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EXCEL - IDEA: XBRL DOCUMENT - WNC Housing Tax Credit Fund VI, L.P., Series 13 | Financial_Report.xls |
EX-31.1 - WNC Housing Tax Credit Fund VI, L.P., Series 13 | ex31-1.htm |
EX-32.1 - WNC Housing Tax Credit Fund VI, L.P., Series 13 | ex32-1.htm |
EX-31.2 - WNC Housing Tax Credit Fund VI, L.P., Series 13 | ex31-2.htm |
EX-32.2 - WNC Housing Tax Credit Fund VI, L.P., Series 13 | ex32-2.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
to Form 10-K/A
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2011
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number: 333-124115
WNC HOUSING TAX CREDIT FUND VI, L.P., Series 13
(Exact name of registrant as specified in its charter)
California | 20-2355224 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
17782 Sky Park Circle | ||
Irvine, CA | 92614-6404 | |
(Address of principal executive offices) | (Zip Code) |
(714) 662-5565
(Telephone number)
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act
Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes [ ] No [X]
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 [ ] No [X]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [X] Smaller reporting company [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.
INAPPLICABLE
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980).
EXPLANATORY NOTE
This Amendment No. 1 on Form 10-K/A (this “Amendment”) to the Annual Report on Form 10-K of WNC Housing Tax Credit Fund VI, L.P., Series 13 (the “Partnership”) for the fiscal year ended March 31, 2011, initially filed with the Securities and Exchange Commission (the “SEC”) on December 3, 2012 (the “Original Filing”), is being filed to correct certain administrative errors in the Original Filing. The report of the independent registered public accounting firm in the Original Filing in Item 8 inadvertently referred to the fiscal years ended March 31, 2010 and 2009, which were audited by a predecessor auditor.
This Amendment No. 1 is being filed solely to correct the report of the independent registered public accounting firm to only cover the fiscal year ended March 31, 2011 and to include the predecessor report of the independent registered public accounting firm for the fiscal years ended March 31, 2010 and 2009 that was intended to be filed with the Original Filing.
In addition, pursuant to the rules of the SEC, “Item 8. Financial Statements and Supplementary Data” is being filed in its entirety in this Amendment, however, the only change in Item 8 from the Original Filing has been to correct the report of the independent registered public accounting firm to cover only the fiscal year ended March 31, 2011 and to include the predecessor auditor’s report of the independent registered public accounting firm for the fiscal years ended March 31, 2010 and 2009. Further, the exhibit list in Item 15 of Part IV of the Original Filing has been amended to contain current dated certifications from the Company’s Chief Executive Officer and Chief Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002. The certifications of the Company’s Chief Executive Officer and Chief Financial Officer are attached as exhibits to this Amendment.
Except for the foregoing amended information, this Amendment does not alter or update any other information contained in the Original Filing. Therefore, this Amendment should be read together with other documents the Partnership has filed with the SEC subsequent to the Original Filing. Information in such reports and documents updates and supersedes certain information contained in the Original Filing.
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REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
To the Partners
WNC Housing Tax Credit Fund VI, L.P., Series 13
We have audited the accompanying balance sheet of WNC Housing Tax Credit Fund VI, L.P., Series 13 (the Partnership) as of March 31, 2011, and the related statements of operations, partners’ deficit and cash flows for the year ended March 31, 2011. The 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 did not audit the financial statements of certain Local Limited Partnerships which investments represent $6,921,020 of the total Partnership assets as of March 31, 2011 and $388,804 of the total Partnership loss for the year ended March 31, 2011. Those statements were audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to those Local Limited Partnerships, is based solely on the reports of the other auditors.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the reports of other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of WNC Housing Tax Credit Fund VI, L.P., Series 13 as of March 31, 2011 and the results of its operations and its cash flows for the year ended March 31, 2011, in conformity with accounting principles generally accepted in the United States of America.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedule listed under Item 15(a)(2) in the index related to the year ended March 31, 2011 is presented for the purpose of complying with the Securities and Exchange Commission’s rules and is not part of the basic financial statements. This schedule has been subjected to the auditing procedures applied to the audit of the basic financial statements and, in our opinion, fairly states in all material respects the financial statement data required to be set forth therein in relation to the basic financial statements taken as a whole.
/s/ CohnReznick LLP |
Bethesda, Maryland
December 3, 2012
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Reznick Group, P.C. 7501 Wisconsin Avenue Suite 400E Bethesda, MD 20814-6583 Tel: (301) 652-9100 |
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
To the Partners
WNC Housing Tax Credit Fund VI, L.P., Series 13
We have audited the accompanying balance sheet of WNC Housing Tax Credit Fund VI, L.P., Series 13 (the Partnership) as of March 31, 2010, and the related statements of operations, partners’ deficit and cash flows for each of the years in the two-year period ended March 31, 2010. The Partnership’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the financial statements of certain Local Limited Partnerships which investments represent $7,315,837 of the total Partnership assets as of March 31, 2010; and $1,748,564 and $2,254,801 of the total Partnership loss for the years ended March 31, 2010 and 2009, respectively. Those statements were audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to those Local Limited Partnerships, is based solely on the reports of the other auditors.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, 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 WNC Housing Tax Credit Fund, VI, L.P., Series 13 as of March 31, 2010, and the results of its operations and its cash flows for each of the years in the two-year period ended March 31, 2010, in conformity with accounting principles generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedules listed under Item 15(a)(2) in the index related to years above are presented for the purpose 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 to the audits of the basic financial statements and, in our opinion, fairly state in all material respects the financial statement data required to be set forth therein in relation to the basic financial statements taken as a whole.
/s/ Reznick Group, P.C. | |
Bethesda, Maryland | |
February 25, 2011 |
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PAILET, MEUNIER and LeBLANC, L.L.P.
Certified Public Accountants
Management Consultants
INDEPENDENT AUDITOR’S REPORT
To the Partners
Crestview Housing, Ltd.
Kalispell, Montana
And USDA Rural Development Servicing Office
Kalispell, Montana
We have audited the accompanying balance sheets of Crestview Housing, Ltd., RHS Project No. 31-015-387826946, as of December 31, 2010 and 2009 and the related statements of operations, changes in partners’ equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the Standards of the Public Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Crestview Housing, Ltd. as of December 31, 2010 and 2009 and the results of its operations, changes in partners’ equity and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report dated September 8, 2011 on our consideration of Crestview Housing, Ltd.’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Metairie, Louisiana
September 8, 2011
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PAILET, MEUNIER and LeBLANC, L.L.P.
Certified Public Accountants
Management Consultants
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Partners
Davenport Housing VII, L.P.
Davenport, Iowa
We have audited the accompanying balance sheet of Davenport Housing VII, L.P., as of December 31, 2010 and 2009 and the related statements of operations, changes in partners’ capital and cash flows for the years then ended. These financial statements are the responsibility of the partnership’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the Standards of the Public Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the partnership’s internal control over financial reporting. Accordingly, we express no such opinion. 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 Davenport Housing VII, L.P. as of December 31, 2010 and 2009 and the results of its operations, changes in partners’ capital and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
Metairie, Louisiana
September 7, 2012
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PAILET, MEUNIER and LeBLANC, L.L.P.
Certified Public Accountants
Management Consultants
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Partners
Head Circle, L.P.
Ruleville, Mississippi
And USDA Rural Development Servicing Office
Greenville, Mississippi
We have audited the accompanying balance sheets of Head Circle, L.P., RHS Project No, 28-067-038654099, as of December 31, 2010 and 2009 and the related statements of operations, changes in partners’ equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the Standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Head Circle, L.P. as of December 31, 2010 and 2009 and the results of its operations, changes in partners’ equity and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report dated January 27, 2011 on our consideration of Head Circle, L.P.’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Metairie, Louisiana
January 27, 2011
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PAILET, MEUNIER and LeBALNC, L.L.P.
Certified Public Accountants
Management Consultants
INDEPENDENT AUDITOR’S REPORT
To the Partners
HEAD CIRCLE, L P.
