INDEPENDENCE TAX CREDIT PLUS LP IV - 10-K Annual Report

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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, 1996

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 their charter)

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

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:

Title of Class
--------------
Limited Partnership Interests and Beneficial Assignment Certificates

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]

DOCUMENTS INCORPORATED BY REFERENCE

None

Page 1 of 44

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").

As of March 31, 1996 the Partnership has received $27,333,000 of Gross
Proceeds of the Offering from 1,564 investors ("BACs holders").

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"). The Partnership's
investment in each Local Partnership represents 98.99% of the partnership
interests in the Local Partnership. As of March 31, 1996 the Partnership
acquired an interest in one Local Partnership. The one Local Partnership was
acquired during the year ended March 31, 1996 for a total purchase price of
approximately $932,000 (including approximately $902,000 classified as a loan
repayable from sale/refinancing proceeds in accordance with the Contribution
Agreement and not including acquisition fees of approximately $70,000), all of
which remains to be paid. The Partnership has approximately $20,728,000
available for future investments. The Partnership will be acquiring additional
properties, and the Partnership may be required to fund potential purchase
price adjustments based on tax credit adjustor clauses. See Item 2,
Properties, below.

The Partnership has been formed to invest in low income Apartment
Complexes that are eligible for the Housing Tax Credit enacted in the Tax
Reform Act of 1986. Some Apartment Complexes may also be eligible for Historic
Rehabilitation Tax Credits ("Historic Complexes"). The investment objectives
of the Partnership are described below.

1. Entitle qualified BACs holders to Housing Tax Credits over 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 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"). The Local Partnership in 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

-2-

"recapture" if its Property fails to remain in compliance with the Tax Credit
requirements. The Local Partnership in which the Partnership has acquired an
interest has not suffered an event of recapture.

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

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

The real estate business is highly competitive and substantially all of
the properties acquired and to be acquired by the Partnership are expected to
have active competition from similar properties in their respective
vicinities. The Partnership will compete in the acquisition of properties with
many other entities engaged in real estate investment activities, some of
which have greater assets than the Partnership. In addition, the number of
entities and the amount available for investment in properties of a type
suitable for investment by the Partnership may increase, resulting in
increased competition for such investments and possible increases in the
prices to be paid. 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 their 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 and Certificate of Limited Partnership (the "Partnership
Agreement").

Item 2. Properties.

The Partnership holds a 98.99% limited partnership interest in one Local
Partnership as of March 31, 1996. Set forth below is a schedule of the Local
Partnership including certain information concerning its respective Apartment
Complexes (the "Local Partnership Schedule"). Further information concerning
the Local Partnership and its property may be found in Schedule III to the
financial statements which are included herein.

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

Name and Location
(Number of Units) Date Acquired Percentage of Units Occupied at May 1, 1996
- - ----------------- ------------- -------------------------------------------

BX-8A Team
Associates, L.P. October 1995 98%
New York, NY (41)

(1) Properties are in rent-up phase.

The Partnership invests in Local Partnerships owning existing Apartment
Complexes which receive either Federal or state subsidies. HUD through FHA,
administers a variety of subsidies for low- and moderate-income housing. FmHA
administers similar housing programs for non-urban areas. The Federal programs
generally provide one or a combination of the following forms of assistance:
(i) mortgage loan insurance, (ii) rental subsidies, (iii) reduction of
mortgage interest payments.

i) HUD provides mortgage insurance for rental housing projects pursuant
to a number of sections of Title II of the National Housing Act ("NHA"),
including Section 236, Section 221(d)(4), Section

-3-

221(d)(3) and Section 220. Under all of these programs, HUD will generally
provide insurance equal to 100% of the total replacement cost of the project
to non-profit owners and 90% of the total replacement cost to
limited-distribution owners. Mortgages are provided by institutions approved
by HUD, including banks, savings and loan companies and local housing
authorities. Section 221(d)(4) of NHA provides for federal insurance of
private construction and permanent mortgage loans to finance new construction
of rental apartment complexes containing five or more units. The most
significant difference between the 221(d)(4) program and the 221(d)(3) program
is the maximum amount of the loan which may be obtained. Under the 221(d)(3)
program, non-profit sponsors may obtain a permanent mortgage equal to 100% of
the total replacement cost; no equity contribution is required of a non-profit
sponsor. In all other respects the 221(d)(3) program is substantially similar
to the 221(d)(4) program.

ii) Many of the tenants in HUD insured projects receive some form of
rental assistance payments, primarily through the Section 8 Housing Assistance
Payments Program (the "Section 8 Program"). Apartment Complexes not receiving
assistance through the Section 8 Program ("Section 8 Payments") will generally
have limitations on the amounts of rent which may be charged. One requirement
imposed by HUD regulations effective for apartment complexes initially
approved for Section 8 payments on or after November 5, 1979 is to limit the
amount of the owner's annual cash distributions from operations to 10% of the
owner's equity investment in an apartment complex if the apartment complex is
intended for occupancy by families and to 6% of the owner's equity investment
in an apartment complex intended for occupancy by elderly persons. The owner's
equity investment in the apartment complex is 10% of the project's replacement
cost as determined by HUD.

iii) Section 236 Program. As well as providing mortgage insurance, the
Section 236 program also provides an interest credit subsidy which reduces the
cost of debt service on a project mortgage, thereby enabling the owner to
charge the tenants lower rents for their apartments. Interest credit subsidy
payments are made monthly by HUD directly to the mortgagee of the project.
Each payment is in an amount equal to the difference between (i) the monthly
interest payment required by the terms of the mortgage to pay principal,
interest and the annual mortgage insurance premium and (ii) the monthly
payment which would have been required for principal and interest if the
mortgage loan bore interest at the rate of 1%. These payments are credited
against the amounts otherwise due from the owner of the project, who makes
monthly payments of the balance.

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

Commercial tenants (to which average rental per square foot applies)
comprise less than 5% of the rental revenues of the Partnership. Rents for the
residential units are determined annually by HUD and reflect increases in
consumer price indices in various geographic areas.

Management continuously reviews the physical state of the properties and
budgets improvements when required which are generally funded from cash flow
from operations or release of replacement reserve escrows. No improvements are
expected to require additional financing.

Management continuously 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 1% of the aggregate cost of the properties as shown in
Schedule III to the financial statements included herein.

