FORM 10-K

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

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

For the fiscal year ended              March 31, 2001               

Commission File Number                     0-21762                  

                   Gateway Tax Credit Fund III Ltd.                 
          (Exact name of Registrant as specified in its charter)
           Florida                              59-3090386          
(State or other jurisdiction of              (I.R.S. Employer No.)
incorporation or organization)

     880 Carillon Parkway, St. Petersburg, Florida   33716           
    (Address of principal executive offices)      (Zip Code)

Registrant's Telephone No., Including Area Code:    (727)573-3800    

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:
Title of Each Class: Beneficial Assignee 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 (Sec. 229.405 of this chapter) is not
contained herein, and will 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  

                                        Number of Record Holders
  Title of Each Class                         March 31, 2001
Limited Partnership Interest                      2,389
General Partner Interest                            2

DOCUMENTS INCORPORATED BY REFERENCE

Parts III and IV - Form S-11 Registration Statement and all amendments
and supplements thereto.      File No. 33-44238

PART I
Item 1. Business

   Gateway Tax Credit Fund III Ltd. ("Gateway") is a Florida Limited Partnership. The general partners are Raymond James Tax Credit Funds, Inc., the Managing General Partner, and Raymond James Partners, Inc., both sponsors of Gateway Tax Credit Fund III Ltd. and wholly-owned subsidiaries of Raymond James Financial, Inc. Gateway was formed October 17, 1991 and commenced operations July 16, 1992 with the first admission of Limited Partners.

   Gateway is engaged in only one industry segment, to acquire limited partnership interests in unaffiliated limited partnerships ("Project Partnerships"), each of which owns and operates one or more apartment complexes eligible for Low-Income Housing Tax Credits under Section 42 of the Internal Revenue Code ("Tax Credits"), received over a ten year period. Subject to certain limitations, Tax Credits may be used by Gateway's investors to reduce their income tax liability generated from other income sources. Gateway will terminate on December 31, 2040, or sooner, in accordance with the terms of its Limited Partnership Agreement. As of March 31, 2001, Gateway received capital contributions of $1,000 from the General Partners and from the Limited Partners, $10,395,000 in Series 7, $9,980,000 from Series 8, $6,254,000 from Series 9, $5,043,000 from Series 10 and $5,127,000 from Series 11.

   Gateway offered Limited Partnership units in series. Each series is treated as though it were a separate partnership, investing in a separate and distinct pool of Project Partnerships. Net proceeds from each series are used to acquire Project Partnerships which are specifically allocated to such series. Income or loss and all tax items from the Project Partnerships acquired by each series are specifically allocated among the limited partners of such series.

   Operating profits and losses, cash distributions from operations and Tax Credits are allocated 99% to the Limited Partners and 1% to the General Partners. Profit or loss and cash distributions from sales of property will be allocated as described in the Limited Partnership Agreement.

   As of March 31, 2001, Gateway had invested in 39 Project Partnerships for Series 7, 43 Project Partnerships for Series 8, 24 Project Partnerships for Series 9, 15 Project Partnerships for Series 10 and 12 Project Partnerships for Series 11. Gateway acquired its interests in these properties by becoming a limited partner in the Project Partnerships that own the properties. The primary source of funds for each series is the capital contributions from Limited Partner investors.

   All but eight of the properties are financed with mortgage loans from the Farmers Home Administration (now called United States Department of Agriculture - Rural Development) ("USDA-RD") under Section 515 of the Housing Act of 1949. These mortgage loans are made at low interest rates for multi-family housing in rural and suburban areas, with the requirement that the interest savings be passed on to low income tenants in the form of lower rents. A significant portion of the project partnerships also receive rental assistance from USDA-RD to subsidize certain qualifying tenants. One recently acquired property in Series 7 received conventional financing. One property in Series 9, two properties in Series 10 and one property in Series 11 are fully financed through the HOME Investment Partnerships Program.

   These HOME Program loans provide financing at rates of 0 % to 0.5% for a period of 15 to 42 years. One property in Series 11 is partially financed by HOME. Two properties in Series 11 received conventional financing.

   Risks related to the operations of Gateway are described in detail on pages 29 through 38 of the Prospectus, as supplemented, under the Caption "Risk Factors" which is incorporated herein by reference. The investment objectives of Gateway are to:

  1) Provide tax benefits to Limited Partners in the form of Tax Credits
     during the period in which each Project is eligible to claim tax
     credits;

  2) Preserve and protect the capital contribution of Investors;

  3) Participate in any capital appreciation in the value of the
     Projects; and

  4) Provide passive losses to i) individual investors to offset 
     passive income from other passive activities, and ii) corporate
     investors to offset business income.