Ruleville, Mississippi
And USDA Rural Development Servicing Office
Greenville, Mississippi
We have audited the accompanying balance sheets of HEAD CIRCLE, L. P., RHS PROJECT NO. 28-067-038654099, as of December 31, 2009 and 2008 and the related statements of operations, changes in partners’ equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the Standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of HEAD CIRCLE, L. P. as of December 31, 2009 and 2008 and the results of its operations, changes in partners’ equity and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report dated January 18, 2010 on our consideration of HEAD CIRCLE, L. P.’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grant .agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed In accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Metairie, Louisiana
January 18, 2010
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Douglas W. Child, CPA Marty D. Van Wagoner, CPA J. Russ Bradshaw, CPA William R. Denney, CPA Roger B. Kennard, CPA Russell E, Anderson, CPA Scott L. Fames 1284 W. Flint Meadow Dr. #D Kaysville, UT 84037-9590 Telephone 801.927.1337 801.927.1337 Facsimile 801.927.1344 5296 S. Commerce Dr. #300 (53rd So. @1-15) SLC.UT 84107-5370 Telephone 801.281.4700 801.281.4700 Facsimile 801.281.4701 Suite B ,4F, North Cape Commercial Bldg. 398 King’s Road North Point, Hong Kong www.cpaone.net |
Report of Independent Registered Public Accounting Firm
To the Partners Fernwood Meadows, L.P. Fernley, Nevada
We have audited the accompanying balance sheets of Fernwood Meadows, L.P. (the Partnership), as of December 31, 2009 and 2008, and the related statements of operations, changes in partners’ equity and cash flows for the years ended December 31, 2009 and 2008. These financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards of the Public Company Accounting Oversight Board (United States of America) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan arid perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Partnership as of December 31,2009 and 2008, and the results of its operations and cash flows for the years ended December 31, 2009 and 2008, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report dated March 22, 2010, on our consideration of the Partnership’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and the results of that testing and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental information shown on page 13 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
/s/ Child, Van Wagoner & Bradshaw
Child, Van Wagoner & Bradshaw, PLLC Kaysville, Utah March 22, 2010 |
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Loveridge Hunt & Co., PLLC
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR’S REPORT ON FINANCIAL STATEMENTS
Partners
Grove Village Limited Partnership
Portland, Oregon
We have audited the accompanying balance sheet of Grove Village Limited Partnership, owner of Grove Village Apartments HUD Section 8 Contract Nos. TX16L00024 and TX16M000311, as of December 31, 2009, and the related statements of operations, changes in partners’ equity (deficit), and cash flows for the year then ended. These financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America, Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Grove Village Limited Partnership as of December 31, 2009, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying additional information on pages 12 through 22 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such additional information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report dated March 30, 2010, on our consideration of the Partnership’s internal control over financial reporting. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and the results of that testing and not to provide an opinion on the internal control over financial reporting. In accordance with Government Auditing Standards, we have also issued an opinion dated March 30, 2010 on compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters that could have a direct and material effect on a major HUD-assisted program. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
March 30, 2010
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PAILET, MEUNIER and LeBLANC, L.L.P
Certified Public Accountants
Management Consultants
INDEPENDENT AUDITOR’S REPORT
To the Partners
Grove Village Limited Partnership
Portland, Oregon
We have audited the accompanying balance sheets of Grove Village Limited Partnership, owner of Grove Village Apartments, HUD Section 8 Contract Nos. TX16L00024 and TX16M000311, as of December 31, 2008, and the related statements of operations, changes in partners’ equity (deficit), and cash flows for the year then ended. These financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Grove Village Limited Partnership as of December 31, 2008 and the results of its operations, changes in partners’ equity, and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated May 7, 2009, on our consideration of Grove Village Limited Partnership’s internal control, and reports dated May 7, 2009, on its compliance with specific requirements applicable to major HUD programs and specific requirements applicable to Fair Housing and Non-Discrimination. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Metairie, Louisiana
May 7, 2009
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PAILET, MEUNIER and LeBLANC, L.L.P.
Certified Public Accountants
Management Consultants
INDEPENDENT AUDITOR’S REPORT
To the Partners
Pleasant Village Limited Partnership
Portland, Oregon
We have audited the accompanying balance sheets of Pleasant Village Limited Partnership, HUD Section 8 Contract Nos. TX16L0G0047 and TX16M000310, as of December 31, 2009, and the related statements of income, changes in partners’ equity, and cash flows for the years then ended. These financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Pleasant Village Limited Partnership, HUD Section 8 Contract Nos. TX16L000047 and TX16M000310, as of December 31. 2009 and the results of its operations, changes in partners’ equity, and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated April 22, 2010, on our consideration of Pleasant Village Limited Partnership’s internal control, and reports dated April 22, 2010, on its compliance with specific requirements applicable to major HUD programs and specific requirements applicable to Fair Housing and Non-Discrimination. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Metairte, Louisiana
April 22, 2010
12 |
PAILET, MEUNIER and LeBLANC, L.L.P.
Certified Public Accountants
Management Consultants
INDEPENDENT AUDITOR’S REPORT
To the Partners
Pleasant Village Limited Partnership
Portland, Oregon
We have audited the accompanying balance sheets of Pleasant Village Limited Partnership, HUD Section 8 Contract Nos. TX16L000047 and TX16M000310, as of December 31, 2008, and the related statements of income, changes in partners’ equity, and cash flows for the years then ended. These financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we .plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Pleasant Village Limited Partnership, HUD Section 8 Contract Nos. TX16L000047 and TX16M000310, as of December 31, 2008 and the results of its operations, changes in partners’ equity, and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated May 7, 2009, on our consideration of Pleasant Village Limited Partnership’s internal control, and reports dated May 7, 2009, on its compliance with specific requirements applicable to major HUD programs and specific requirements applicable to Fair Housing and Non-Discrimination. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Metairie, Louisiana
May 7, 2009
13 |
Douglas W. Child, CFA Marty D. Van Wagoner, CPA J. Russ Bradshaw, CPA William R. Denney, CPA Roger B. Kennard, CPA Russell E. Anderson, CPA Scott L. Fames 1284
W. Flint Meadow Dr. #D Facsimile 801.927.1344 5298 S. Commerce Dr, #300 (53rd So. @l-15) SLC, UT 64107-5370 Telephone 801.281.4700 801.281.4700 Facsimile 801.281.4701 Suite B, 4F, North Cape Commercial Bldg. 398 King’s Road North Point, Hong Kong www.cpaone.net |
Report of Independent Registered Public Accounting Firm
To the Partners Sierra’s Run L.P. Fernley, Nevada
We have audited the accompanying balance sheets of Sierra’s Run L.P. (the Partnership) as of December 31, 2009 and 2008, and the related statements of operations, changes in partners’ equity, and cash flows for the years then ended. These financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America, the standards of the Public Company Accounting Oversight Board (United States of America) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Partnership as of December 31, 2009 and 2008, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report dated March 19, 2010, on our consideration of the Partnership’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters, The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information shown on page 13 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
/s/ Child, Van Wagoner & Bradshaw
Child, Van Wagoner & Bradshaw, PLLC Kaysville, Utah March 19, 2010 |
14 |
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A California Limited Partnership)
BALANCE SHEETS
For the Years Ended March 31, | ||||||||