In connection with investments in development-stage Apartment Complexes,
the General Partner generally requires that the general partners of the Local
Partnerships ("Local General Partners") provide completion guarantees and/or
undertake to repurchase the Partnership's interest in the Local Partnership if
construction or rehabilitation is not completed substantially on time or on
budget ("Development Deficit Guarantees"). The

-4-

Development Deficit Guarantees generally also require the Local General
Partner to provide any funds necessary to cover net operating deficits of the
Local Partnership until such time as the Apartment Complex has achieved
break-even operations. The General Partner generally requires that the Local
General Partners undertake an obligation to fund operating deficits of the
Local Partnership (up to a stated maximum amount) during a limited period of
time (typically three to five years) following the achievement of break-even
operations ("Operating Deficit Guarantees"). Under the terms of the
Development and Operating Deficit Guarantees, amount funded will be treated as
Operating Loans which will not bear interest and which will be repaid only out
of 50% of available cash flow or out of available net sale or refinancing
proceeds. In some instances, the Local General Partners are required to
undertake an obligation to comply with a Rent-Up Guaranty Agreement, whereby
the Local General Partner agrees to pay liquidating damages if predetermined
occupancy rates are not achieved. These payments are made without right of
repayment. In cases where the General Partner deems it appropriate, the
obligations of a Local General Partner under the Development Deficit,
Operating Deficit and/or Rent-Up Guarantees are secured by letters of credit
and/or cash escrow deposits.

Housing Tax Credits with respect to a given Apartment Complex are
available for a ten-year period that commences when the property is placed
into service. 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.

-5-

PART II

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

As of March 31, 1996, the Partnership had issued and outstanding 27,333
Limited Partnership Interests, each representing a $1,000 capital contribution
to the Partnership, or an aggregate capital contribution of $27,333,000. 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 27,333 BACs to the purchasers thereof for an aggregate purchase
price of $27,333,000. 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
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 March 31, 1996 the Partnership has approximately 1,564 registered
holders of an aggregate of 27,333 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's Amended and
Restated Agreement of Limited Partnership (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, 1996. The Partnership does not anticipate providing cash distributions to
its BACs holders other than from net refinancing or sales proceeds.

-6-

Item 6. Selected Financial Data.

The information set forth below presents selected financial data of the
Partnership. There were no operations prior to commencement of the Offering of
BACs on July 6, 1995. Additional financial information is set forth in the
audited financial statements in Item 8 hereof.

Year Ended March 31,
---------------------
OPERATIONS 1996
- - ---------- --------------------

Revenues $ 270,029
Operating expenses 108,857
------------

Income before minority interest 161,172

Minority interest in loss of subsidiary partnership 225
------------

Net income $ 161,397
============
Net income per weighted average BAC $ 19.39
============

FINANCIAL POSITION March 31,
- - ------------------ -----------------------------
1996 1995
---------- -----------

Total assets $27,605,692 $ 51,010
=========== ==========
Total liabilities $ 2,745,844 $ 169,491
=========== ==========
Minority interest $ 321,081 $ 0
=========== ==========
Total partners' capital $24,538,767 $ (118,481)
=========== ==========

During the year ended March 31, 1996, total assets and liabilities
increased primarily due to capital contributions which were not fully expended
and the acquisition of a Local Partnership. Property and equipment increased
approximately $2,700,000 and construction loans increased approximately
$2,000,000. Minority interest increased during the year due to capital
contributions from local general partners.

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

The Partnership has made no distributions to the BACs holders as of March
31, 1996.

-7-

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) gross proceeds from
the sale of BAC's and (ii) interest earned on Gross Proceeds which are
invested in tax-exempt money market instruments pending final payments to the
Local Partnerships and (iii) working capital reserves in the original amount
of 2.5% of gross proceeds raised and interest earned thereon. All these
sources of funds are available to meet obligations of the Partnership.

The Partnership has received $27,333,000 in gross proceeds (all of which
was raised during the year ended March 31, 1996) for BACs pursuant to a public
offering resulting in net proceeds available for investment of approximately
$21,730,000 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, 1996, the Partnership has invested approximately $932,000
(including approximately $902,000 classified as a loan repayable from
sale/refinancing proceeds in accordance with the Contribution Agreement and
not including acquisition fees of approximately $70,000) of net proceeds in
one Local Partnership, all of which remains to be paid to the Local
Partnership as certain benchmarks, such as occupancy level, must be attained
prior to the release of the funds. The one Local Partnership was acquired
during the year ended March 31, 1996. The Partnership has approximately
$20,728,000 available for future investments. The Partnership will be
acquiring additional properties, and the Partnership may be required to fund
potential purchase price adjustments based on tax credit adjustor clauses.

During the year ended March 31, 1996, cash and cash equivalents increased
approximately $8,484,000. This increase is primarily attributable to capital
contributions of $27,333,000, proceeds from construction loans of $2,039,000,
and cash flow from operations of $9,000 which exceeded an increase in cash
flow held in escrow of $3,000,000, acquisition of property and equipment of
$2,369,000, an increase in investments available for sale of $11,505,000, an
increase in deferred costs of $1,656,000 and an increase in offering costs of
$2,837,000. Included in adjustments to reconcile the net income to cash flow
used in operations is depreciation and amortization of approximately $29,000.

Included in cash and cash equivalents is working capital reserve of
approximately $683,000 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, 1996, all of this reserve remains unused. The General Partners
believe 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.

The Partnership will be negotiating Development Deficit Guarantees with
the Local Partnerships in which it will invest. The Local General Partners
will agree to fund development deficit through the breakeven dates of each of
the Local Partnerships. As of March 31, 1996, there were no Development
Deficit Guarantees. The terms of the Development Deficit Guarantees will vary
for each Local Partnership, with maximum dollar amounts to be funded for a
specific period of time, generally three years, commencing on the break-even
date.

The Partnership will be negotiating Operating Deficit Guaranty Agreements
with all Local Partnerships by which the general partners of the Local
Partnerships will agree to fund operating deficits for a specified period of
time. The terms of the Operating Deficit Guaranty Agreements will vary for
each Local Partnership, with maximum dollar amounts to be funded for a
specified period of time, generally three years, commencing on the break-even
date. The gross amount of the one Operating Deficit Guarantee aggregates
approximately $300,000, none of which has expired as of March 31, 1996. The
current operating deficit guarantee expires within the next three years. As of
March 31, 1996, $0 has been funded under the Operating Deficit Guaranty
agreement. Amounts funded under such agreement 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.

