, with maximum dollar
amounts to be funded for a specified period of time, generally three years,
commencing on the break-even date. As of March 31, 2003 and 2002, Operating
Deficit Guarantees aggregate approximately $2,159,000 and $2,659,000,

59



INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003

respectively. All current Operating Deficit Guarantees expire within the next
two years. As of March 31, 2003, $0 has been funded under the Operating Deficit
Guaranty Agreements. Amounts funded under such agreements will be treated as
non-interest bearing loans, which will be paid only out of 50% of available cash
flow or out of available net sale or refinancing proceeds.

B) Related Party Expenses

Expenses incurred to related parties for the years ended March 31, 2003, 2002
and 2001 were as follows:



Year Ended March 31,
------------------------------
2003 2002 2001
-------- -------- --------

Partnership management fees (a) $337,120 $334,968 $329,923
Expense reimbursements (b) 111,856 119,009 132,549
Local administrative fees (d) 53,000 48,000 43,000
-------- -------- --------

Total general and administrative-
General Partner 501,976 501,977 505,472

Property
management fees incurred
to affiliates of the subsidiary partnerships'
general partners (c) 116,718 101,972 110,501
-------- -------- --------

Total general and administrative-
related parties $618,694 $603,949 $615,973
======== ======== ========


(a) The General Partner is entitled to receive a partnership management fee,
after payment of all Partnership expenses, which together with the annual local
administrative fees will not exceed a maximum of 0.5% per annum of invested
assets (as defined in the Partnership Agreement), for administering the affairs
of the Partnership. Subject to the foregoing limitation, the partnership
management fee will be determined by the General Partner in its sole discretion
based upon its review of the Partnership's investments. Unpaid partnership
management fees for any year will be accrued without interest and will be
payable only to the extent of available funds after the Partnership has made
distributions to the limited partners of sale or refinancing proceeds equal to
their original capital contributions plus a 10% priority return thereon (to the
extent not previously paid out of cash flow). Partnership management fees owed
to the General Partner amounting to approximately $1,292,000 and $955,000 were
accrued and unpaid as of March 31, 2003 and 2002, respectively.

(b) The Partnership reimburses the General Partner and its affiliates for actual
Partnership operating expenses incurred by the General Partner and its
affiliates on the Partnership's behalf. The amount of reimbursement from the
Partnership is limited by the provisions of the Partnership Agreement. Another
affiliate of the General Partner performs asset monitoring for the Partnership.
These services include site visits and evaluations of the subsidiary
partnerships' performance.

(c) Property management fees incurred by the Local Partnerships amounted to
$354,672, $335,474 and $345,771 for the years ended March 31, 2003, 2002 and

60



INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003

2001, respectively. Of these fees, $116,718, $101,972 and $110,501 was incurred
to affiliates of the subsidiary partnerships' general partners.

(d) Independence SLP IV L.P., a special limited partner of the subsidiary
partnerships, is entitled to receive a local administrative fee of up to $5,000
per year from each subsidiary partnership.

C) Due to Local General Partners and Affiliates

Due to local general partners and affiliates consists of the following:



March 31,
--------------------------
2003 2002
----------- -----------

Development fee payable $ 2,142,384 $ 2,311,366
General partner loan payable 104,992 104,992
General partner loan receivable (140,602) (142,683)
Construction advances 373,955 368,166
Construction costs payable 56,652 64,708
Operating advances 6,000 0
Management and other fees 39,768 71,265
----------- -----------

$ 2,583,149 $ 2,777,814
=========== ===========


NOTE 9 - Income Taxes

A reconciliation of the financial statement net loss to the income tax loss for
the Partnership and its consolidated subsidiaries follows:




Year Ended December 31,
-----------------------------------------
2002 2001 2000
----------- ----------- -----------

Financial statement net loss $(3,379,151) $(3,306,462) $(3,773,666)

Differences between depreciation and amortiza-
tion expense for financial reporting purposes
and income tax purposes (356,405) (386,694) (262,761)

Differences resulting from parent company
having a different fiscal year for income tax and
financial reporting purposes (81,578) 29,186 (57,363)

Tax exempt interest income (15,073) (45,024) (142,015)

Other, including accruals for financial reporting
purposes not deductible for income tax pur-
poses until paid (228,738) (149,561) (65,563)
----------- ----------- -----------

Net loss as shown on the income tax returns $(4,060,945) $(3,858,555) $(4,301,368)
=========== =========== ===========



61



INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003

NOTE 10 - Commitments and Contingencies

a) Uninsured Cash and Cash Equivalents

The Partnership and its subsidiary partnerships maintain their cash and cash
equivalents in various banks. The accounts at each bank are insured by the
Federal Deposit Insurance Corporation for up to $100,000. At March 31, 2003,
uninsured cash and cash equivalents at various banking institutions approximated
$1,434,000.

b) Leases

One subsidiary partnership is leasing the land on which the Project is located,
for a term of 65 years starting on July 14, 1982. At December 31, 2002, the
subsidiary partnership is obligated to pay rent of $1 per annum.

c) Other

The Partnership is subject to the risks incident to potential losses arising
from the management and ownership of improved real estate and poor economic
conditions.