2011 | 2010 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 2,357,819 | $ | 678,636 | ||||
Investments in Local Limited Partnerships, net (Notes 2 and 3) | 8,956,651 | 10,079,132 | ||||||
Total Assets | $ | 11,314,470 | $ | 10,757,768 | ||||
LIABILITIES AND PARTNERS’ EQUITY (DEFICIT) | ||||||||
Liabilities: | ||||||||
Payables to Local Limited Partnerships (Note 4) | $ | 2,598,328 | $ | 692,220 | ||||
Accrued fees and expenses due to General Partner and Affiliates (Note 3) | 619,219 | 993,507 | ||||||
Total Liabilities | 3,217,547 | 1,685,727 | ||||||
Partners’ equity (deficit) | ||||||||
General Partner | (10,012 | ) | (9,037 | ) | ||||
Limited Partners (25,000 Partnership Units authorized, 20,981, Partnership Units issued and outstanding) | 8,106,935 | 9,081,078 | ||||||
Total Partners’ Equity (Deficit) | 8,096,923 | 9,072,041 | ||||||
Total Liabilities and Partners’ Equity | $ | 11,314,470 | $ | 10,757,768 |
See accompanying notes to financial statements
F-1 |
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
For the Years Ended March 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Reporting fees | $ | 157 | $ | - | $ | 7,333 | ||||||
Other income | 123,970 | - | - | |||||||||
Total operating income | 124,127 | - | 7,333 | |||||||||
Operating expenses and loss: | ||||||||||||
Amortization | 68,700 | 68,700 | 68,700 | |||||||||
Asset management fees | 163,604 | 178,455 | 178,693 | |||||||||
Asset management expenses | 7,375 | 11,137 | 15,047 | |||||||||
Accounting and legal fees | 140,136 | 77,592 | 19,861 | |||||||||
Write off of advances to a Local Limited Partnership (Note 6) | - | 846,175 | 22,311 | |||||||||
Impairment loss | 82,672 | 1,169,440 | 80,344 | |||||||||
Other | 11,323 | 29,116 | 3,927 | |||||||||
Total operating expenses and loss | 473,810 | 2,380,615 | 388,883 | |||||||||
Loss from operations | (349,683 | ) | (2,380,615 | ) | (381,550 | ) | ||||||
Equity in losses of Local Limited Partnerships | (713,926 | ) | (1,861,108 | ) | (2,443,000 | ) | ||||||
Gain on sale of Local Limited Partnerships | 85,349 | - | - | |||||||||
Interest income | 3,142 | 789 | 12,187 | |||||||||
Net loss | $ | (975,118 | ) | $ | (4,240,934 | ) | $ | (2,812,363 | ) | |||
Net loss allocated to: | ||||||||||||
General Partner | $ | (975 | ) | $ | (4,241 | ) | $ | (2,812 | ) | |||
Limited Partners | $ | (974,143 | ) | $ | (4,236,693 | ) | $ | (2,809,551 | ) | |||
Net loss per Partnership Unit | $ | (46.43 | ) | $ | (201.93 | ) | $ | (133.91 | ) | |||
Outstanding weighted Partnership Units | 20,981 | 20,981 | 20,981 |
See accompanying notes to financial statements
F-2 |
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A California Limited Partnership)
STATEMENTS OF PARTNERS’ EQUITY (DEFICIT)
For the Years Ended March 31, 2011, 2010 and 2009
General Partner | Limited Partners | Total | ||||||||||
Partners’ equity (deficit) at March 31, 2008 | $ | (1,984 | ) | $ | 16,177,322 | $ | 16,175,338 | |||||
Net loss | (2,812 | ) | (2,809,551 | ) | (2,812,363 | ) | ||||||
Partners’ equity (deficit) at March 31, 2009 | (4,796 | ) | 13,367,771 | 13,362,975 | ||||||||
Syndication costs | - | (50,000 | ) | (50,000 | ) | |||||||
Net loss | (4,241 | ) | (4,236,693 | ) | (4,240,934 | ) | ||||||
Partners’ equity (deficit) at March 31, 2010 | (9,037 | ) | 9,081,078 | 9,072,041 | ||||||||
Net loss | (975 | ) | (974,143 | ) | (975,118 | ) | ||||||
Partners’ equity (deficit) at March 31, 2011 | $ | (10,012 | ) | $ | 8,106,935 | $ | 8,096,923 |
See accompanying notes to financial statements
F-3 |
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
For the Years Ended March 31, 2011, 2010 and 2009
2011 | 2010 | 2009 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net loss | $ | (975,118 | ) | $ | (4,240,934 | ) | $ | (2,812,363 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
Amortization | 68,700 | 68,700 | 68,700 | |||||||||
Equity in losses of Local Limited Partnerships | 713,926 | 1,861,108 | 2,443,000 | |||||||||
Impairment loss | 82,672 | 1,169,440 | 80,344 | |||||||||
Gain on sale of Local Limited Partnerships | (85,349 | ) | - | - | ||||||||
Decrease in accrued expenses | - | - | (17,765 | ) | ||||||||
Increase (decrease) in accrued fees and expenses due to General Partner and affiliates | (374,288 | ) | 701,968 | 179,643 | ||||||||
Net cash used in operating activities | (569,457 | ) | (439,718 | ) | (58,441 | ) | ||||||
Cash flows used in investing activities: | ||||||||||||
Capital contributions paid | (157,205 | ) | (407,453 | ) | (2,135,434 | ) | ||||||
Proceeds from sale of Local Limited Partnerships | 2,829,428 | - | - | |||||||||
Distributions received from Local Limited Partnerships | 3,558 | 3,559 | 1,000 | |||||||||
Advances to Local Limited Partnerships | (427,141 | ) | (846,175 | ) | (22,311 | ) | ||||||
Write off of advances to Local Limited Partnerships | - | 846,175 | 22,311 | |||||||||
Net cash provided by (used in) investing activities | 2,248,640 | (403,894 | ) | (2,134,434 | ) | |||||||
Net increase (decrease) in cash and cash equivalents | 1,679,183 | (843,612 | ) | (2,192,875 | ) | |||||||
Cash and cash equivalents, beginning of period | 678,636 | 1,522,248 | 3,715,123 | |||||||||
Cash and cash equivalents, end of period | $ | 2,357,819 | $ | 678,636 | $ | 1,522,248 |
See accompanying notes to financial statements
F-4 |
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS - CONTINUED
For the Years Ended March 31, 2011, 2010 and 2009
2011 | 2010 | 2009 | ||||||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||||||||||
Taxes paid | $ | 800 | $ | 800 | $ | 800 | ||||||
SIGNIFICANT NONCASH INVESTING AND FINANCING ACTIVITIES | ||||||||||||
The Partnership increased its investment in Local Limited Partnerships for unpaid capital contributions payable to Local Limited Partnerships | $ | 2,490,651 | $ | - | $ | - | ||||||
The Partnership decreased its investment in Local Limited Partnerships and capital contributions payable to Local Limited Partnerships for tax credit adjusters | $ | - | $ | 10,366 | $ | 108,131 | ||||||
The Partnership decreased its investment in Local Limited Partnerships and Limited Partners’ equity for syndication costs | $ | - | $ | 50,000 | $ | - | ||||||
The Partnership decreased its advances to Local Limited Partnerships and decreased its due to Local Limited Partnerships for conversion of advances receivable to capital contributions paid. | $ | 427,141 | $ | - | $ | - |
See accompanying notes to financial statements
F-5 |
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Years Ended March 31, 2011, 2010 and 2009
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
WNC Housing Tax Credit Fund VI, L.P., Series 13, a California Limited Partnership (the “Partnership”), was formed on February 7, 2005 under the laws of the State of California, and commenced operations on December 14, 2005. The Partnership was formed to invest primarily in other limited partnerships and limited liability companies (the “Local Limited Partnerships”) which owns multi-family housing complexes (“Housing Complexes”) that are eligible for Federal low income housing tax credits (“Low Income Housing Tax Credits”). The local general partners (the “Local General Partners”) of each Local Limited Partnership retain responsibility for maintaining, operating and managing the Housing Complex. Each Local Limited Partnership is governed by its agreement of limited partnership (the “Local Limited Partnership Agreement”).
The general partner of the Partnership is WNC National Partners, LLC (the “General Partner”.) The general partner of the General Partner is WNC & Associates, Inc. (“Associates”). The chairman and the president of Associates owns all of the outstanding stock of Associates. The business of the Partnership is conducted primarily through Associates, as the Partnership and General Partner have no employees of their own.
The Partnership shall continue in full force and effect until December 31, 2070, unless terminated prior to that date, pursuant to the partnership agreement or law.
The financial statements include only activity relating to the business of the Partnership and do not give effect to any assets that the partners may have outside of their interests in the Partnership, or to any obligations, including income taxes of the partners.
Pursuant to a registration statement filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 18, 2005, the Partnership commenced a public offering of 25,000 units of limited partnership interest (“Partnership Units”) at a price of $1,000 per Partnership Unit. The required minimum offering amount of $1,400,000 was achieved by December 14, 2005. As of March 31, 2006, subscriptions for 7,691 Partnership Units had been accepted by the Partnership. As of March 31, 2007 total subscriptions for 20,981 Partnership Units had been accepted, representing $20,965,400, which is net of volume discounts of $4,540 and dealer discounts of $11,060. Holders of Partnership Units are referred to herein as “Limited Partners.” The General Partner has a 0.1% interest in operating profits and losses, taxable income and losses, in cash available for distribution from the Partnership and tax credits. The Limited Partners will be allocated the remaining 99.9% interest in proportion to their respective investments. This offering was closed on September 21, 2006.