-8-

In addition, Local Partnerships will have Rent-Up Guaranty Agreements, in
which the Local General Partner will agree to pay liquidating damages if
predetermined occupancy rates are not achieved. The terms of the Rent-Up
Guaranty Agreements will vary for each Local Partnership, with maximum dollar
amounts to be funded for a specified period of time. The gross amount of the
one Rent-Up Guarantee aggregates approximately $764,000 of which none has
expired as of March 31, 1996. The current rent-up deficit guarantee expires
within the next three years. There has not been any funding under the guaranty
agreement. Amounts received under rental guaranty from the sellers of the
properties purchased by the Partnership will be treated as a reduction of the
asset.

The Operating Deficit Guaranty Agreements, Rent-Up Guaranty Agreements,
and Development Deficit Guaranty Agreements will be negotiated to protect the
Partnership's interest in the Local Partnerships and to provide incentive to
the Local General Partners to generate positive cash flow.

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 for 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 Partnership anticipates
investing the proceeds of its offering in Local Partnerships, all of which
will fully have their tax credits in place. 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 the ten-year period. If trends in the real
estate market warranted the sale of a property, the remaining tax credits
would transfer to the new owner; thereby adding significant value to the
property on the market, which will not be included in the financial statement
carrying amount.

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

Property and equipment are carried at the lower of depreciated cost or
estimated amounts recoverable through future operations and ultimate
disposition of the property. Cost includes the purchase price, acquisition
fees and expenses, and any other costs incurred in acquiring the properties. A
provision for loss on impairment of assets is recorded when estimated amounts
recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. However, depreciated cost,
adjusted for such reductions in value, if any, may be greater than the fair
value. 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, 1996, the Partnership has not recorded any provisions for loss on
impairment of assets or reduction to estimated fair value.

In March 1995, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of". Under SFAS No. 121, the Partnership is required to review long-lived
assets and certain identifiable intangibles for impairment whenever events or
changes in circumstances indicate that the book value of an asset may not be
recoverable. An impairment loss should be recognized whenever the review
demonstrates that the book value of a long-lived asset is not recoverable.

Effective April 1, 1996, the Partnership intends to adopt SFAS No. 121,
consistent with the required adoption period. The Partnership does not expect
the implementation to have a material impact on its financial condition or its
future results of operations.

-9-

The following is a summary of the results of operations of the
Partnership for the year ended March 31, 1996 (the 1995 Fiscal Year).

The net income for the 1995 Fiscal Year totaled $161,397.

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 $42,668 Housing Tax Credits
during the 1995 tax year.

As of March 31, 1996, the Partnership had acquired an interest in one
Local Partnership. The Partnership intends to utilize the net proceeds of the
offering to acquire additional interests in Local Partnerships.

The Partnership's results of operations for the year ended March 31, 1996
consisted primarily of (1) approximately $222,000 of tax-exempt interest
income earned on funds not currently invested in Local Partnerships and (2)
the results of the Partnership's investment in one consolidated Local
Partnership.

The results of operations are not reflective of future operations of the
Partnership due to the continued utilization of the net proceeds of the
Offering to invest in Local Partnerships and the continued offering of BACs
for sale. The Partnership will utilize the net proceeds of the Offering to
invest in Local Partnerships owning apartment complexes which are eligible for
the Housing Tax Credit, some of which may also be eligible for the Historic
Tax Credit. In addition, interest income will decrease in future periods since
a substantial portion of the proceeds from the Offering will be invested in
Local Partnerships. For the year ended March 31, 1996 there was one
consolidated Local Partnership, whose property had completed construction.

Other
- - -----

The Partnership's investment as a limited partner in the Local
Partnership is subject to the risks of potential losses arising from
management and ownership of improved real estate. The Partnership's investment
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 financing 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 the Department of Housing
and Urban Development 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.

-10-

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.

Item 8. Financial Statements and Supplementary Data.

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

(a) 1. Consolidated Financial Statements

Independent Auditors' Report 12

Consolidated Balance Sheets at March 31, 1996 and 1995 14

Consolidated Statement of Operations for the year ended
March 31, 1996 15

Consolidated Statements of Changes in Partners' Capital
for the year ended March 31, 1996 and the period
February 22, 1995 (Inception) through March 31, 1995 16

Consolidated Statement of Cash Flows for the year ended
March 31, 1996 17

Notes to Consolidated Financial Statements 19

-11-

[FRIEDMAN ALPREN & GREEN LLP LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Independence Tax Credit Plus L.P. IV and Subsidiary
(A Delaware Limited Partnership)

We have audited the accompanying consolidated balance sheets of
Independence Tax Credit Plus L.P. IV and Subsidiary (a Delaware Limited
Partnership) as of March 31, 1996 and 1995, and the related consolidated
statements of operations and cash flows for the year ended March 31, 1996 and
consolidated statements of changes in partners' capital for the year ended
March 31, 1996 and period February 22, 1995 (inception) through March 31,
1995. 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
the subsidiary partnership, whose net loss for the year ended March 31, 1996
was $22,536 and whose assets constituted 10% of the Partnership's assets at
March 31, 1996. Those statements were audited by other auditors whose report
has been furnished to us, and our opinion, insofar as it relates to the
amounts included for the subsidiary partnership, is based solely on the report
of the other auditors.

We conducted our audits 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 audits and the report of other
auditors provide a reasonable basis for our opinion.

In our opinion, based upon our audits, and the report 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 Subsidiary at March 31, 1996 and 1995, and the results
of their operations and their cash flows for the year ended March 31, 1996 in
conformity with generally accepted accounting principles.

/s/ Friedman Alpren & Green LLP

June 28, 1996

-12-

[Leshkowitz & Company, LLP Letterhead]

Independent Auditor's Report

To the Partners of
BX 8A Team Associates L.P.:

We have audited the accompanying balance sheet of BX 8A Team Associates
L.P. as of December 31, 1995, and the related statements of operations,
changes in partners' capital, and cash flows for the period from October 1,
1995 (date of investor entry) through December 31, 1995. 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 BX 8A Team Associates L.P.
at December 31, 1995 and the results of its operations, changes in partners'
capital and its cash flows for the period from October 1, 1995 (date of
investor entry) through December 31, 1995, in conformity with generally
accepted accounting principles.