The Partnership and BACs holders will begin to recognize Housing Tax Credits
with respect to a property when the credit period for such property commences.
Because of the time required for the acquisition, completion and rent-up of
properties, it is expected that the amount of Tax Credits per BAC will gradually
increase over the first three years of the Partnership. Housing Tax Credits not
recognized in the first three years will be recognized in the 11th through 13th
years. The Partnership generated $5,356,758, $5,356,758 and $5,506,354 of
Housing Tax Credits during the 2002, 2001 and 2000 tax years, respectively. The
Housing Tax Credits expire at various times ending in 2009.

62


Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

None

PART III

Item 10. Directors and Executive Officers of the Registrant.

The Partnership has no directors or executive officers. The Partnership's
affairs are managed and controlled by Related Independence L.L.C. ("RILLC"), the
General Partner. The members of RILLC are Related General II, L.P., a Delaware
limited partnership ("RGII), Alan P. Hirmes and Stuart J. Boesky. RCMP, Inc., a
Delaware corporation ("RCMP") is the sole general partner of RGII.

In December 2002, Charter Municipal Mortgage Acceptance Company ("CharterMac"),
which is also managed by an affiliate of Related Capital Company, announced a
proposed acquisition of Related Capital Company, an affiliate of the General
Partner. Pursuant to the proposed acquisition, CharterMac will acquire
controlling interests in the general partner of the General Partner. This
acquisition is not anticipated to affect the Partnership or its day-to-day
operations as management of the General Partners will not change.

Certain information concerning the executive officers and directors of the
General Partner of RCMP is set forth below.

Name Position
- ---- --------

Stephen M. Ross Director and President of RCMP

Alan P. Hirmes President and Member of RILLC

Michael J. Wechsler Director and Executive Vice President of RCMP

Stuart J. Boesky Senior Vice President and Member of RILLC

Marc D. Schnitzer Vice President of RILLC

Denise L. Kiley Vice President of RILLC

Glenn F. Hopps Treasurer of RILLC

Teresa Wicelinski Secretary of RILLC

STEPHEN M. ROSS, 63, is a Director of RILLC. Mr. Ross is the President, a
Director and a shareholder of The Related Realty Group, Inc., the General
Partner of The Related Companies, L.P. ("TRCLP"). He graduated from the
University of Michigan School of Business Administration with a Bachelor of
Science degree and from Wayne State University School of Law with a Juris Doctor
degree. Mr. Ross then received a Master of Laws degree in taxation from New York
University School of Law. He joined the accounting firm of Coopers & Lybrand in
Detroit as a tax specialist and later moved to New York, where he worked for two
large Wall Street investment banking firms in their real estate and corporate
finance departments. Mr. Ross formed the predecessor of TRCLP in 1972 to
develop, manage, finance and acquire subsidized and conventional apartment
developments. Mr. Ross also serves on the Board of Trustees of Charter Municipal
Mortgage Acceptance Company.

63


ALAN P. HIRMES, 48, is President of RILLC. Mr. Hirmes has been a Certified
Public Accountant in New York since 1978. Prior to joining Related in October
1983, Mr. Hirmes was employed by Weiner & Co., Certified Public Accountants. Mr.
Hirmes is also a Vice President of Capital. Mr. Hirmes graduated from Hofstra
University with a Bachelor of Arts degree. Mr. Hirmes also serves on the Board
of Trustees of Charter Municipal Mortgage Acceptance Company and American
Mortgage Acceptance Company.

MICHAEL J. WECHSLER, 64, is a Director and Executive Vice President of RCMP. Mr.
Wechsler joined the predecessor of The Related Companies, L.P. in 1987 as Chief
Operating Officer and Executive Vice President and is the Chief Operating
Officer and Executive Vice President of the Related Realty Group, Inc. Prior to
that, he was Senior Vice President and a Managing Director of the Real Estate
Division of Chemical Bank with overall responsibility for administration and
lending activities of the Division in 25 states and New York City. He supervised
a diversified portfolio of construction and real estate loans of over $3.5
billion. Mr. Wechsler attended the Massachusetts Institute of Technology when he
received a Bachelor of Science degree in Civil Engineering and received his
Masters in Business Administration from the Harvard Graduate School of Business
Administration.