The proceeds from the disposition of any of the Housing Complexes will be used first to pay debts and other obligations per the respective Local Limited Partnership Agreement. Any remaining proceeds will then be paid to the partners of the Local Limited Partnership, including the Partnership, in accordance with the terms of the particular Local Limited Partnership Agreement. The sale of a Housing Complex may be subject to other restrictions and obligations. Accordingly, there can be no assurance that a Local Limited Partnership will be able to sell its Housing Complex. Even if it does so, there can be no assurance that any significant amounts of cash will be distributed to the Partnership. Should such distributions occur, the Limited Partners will be entitled to receive distributions from the proceeds remaining after payment of Partnership obligations and funding reserves, equal to their capital contributions and their return on investment (as defined in the Partnership Agreement). The General Partner would then be entitled to receive proceeds equal to their capital contributions from the remainder. Any additional sale or refinancing proceeds will be distributed 90% to the Limited Partners (in proportion to their respective investments) and 10% to the General Partner.
F-6 |
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS – CONTINUED
For the Years Ended March 31, 2011, 2010 and 2009
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Risks and Uncertainties
An investment in the Partnership and the Partnership’s investments in Local Limited Partnerships and their Housing Complexes are subject to risks. These risks may impact the tax benefits of an investment in the Partnership, and the amount of proceeds available for distribution to the Limited Partners, if any, on liquidation of the Partnership’s investments. Some of those risks include the following:
The Low Income Housing Tax Credits rules are extremely complicated. Noncompliance with these rules results in the loss of future Low Income Housing Tax Credits and the fractional recapture of Low Income Housing Tax Credits already taken. In most cases the annual amount of Low Income Housing Tax Credits that an individual can use is limited to the tax liability due on the person’s last $25,000 of taxable income. The Local Limited Partnerships may be unable to sell the Housing Complexes at a price which would result in the Partnership realizing cash distributions or proceeds from the transaction. Accordingly, the Partnership may be unable to distribute any cash to its Limited Partners. Low Income Housing Tax Credits may be the only benefit from an investment in the Partnership.
The Partnership has invested in a limited number of Local Limited Partnerships. Such limited diversity means that the results of operation of each single Housing Complex will have a greater impact on the Partnership. With limited diversity, poor performance of one Housing Complex could impair the Partnership’s ability to satisfy its investment objectives. Each Housing Complex is subject to mortgage indebtedness. If a Local Limited Partnership failed to pay its mortgage, it could lose its Housing Complex in foreclosure. If foreclosure were to occur during the first 15 years (the “Compliance Period”), the loss of any remaining future Low Income Housing Tax Credits, a fractional recapture of prior Low Income Housing Tax Credits, and a loss of the Partnership’s investment in the Housing Complex would occur. The Partnership is a limited partner or non-managing member of each Local Limited Partnership. Accordingly, the Partnership will have very limited rights with respect to management of the Local Limited Partnerships. The Partnership will rely totally on the Local General Partners. Neither the Partnership’s investments in Local Limited Partnerships, nor the Local Limited Partnerships’ investments in Housing Complexes, are readily marketable. To the extent the Housing Complexes receive government financing or operating subsidies, they may be subject to one or more of the following risks: difficulties in obtaining tenants for the Housing Complexes; difficulties in obtaining rent increases; limitations on cash distributions; limitations on sales or refinancing of Housing Complexes; limitations on transfers of interests in Local Limited Partnerships; limitations on removal of Local General Partners; limitations on subsidy programs; and possible changes in applicable regulations. Uninsured casualties could result in loss of property and Low Income Housing Tax Credits and recapture of Low Income Housing Tax Credits previously taken. The value of real estate is subject to risks from fluctuating economic conditions, including employment rates, inflation, tax, environmental, land use and zoning policies, supply and demand of similar properties, and neighborhood conditions, among others.
The ability of Limited Partners to claim tax losses from the Partnership is limited. The IRS may audit the Partnership or a Local Limited Partnership and challenge the tax treatment of tax items. The amount of Low Income Housing Tax Credits and tax losses allocable to the Limited Partners could be reduced if the IRS were successful in such a challenge. The alternative minimum tax could reduce tax benefits from an investment in the Partnership. Changes in tax laws could also impact the tax benefits from an investment in the Partnership and/or the value of the Housing Complexes.
No trading market for the Partnership Units exists or is expected to develop. Limited Partners may be unable to sell their Partnership Units except at a discount and should consider their Partnership Units to be a long-term investment. Individual Limited Partners will have no recourse if they disagree with actions authorized by a vote of the majority of Limited Partners.
F-7 |
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS – CONTINUED
For the Years Ended March 31, 2011, 2010 and 2009
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Anticipated future and existing cash resources of the Partnership are not sufficient to pay existing liabilities of the Partnership. However, substantially all of the existing liabilities of the Partnership are payable to the General Partner and/or its affiliates. Though the amounts payable to the General Partner and/or its affiliates are contractually currently payable, the Partnership anticipates that the General Partner and/or its affiliates will not require the payment of these contractual obligations until capital reserves are in excess of the aggregate of then existing contractual obligations and then anticipated future foreseeable obligations of the Partnership. The Partnership would be adversely affected should the General Partner and/or its affiliates demand current payment of the existing contractual obligations and or suspend services for this or any other reason.
The Partnership currently has insufficient working capital to fund its operations. Associates has agreed to continue providing advances sufficient enough to fund the operations and working capital requirements of the Partnership through October 31, 2013.
Exit Strategy
The Compliance Period for a Housing Complex is generally 15 years following construction or rehabilitation completion. Associates was one of the first in the industry to offer syndicated investments in Low Income Housing Tax Credits. The initial programs have completed their Compliance Periods. Upon the sale of a Local Limited Partnership Interest or Housing Complex after the end of the Compliance Period, there would be no recapture of Low Income Housing Tax Credits. A sale prior to the end of the Compliance Period must satisfy the reasonable belief test outlined above to avoid recapture.
With that in mind, as of March 31, 2011, except as indicated in the following two paragraphs, the General Partner has not begun reviewing the Housing Complexes for potential disposition, since none of the Housing Complexes have completed the ten-year credit period. Once the Housing Complexes have done so, the review will take into consideration many factors, including extended use requirements (such as those due to mortgage restrictions or state compliance agreements), the condition of the Housing Complexes, and the tax consequences to the Limited Partners from the sale of the Housing Complexes.
During the year ended March 31, 2010, on December 24, 2009, the Partnership identified two Local Limited Partnerships, Fernwood Meadows, L.P. (“Fernwood”) and Sierra’s Run, L.P. (“Sierra’s Run”) for disposition in order to generate sufficient equity to complete the purchase of additional low income housing tax credits for Davenport Housing VII, L.P. (“Davenport”, see Note 2 to the audited financial statements). On February 12, 2010, Fernwood and Sierra’s Run were sold, subject to a condition that the Limited Partners subsequently approve the sales by a majority in interest of the Limited Partners. The approval of the Limited Partners was sought as the transfers were to a limited partnership that is affiliated with the General Partner. Fernwood and Sierra’s Run were sold for an aggregate purchase price of $2,829,428.
The Partnership filed preliminary materials to the Securities and Exchange Commission (“SEC”) on April 2, 2010 and filed definitive materials on April 15, 2010. They were disseminated to the Limited Partners on April 15, 2010. The definitive materials sought approval for the disposition of Sierra’s Run and Fernwood with those proceeds being used to purchase the additional low income housing tax credits for Davenport. On May 10, 2010, the Partnership filed additional definitive materials, which served as a reminder to the Limited Partners that all proxies had to be received by the General Partner of the Partnership by June 14, 2010. A majority vote in favor of the dispositions was obtained on June 9, 2010. The total net investment balances in Fernwood and Sierra’s Run were $85,349 less than the aggregate purchase price of $2,829,427. Accordingly, a gain on sale of Local Limited Partnerships in that amount was recorded during the year ended March 31, 2011.