/s/Leshkowitz & Company

June 12, 1996

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

March 31,
------------------------
1996 1995
----------- ---------
ASSETS

Property and equipment - at cost, less accumulated depreciation
(Notes 2 and 4) $ 2,657,976 $ 0
Cash and cash equivalents (cost approximates market) (Notes 2 and 10) 8,484,832 1,010
Investments available for sale (Note 2) 11,502,412 0
Cash held in escrow (Note 5) 3,000,000 0
Deferred costs, less accumulated amortization (Notes 2 and 6) 1,700,358 50,000
Other assets 260,114 0
----------- ---------

Total assets $27,605,692 $ 51,010
=========== =========

LIABILITIES AND PARTNERS' CAPITAL

Liabilities:
Construction loan payable (Note 7) $ 2,039,174 $ 0
Accounts payable and other liabilities 106,084 55,245
Due to local general partners and affiliates 311,987 0
Due to general partner and affiliates (Note 8) 288,599 114,246
----------- ---------
Total liabilities 2,745,844 169,491
----------- ---------

Minority interest 321,081 0
----------- ---------

Commitments and contingencies (Note 10)

Partners' capital:
Limited partners (100,000 BACs authorized;
27,333 and 0 issued and outstanding in
1996 and 1995, respectively) (Note 1) 24,536,153 (119,481)
General partner 2,614 1,000
----------- ---------

Total partners' capital 24,538,767 (118,481)
----------- ---------

Total liabilities and partners' capital $27,605,692 $ 51,010
=========== =========

See accompanying notes to consolidated financial statements.

-13-

INDEPENDENCE TAX CREDIT PLUS L.P.IV
AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1996

Revenues
Rental income $ 47,060
Other income (principally interest on capital contributions) 222,969
--------
270,029
--------

Expenses
General and administrative 16,112
General and administrative-related parties (Note 8) 25,916
Repairs and maintenance 294
Operating and other 17,635
Insurance 4,071
Interest 15,957
Depreciation and amortization 28,872
--------

108,857
--------

Net income before minority interest 161,172

Minority interest in loss of subsidiary partnership 225
--------

Net income $161,397
========

Net income per limited partnership interest $159,783
========

Weighted average number of BACs outstanding 8,241
========

Net income per weighted average BAC $ 19.39
========

See Accompanying notes to consolidated financial statements.

-14-

INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
FOR THE PERIOD FEBRUARY 22, 1995 (INCEPTION) THROUGH
MARCH 31, 1995 AND THE YEAR ENDED MARCH 31, 1996

Limited General
Total Partners Partner
----------- ----------- -------
Capital contributions $ 1,010 $ 10 $1,000

Offering costs (119,491) (119,491) 0
----------- ----------- ------

Partners' capital - March 31, 1995 (118,481) (119,481) 1,000

Capital contributions 27,333,000 27,333,000 0

Distributions (10) (10) 0

Offering costs (2,837,139) (2,837,139) 0

Net income 161,397 159,783 1,614
----------- ----------- ------

Partners' capital - March 31, 1996 $24,538,767 $24,536,153 $2,614
=========== =========== ======

See accompanying notes to consolidated financial statements.

-15-

INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
INCREASE IN CASH AND CASH EQUIVALENTS
YEAR ENDED MARCH 31, 1996

Cash flows from operating activities:
Net income $ 161,397
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation and amortization 28,872
Minority interest in loss of subsidiary partnership 225
Increase in assets
Other assets (210,031)
Increase in liabilities
Accounts payable and other liabilities 756
Due to general partners and affiliates 28,214
-----------
Total adjustments (151,964)
-----------
Net cash provided by operating activities 9,433
-----------

Cash flows from investing activities:
Acquisition of property and equipment (2,368,940)
Cash held in escrow (3,000,000)
Increase in investments available for sale (11,502,412)
Increase in deferred costs (1,656,279)
-----------
Net cash used in investing activities (18,527,631)
-----------
Cash flows from financing activities:
Capital contributions received 27,333,000
Capital distributions paid (10)
Proceeds from construction loan 2,039,174
Increase in due to general partner and affiliates 146,139
Increase in offering costs (2,837,139)
Increase in capitalization of consolidated subsidiary
attributable to minority interest 320,856
-----------
Net cash provided by financing activities 27,002,020
-----------

See accompanying notes to consolidated financial statements.

-16-

INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
INCREASE IN CASH AND CASH EQUIVALENTS
YEAR ENDED MARCH 31, 1996

Net increase in cash and cash equivalents $8,483,822

Cash and cash equivalents at beginning of year 1,010
----------

Cash and cash equivalents at end of year $8,484,832
==========
Supplemental disclosure of cash flows information:

Cash paid during the year for interest $ 15,957

Retainage included in other assets and accounts
payable and other liabilities $ 50,083

Development fees due to local general partners and
affiliates capitalized to property and equipment $ 311,987

See accompanying notes to consolidated financial statements.

-17-

INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996

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 leveraged
apartment complexes that are eligible for the low-income housing tax credit
("Tax Credit") enacted in the Tax Reform Act of 1986, some of which complexes
may also be eligible for the historic rehabilitation tax credit.

The Partnership has acquired an interest in one subsidiary partnership as
of March 31, 1996. In the future the Partnership anticipates acquiring
interests of approximately 99% in subsidiary partnerships.

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. As of March 31, 1996 the
Partnership has raised a total of $27,333,000 representing 27,333 BACs.

The terms of the Amended and Restated Agreement of the Limited
Partnership provide, among other things, that net profits or losses and
distributions of cash flow are, in general, allocated 99% to the limited
partners and BACs holders and 1% to the General Partner.

NOTE 2 - Summary of Significant Accounting Policies

a) Basis of Accounting

The Partnership's fiscal year ends on March 31. The subsidiary
partnership has a fiscal year ending December 31. Accounts of the subsidiary
have been adjusted for intercompany transactions from January 1 through March
31. 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 one subsidiary partnership for the year ended March 31, 1996,
in which the Partnership is a limited partner. All intercompany accounts and
transactions with the subsidiary partnership have been eliminated in
consolidation.