   The investment objectives and policies of Gateway are described in detail on pages 39 through 47 of the Prospectus, as supplemented, under the caption "Investment Objectives and Policies" which is incorporated herein by reference.

   Gateway's goal is to invest in a diversified portfolio of Project Partnerships located in rural and suburban locations with a high demand for low income housing. As of March 31, 2001 the Series' investor capital contributions were successfully invested in Project Partnerships which met the investment criteria. Management anticipates that competition for tenants will only be with other low income housing projects and not with conventionally financed housing. With a significant number of rural American households living below the poverty level in substandard housing, management believes there will be a continuing demand for affordable low income housing for the foreseeable future.

   Gateway has no direct employees. Services are performed by the Managing General Partner and its affiliates and by agents retained by it. The Managing General Partner has full and exclusive discretion in management and control of Gateway.

Item 2.  Properties

   Gateway owns a majority interest in properties through its limited partnership investments in Project Partnerships. The largest single net investment in a Project Partnership in Series 7 is 15.6% of the Series' total balance sheet assets, Series 8 is 8.1%, Series 9 is 15.6%, Series 10 is 20.5% and Series 11 is 21.7%. The following table provides certain summary information regarding the Project Partnerships in which Gateway had an interest as of December 31, 2000:

Item 2 - Properties (continued):

SERIES 7

An average effective rental per unit is $3,390 per year ($283 per month).

Item 2 - Properties (continued):

SERIES 8

An average effective rental per unit is $3,366 per year ($281 per month).

Item 2 - Properties (continued):

SERIES 9

An average effective rental per unit is $3,262 per year ($272 per month).

Item 2 - Properties (continued):

SERIES 10

An average effective rental per unit is $3,285 per year ($274 per month).

Item 2 - Properties (continued):

SERIES 11

An average effective rental per unit is $3,809 per year ($317 per month).

Item 2 - Properties (continued):

A summary of the cost of the properties at December 31, 2000, 1999 and 1998 is as follows:
                                   12/31/00

12/31/99

12/31/98

Item 3. Legal Proceedings

Gateway is not a party to any material pending legal proceedings.

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

As of March 31, 2001, no matters were submitted to a vote of security holders, through the solicitation of proxies or otherwise.

PART II

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

 (a) Gateway's Limited Partnership interests are not publicly traded.
     There is no market for Gateway's Limited Partnership interests and
     it is unlikely that any will develop. No transfers of Limited
     Partnership Interests are permitted without the prior written
     consent of the Managing General Partner. There have been several
     transfers from inception to date with most being from individuals
     to their trusts or heirs. The Managing General Partner is not aware
     of the price at which Limited Partnership units are transferred.
     The criteria for and the details regarding transfers are found on
     pages A-28 and A-29 of the Limited Partnership Agreement under
     ARTICLE XII under the caption "Transfers of Units" found in the
     Prospectus, which is incorporated herein by reference.

   There have been no distributions to Limited Partner investors from
inception to date.

                                  Number of Holders
Title of Class                    as of March 31, 2001

Limited Partner Interest                 2,389
General Partner Interest                   2

Item 6. Selected Financial Data

FOR THE YEARS ENDED MARCH 31,

FOR THE YEARS ENDED MARCH 31,

FOR THE YEARS ENDED MARCH 31,

FOR THE YEARS ENDED MARCH 31,

FOR THE YEARS ENDED MARCH 31,

(A) The tax information is as of December 31, the year end for tax purposes.

The above selected financial data should be read in conjunction with the financial statements and related notes appearing elsewhere in this report. This statement is not covered by the auditor's opinion included elsewhere in this report.

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

Results of Operations, Liquidity and Capital Resources

   Operations commenced on July 16, 1992 with the first admission of Limited Partners in Series 7. The proceeds from Limited Partner investors' capital contributions available for investment are used to acquire interests in Project Partnerships.

   As disclosed on the statement of operations for each Series, except as described below, interest income is comparable for the years ended March 31, 2001, March 31, 2000 and March 31, 1999. General and Administrative expenses - General Partner and General and Administrative expenses - Other for the year ended March 31, 2001 are comparable to March 31, 2000 and March 31, 1999.