STUART J. BOESKY, 47, is a Vice President of RILLC. Mr. Boesky practiced real
estate and tax law in New York City with the law firm of Shipley & Rothstein
from 1984 until February 1986 when he joined Capital. From 1983 to 1984 Mr.
Boesky practiced law with the Boston law firm of Kaye Fialkow Richard &
Rothstein (which subsequently merged with Strook & Strook & Lavan) and from 1978
to 1980 was a consultant specializing in real estate at the accounting firm of
Laventhol & Horwath. Mr. Boesky graduated from Michigan State University with a
Bachelor of Arts degree and from Wayne State School of Law with a Juris Doctor
degree. He then received a Master of Laws degree in Taxation from Boston
University School of Law. Mr. Boesky also serves on the Board of Trustees of
Charter Municipal Mortgage Acceptance Company and American Mortgage Acceptance
Company.

MARC D. SCHNITZER, 42, is a Vice President of RILLC. He is responsible both for
financial restructurings of real estate properties and directing Related's
acquisitions of properties generating Housing Tax Credits. Mr. Schnitzer
received a Masters of Business Administration from The Wharton School of the
University of Pennsylvania in December 1987 before joining Related in January
1988. From 1983 to January 1986, he was a financial analyst for the First Boston
Corporation in New York. Mr. Schnitzer graduated summa cum laude with a Bachelor
of Science in Business Administration from the School of Management at Boston
University in May 1983.

DENISE L. KILEY, 43, is responsible for overseeing the due diligence and asset
management of the multifamily residential properties invested in RCC sponsored
corporate, public and private equity and debt funds. Prior to joining Related in
1990, Ms. Kiley had experience acquiring, financing and asset managing
multifamily residential properties. From 1981 through 1985 she was an auditor
with Price Waterhouse. Ms. Kiley holds a Bachelor of Science in Accounting from
Boston College.

GLENN F. HOPPS, 40, is Treasurer of RILLC. Mr. Hopps joined Related in December
1990, and prior to that date was employed by Marks Shron & Company and
Weissbarth, Altman and Michaelson, certified public accountants. Mr. Hopps
graduated from New York State University at Albany with a Bachelor of Science
Degree in Accounting.

TERESA WICELINSKI, 37, is Secretary of RILLC. Prior to joining Related in June
1992, Ms. Wicelinski was employed by Friedman, Alpren & Green, certified public
accountants. Ms. Wicelinski graduated from Pace University with a Bachelor of
Arts Degree in Accounting.

64



Item 11. Executive Compensation.

The Partnership has no officers or directors. The Partnership does not pay or
accrue any fees, salaries or other forms of compensation to members or officers
of the General Partner for their services. However, under the terms of the
Partnership Agreement, the Partnership has entered into certain arrangements
with the General Partner and its affiliates, which provide for compensation to
be paid to the General Partner and its affiliates. Such arrangements include
(but are not limited to) agreements to pay nonrecurring Acquisition Fees, a
nonaccountable Acquisition Expense allowance, an accountable expense
reimbursement and Subordinated Disposition Fees to the General Partner and/or
its affiliates. In addition, the General Partner is entitled to a subordinated
interest in Cash from Sales or Financings and a 1% interest in Net Income, Net
Loss, Distributions of Adjusted Cash from Operations and Cash from Sales or
Financings. Certain members and officers of the General Partner receive
compensation from the General Partner and its affiliates for services performed
for various affiliated entities which may include services performed for the
Partnership. The maximum annual partnership management fee paid to the General
Partner is 0.5% of invested assets. See Note 8 to the Financial Statements in
Item 8 above, which is incorporated herein by reference.

Tabular information concerning salaries, bonuses and other types of compensation
payable to executive officers has not been included in this annual report. As
noted above, the Partnership has no executive officers. The levels of
compensation payable to the General Partner and/or its affiliates is limited by
the terms of the Partnership Agreement and may not be increased therefrom on a
discretionary basis.

Item 12. Security Ownership of Certain Beneficial Owners and Management.



Name and address of Amount and Nature of Percentage
Title of Class Beneficial Ownership Beneficial Ownership of Class
- -------------- -------------------- -------------------- ----------

General Partnership Related Independence $1,000 capital 100%
Interest in the L.L.C. contribution
Partnership 625 Madison Avenue -directly owned
New York, NY 10022


Independence SLP IV L.P., a limited partnership whose general partner is the
General Partner of the Partnership and which acts as the special limited partner
of each Local Partnership, holds a .01% limited partnership interest in the
Local Partnerships. See Note 8 to the Financial Statements in Item 8 above,
which information is incorporated herein by reference thereto.