The increase in the capitalization of the consolidated subsidiary
attributable to minority interest arise from cash contributions from the
minority interest partners.

Losses attributable to minority interest which exceed the minority
interests' investment in a subsidiary are charged to the Partnership. The
Partnership's investment in the subsidiary is equal to the subsidiary's
partners' equity less minority interest capital.

-18-

INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996

NOTE 2 - Summary of Significant Accounting Policies (Continued)

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) Investments Available For Sale

At inception, the Partnership adopted the provisions of the Financial
Accounting Standards Board's Statement of Financial Accounting Standards
("SFAS") No. 115 "Accounting for Certain Investments in Debt and Equity
Securities." At March 31, 1996, the Partnership has classified its securities
as available for sale.

Available for sale securities are carried at fair value with net
unrealized gain (loss) reported as a separate component of partners' capital
until realized. A decline in the market value of any available for sale
security below cost that is deemed other than temporary is charged to
earnings, resulting in the establishment of a new cost basis for the security.

At March 31, 1996, the Partnership's investments classified as
investments available for sale are carried at cost which approximates fair
market value, have maturities of less than one year and consists of municipal
bonds and municipal bond instruments. As further clarification, the maturities
of the investments are approximately one month and therefore there are no
material unrealized gains or losses.

e) Property and Equipment

Property and equipment are carried at the lower of depreciated cost or
estimated amounts recoverable through future operations and ultimate
disposition of the property. Cost includes the purchase price, acquisition
fees and expenses, 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 provision for loss on
impairment of assets is recorded when estimated amounts recoverable through
future operations and sale of the property on an undiscounted basis are below
depreciated cost. However, depreciated cost, adjusted for such reductions in
value, if any, may be greater than the fair value. 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, 1996, the Partnership has
not recorded any provisions for loss on impairment of assets or reduction to
estimated fair value.

f) 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 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).

-19-

INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996

NOTE 2 - Summary of Significant Accounting Policies (Continued)

g) Organization and Offering Costs

Costs incurred to organize the Partnership, including but not limited
to legal, accounting and registration fees, are considered deferred
organization expenses. These costs are capitalized and are being amortized
over a 60-month period. 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 and the nonaccountable expense
allowance are considered selling and offering expenses. These costs are
charged directly to limited partners' capital.

h) Deferred Acquisition Costs

Acquisition costs and fees incurred in connection with the proposed
purchase of interests in certain subsidiary partnerships have been deferred.
In the event these partnerships are acquired, these amounts will be
capitalized as property costs. If the subsidiary partnerships are not
acquired, these amounts will be charged to operations.

i) 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.

j) 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.

k) Accounting Pronouncements Not Yet Implemented

In March 1995, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of". Under SFAS No. 121, the Partnership
is required to review long-lived assets and certain identifiable intangibles
for impairment whenever events or changes in circumstances indicate that the
book value of an asset may not be recoverable. An impairment loss should be
recognized whenever the review demonstrates that the book value of a
long-lived asset is not recoverable.

Effective April 1, 1996, the Partnership intends to adopt SFAS No.
121, consistent with the required adoption period. The Partnership does not
expect the implementation to have a material impact on its financial condition
or its future results of operations.

-20-

INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996

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, Certificates of Deposit, and Escrow Deposits
-----------------------------------------------------------------------

The carrying amount approximates fair value.

Construction Loan Payable
-------------------------

The carrying amount approximates fair value.

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

NOTE 4 - Property and Equipment

The components of property and equipment and their estimated useful lives
at March 31, 1996 are as follows:

Estimated
Useful Lives
(Years)
------------
Land $ 5,849 -
Building and improvements 2,675,078 27.5
-----------
2,680,927
Less: Accumulated depreciation 22,951
$ 2,657,976
===========
Included in property and equipment for the year ended March 31, 1996 was
$70,304 of acquisition fees paid to the General Partner.

In connection with the rehabilitation of the properties, the subsidiary
partnership has incurred developer's fees of $311,987 to the local general
partners and affiliates as of March 31, 1996. Such fees have been included in
the cost of property and equipment.

Depreciation expense for the year ended March 31, 1996 amounted to
$22,951.

-21-

INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996

NOTE 5 - Cash Held in Escrow

Cash was held in escrow at March 31, 1996 for the potential acquisition
of a subsidiary partnership. In June 1996 such amount was returned to the
Partnership.

NOTE 6 - Deferred Costs

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

March 31,
---------------------
1996 1996 Period
--------- ------- ---------
Financing costs $ 75,036 $ 0 *
Deferred acquisition costs 1,581,243 0 **
Organization costs 50,000 50,000 60 months
---------- -------
1,706,279 50,000
Less: Accumulated amortization 5,921 0
--------- -------

$1,700,358 $50,000
========== =======

*Over the life of the related anticipated mortgage note.

**Will be capitalized as part of the cost of future acquisitions.

Amortization expense for the year ended March 31, 1996 amounted to
$5,921.

NOTE 7 - Construction Loan Payable

The subsidiary partnership's construction loan is payable in interest
only monthly installments of approximately $5,300 at a rate of 3.12% per
annum, until permanent mortgage loan closing takes place. The loan is
collateralized by the land and building of the subsidiary partnership, the
assignment of certain subsidiary partnership's rents and leases, and is
without further recourse.

-22-

INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996

NOTE 8 - Related Party Transactions

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

The General Partner and its affiliates perform services for the
Partnership. The costs incurred for the year ended March 31, 1996 are as
follows:

A) Acquisition Fees and Expenses

The General Partner is entitled to an acquisition fee equal to 6.0% of
the gross proceeds of the offering paid upon investor closing, for its
services in connection with the selection and evaluation of Local
Partnerships. Such fees are capitalized as a cost of the investments upon
closing of subsidiary partnerships acquisitions. As of March 31, 1996,
$1,639,980 of such costs have been incurred.