   The capital resources of each Series are used to pay General and Administrative operating costs including personnel, supplies, data processing, travel and legal and accounting associated with the administration and monitoring of Gateway and the Project Partnerships. The capital resources are also used to pay the Asset Management Fee due the Managing General Partner, but only to the extent that Gateway's remaining resources are sufficient to fund Gateway's ongoing needs. (Payment of any Asset Management Fee unpaid at the time Gateway sells its interests in the Project Partnerships is subordinated to the investors' return of their original capital contribution.)

   The sources of funds to pay the operating costs of each Series are short-term investments and interest earned thereon, the maturity of U.S. Treasury Security Strips ("Zero Coupon Treasuries") which were purchased with funds set aside for this purpose, and cash distributed to the Series from the operations of the Project Partnerships.

   Series 7 - Gateway closed this series on October 16, 1992 after receiving $10,395,000 from 635 Limited Partner investors. As of March 31, 2001, the series had invested $7,732,089 in 39 Project Partnerships located in 14 states containing 1,195 apartment units. Average occupancy of the Project Partnerships was 96% at December 31, 2000.

   Equity in losses of Project Partnerships for the year ended March 31, 2001 of $434,461 were comparable to the Equity in losses of Project Partnerships of $471,721 for the year ended March 31, 2000. The Equity in Losses of Project Partnerships decreased from $718,721 for the year ended March 31, 1999 to $471,721 for the year ended March 31, 2000 as a result of not including losses of $396,875, as these losses would reduce the investment in certain Project Partnerships below zero. In general, it is common in the real estate industry to experience losses for financial and tax reporting purposes because of the non-cash expenses of depreciation and amortization. (These Project Partnerships reported depreciation and amortization of $1,525,659, $1,502,758 and $1,466,589 for the periods ended December 31, 1998, 1999 and 2000, respectively.) As a result, management expects that this Series, as well as the Series described below, will report its equity in Project Partnerships as a loss for tax and financial reporting purposes. Overall management believes the Project Partnerships are operating as expected and are generating tax credits which meet projections. However, one Project Partnership experienced significant operating problems worth noting.

   At March 31, 2001, the Series had $353,838 of short-term investments (Cash and Cash Equivalents). It also had $382,386 in Zero Coupon Treasuries with annual maturities providing $57,000 in fiscal year 2001 increasing to $86,000 in fiscal year 2008. Management believes the sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.

   As disclosed on the statement of cash flows, the Series had a net loss of $508,769 for the year ending March 31, 2001. However, after adjusting for Equity in Losses of Project Partnerships of $434,461 and the changes in operating assets and liabilities, net cash used in operating activities was $36,234 of which $43,788 was the Asset Management Fee actually paid. Cash provided by investing activities totaled $65,916 consisting of $32,646 in cash distributions from the Project Partnerships and $33,270 from matured Zero Coupon Treasuries. There were no unusual events or trends to describe.

   A Project Partnership located in Bloomfield, NE experienced cash shortages since 1998 from operations due to low occupancy. In 2000, the average occupancy rate was 71%. The local general partner continues to actively market the development. Management does not expect any materially adverse effect to Gateway from this Project Partnership.

   Series 8 - Gateway closed this Series on June 28, 1993 after receiving $9,980,000 from 664 Limited Partner investors. As of March 31, 2001, the series had invested $7,586,105 in 43 Project Partnerships located in 18 states containing 1,207 apartment units. Average occupancy of the Project Partnerships was 94% at December 31, 2000.

   Equity in Losses of Project Partnerships increased from $960,106 for the year ended March 31, 1999 to $1,158,932 for the year ended March 31, 2000 and decreased to $457,729 for the year ended March 31, 2001. In 1999, four Project Partnerships had a change in Accounting Principle as a result of changing its method of depreciating buildings. The effect of the change increased the net loss of the Project Partnerships for the year ended March 31, 2000 by approximately $492,000. As presented in Note 5, Gateway's share of net loss increased from $1,129,437 in 1999 to $1,588,675 in 2000 and decreased to $1,146,826 in 2001. Suspended Losses increased from $169,331 for the year ended March 31, 1999 to $429,743 for the year ended March 31, 2000 and to $689,097 for the year ended March 31, 2001. These losses would reduce the investment in Project Partnerships below zero. (These Project Partnerships reported depreciation and amortization of $1,609,164, $2,101,828 and $1,578,473 for the periods ended December 31, 1998, 1999 and 2000, respectively.) Overall management believes the Project Partnerships are operating as expected and are generating tax credits which meet projections.