Except as set forth below no person is known by the Partnership to be the
beneficial owner of more than five percent of the Limited Partnership Interests
and/or BACs; and neither the General Partner nor any director or officer of the
General Partner beneficially owns any Limited Partnership Interests or BACs. The
following table sets forth the number of BACs beneficially owned as of May 5,
2003 by (i) each BACs holder known to the Partnership to be a beneficial owner
of more than 5% of the BACs, (ii) each director and executive officer of the
General Partner of RCMP and (iii) the directors and executive officers of the
General Partners of RCMP as a group. Unless otherwise noted, all BACs are owned
directly with sole voting and dispositive powers.

65





Amount and Nature of Percentage
Name of Beneficial Owner (1) Beneficial Ownership of Class
- ---------------------------- -------------------- ----------

Lehigh Tax Credit Partners, Inc. 2,868.06(2) 6.3%
J. Michael Fried 2,868.06(2)(3) 6.3%
Michael J. Wechsler -- --
Alan P. Hirmes 2,868.06(2)(3) 6.3%
Stuart J. Boesky 2,868.06(2)(3) 6.3%
Stephen M. Ross 2,868.06(2)(3) 6.3%
Marc D. Schnitzer 2,868.06(2)(3) 6.3%
Glenn F. Hopps -- --
Teresa Wicelinski -- --

All directors and executive
officers of the general partner
of the Related General Partner as
a group (eight persons) 2,868.06(2)(3) 6.3%


(1) The address for each of the persons in the table is 625 Madison Avenue, New
York, New York 10022.

(2) As set forth in Schedule 13D filed by Lehigh Tax Credit Partners III L.L.C.
("Lehigh III") and Lehigh Tax Credit Partners, Inc. (the "Managing Member") on
January 25, 1999 with the Securities and Exchange Commission (the "Commission")
and pursuant to a letter agreement dated October 6, 1998 among the Partnership,
Lehigh III and Related Independence Associates IV L.P. ("RIA") (the "Standstill
Agreement"), Lehigh III agreed that, prior to October 6, 2008 (the "Standstill
Expiration Date"), it will not and it will cause certain affiliates not to (i)
seek to propose to enter into, directly or indirectly, any merger,
consolidation, business combination, sale or acquisition of assets, liquidation,
dissolution or other similar transaction involving the Partnership, (ii) form,
join or otherwise participate in a "group" (within the meaning of Section
13(d)(3) of the Act) with respect to any voting securities of the Partnership,
except that those affiliates bound by the Standstill Agreement will not be
deemed to have violated it and formed a "group" solely by acting in accordance
with the Standstill Agreement, (iii) disclose in writing to any third party any
intention, plan or arrangement inconsistent with the terms of the Standstill
Agreement, or (iv) loan money to, advise, assist or encourage any person in
connection with any action inconsistent with the terms of the Standstill
Agreement, Lehigh III also agreed to vote its BACs in the same manner as a
majority of all voting BACs holders; provided, however, Lehigh is entitled to
vote its BACs as it determines with regard to any proposal (i) to remove RIA as
a general partner of the Partnership or (ii) concerning the reduction of any
fees, profits, distributions or allocations for the benefit of RIA or its
affiliates. The discussion herein of the Standstill Agreement is subject to and
qualified in its entirety by reference to such agreement, a copy of which is
attached hereto as an exhibit and incorporated herein by reference. The
addresses of each of the Partnership, Lehigh III and RIA is 625 Madison Avenue,
New York, New York 10022.

(3) Each such party serves as a director and executive officer of the Managing
Member and owns an equity interest therein except J. Michael Fried who owns only
an economic interest.

66


Item 13. Certain Relationships and Related Transactions.

The Partnership has and will continue to have certain relationships with the
General Partner and its affiliates, as discussed in Item 11 and also Note 8 to
the Financial Statements in Item 8 above, which are incorporated herein by
reference thereto. However, there have been no direct financial transactions
between the Partnership and the members and officers of the General Partner.

Item 14. Controls and Procedures

The Chief Executive Officer and Chief Financial Officer of Related Independence
L.L.C. which is a general partner of the Partnership, has evaluated the
Partnership's disclosure controls and procedures relating to the Partnership's
annual report on Form 10-K for the period ending March 31, 2003 as filed with
the Securities and Exchange Commission and has judged such controls and
procedures to be effective as of March 31, 2003 (the "Evaluation Date").