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

B) Public Offering Costs

Costs incurred to organize the Partnership and certain costs of offering
the BACs including but not limited to legal, accounting, and registration fees
are considered organization and offering costs. Related Equities Corporation,
the Dealer Manager, is entitled to a non-accountable organization and offering
expense allowance equal to 2.5% of Gross Proceeds, in consideration of which
it is obligated to pay all such expenses up to the amount of such allowance.
The Partnership is obligated to pay all such expenses that are in excess of
2.5% of Gross Proceeds and up to 3.5% of Gross Proceeds. The Dealer Manager is
responsible for all such expenses in excess of 3.5% of Gross Proceeds. The
selling commissions and a non-accountable marketing expense allowance are
considered offering costs. These costs are charged directly to limited
partners' capital. As of March 31, 1996, offering costs totaled $906,655, and
along with selling commissions (see Note 8(c)) were charged directly to
limited partner's capital.

C) Selling Commissions and Fees

The Partnership will pay up to 7.5% of the aggregate purchase price of
BACs sold, without regard to quantity discounts, to Related Equities
Corporation, an affiliate of the General Partner. Through March 31, 1996
$2,049,975 was paid or incurred to Related Equities Corporation and then fully
reallocated to other broker/dealers.

D) Guarantees

The Partnership will be negotiating Development Deficit Guarantees with
the Local Partnerships in which it will invest. The Local General Partners
will agree to fund development deficit through the breakeven dates of each of
the Local Partnerships. As of March 31, 1996, there were no Development
Deficit Guarantees. The terms of the Development Deficit Guarantees will vary
for each Local Partnership, with maximum dollar amounts to be funded for a
specific period of time, generally three years, commencing on the break-even

-23-

INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996

NOTE 8 - Related Party Transactions (Continued)

date.

The Partnership has negotiated a Operating Deficit Guaranty Agreement
with the Local Partnership by which the general partners of the Local
Partnership have agreed to fund operating deficits for a specified period of
time. The Local General partners have agreed to fund operating deficits
through the break-even date. The gross amount of the Operating Deficit
Guarantees aggregates approximately $300,000, none of which has expired as of
March 31, 1996. The current Operating Deficit Guarantee expires within the
next three years. As of March 31, 1996, $0 has been funded under the Operating
Deficit Guaranty agreement. Amounts funded under such agreement are 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.

In addition, the one Local Partnership has a Rent-Up Guaranty Agreement,
in which the Local General Partners agrees to pay liquidating damages if
predetermined occupancy rates are not achieved. The Local General Partners
have agreed to fund per Rent-Up Guarantee through the break-even date. The
gross amount of this Rent-Up Guarantee for the Local Partnership aggregates
approximately $764,000, none of which has expired as of March 31, 1996. There
has not been any fundings under these guaranty agreements. Amounts received
under rental guarantee from the sellers of the properties purchased by the
Partnership are treated as a reduction of the asset.

The Operating Deficit Guaranty Agreement, Rent-Up Guaranty Agreement and
Development Deficit Guaranty Agreement were negotiated to protect the
Partnership's interest in the Local Partnership and to provide an incentive to
the Local General Partner to generate positive cash flow.

E) Other Related Party Expenses

The costs incurred to related parties for the year ended March 31, 1996
were as follows:

Partnership management fees (a) $ 6,667
Expense reimbursement (b) 11,659
Property management fees (c) 2,590
Local administrative fee (d) 5,000
--------
$ 25,916
========

(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 theretofore paid out of cash flow).

(b) The Partnership reimburses the General Partners and their affiliates
for actual Partnership operating expenses incurred by the General Partners and
their affiliates on the Partnership's behalf. The amount of reimbursement from
the Partnership is limited by the provisions of the Partnership Agreement.

-24-

INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996

NOTE 8 - Related Party Transactions (Continued)

(c) Property management fees incurred by the Local Partnership amounted
to $2,590 for the year ended March 31, 1996, all of which was incurred to
affiliates of the subsidiary partnership's General Partner.

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

F) Due to Local General Partners and Affiliates

Due to local general partners and affiliates as of December 31, 1995
consisted of a development fee payable in the amount of $311,987.

NOTE 9 - Income Taxes

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

For the Year Ended
December 31, 1995
------------------

Financial statement
net income $ 161,397

Differences resulting from parent
company having a different fiscal
year for income tax and financial
reporting purposes (141,908)

Tax exempt interest income (68,937)

Other, including accruals for financial reporting not
deductible for tax purposes until paid 7,322
-----------
Net loss as shown on the income tax return
for the calendar year ended December 31, 1995 $ (42,126)
===========

-25-

INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996

NOTE 10 - Commitments and Contingencies

a) Uninsured Cash and Cash Equivalents

The Partnership maintains its cash and cash equivalents in various
banks. The accounts at each bank are guaranteed by the Federal Deposit
Insurance Corporation up to $100,000. At March 31, 1996, uninsured cash and
cash equivalents approximated $8,469,000.

b) Other

The Partnership is subject to the risks incident to potential losses
arising from the management and ownership of improved real estate. The
Partnership can also be affected by poor economic conditions generally,
however the Partnership intends to purchase additional properties which will
diversify its portfolio. There are also substantial risks associated with
owning properties receiving government assistance, for example the possibility
that Congress may not appropriate funds to enable HUD to make rental
assistance payments. HUD also restricts annual cash distributions to partners
based on operating results and a percentage of the owners equity contribution.
The Partnership cannot sell or substantially liquidate its investments in
subsidiary partnerships during the period that the subsidy agreements are in
existence, without HUD's approval. Furthermore there may not be market demand
for apartments at full market rents when the rental assistance contracts
expire.

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. For the 1995 tax year, Housing Tax Credits of $42,668
were generated.

NOTE 11 - Subsequent Events

The Partnership has received $5,736,000 of gross proceeds representing
the purchase price for 5,736 BACs for the period April 1, 1996 to June 28,
1996.

-26-

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), J. Michael fried, Alan P. Hirmes. and
Stuart J. Boesky. RCMP, Inc., a Delaware corporation ("RCMP") is the sole
general partner of RGII. The executive officers and directors of the General
Partner of RCMP are as follows:

Name Position

Stephen M. Ross Director and Resident of RCMP

J. Michael Fried President and Member of RILLC

Andrew D. Augenblick Director and Executive Vice President of RCMP

Michael J. Wechsler Director and Executive Vice President of RCMP

Alan P. Hirmes Senior Vice President and Member of RILLC

Stuart J. Boesky Vice President and member of RILLC

Ryne A. Nishimi Vice President of RILLC

Marc D. Schnitzer Vice President of RILLC

Lawrence J. Lipton Assistant Vice President and Treasurer of RILLC

Robert Bordonaro Assistant Vice President of RILLC

Lynn A. McMahon Secretary of RILLC

Susan J. McGuire Assistant Secretary of RILLC

STEPHEN M. ROSS, 56, is a Director of RILLC. Mr. Ross is also President,
Director and shareholder of The Related Realty Group, Inc., the General
Partner of The Related Companies, L.P. 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 The Related
Companies, L.P. in 1972 to develop, manage, finance and acquire subsidized and
conventional apartment developments.