F-8 |
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS – CONTINUED
For the Years Ended March 31, 2011, 2010 and 2009
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Fernwood and Sierra’s Run will complete their Compliance Periods in 2022; therefore there is a risk of tax credit recapture. The maximum exposure of recapture (excluding the interest and penalties related to the recapture) is $177,508 and $170,246, respectively, for Fernwood and Sierra’s Run, which equates to $16.57 per Partnership Unit in the aggregate. Under the circumstances, the General Partner believes there is a reasonable expectation that each Local Limited Partnership will continue to be operated as qualified low income housing for the balance of its Compliance Period, and, accordingly, does not anticipate that there will be any recapture.
Upon identifying those Housing Complexes with the highest potential for a successful sale, refinancing or syndication after termination of the ten-year credit period, the Partnership expects to proceed with efforts to liquidate them with the objective of winding down the Partnership. Local Limited Partnership Interests may be disposed of any time by the General Partner at its discretion.
The proceeds from the disposition of any of the Housing Complexes will be used first to pay debts and other obligations per the respective Local Limited Partnership Agreement. Any remaining proceeds will then be paid to the partners of the Local Limited Partnership, including the Partnership, in accordance with the terms of the particular Local Limited Partnership Agreement. The sale of a Housing Complex may be subject to other restrictions and obligations. Accordingly, there can be no assurance that a Local Limited Partnership will be able to sell its Housing Complex. Even if it does so, there can be no assurance that any significant amounts of cash will be distributed to the Partnership, as the proceeds first would be used to pay Partnership obligations and funding of reserves.
Method of Accounting For Investments in Local Limited Partnerships
The Partnership accounts for its investments in Local Limited Partnerships using the equity method of accounting, whereby the Partnership adjusts its investment balance for its share of the Local Limited Partnerships’ results of operations and for any contributions made and distributions received. The Partnership reviews the carrying amount of an individual investment in a Local Limited Partnership for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such investment may not be recoverable. Recoverability of such investment is measured by the estimated value derived by management, generally consisting of the product of the remaining future Low Income Housing Tax Credits estimated to be allocable to the Partnership and the estimated residual value to the Partnership. If an investment is considered to be impaired, the Partnership reduces the carrying value of its investment in any such Local Limited Partnership. The accounting policies of the Local Limited Partnerships, generally, are expected to be consistent with those of the Partnership. Costs incurred by the Partnership in acquiring the investments are capitalized as part of the investment account and are being amortized over 27.5 years. (See Notes 2 and 3 to the financial statements)
“Equity in losses of Local Limited Partnerships” for each year ended March 31 has been recorded by the Partnership based on the twelve months of reported results provided by the Local Limited Partnerships for each year ended December 31. Equity in losses from the Local Limited Partnerships allocated to Partnership is not recognized to the extent that the investment balance would be adjusted below zero. If the Local Limited Partnerships report net income in future years, the Partnership will resume applying the equity method only after its share of such net income equals the share of net losses not recognized during the period(s) the equity method was suspended.
Distributions received from the Local Limited Partnerships are accounted for as a reduction of the investment balance. Distributions received after the investment has reached zero are recognized as distribution income.
F-9 |
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS – CONTINUED
For the Years Ended March 31, 2011, 2010 and 2009
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
In accordance with the accounting guidance for the consolidation of variable interest entities, the Partnership determines when it should include the assets, liabilities, and activities of a variable interest entity (VIE) in its financial statements, and when it should disclose information about its relationship with a VIE. The analysis that must be performed to determine which entity should consolidate a VIE focuses on control and economic factors. A VIE is a legal structure used to conduct activities or hold assets, which must be consolidated by a company if it is the primary beneficiary because it has (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (2) the obligation to absorb losses or receive benefits that could potentially be significant to the VIE. If multiple unrelated parties share such power, as defined, no party will be required to consolidate the VIE. Further, the guidance requires continual reconsideration of the primary beneficiary of a VIE.
Based on this guidance, the Local Limited Partnerships in which the Partnership invests meet the definition of a VIE because the owners of the equity at risk in these entities do not have the power to direct their operations. However, management does not consolidate the Partnership’s interests in these VIEs, as it is not considered to be the primary beneficiary since it does not have the power to direct the activities that are considered most significant to the economic performance of these entities. The Partnership currently records the amount of its investment in these Local Limited Partnerships as an asset on its balance sheets, recognizes its share of partnership income or losses in the statements of operations, and discloses how it accounts for material types of these investments in its financial statements. The Partnership’s balance in investment in Local Limited Partnerships, plus the risk of recapture of tax credits previously recognized on these investments, represents its maximum exposure to loss. The Partnership’s exposure to loss on these Local Limited Partnerships is mitigated by the condition and financial performance of the underlying Housing Complexes as well as the strength of the Local General Partners and their guarantee against credit recapture to the investors in the Partnership.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.
Cash and Cash Equivalents
The Partnership considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. As of March 31, 2011 and 2010, the Partnership had cash equivalents of $92,524 and $319,375, respectively.
Reporting Comprehensive Income
The Partnership had no items of other comprehensive income for all periods presented.
Net Loss Per Partnership Unit
Net loss per Partnership Unit includes no dilution and is computed by dividing loss allocated to Limited Partners by the weighted average Partnership Units outstanding during the period. Calculation of diluted net loss per Partnership Unit is not required.
F-10 |
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS – CONTINUED
For the Years Ended March 31, 2011, 2010 and 2009
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Concentration of Credit Risk
At March 31, 2011 and 2010, the Partnership maintained cash and cash equivalent balances at certain financial institutions in excess of the federally insured maximum. The Partnership believes it is not exposed to any significant financial risk on cash.
Income Taxes
The Partnership has elected to be treated as a pass-through entity for income tax purposes and, as such, is not subject to income taxes. Rather, all items of taxable income, deductions and tax credits are passed through to and are reported by its owners on their respective income tax returns. The Partnership’s federal tax status as a pass-through entity is based on its legal status as a partnership. Accordingly, the Partnership is not required to take any tax positions in order to qualify as a pass-through entity. The Partnership is required to file and does file tax returns with
the Internal Revenue Service and other taxing authorities. Accordingly, these financial statements do not reflect a provision for income taxes and the Partnership has no other tax positions which must be considered for disclosure.
Revenue Recognition
The Partnership is entitled to receive reporting fees from the Local Limited Partnerships. The intent of the reporting fees is to offset (in part) administrative costs incurred by the Partnership in corresponding with the Local Limited Partnerships. Due to the uncertainty of the collection of these fees, the Partnership recognizes reporting fees as collections are made.
Amortization
Acquisition fees and costs included in investments in Local Limited Partnerships are being amortized over 27.5 years using the straight-line method. Amortization expense for all periods presented was $68,700. Future estimated amortization expense for each of the years through March 31, 2016 is $68,700.
Impairment
The Partnership reviews its investments in Local Limited Partnership for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value of such investments may not be recoverable. Recoverability is measured by a comparison of the carrying amount of the investment to the sum of the total amount of the remaining Low Income Housing Tax Credits allocated to the Partnership and any estimated residual value of the investment. For the years ended March 31, 2011, 2010 and 2009 impairment loss related to investments in Local Limited Partnerships was $82,672, $1,169,440, and $80,344, respectively.
The Partnership also evaluates its intangibles for impairment in connection with its investment in Local Limited Partnerships. Impairment on the intangibles is measured by comparing the Partnership’s total investment balance after impairment of investments in Local Limited Partnerships to the sum of the total of the Low Income Housing Tax Credits allocated to the Partnership and the estimated residual value of the investment. During each of the years ended March 31, 2011, 2010, and 2009, there was no impairment loss recorded on the related intangibles.
F-11 |
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS – CONTINUED
For the Years Ended March 31, 2011, 2010 and 2009
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Impact of Recent Accounting Pronouncements
In September 2006, the Financial Accounting Standards Board (FASB) issued accounting guidance for Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value and expands disclosure about fair value measurements. This guidance is effective for financial statements issued for fiscal years beginning after November 15, 2007 and shall be applied prospectively except for very limited transactions. In February 2008, the FASB delayed for one year implementation of the guidance as it pertains to certain non-financial assets and liabilities. The Partnership adopted Generally Accepted Accounting Principles (GAAP) for Fair Value Measurements effective April 1, 2008, except as it applies to those non-financial assets and liabilities, for which the effective date was April 1, 2009. The Partnership has determined that adoption of this guidance has no material impact on the Partnership’s financial statements.