There have been no significant changes in the internal controls or in other
factors that could significantly affect internal controls relating to the
Partnership since the Evaluation Date.

67


PART IV

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

Sequential
Page
----------

(a) 1. Financial Statements
--------------------
Independent Auditors' Report 16

Consolidated Balance Sheets at March 31, 2003 and 2002 49

Consolidated Statements of Operations for the Years Ended
March 31, 2003, 2002 and 2001 50

Consolidated Statements of Changes in Partners' Capital
(Deficit) for the Years Ended March 31, 2003, 2002 and 2001 51

Consolidated Statements of Cash Flows for the Years Ended
March 31, 2003, 2002 and 2001 52

Notes to Consolidated Financial Statements 54

(a)2. Consolidated Financial Statement Schedules
------------------------------------------

Independent Auditors' Report 75

Schedule I - Condensed Financial Information of Registrant 76

Schedule III - Real Estate and Accumulated Depreciation 79

All other schedules have been omitted because they are not
required or because the required information is contained
in the financial statements or notes thereto.

(a)3. Exhibits
--------
(3A) Agreement of Limited Partnership of Independence Tax Credit
Plus L.P. IV as adopted on February 22, 1995*

(3B) Form of Amended and Restated Agreement of Limited Partnership
of Independence Tax Credit Plus L.P. IV, attached to the
Prospectus as Exhibit A**

(3C) Certificate of Limited Partnership of Independence Tax Credit
Plus L.P. IV as filed on February 22, 1995*

(10A) Form of Subscription Agreement attached to the Prospectus as
Exhibit B**

(10B) Escrow Agreement between Independence Tax Credit Plus L.P. IV
and Bankers Trust Company*

(10C) Form of Purchase and Sales Agreement pertaining to the
Partnership's acquisition of Local Partnership Interests*

68

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(continued)

Sequential
Page
----------
(10D) Form of Amended and Restated Agreement of Limited
Partnership of Local Partnerships*

(21) Subsidiaries of the Registrant

*Incorporated herein as an exhibit by reference to exhibits
filed with Post-Effective Amendment No. 4 to the
Registration Statement on Form S-11 {Registration No.
33-89968}

**Incorporated herein as an exhibit by reference to
exhibits filed with Post-Effective Amendment No. 8 to the
Registration Statement on Form S-11 {Registration No.
33-89968}

(b) Reports on Form 8-K
-------------------

No reports on Form 8-K were filed during the quarter.

(c) Additional Exhibits
-------------------

99.1 Certification Pursuant to 18
U.S.C. Section 1350, as adopted
pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002. 74

69


Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(continued)

Jurisdiction
(c) Subsidiaries of the Registrant (Exhibit 21) of Organization
------------------------------------------- ---------------
BX-8A Team Associates, L.P. NY
Westminster Park Plaza CA
Fawcett Street Limited Partnership WA
Figueroa Senior Housing Limited Partnership CA
NNPHI Senior Housing Limited Partnership CA
Belmont/McBride Apartments Limited Partnership NJ
New Zion Apartments Limited Partnership LA
Bakery Village Urban Renewal Associates, L.P. NJ
Sojourner Douglass, L.P. NJ
Marlton Housing Partnership, L.P. PA
GP Kaneohe Limited Partnership HI
KSD Village Apartments, Phase II, Ltd. KY
Kanisa Apartments, Ltd. KY
Guymon Housing Partners, L.P. OK


(d) Not applicable


70


SIGNATURES
----------

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


INDEPENDENCE TAX CREDIT PLUS L.P. IV
------------------------------------
(Registrant)



By: RELATED INDEPENDENCE L.L.C.,
a General Partner



Date: May 30, 2003 By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
President, Chief Executive Officer
and Chief Financial Officer


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated:





Signature Title Date
- ------------------- ------------------------------------- ------------

President and Chief Executive Officer
Director and President of RCMP, Inc.,
/s/ Stephen M. Ross the general partner of Related
- ------------------- General II L.P., a Member of Related
Stephen M. Ross Independence L.L.C. May 30, 2003



President and Member of
/s/ Alan P. Hirmes Related Independence L.L.C.
- ------------------ President, Chief Executive Officer
Alan P. Hirmes and Chief Financial Officer May 30, 2003



Director and Executive Vice President
/s/ Michael J. Wechsler of RCMP, Inc., the general partner of
- ----------------------- Related General II L.P., a Member of
Michael J. Wechsler Related Independence L.L.C. May 30, 2003


/s/ Stuart J. Boesky
- -------------------- Vice President and Member of
Stuart J. Boesky Related Independence L.L.C. May 30, 2003