J. MICHAEL FRIED, 52, is President of RILLC. Mr. Fried is the sole
shareholder of one of the general partners of Related Capital Company
("Capital"), a real estate finance and acquisition affiliate of the Related
General Partner. In that capacity, he is responsible for all of Capital's
syndication, finance, acquisition and investor reporting activities. Mr. Fried
practiced corporate law in New York City with the law firm of Proskauer Rose
Goetz

-27-

& Mendelsohn from 1974 until he joined Capital in 1979. Mr. Fried graduated
from Brooklyn Law School with a Juris Doctor degree, magna cum laude; from
Long Island University Graduate School with a Master of Science degree in
Psychology; and from Michigan State University with a Bachelor of Arts degree
in History.

ANDREW D. AUGENBLICK, 35, is a Director and Executive Vice President of
RCMP. Mr. Augenblick is also an Executive Vice President of The Related
Companies, L.P. Prior to joining Related in 1985, he was with McKinsey &
Company. Mr. Augenblick graduated from Dartmouth College when he received a
Bachelor of Arts Degree and from the Harvard Graduate School of Business
Administration when he received a Masters degree in Business Administration.

MICHAEL J. WECHSLER, 57, 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.

ALAN P. HIRMES, 41, is a Senior Vice 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.

STUART J. BOESKY, 40, 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 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.

RYNE A. NISHIMI, 37, is a Vice President of RILLC. Mr. Nishimi is a
Senior Vice President of and serves as the National Sales Manager for Related
Capital Corporation and has held other positions in marketing since joining
Capital in 1983. From 1981 to 1983, Mr. Nishimi worked for Fox & Carskadon
Financial Corporation as a Marketing Manager in their real estate syndication
operation. Mr. Nishimi graduated from Santa Clara University School of
Business Administration with a Bachelor of Science degree.

MARC D. SCHNITZER, 35, 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.

LAWRENCE J. LIPTON, 40, is Treasurer and an Assistant Vice President of
RILLC. Mr. Lipton is also a controller of The Related Companies, L.P. Mr.
Lipton has been a Certified Public Accountant in New York since 1989. Prior to
joining Related, Mr. Lipton was employed by Deloitte & Touche from 1987-1991.
Mr. Lipton graduated from Rutgers College with a Bachelor of Arts degree and
from Baruch College with a Masters of Business Administration degree.

-28-

ROBERT BORDONARO, 42, is an Assistant Vice President of RILLC. Mr.
Bordonaro is also a controller of The Related Companies, L.P. Mr. Bordonaro
has been a Certified Public Accountant in New York since 1977. Prior to
joining Related, Mr. Bordonaro was employed by the accounting firms of Weiner
& Co. from 1982-1985 and Arthur Young from 1975-1981. Mr. Bordonaro graduated
from New York University with a Bachelor of Science degree in 1974 and with a
Masters of Business Administration degree in 1975.

LYNN A. McMAHON, 40, is Secretary of RILLC. Since 1983, she has served as
Assistant to the President of Capital. From 1978 to 1983 she was employed at
Sony Corporation of America in the Government Relations Department.

SUSAN J. McGUIRE, 49, is Assistant Secretary of RILLC. Since January 1977
she has served as Assistant to the President and Office Manager at Capital.
From May 1973 to January 1977, she was employed as an administrative assistant
with Condren, Walker & Co., Inc., an investment banking firm in New York City.
Ms. McGuire attended Queensboro Community College.

-29-

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 Partners and/or their 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 L.L.C. $1,000 capital contribution 100%
Interest in the 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 Partnership, holds a .01% limited partnership interest in the
Local Partnership. See Note 8 to the Financial Statements in Item 8 above,
which information is incorporated herein by reference thereto.

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.

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 is 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.

-30-

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

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

(a) 1. Consolidated Financial Statements
---------------------------------

Independent Auditors' Report 12

Consolidated Balance Sheets at March 31, 1996 and
1995 14

Consolidated Statement of Operations for the year
ended March 31, 1996 15

Consolidated Statements of Changes in Partners'
Capital for the year ended March 31, 1996 and the
period February 22, 1995 (Inception) through March
31, 1995 16

Consolidated Statement of Cash Flows for the year
ended March 31, 1996 17

Notes to Consolidated Financial Statements 19

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

Independent Auditors' Report 37

Schedule I - Condensed Financial Information of
Registrant 38
Schedule III - Real Estate and Accumulated
Depreciation 41

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.

-31-

Item 14. Exhibits, Financial Statement Schedules (continued), and Reports on
Form 8-K. (Continued)

Sequential
Page
----------
(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*

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

(22) Subsidiaries of the Registrant 43

(27) Financial Data Schedule (filed herewith) 44

*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.

-32-

Supplemental Information to be furnished with Reports Filed Pursuant to
Section 15(d) of the Act by Registrants which have Not Registered Securities
Pursuant to Section 12 of the Act.

No annual report to security holders covering the Registrant's last
fiscal year nor any proxy statement, form of proxy or other proxy soliciting
material with respect to any annual or other meeting of security holders has
been sent to security holders.