In November 2008, the FASB issued accounting guidance on Equity Method Investment Accounting Considerations that addresses how the initial carrying value of an equity method investment should be determined, how an impairment assessment of an underlying indefinite-lived intangible asset of an equity method investment should be performed, how an equity method investee’s issuance of shares should be accounted for, and how to account for a change in an investment from the equity method to the cost method. This guidance is effective in fiscal years beginning on or after December 15, 2008, and interim periods within those fiscal years. The Partnership adopted the guidance for the interim quarterly period beginning April 1, 2009. The impact of adopting it did not have a material impact on the Partnership’s financial condition or results of operations.
In April 2009, the FASB issued accounting guidance for Interim Disclosures about Fair Value of Financial Instruments. This requires disclosure about the method and significant assumptions used to establish the fair value of financial instruments for interim reporting periods as well as annual statements. It became effective for as of and for the interim period ended June 30, 2009 and had no impact on the Partnership’s financial condition or results of operations.
In May 2009, the FASB issued guidance regarding subsequent events, which was subsequently updated in February 2010. This guidance established general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. In particular, this guidance sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. This guidance was effective for financial statements issued for fiscal years and interim periods ending after June 15, 2009, and was therefore adopted by the Partnership for the quarter ended June 30, 2009. The adoption did not have a significant impact on the subsequent events that the Partnership reports, either through recognition or disclosure, in the financial statements. In February 2010, the FASB amended its guidance on subsequent events to remove the requirement to disclose the date through which an entity has evaluated subsequent events, alleviating conflicts with current SEC guidance. This amendment was effective immediately and therefore the Company did not include the disclosure in this Form 10-K.
In June 2009, the FASB issued an amendment to the accounting and disclosure requirements for the consolidation of variable interest entities (VIEs). The amended guidance modifies the consolidation model to one based on control and economics, and replaces the current quantitative primary beneficiary analysis with a qualitative analysis. The primary beneficiary of a VIE will be the entity that has (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (2) the obligation to absorb losses or receive benefits that could potentially be significant to the VIE. If multiple unrelated parties share such power, as defined, no party will be required to consolidate the VIE. Further, the amended guidance requires continual reconsideration of the primary beneficiary of a VIE and adds an additional reconsideration event for determination of whether an entity is a VIE. Additionally, the amendment requires enhanced and expanded disclosures around VIEs. This amendment is effective for fiscal years beginning after November 15, 2009. The adoption of this guidance on April 1, 2010 did not have a material effect on the Partnership’s financial statements.
F-12 |
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS – CONTINUED
For the Years Ended March 31, 2011, 2010 and 2009
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
In June 2009, the FASB issued the Accounting Standards Codification (Codification). Effective July 1, 2009, the Codification is the single source of authoritative accounting principles recognized by the FASB to be applied by non-governmental entities in the preparation of financial statements in conformity with GAAP. The Codification is intended to reorganize, rather than change, existing GAAP. Accordingly, all references to currently existing GAAP have been removed and have been replaced with plain English explanations of the Partnership’s accounting policies. The adoption of the Codification did not have a material impact on the Partnership’s financial position or results of operations.
NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS
As of the March 31, 2011 and 2010 the Partnership has acquired limited partnership interests in 8 and 10, Local Limited Partnerships, respectively, each of which owns one Housing Complex consisting of an aggregate of 598 and 647 apartment units, respectively. The respective Local General Partners of the Local Limited Partnerships manage the day-to-day operations of the entities. Significant Local Limited Partnership business decisions require approval from the Partnership. The Partnership, as a limited partner, is entitled to 99.98%, as specified in the Local Limited Partnership agreements, of the operating profits and losses, taxable income and losses and Low Income Housing Tax Credits of the Local Limited Partnerships.
The Partnership’s investments in Local Limited Partnerships as shown in the balance sheets at March 31, 2011 and 2010 is approximately $4,156,000 and $22,000 greater than the Partnership’s equity at the preceding December 31 as shown in the Local Limited Partnerships’ combined financial statements presented below. This difference is primarily due to acquisition, selection and other costs related to the acquisition of the investments which have been capitalized in the Partnership’s investment account and capital contributions payable to the Local Limited Partnerships which were netted against partner capital in the Local Limited Partnerships financial statements.
At March 31, 2011, the investment account in three of the Local Limited Partnerships has reached zero balance. Consequently, a portion of the Partnerships estimate of its share of losses for the years ended March 31, 2011, 2010 and 2009, amounting to approximately $1,297,000, $2,000, and $0, respectively, have not been recognized. As of March 31, 2011, the aggregate share of net losses not recognized by the Partnership amounted to $1,299,000.
The Partnership reviews its investments in Local Limited Partnership for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value of such investments may not be recoverable. Recoverability is measured by a comparison of the carrying amount of the investment to the sum of the total amount of the remaining Low Income Housing Tax Credits allocated to the Partnership and any estimated residual value of the investment. For the years ended March 31, 2011, 2010 and 2009, impairment loss related to investments in Local Limited Partnerships was $82,672, $1,169,440 and $80,344, respectively.
The Partnership also evaluates its intangibles for impairment in connection with its investment in Local Limited Partnerships. Impairment on the intangibles is measured by comparing the Partnership’s total investment balance after impairment of investments in Local Limited Partnerships to the sum of the total of the Low Income Housing Tax Credits allocated to the Partnership and the estimated residual value of the investment. During each of the years ended March 31, 2011, 2010 and 2009, there was no impairment loss recorded on the related intangibles.
F-13 |
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS – CONTINUED
For the Years Ended March 31, 2011, 2010 and 2009
NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS, continued
The following is a summary of the equity method activity of the investments in Local Limited Partnerships for the periods presented:
For the Years Ended March 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Investments per balance sheet, beginning of period | $ | 10,079,132 | $ | 13,242,305 | $ | 15,943,480 | ||||||
Additional investment in a Local Limited Partnership | 2,490,651 | - | - | |||||||||
Dispositions of Local Limited Partnerships | (2,744,276 | ) | - | - | ||||||||
Distributions received from Local Limited Partnerships | (3,558 | ) | (3,559 | ) | (1,000 | ) | ||||||
Equity in losses of Local Limited Partnerships | (713,926 | ) | (1,861,108 | ) | (2,443,000 | ) | ||||||
Tax credit adjustments | - | (10,366 | ) | (108,131 | ) | |||||||
Impairment loss | (82,672 | ) | (1,169,440 | ) | (80,344 | ) | ||||||
Syndication costs | - | (50,000 | ) | - | ||||||||
Amortization of acquisition fees and costs | (68,664 | ) | (68,664 | ) | (68,664 | ) | ||||||
Amortization of warehouse interest and costs | (36 | ) | (36 | ) | (36 | ) | ||||||
Investments per balance sheet, end of period | $ | 8,956,651 | $ | 10,079,132 | $ | 13,242,305 |
For the Years Ended March 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Investments in Local Limited Partnerships, net | $ | 7,352,657 | $ | 8,406,438 | $ | 11,500,911 | ||||||
Acquisition fees and costs, net of accumulated amortization of $285,159, $216,495, and $147, | 1,603,131 | 1,671,795 | 1,740,459 | |||||||||
Warehouse interest and costs, net of accumulated amortization of $176, $140, and $104 | 863 | 899 | 935 | |||||||||
Investments per balance sheet, end of period | $ | 8,956,651 | $ | 10,079,132 | $ | 13,242,305 |
F-14 |
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS – CONTINUED
For the Years Ended March 31, 2011, 2010 and 2009
NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS, continued
The financial information from the individual financial statements of the Local Limited Partnerships include rental and interest subsidies. Rental subsidies are included in total revenues and interest subsidies are generally netted against interest expense. Approximate combined condensed financial information from the individual financial statements of the Local Limited Partnerships as of December 31 and for the years then ended is as follows:
COMBINED CONDENSED BALANCE SHEETS
2010 | 2009 | |||||||
ASSETS | ||||||||
Buildings and improvements, net of accumulated depreciation of $9,481,000, and$7,838,000 | $ | 39,922,000 | $ | 46,724,000 | ||||
Construction in progress | - | - | ||||||
Land | 3,063,000 | 2,371,000 | ||||||
Other assets | 1,997,000 | 2,257,000 | ||||||
Total Assets | $ | 44,982,000 | $ | 51,352,000 | ||||
LIABILITIES | ||||||||
Mortgage and construction loans payable | $ | 18,934,000 | $ | 25,260,000 | ||||
Due to related parties | 10,218,000 | 5,538,000 | ||||||
Other liabilities | 3,156,000 | 2,609,000 | ||||||
Total Liabilities | 32,308,000 | 33,407,000 | ||||||
PARTNERS’ EQUITY | ||||||||
WNC Housing Tax Credit Fund VI, L.P., Series 13 | 4,801,000 | 10,057,000 | ||||||
Other partners | 7,873,000 | 7,888,000 | ||||||
Total Partners’ Equity | 12,674,000 | 17,945,000 | ||||||
Total Liabilities and Partners’ Equity | $ | 44,982,000 | $ | 51,352,000 |
COMBINED CONDENSED STATEMENTS OF OPERATIONS
2010 | 2009 | 2008 | ||||||||||
Revenues | $ | 4,538,000 | $ | 4,617,000 | $ | 4,516,000 | ||||||
Expenses: | ||||||||||||
Operating expenses | 3,491,000 | 3,468,000 | 3,847,000 | |||||||||
Interest expense | 1,108,000 | 1,137,000 | 1,219,000 | |||||||||
Depreciation and amortization | 1,950,000 | 1,926,000 | 1,894,000 | |||||||||
Total expenses | 6,549,000 | 6,531,000 | 6,960,000 | |||||||||
Net loss | $ | (2,011,000 | ) | $ | (1,914,000 | ) | $ | (2,444,000 | ) | |||
Net loss allocable to the Partnership | $ | (2,011,000 | ) | $ | (1,914,000 | ) | $ | (2,443,000 | ) | |||
Net loss recorded by the Partnership | $ | (714,000 | ) | $ | (1,861,000 | ) | $ | (2,443,000 | ) |
F-15 |
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS – CONTINUED
For the Years Ended March 31, 2011, 2010 and 2009
NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS, continued
Certain Local Limited Partnerships have incurred operating losses and/or have working capital deficiencies. In the event these Local Limited Partnerships continue to incur significant operating losses, additional capital contributions by the Partnership and/or the Local General Partner may be required to sustain the operations of such Local Limited Partnerships. If additional capital contributions are not made when they are required, the Partnership’s investment in certain Local Limited Partnerships could be impaired, and the loss and recapture of the related Low Income Housing Tax Credits could occur.
Troubled Housing Complex
Davenport started construction in October 2006 and was scheduled to be completed in June 2008. Construction was delayed due to the original Local General Partner defaulting on his construction guarantee and resulting disputed mechanic liens on the property. In November 2008, the original Local General Partner was replaced with a new Local General Partner, Shelter Resource Corporation, due to restrictions implemented by the Iowa Finance Authority (“IFA”). Subsequently, with IFA’s approval, the defaulting original Local General Partner was removed from the Partnership leaving Shelter Resource Corporation as the sole Local General Partner.
As of March 31, 2010, the property was 100% completed and a certificate of occupancy was granted for both buildings in December 2009. The Partnership engaged all sub-contractors to sign new construction contracts, along with lien releases for any and all work done after their engagement. During the year ended March 31, 2010, the Partnership voluntarily advanced $427,131 to Davenport for construction related costs which later was offset by the capital contributions due to the property.
The project was fully completed as of March 31, 2010 and it achieved stabilized operations by June 2010. In June 2010 the property achieved 85% occupancy and has maintained occupancy of 80% to 90% to the date of this filing. Davenport has been awarded state historical tax credits from the State of Iowa, federal historical credits and federal Low Income Housing Tax Credits. The State historical credits are given in the form of a refund check from the State in conjunction with the State tax return filing. The net amount of the check after applicable federal taxes will be contributed back to the property to help fund construction shortfalls. Davenport was also allocated additional federal Low Income Housing Tax Credits as well as federal historical tax credits. Upon the Limited Partners’ approval of the dispositions of Sierra Run’s and Fernwood, the Partnership will make the additional investment in Davenport. See the exit strategy in Note 1 regarding the dispositions of Sierra’s Run and Fernwood. On July 1, 2010, the Partnership committed additional capital to Davenport in the amount of $2,490,651. This additional commitment is expected to generate $408,710 of federal historic credits and $3,582,550 of additional federal Low Income Housing Tax Credits which will be allocable to the partners of the Partnership.
NOTE 3 - RELATED PARTY TRANSACTIONS
Under the terms of the Partnership Agreement, the Partnership has paid or is obligated to the General Partner or its affiliates for the following items:
Acquisition fees of 7% of the gross proceeds from the sale of Partnership Units as compensation for services rendered in connection with the acquisition of Local Limited Partnerships. As of March 31, 2011, and 2010, the Partnership had incurred cumulative acquisition fees of $1,468,670 which were included in investments in Local Limited Partnerships. Accumulated amortization of these capitalized costs was $221,801, and $168,393, as of March 31, 2011, and 2010, respectively.
F-16 |
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS – CONTINUED
For the Years Ended March 31, 2011, 2010 and 2009
NOTE 3 - RELATED PARTY TRANSACTIONS, continued
A non-accountable acquisition costs of 2% of the gross proceeds from the sale of Partnership Units as an expense reimbursement in connection with the acquisition of Local Limited Partnerships. As of March 31, 2011 and 2010, the Partnership incurred cumulative acquisition costs of $419,620 which were included in investments in Local Limited Partnerships. Accumulated amortization of these capitalized costs was $63,358, and $48,102, as of March 31, 2011, and 2010, respectively.
An annual asset management fee accrues in an amount equal to 0.5% of the Invested Assets of the Partnership, as defined. “Invested Assets” is defined as the sum of the Partnership’s Investment in Local Limited Partnerships, plus the reserves of the Partnership of up to 5% of gross Partnership Unit sales proceeds, and the Partnership’s allocable share of the amount of the mortgage loans and other debts related to the Housing Complexes owned by such Local Limited Partnerships. Management fees of $163,604, $178,455, and $178,693 were incurred during the years ended March 31, 2011, 2010, and 2009, respectively, of which$0, $0, and $18,000, was paid during the years ended March 31, 2011, 2010, and 2009, respectively.
The Partnership will reimburse the General Partner or its affiliates for operating expenses incurred on behalf of the Partnership and paid for by the General Partner or its affiliates on behalf of the Partnership. Operating expense reimbursements were $285,055, $0, and $19,886 during the years ended March 31, 2011, 2010, and 2009, respectively.
A subordinated disposition fee will be paid in an amount equal to 1% of the sales price of real estate sold. Payment of this fee is subordinated to the Limited Partners receiving a return on investment (as defined in the Partnership Agreement) and is payable only if the General Partner or its affiliates render services in the sales effort. No disposition fees have been incurred for the three years presented.
WNC Holding, LLC (“Holding”), a wholly owned subsidiary of Associates, acquires investments in Local Limited Partnerships using funds from a secured warehouse line of credit. Such investments are warehoused by Holding until transferred to syndicated partnerships as investors are identified. The transfer of the warehoused investments is typically achieved through the admittance of the syndicated partnership as the Limited Partner of the Local Limited Partnership and the removal of Holding as the Limited Partner. Consideration paid to Holding for the transfer of its interest in the Local Limited Partnership generally consists of cash reimbursement of capital contribution installment(s) paid to the Local Limited Partnerships by Holding, assumption of the remaining capital contributions payable due to the Local Limited Partnership and financing costs and interest charged by Holding. For the period ended March 31, 2011, the Partnership incurred financing costs of $772 and interest of $267 which are included in investments in Local Limited Partnerships. The accumulated amortization of these financing costs and interest was $176 as of March 31, 2011.