/s/ Glenn F. Hopps
- ------------------ Treasurer of Related Independence
Glenn F. Hopps L.L.C. (principal accounting officer) May 30, 2003






CERTIFICATION

I, Alan P. Hirmes, Chief Executive Officer and Chief Financial Officer of
Related Independence L.L.C. (the "General Partner"), which is the General
Partner of Independence Tax Credit Plus L.P. IV (the "Partnership"), hereby
certify that:

1. I have reviewed this annual report on Form 10-K for the year ended
March 31, 2003 of the Partnership;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary in order 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 annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the Partnership as of, and for, the annual presented in
this annual report;

4. I am responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15-d-14)
for the Partnership and I have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the Partnership, including its
consolidated subsidiaries, is made known to me by others within those
entities, particularly during the period in which this annual report
was being prepared;

b) evaluated the effectiveness of the Partnership's disclosure
controls and procedures as of March 31, 2003 (the "Evaluation Date");
and

c) presented in this annual report my conclusions about the
effectiveness of the disclosure controls and procedures based on my
evaluation as of the Evaluation Date;

5. I have disclosed, based on my most recent evaluation, to the
Partnership's auditors and to the Board of Directors of the General
Partner:

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the Partnership's ability to
record, process, summarize and report financial data and have
identified for the Partnership's auditors any material weaknesses in
internal controls; and

b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Partnership's
internal controls; and

6. I have indicated in this annual report whether or not there were
significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date of
our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
President, Chief Executive Officer and
Chief Financial Officer
May 30, 2003





Exhibit 99.1


CERTIFICATION PURSUANT TO
18.U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Annual Report of Independence Tax Credit Plus L.P. IV
(the "Partnership") on Form 10-K for the year ended March 31, 2003 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Alan P. Hirmes, Chief Executive Officer and Chief Financial Officer of Related
Independence L.L.C. which is the general partner of the Partnership, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:


(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and


(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Partnership.


By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
President, Chief Executive Officer and Chief Financial Officer
May 30, 2003





INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENT SCHEDULES
-------------------------------------------------------------


TO THE PARTNERS OF
INDEPENDENCE TAX CREDIT PLUS L.P. IV AND SUBSIDIARIES


In connection with our audits of the consolidated financial statements of
INDEPENDENCE TAX CREDIT PLUS L.P. IV AND SUBSIDIARIES included in the Form 10-K
as presented in our opinion dated May 12, 2003, which is based in part on the
reports of other auditors, we have also audited supporting Schedule I as of
March 31, 2003 and 2002 and for the years ended 2003, 2002 and 2001 and Schedule
III as of March 31, 2003 and for the years ended March 31, 2003, 2002 and 2001.
In our opinion, based on our audits, the reports of the other auditors, these
schedules present fairly, when read in conjunction with the related financial
statements, the financial data required to be set forth therein.




/s/ Friedman Alpren & Green LLP
Friedman Alpren & Green LLP

New York, New York
May 12, 2003






INDEPENDENCE TAX CREDIT PLUS L.P. IV
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(Not Including Consolidated Subsidiary Partnerships)


CONDENSED BALANCE SHEETS


ASSETS




March 31,
--------------------------
2003 2002*
----------- -----------

Cash and cash equivalents $ 1,215,461 $ 1,509,840
Investment in subsidiary partnerships 23,372,840 26,224,447
Cash held in escrow 615,135 741,459
Other assets 1,800,821 1,606,401
----------- -----------

Total assets $27,004,257 $30,082,147
=========== ===========


LIABILITIES AND PARTNERS' CAPITAL


Due to general partner and affiliates $ 1,338,353 $ 1,038,873
Other liabilities 50,410 48,629
----------- -----------

Total liabilities 1,388,763 1,087,502

Partners' capital 25,615,494 28,994,645
----------- -----------

Total liabilities and partners' capital $27,004,257 $30,082,147
=========== ===========



* Reclassified for comparative purposes.