-33-

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: June 28, 1996

By: /s/J. Michael Fried
------------------------------
J. Michael Fried
President and Member
(principal executive officer)

-34-

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
- - --------- ----- -------------

/s/Stephen M. Ross Director and President of RCMP, Inc.,
- - ---------------------------- the general partner of Related General II L.P.,
Stephen M. Ross a Member of Related Independence L.L.C. June 28, 1996

/s/Andrew D. Augenblick Director and Executive Vice President of RCMP,
- - ---------------------------- Inc., the general partner of Related General II L.P.,
Andrew D. Augenblick a Member of Related Independence L.L.C. June 28, 1996

/s/Michael J. Wechsler Director and Executive Vice President of RCMP,
- - ---------------------------- Inc., the general partner of Related General II L.P.,
Michael J. Wechsler a Member of Related Independence L.L.C. June 28, 1996

/s/J. Michael Fried President and Member of Related Independence
- - ---------------------------- L.L.C. (principal executive officer) June 28, 1996
J. Michael Fried

/s/Alan P. Hirmes
- - ---------------------------- Senior Vice President and Member of
Alan P. Hirmes Related Independence L.L.C. June 28, 1996

/s/Stuart J. Boesky
- - ---------------------------- Vice President and Member of
Stuart J. Boesky Related Independence L.L.C. June 28, 1996

/s/Lawrence J. Lipton
- - ---------------------------- Treasurer of Related Independence L.L.C.
Lawrence J. Lipton (principal financial and accounting officer) June 28, 1996

-35-

[FRIEDMAN ALPREN & GREEN LLP LETTERHEAD]

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

To the Partners of
Independence Tax Credit Plus L.P. IV and Subsidiary
(A Delaware Limited Partnership)

In connection with our audits of the consolidated financial statements of
Independence Tax Credit Plus L.P. IV and Subsidiary included in the Form 10-K
as presented in our opinion dated June 28, 1996, which is based in part on the
report of other auditors, we have also audited supporting Schedules I and III
for the 1996 and 1995 fiscal years. In our opinion, based on our audits and
the report of the other auditors, these consolidated schedules present fairly,
when read in conjunction with the related consolidated financial statements,
the financial data required to be set forth therein.

/s/ Friedman Alpren & Green LLP

June 28, 1996

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

CONDENSED BALANCE SHEETS

ASSETS

March 31,
------------------------
1996 1995
----------- ---------
Cash and cash equivalents $ 8,484,832 $ 1,010
Investments available for sale 11,502,412 0
Investment in subsidiary partnership 85,433 0
Cash held in escrow 3,000,000 0
Other assets 1,782,882 50,000
----------- ---------
Total assets $24,855,559 $ 51,010
=========== =========

LIABILITIES AND PARTNERS' CAPITAL

Due to general partner and affiliates $ 283,599 $ 114,246
Due to subsidiary partnership 29,879 0
Other liabilities 3,314 55,245
----------- ---------

Total liabilities 316,792 169,491
Partners' capital 24,538,767 (118,481)
----------- ---------
Total liabilities and partners' capital $24,855,559 $ 51,010
=========== =========

-1-

INDEPENDENCE TAX CREDIT PLUS L.P. IV
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
FOR THE YEAR ENDED MARCH 31, 1996
(Not Including Consolidated Subsidiary Partnership)

CONDENSED STATEMENT OF OPERATIONS

Revenues

Interest income $ 222,419
---------

Expenses

Administrative and management 15,305
Administrative and management-related parties 18,326
Amortization 5,000
---------

Total Expenses 38,631
---------

Income from operations 183,788

Equity in loss of subsidiary partnership (22,391)
---------

Net income $ 161,397
=========

-2-

INDEPENDENCE TAX CREDIT PLUS L.P. IV
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
FOR THE YEAR ENDED MARCH 31, 1996
(Not Including Consolidated Subsidiary Partnership)

CONDENSED STATEMENT OF CASH FLOWS

Cash flows from operating activities:

Net income $ 161,397
------------

Adjustments to reconcile net income to net cash
provided by operating activities:

Amortization 5,000
Equity in loss of subsidiary partnership 22,391
Increase in other assets (156,639)
Due to general partners and affiliates 23,214
Other liabilities (51,931)
------------

Total adjustments (157,965)
------------

Net cash provided by operating activities 3,432
------------

Cash flows from investing activities:

Investments available for sale (11,502,412)
Cash held in escrow (3,000,000)
Increase in other assets (1,581,243)
Investments in subsidiary partnership (77,945)
------------

Net cash used in investing activities (16,161,600)
------------

Cash flow from financing activities:

Capital contributions received 27,333,000
Capital distributions paid (10)
Offering costs (2,837,139)
Due to general partners and affiliates 146,139
------------

Net cash provided by financing activities 24,641,990
------------

Net increase in cash and cash equivalents 8,483,822

Cash and cash equivalents, beginning of year 1,010
------------

Cash and cash equivalents, end of year $ 8,484,832
============

-3-

INDEPENDENCE TAX CREDIT PLUS L.P. IV

AND SUBSIDIARY
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 31, 1996

Cost Gross Amount at which Carried
Initial Cost to Partnership Capitalized At Close of Year
--------------------------- Subsequent to -------------------------------------
Buildings and Acquisition: Buildings and
Description Encumbrances Land Improvements Improvements Land Improvements Total
- - -------------------------- ------------ -------- ------------- ------------- -------- -------------- -----------

Apartment Complexes

BX-8A Team Associates, L.P. $2,039,174 $5,467 $2,667,819 $7,259 $5,849 $2,675,078 $2,680,927
- - --------------------------- ---------- ------ ---------- ------ ------ ---------- ----------

2,039,174 $5,467 $2,667,819 $7,259 $5,849 $2,675,078 $2,680,927
========== ====== ========== ====== ====== ========== ==========

Year of Depreciation in
Con- Latest Income
Accumulated struction/ Date Statement is
Description Depreciation Renovation Acquired Computed(a)
- - -------------------------- ------------ ------------ -------- ----------------

Apartment Complexes

BX-8A Team Associates, L.P. $22,951 1995-96 October 1995 27.5

-------

$22,951
=======

(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 SUBSIDIARY
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral (Continued)
MARCH 31, 1996

Accumulated
Cost of Property Depreciation
----------------- --------------
Year Ended March 31,
-----------------------------
1996 1996
------------ ------------
Balance at beginning of year $ 0 $ 0
Additions during year:
Land, building and improvements 2,680,927
Depreciation expense 22,951
Reductions during year:
Dispositions 0 0
Balance at end of year $2,680,927 $22,951
========== =======

At the time the Local Partnership was 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 Partnership as property and equipment with an
offsetting credit to capital. Since the project was in the construction phase
at the time of acquisition, the capital accounts were insignificant.
Therefore, there are no material differences between the original cost basis
for tax and generally accepted accounting principles.

(Exhibit 22)

Jurisdiction of
Organization
---------------

BX-8A Team Associates, L.P. NY