   At March 31, 2001, the Series had $447,343 of short-term investments (Cash and Cash Equivalents). It also had $362,125 in Zero Coupon Treasuries with annual maturities providing $54,000 in fiscal year 2001 increasing to $82,000 in fiscal year 2008. Management believes the sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.

   As disclosed on the statement of cash flows, the Series had a net loss of $539,766 for the year ending March 31, 2001. However, after adjusting for Equity in Losses of Project Partnerships of $457,729 and the changes in operating assets and liabilities, net cash used in operating activities was $36,058 of which $43,381 was the Asset Management Fee actually paid. Cash provided by investing activities totaled $57,954 consisting of $24,621 received in cash distributions from the Project Partnerships and $33,333 from matured Zero Coupon Treasuries. Management believes the sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee. There were no unusual events or trends to describe.

   A Project Partnership located in Russellville, KY experienced cash shortages from operations since 1998 due to low occupancies. The local general partner has funded the deficit by lending $16,400 in previous years and $2,500 in 2000. However, the local general partner will continue to fund the operating deficits of the partnership as needed. Management does not expect any materially adverse effect to Gateway from this Project Partnership.

   A Project Partnership located in Bridgeport, NE experienced cash shortages from operations in 2000 due to low occupancies. A new site manager was hired in 2001 who has aggressively advertised and marketed the project. The occupancy rate has increased from 38% in December of 2000 to 81% in June of 2001. Management does not expect any materially adverse effect to Gateway from this Project Partnership.

   Series 9 - Gateway closed this Series on September 30, 1993 after receiving $6,254,000 from 406 Limited Partner investors. As of March 31, 2001, the series had invested $4,914,116 in 24 Project Partnerships located in 11 states containing 624 apartment units. Average occupancy of the Project Partnerships was 95% at December 31, 2000.

   The Equity in Losses of Project Partnerships decreased from $496,765 for the year ended March 31, 2000 to $409,450 for the year ended March 31, 2001 as a result of not including losses of $200,607, as these losses would reduce the investment in certain Project Partnerships below zero. Equity in losses of Project Partnerships for the year ended March 31, 1999 were comparable to the year ended March 31, 2000. (These Project Partnerships reported depreciation and amortization of $887,635, $842,272 and $832,666 for the years ended December 31, 1998, 1999 and 2000, respectively.) Overall management believes the Project Partnerships are operating as expected and are generating tax credits which meet projections.

   At March 31, 2001, the Series had $232,688 of short-term investments (Cash and Cash Equivalents). It also had $244,042 in Zero Coupon Treasuries with annual maturities providing $32,000 in fiscal year 2001 increasing to $47,000 in fiscal year 2009. Management believes the sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.

   As disclosed on the statement of cash flows, the Series had a net loss of $457,177 for the period ending March 31, 2001. After adjusting for Equity in Losses of Project Partnerships of $409,450 and the changes in operating assets and liabilities, net cash used in operating activities was $15,791 of which $17,375 was the Asset Management Fee actually paid. Cash provided by investing activities totaled $38,515 consisting of $16,992 received in cash distributions from the Project Partnerships and $21,523 from matured Zero Coupon Treasuries. Management believes the sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee. There were no unusual events or trends to describe.

   A Project Partnership located in Pierre, SD experienced cash shortages from operations in 1999 and 2000 due to low occupancy as a result of a reduction of state employees, competition from a new women's prison for low-paying contract and services jobs, and the development of a 150-unit manufactured housing subdivision. The manufacturer offers houses for rent, rent to own, or for sale with no down payment. The general partner is actively marketing the project. Management does not expect any materially adverse effect to Gateway from this Project Partnership.

   Series 10 - Gateway closed this Series on January 21, 1994 after receiving $5,043,000 from 325 Limited Partner investors. As of March 31, 2001, the series had invested $3,914,672 in 15 Project Partnerships located in 10 states containing 409 apartment units. Average occupancy of the Project Partnerships was 95% at December 31, 2000.

   Equity in losses of Project Partnerships of $292,747 for the year ended March 31, 2001 were comparable to $299,182 for the year ended March 31, 2000 and to $237,276 for the year ended March 31, 1999. (These Project Partnerships reported depreciation and amortization of $511,296, $502,179 and $496,926 for the years ended December 31, 1998, 1999, and 2000 respectively.) Overall management believes the Project Partnerships are operating as expected and are generating tax credits which meet projections.

   At March 31, 2001, the Series had $236,522 of short-term investments (Cash and Cash Equivalents). It also had $201,660 in Zero Coupon Treasuries with annual maturities providing $25,000 in fiscal year 2001 increasing to $40,000 in fiscal year 2010. Management believes the sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.