INDEPENDENCE TAX CREDIT PLUS L.P. IV
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(Not Including Consolidated Subsidiary Partnerships)


CONDENSED STATEMENTS OF OPERATIONS



Year Ended March 31,
-----------------------------------------
2003 2002 2001
----------- ----------- -----------

Revenues

Interest income $ 13,751 $ 58,353 $ 161,204
----------- ----------- -----------
Expenses

Administrative and management 114,727 105,301 245,743
Administrative and management-related parties 448,976 453,977 462,472
----------- ----------- -----------

Total expenses 563,703 559,278 708,215
----------- ----------- -----------

Loss from operations (549,952) (500,925) (547,011)

Equity in loss of subsidiary partnerships (2,829,199) (2,805,537) (3,226,655)
----------- ----------- -----------

Net loss $(3,379,151) $(3,306,462) $(3,773,666)
=========== =========== ===========








INDEPENDENCE TAX CREDIT PLUS L.P. IV
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(Not Including Consolidated Subsidiary Partnerships)

CONDENSED STATEMENTS OF CASH FLOWS



Year Ended March 31,
-----------------------------------------
2003 2002* 2001
----------- ----------- -----------

Cash flows from operating activities:

Net loss $(3,379,151) $(3,306,462) $(3,773,666)
----------- ----------- -----------

Adjustments to reconcile net loss
to net cash (used in) provided by operating
activities:

Equity in loss of subsidiary partnerships 2,829,199 2,805,537 3,226,655
(Increase) decrease in other assets (194,420) 493,009 492,651
Increase in liabilities:
Due to general partner and affiliates 299,480 166,318 400,234
Other liabilities 1,781 1,042 7,496
----------- ----------- -----------

Total adjustments 2,936,040 3,465,906 4,127,036
----------- ----------- -----------

Net cash (used in) provided by operating activities (443,111) 159,444 353,370
----------- ----------- -----------

Cash flows from investing activities:

Decrease in investments available for sale 0 0 3,100,000
Decrease (increase) in cash held in escrow 126,324 (245,958) 133,799
Increase (decrease) in investments in subsidiary
partnerships 22,408 (1,204,157) (1,915,793)
----------- ----------- -----------

Net cash provided by (used in) investing activities 148,732 (1,450,115) 1,318,006
----------- ----------- -----------

Net (decrease) increase in cash and cash
equivalents (294,379) (1,290,671) 1,671,376

Cash and cash equivalents, beginning of year 1,509,840 2,800,511 1,129,135
----------- ----------- -----------

Cash and cash equivalents, end of year $ 1,215,461 $ 1,509,840 $ 2,800,511
=========== =========== ===========



* Reclassified for comparative purposes.




INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 31, 2003






Initial Cost to Partnership Cost Capitalized
--------------------------- Subsequent to
Buildings and Acquisition:
Description Encumbrances Land Improvements Improvemets
- ------------------- ------------ ----------- ------------- ----------------

Apartment Complexes

BX-8A Team Associates, L.P. $ 1,829,044 $ 5,467 $ 2,667,819 $ 311,594
Bronx, NY
Westminster Park Plaza 7,783,379 1,197,697 8,093,774 1,939,639
Los Angeles, CA
Fawcett Street Limited Partnership 2,011,712 390,654 4,247,465 188,181
Tacoma, WA
Figueroa Senior Housing Limited Partnership 3,009,313 279,000 4,978,250 540,817
Los Angeles, CA
NNPHI Senior Housing Limited Partnership 3,930,208 709,657 6,135,419 346,094
Los Angeles, CA
Belmont/McBride Apartments 2,848,672 154,934 5,627,693 2,512,963
Limited Partnership
Paterson, NJ
Sojourner Douglass, L.P. 1,977,352 141,297 2,573,950 112,727
Paterson, NJ
New Zion Apartments Limited Partnership 1,034,853 20,000 2,688,770 76,839
Shreveport, LA
Bakery Village Urban Renewal 4,580,003 50,000 14,912,416 2,731,224
Associates, L.P.
Montclair, NJ
Marlton Housing Partnership, L.P. 1,849,000 2,648 1,547,121 1,735,719
Philadelphia, PA
GP Kaneohe Limited Partnership 1,984,232 0 3,306,828 43,110
Kaneohe, HI
KSD Village Apartments, Phase II Ltd. 415,053 0 887,539 29,870
Danville, KY
Kanisa Apartments Ltd. 1,408,217 106,592 4,846,543 102,813
Fayette County, KY
Guymon Housing Partners, L.P. 1,739,968 84,918 4,238,907 739,965
Guymon, OK
------------ ----------- ------------- ----------------

$ 36,401,006 $ 3,142,864 $ 66,752,494 $ 11,411,555
============ =========== ============= ================


Gross Amount at which Carried At Close of Period
------------------------------------------------
Buildings and Accumulated
Description Land Improvements Total Depreciation
- ------------------- ------------ ------------- ------------- ------------