F-17 |
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS – CONTINUED
For the Years Ended March 31, 2011, 2010 and 2009
NOTE 3 - RELATED PARTY TRANSACTIONS, continued
The accrued fees and expenses due to General Partner and affiliates consist of the following at:
March 31, | |||||||||
2011 | 2010 | ||||||||
Asset management fee payable | $ | 600,611 | $ | 437,007 | |||||
Reimbursements for expenses paid by the General Partner or an affiliate | 18,608 | 148,330 | |||||||
Advances from the General Partner or an affiliate | - | 408,170 | |||||||
Total | $ | 619,219 | $ | 993,507 |
The Partnership currently has insufficient working capital to fund its operations. Associates has agreed to continue providing advances sufficient enough to fund the operations and working capital requirements of the Partnership through October 31, 2013.
NOTE 4 - PAYABLES TO LOCAL LIMITED PARTNERSHIPS
Payables to Local Limited Partnerships represent amounts which are due at various times based on conditions specified in the Local Limited Partnership agreements. These contributions are payable in installments and are generally due upon the Local Limited Partnerships achieving certain operating and development benchmarks (generally within two years of the Partnership’s initial investment). The payables to Local Limited Partnerships are subject to adjustment in certain circumstances. During the years ended March 31, 2011, 2010, and 2009, payables to Local Limited Partnerships were increased (reduced) for tax credit adjusters in the amounts of $0, $(10,366), and $(108,131), respectively.
F-18 |
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS – CONTINUED
For the Years Ended March 31, 2011, 2010 and 2009
NOTE 5 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The following is a summary of the quarterly operations for the years ended March 31 (rounded):
June 30 | September 30 | December 31 | March 31 | |||||||||||||
2011 | ||||||||||||||||
Income | $ | - | - | - | 124,000 | |||||||||||
Operating expenses | (232,000 | ) | (84,000 | ) | (74,000 | ) | (84,000 | ) | ||||||||
Gain (loss) from operations | (232,000 | ) | (84,000 | ) | (74,000 | ) | 40,000 | |||||||||
Equity in losses of Local Limited Partnerships | (347,000 | ) | (51,000 | ) | (51,000 | ) | (264,000 | ) | ||||||||
Gain on sale | 85,000 | - | - | - | ||||||||||||
Interest income | - | 1,000 | 1,000 | 1,000 | ||||||||||||
Net loss | (494,000 | ) | (134,000 | ) | (124,000 | ) | (223,000 | ) | ||||||||
Net loss available to Limited Partners | (494,000 | ) | (134,000 | ) | (124,000 | ) | (222,000 | ) | ||||||||
Net loss per Partnership Unit | (24 | ) | (6 | ) | (6 | ) | (11 | ) |
June 30 | September 30 | December 31 | March 31 | |||||||||||||
2010 | ||||||||||||||||
Income | $ | - | $ | - | $ | - | $ | - | ||||||||
Operating expenses | (517,000 | ) | (474,000 | ) | (1,122,000 | ) | (268,000 | ) | ||||||||
Loss from operations | (517,000 | ) | (474,000 | ) | (1,122,000 | ) | (268,000 | ) | ||||||||
Equity in losses of Local Limited Partnerships | (611,000 | ) | (611,000 | ) | (585,000 | ) | (54,000 | ) | ||||||||
Interest income | 1,000 | - | - | - | ||||||||||||
Net loss | (1,127,000 | ) | (1,085,000 | ) | (1,707,000 | ) | (322,000 | ) | ||||||||
Net loss available to Limited Partners | (1,126,000 | ) | (1,084,000 | ) | (1,705,000 | ) | (322,000 | ) | ||||||||
Net loss per Partnership Unit | (54 | ) | (52 | ) | (81 | ) | (15 | ) |
F-19 |
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS – CONTINUED
For the Years Ended March 31, 2011, 2010 and 2009
NOTE 5 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED), continued
June 30 | September 30 | December 31 | March 31 | |||||||||||||
2009 | ||||||||||||||||
Income | $ | 2,000 | $ | 6,000 | $ | - | $ | - | ||||||||
Operating expenses | (148,000 | ) | (74,000 | ) | (73,000 | ) | (94,000 | ) | ||||||||
Loss from operations | (146,000 | ) | (68,000 | ) | (73,000 | ) | (94,000 | ) | ||||||||
Equity in losses of Local Limited Partnerships | (611,000 | ) | (611,000 | ) | (611,000 | ) | (610,000 | ) | ||||||||
Interest income | 3,000 | 8,000 | 1,000 | - | ||||||||||||
Net loss | (754,000 | ) | (671,000 | ) | (683,000 | ) | (704,000 | ) | ||||||||
Net loss available to Limited Partners | (754,000 | ) | (671,000 | ) | (682,000 | ) | (703,000 | ) | ||||||||
Net loss per Partnership Unit | (36 | ) | (32 | ) | (33 | ) | (34 | ) |
NOTE 6 - ADVANCES TO LOCAL LIMITED PARTNERSHIPS
During the year ended March 31, 2011, the Partnership voluntarily advanced $427,141 to one Local Limited Partnership in which the Partnership is a limited partner, which was later converted to a capital contribution payment to the Local Limited Partnership. Advances in the amount of $846,175 and $22,311 were made to the same Local Limited Partnership for period ended March 31, 2010, and 2009, respectively. The Local Limited Partnership had been experiencing construction issues. The Partnership determined the recoverability of these advances to be improbable and, accordingly, a reserve had been recorded in full for both periods. During the year ended March 31, 2011, $123,970 of the advances that were previously reserved for were repaid to the Partnership.
F-20 |
PART IV.
Item 15. Exhibits and Financial Statement Schedules
(a)(1) | List of financial statements included in Part II hereof: |
Reports of Independent Registered Public Accounting Firms
Balance Sheets, March 31, 2011 and 2010
Statement of Operations for the years ended in March 31, 2011, 2010 and 2009
Statement of Partners’ Equity (Deficit) for the year ended in March 31, 2011, 2010 and 2009
Statement of Cash Flows for the years ended in March 31, 2011, 2010 and 2009
Notes to Financial Statements
(a)(2) | List of Financial statement schedules: |
Schedule III - Real Estate Owned by Local Limited Partnerships
(a)(3) | Exhibits |
3.1 | Agreement of Limited Partnership dated February 7, 2005 filed in the Post-Effective Amendment No. 1 on July 11, 2006 is hereby incorporated herein by reference as exhibit 3.1 |
31.1 | Certification of the Chief Executive Officer pursuant to Rule 13a-14 and 15d-14 (filed herewith) |
31.2 | Certification of the Chief Financial Officer pursuant to Rule 13a-14 and 15d-14 (filed herewith) |
32.1 | Section 1350 Certification of the Chief Executive Officer. (filed herewith) |
32.2 | Section 1350 Certification of the Chief Financial Officer. (filed herewith) |
101. | Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Balance Sheets at March 31, 2011 and 2010, (ii) the Statements of Operations for the years ended March 31, 2011, 2010 and 2009, (iii) the Statements of Cash Flows for the years ended March 31, 2011, 2010 and 2009 and (iv) the Notes to Financial Statements |
Exhibits 32.1, 32.2 and 101 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. Such exhibits shall not be deemed incorporated by reference into any filing under the Securities Act of 1933 or Securities Exchange Act of 1934.
F-21 |
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.
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
By: | WNC National Partners, LLC | |
General Partner | ||
By: | /s/ Wilfred N. Cooper, Jr. | |
Wilfred N. Cooper, Jr., |
||
President of WNC & Associates, Inc.2 |
Date: February 20, 2013
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.
By: | /s/ Wilfred N. Cooper, Jr. | |
Wilfred N. Cooper, Jr., | ||
Chief Executive Officer, President and Director of WNC & Associates, Inc. (principal executive officer) |
Date: February 20, 2013
By: | /s/ Melanie R. Wenk | |
Melanie R. Wenk, | ||
Vice-President - Chief Financial Officer of WNC & Associates, Inc. (principal financial officer and principal accounting officer) |
Date: February 20, 2013
By: | /s/ Wilfred N. Cooper, Sr. | |
Wilfred N. Cooper, Sr., | ||
Chairman of the Board of WNC & Associates, Inc. |
Date: February 20, 2013
By: | /s/ Kay L. Cooper | |
Kay L. Cooper | ||
Director of WNC & Associates, Inc. |
Date: February 20, 2013
F-22 |