   As disclosed on the statement of cash flows, the Series had net loss of $321,107 for the year ending March 31, 2001. After adjusting for Equity in Losses of Project Partnerships of $292,747 and the changes in operating assets and liabilities, net cash used in operating activities was $20,497 of which $27,226 was the Asset Management Fee actually paid. Cash provided by investing activities totaled $30,949 consisting of $14,741 received in cash distributions from the Project Partnerships and $16,208 from matured Zero Coupon Treasuries. Management believes the sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee. There were no unusual events or trends to describe.

   Series 11 - Gateway closed this Series on April 29, 1994 after receiving $5,127,000 from 330 Limited investors. As of March 31, 2001 the series had invested $4,128,042 in 12 Project Partnerships located in 7 states containing 361 apartments. Average occupancy of the Project Partnerships was 95% at December 31, 2000.

   Equity in losses of Project Partnerships were comparable for the years ended March 31, 1999, 2000 and 2001. (These Project Partnerships reported depreciation and amortization of $510,062, $516,489 and $516,766 for the periods ended December 31, 1998, 1999 and 2000.) Overall management believes the Project Partnerships are operating as expected and are generating tax credits which meet projections.

   At March 31, 2001, the Series had $244,339 of short-term investments (Cash and Cash Equivalents). It also had $224,193 in Zero Coupon Treasuries with annual maturities providing $26,000 in fiscal year 2001 increasing to $44,000 in fiscal year 2010. Management believes the sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.

   As disclosed on the statement of cash flows, the Series had net loss of $202,390 for the year ending March 31, 2001. After adjusting for Equity in Losses of Project Partnerships of $181,405 and the changes in operating assets and liabilities, net cash used in operating activities was $19,422 of which $28,781 was the Asset Management Fee actually paid. Cash provided by investing activities totaled $32,887 consisting of $16,430 from matured Zero Coupon Treasures and $16,457 received in cash distributions from Project Partnerships. Management believes the sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee. There were no unusual events or trends to describe.

Item 8. Financial Statements and Supplementary Data

INDEPENDENT AUDITOR'S REPORT

To the Partners of Gateway Tax Credit Fund III Ltd.

   We have audited the accompanying balance sheets of each of the five Series (Series 7 through 11) constituting Gateway Tax Credit Fund III Ltd. (a Florida Limited Partnership) as of March 31, 2001 and 2000 and the related statements of operations, members equity, and cash flows of each of the five Series for 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 did not audit the financial statements of certain Project Partnerships for which cumulative equity in losses included on the balance sheets as of March 31, 2001 and 2000 and net losses included on the statements of operations for each of the three years in the period ended March 31, 2001 are:

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 such underlying 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 other auditors provide a reasonable basis for our opinion.

   In our opinion, based on our audits and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of each of the five Series (Series 7 through 11) constituting Gateway Tax Credit Fund III Ltd. as of March 31, 2001 and 2000, and the results of their operations and their 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 schedules listed under Item 14(a)(2) in the index are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, based on our audits and the reports of other auditors, fairly stated in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.

   As discussed in Note 2, four of the Project Partnerships, whose financial statements were audited by other auditors, changed their method of computing depreciation for the year ended December 31, 1999.

                               /s/ Spence Marston, Bunch, Morris & Co.
                               SPENCE, MARSTON, BUNCH, MORRIS & CO.
                               Certified Public Accountants

Clearwater, Florida
July 5, 2001

PART I - Financial Information
Item 1. Financial Statements

GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
MARCH 31, 2001 AND 2000

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
MARCH 31, 2001 AND 2000

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
MARCH 31, 2001 AND 2000

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
MARCH 31, 2001 AND 2000

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
MARCH 31, 2001 AND 2000

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
MARCH 31, 2001 AND 2000

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)

STATEMENTS OF PARTNERS' EQUITY (deficit)
FOR THE YEARS ENDED MARCH 31, 2001, 2000 AND 1999:

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)

STATEMENTS OF PARTNERS' EQUITY (deficit)
FOR THE YEARS ENDED MARCH 31, 2001, 2000 AND 1999:

See accompanying notes to financial statements.

 GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)

STATEMENTS OF PARTNERS' EQUITY (deficit)
FOR THE YEARS ENDED MARCH 31, 2001, 2000 AND 1999:

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)

STATEMENTS OF PARTNERS' EQUITY (deficit)
FOR THE YEARS ENDED MARCH 31, 2001, 2000 AND 1999: 

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)

STATEMENTS OF PARTNERS' EQUITY (deficit)
FOR THE YEARS ENDED MARCH 31, 2001, 2000 AND 1999:

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)

STATEMENTS OF PARTNERS' EQUITY (deficit)
FOR THE YEARS ENDED MARCH 31, 2001, 2000 AND 1999: 

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2001, 2000 AND 1999:

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2001, 2000 AND 1999:

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2001, 2000 AND 1999:

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2001, 2000 AND 1999:

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2001, 2000 AND 1999:

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2001, 2000 AND 1999:

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001, 2000 AND 1999

Quarterly the Investments in Project Partnerships are increased or decreased as follows:

  Pursuant to the limited partnership agreements for the Project Partnerships, cash losses generated by the Project Partnerships are allocated to the general partners of those partnerships. In subsequent years, cash profits, if any, are first allocated to the general partners to the extent of the allocation of prior years' cash losses.

  Since Gateway invests as a limited partner, and therefore is not obligated to fund losses or make additional capital contributions, it does not recognize losses from individual Project Partnerships to the extent that these losses would reduce the investment in those Project Partnerships below zero. The suspended losses will be used to offset future income from the individual Project Partnerships.

  Gateway recognizes a decline in the carrying value of its investment in the Project Partnerships when there is evidence of a non-temporary decline in the recoverable amount of the investment. There is a possibility that the estimates relating to reserves for non-temporary declines in carrying value of the investments in Project Partnerships may be subject to material near term adjustments.

  Gateway, as a limited partner in the Project Partnerships, is subject to risks inherent in the ownership of property which are beyond its control, such as fluctuations in occupancy rates and operating expenses, variations in rental schedules, proper maintenance and continued eligibility of tax credits. If the cost of operating a property exceeds the rental income earned thereon, Gateway may deem it in its best interest to voluntarily provide funds in order to protect its investment.

Cash and Cash Equivalents

  It is Gateway's policy to include short-term investments with an original maturity of three months or less in Cash and Cash Equivalents. Short-term investments are comprised of money market mutual funds.

  Effective April 1, 1994, Gateway adopted Statement of Financial Accounting Standards No. 115, Accounting for Certain Investments in Debt and Equity Securities ("FAS 115"). Under FAS 115, Gateway is required to categorize its debt securities as held-to-maturity, available-for-sale or trading securities, dependent upon Gateway's intent in holding the securities. Gateway's intent is to hold all of its debt securities (U. S. Treasury Security Strips) until maturity and to use these reserves to fund Gateway's ongoing operations. Interest income is recognized ratably on the U.S. Treasury Strips using the effective yield to maturity.

  Offering and commission costs are charged against Limited Partners' Equity upon admission of Limited Partners.

  Four of the Project Partnerships changed their method of accounting for depreciating their buildings from the straight line to the declining balance method. The effect of this change was reported as a cumulative effect of a Change in Accounting Principle. The change increased the net losses reported by the Project Partnerships by $492,138 for the year ended December 31, 1999.

  For comparability, the 1999 and 2000 figures have been reclassified, where appropriate, to conform with the financial statement presentation used in 2001.

  The March 31, 2001 Balance Sheet includes Investment in Securities consisting of U.S. Treasury Security Strips which represents their cost, plus accreted interest income of $174,085 for Series 7, $151,347 for Series 8, $87,806 for Series 9, $77,475 for Series 10 and $88,671 for Series 11.

As of March 31, 2001, the cost and accreted interest of debt securities by contractual maturities is as follows:

  For the periods ended March 31, 2001, 2000, and 1999 the General Partners and affiliates are entitled to compensation and reimbursement for costs and expenses incurred by Gateway as follows:

  Asset Management Fee - The Managing General Partner is entitled to receive an annual asset management fee equal to the greater of (i) $2,000 for each limited partnership in which Gateway invests, as adjusted by the Consumer Price Index, or (ii) 0.275% of Gateway's gross proceeds from the sale of limited partnership interests. In either event (i) or (ii), the maximum amount may not exceed 0.2% of the aggregate cost (Gateway's capital contribution plus Gateway's share of the Properties' mortgage) of Gateway's interest in properties owned by the Project Partnerships. The asset management fee will be paid only after all other expenses of Gateway have been paid. These fees are included in the Statement of Operations.

  General and Administrative Expenses - The Managing General Partner is reimbursed for general and administrative expenses of Gateway on an accountable basis. This expense is included in the Statement of Operations.