Apartment Complexes

BX-8A Team Associates, L.P. $ 11,579 $ 2,973,301 $ 2,984,880 $ 706,605
Bronx, NY
Westminster Park Plaza 1,292,427 9,938,683 11,231,110 1,582,355
Los Angeles, CA
Fawcett Street Limited Partnership 396,383 4,429,917 4,826,300 1,031,183
Tacoma, WA
Figueroa Senior Housing Limited Partnership 291,377 5,506,690 5,798,067 1,053,545
Los Angeles, CA
NNPHI Senior Housing Limited Partnership 715,387 6,475,783 7,191,170 1,085,218
Los Angeles, CA
Belmont/McBride Apartments 182,633 8,112,957 8,295,590 1,339,327
Limited Partnership
Paterson, NJ
Sojourner Douglass, L.P. 143,996 2,683,978 2,827,974 572,004
Paterson, NJ
New Zion Apartments Limited Partnership 22,699 2,762,910 2,785,609 599,018
Shreveport, LA
Bakery Village Urban Renewal 52,699 17,640,941 17,693,640 2,011,812
Associates, L.P.
Montclair, NJ
Marlton Housing Partnership, L.P. 4,355 3,281,133 3,285,488 310,185
Philadelphia, PA
GP Kaneohe Limited Partnership 613 3,349,325 3,349,938 349,654
Kaneohe, HI
KSD Village Apartments, Phase II Ltd. 612 916,796 917,408 92,808
Danville, KY
Kanisa Apartments Ltd. 107,205 4,948,743 5,055,948 433,364
Fayette County, KY
Guymon Housing Partners, L.P. 85,531 4,978,260 5,063,791 748,121
Guymon, OK
------------ ------------- ------------- ------------

$ 3,307,496 $ 77,999,417 $ 81,306,913 $ 11,915,199
============ ============= ============= ============

Life on which
Depreciation in
Year of Latest Income
Construction/ Date Statements are
Description Renovation Acquired Computed (a)
- ------------------- ------------- ------------- ---------------

Apartment Complexes

BX-8A Team Associates, L.P. 1995-96 Oct. 1995 27.5 years
Bronx, NY
Westminster Park Plaza 1996-97 June 1996 27.5 years
Los Angeles, CA
Fawcett Street Limited Partnership 1996-97 June 1996 27.5 years
Tacoma, WA
Figueroa Senior Housing Limited Partnership 1996-97 Nov. 1996 27.5 years
Los Angeles, CA
NNPHI Senior Housing Limited Partnership 1996-97 Dec. 1996 27.5 years
Los Angeles, CA
Belmont/McBride Apartments 1997-98 Jan. 1997 27.5 years
Limited Partnership
Paterson, NJ
Sojourner Douglass, L.P. 1997-98 Feb. 1997 27.5 years
Paterson, NJ
New Zion Apartments Limited Partnership 1997-98 Oct. 1997 27.5 years
Shreveport, LA
Bakery Village Urban Renewal 1997-98 Dec. 1997 27.5 years
Associates, L.P.
Montclair, NJ
Marlton Housing Partnership, L.P. 1998-99 May 1998 27.5 years
Philadelphia, PA
GP Kaneohe Limited Partnership 1999-00 July 1999 7-40 years
Kaneohe, HI
KSD Village Apartments, Phase II Ltd. 1999-00 July 1999 10-40 years
Danville, KY
Kanisa Apartments Ltd. 1998-99 Oct. 1999 5-40 years
Fayette County, KY
Guymon Housing Partners, L.P. 1998-99 Dec. 1999 27.5 years
Guymon, OK



(a) Depreciation is computed using primarily the straight-line method over the
estimated useful lives determined by the Partnership date of acquisition.




INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 31, 2003


Cost of Property and Equipment Accumulated Depreciation
------------------------------------------- ------------------------------------------
Year Ended March 31,
----------------------------------------------------------------------------------------
2002 2001 2000 2002 2001 2000
------------ ------------ ------------ ------------ ------------ ------------

Balance at beginning of year $ 81,381,851 $ 80,299,731 $ 79,028,996 $ 9,458,063 $ 7,000,352 $ 4,577,654
(Adjustment to) additions during year:
Land, building and improvements (74,938) 1,082,120 1,270,735
Depreciation expense 2,457,136 2,457,711 2,422,698
------------ ------------ ------------ ------------ ------------ ------------
Balance at close of year $ 81,306,913 $ 81,381,851 $ 80,299,731 $ 11,915,199 $ 9,458,063 $ 7,000,352
============ ============ ============ ============ ============ ============



At the time the Local Partnerships were acquired by Independence Tax Credit Plus
L.P. IV, the entire purchase price paid by Independence Tax Credit Plus L.P. IV
was pushed down to the Local Partnerships as property and equipment with an
offsetting credit to capital.