UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2011

[ ] 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 0-19022

Gateway Tax Credit Fund II Ltd.

(Exact name of Registrant as specified in its charter)

Florida		65-0142704
(State or other jurisdiction of incorporation or organization)		(IRS Employer No.)

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

Registrant’s Telephone Number, Including Area Code:

(727) 567-1000

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES [X]

NO [ ]

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

YES [X]

NO [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See 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 [ ]	Smaller Reporting Company [X]

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

Yes [ ]

No [X]

PART I - Financial Information

Item 1. Financial Statements

Balance of this page intentionally left blank.

GATEWAY TAX CREDIT FUND II LTD.

(A Florida Limited Partnership)

BALANCE SHEETS

(Unaudited)

	SERIES 2						SERIES 3						SERIES 4
	September 30,			March 31,			September 30,			March 31,			September 30,			March 31,
	2011			2011			2011			2011			2011			2011
ASSETS
Current Assets:
Cash and Cash Equivalents	$	66,465		$	614,473		$	73,070		$	921,155		$	421,703		$	453,463
Receivable - Other		-			-			-			-			20,850			-

Total Assets	$	66,465		$	614,473		$	73,070		$	921,155		$	442,553		$	453,463

LIABILITIES AND PARTNERS' DEFICIT
Current Liabilities:
Payable to General Partners	$	877,218		$	3,398		$	753,626		$	19,502		$	914,089		$	2,978
Distribution Payable		-			540,593			-			836,342			291,870			310,828
Deferred Gain on Sale of Project Partnerships		-			-			-			-			20,668			-
Payable - Other		5,703			-			5,192			-			-			-

Total Current Liabilities		882,921			543,991			758,818			855,844			1,226,627			313,806

Long-Term Liabilities:
Payable to General Partners		-			874,619			-			737,017			-			904,255

Partners' (Deficit) Equity:
Limited Partner Assignees - 40,000 BAC's
authorized of which 6,136, 5,456, and 6,915
for Series 2, 3, and 4, respectively, have been
issued at September 30, 2011 and March 31, 2011		(960,817	)		(948,611	)		(693,929	)		(680,027	)		(791,292	)		(772,011	)
General Partners		144,361			144,474			8,181			8,321			7,218			7,413

Total Partners' Deficit		(816,456	)		(804,137	)		(685,748	)		(671,706	)		(784,074	)		(764,598	)

Total Liabilities and Partners' Deficit	$	66,465		$	614,473		$	73,070		$	921,155		$	442,553		$	453,463

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND II LTD.

(A Florida Limited Partnership)

BALANCE SHEETS

(Unaudited)

	SERIES 5						SERIES 6						TOTAL SERIES 2 - 6
	September 30,			March 31,			September 30,			March 31,			September 30,			March 31,
	2011			2011			2011			2011			2011			2011
ASSETS
Current Assets:
Cash and Cash Equivalents	$	1,136,604		$	1,247,249		$	641,500		$	569,140		$	2,339,342		$	3,805,480
Receivable - Other		104,150			-			-			-			125,000			-

Total Assets	$	1,240,754		$	1,247,249		$	641,500		$	569,140		$	2,464,342		$	3,805,480

LIABILITIES AND PARTNERS' DEFICIT
Current Liabilities:
Payable to General Partners	$	970,623		$	5,535		$	1,386,556		$	7,877		$	4,902,112		$	39,290
Distribution Payable		1,128,832			1,224,085			493,187			410,570			1,913,889			3,322,418
Deferred Gain on Sale of Project Partnerships		102,781			-			-			-			123,449			-
Payable - Other		-			-			-			-			10,895			-

Total Current Liabilities		2,202,236			1,229,620			1,879,743			418,447			6,950,345			3,361,708

Long-Term Liabilities:
Payable to General Partners		-			951,064			-			1,348,305			-			4,815,260

Partners' (Deficit) Equity:
Limited Partner Assignees - 40,000 BAC's
authorized of which 8,616 and 10,105 for
Series 5 and 6, respectively, have been
issued at September 30, 2011 and March 31, 2011		(972,916	)		(945,128	)		(1,242,275	)		(1,201,691	)		(4,661,229	)		(4,547,468	)
General Partners		11,434			11,693			4,032			4,079			175,226			175,980

Total Partners' Deficit		(961,482	)		(933,435	)		(1,238,243	)		(1,197,612	)		(4,486,003	)		(4,371,488	)

Total Liabilities and Partners' Deficit	$	1,240,754		$	1,247,249		$	641,500		$	569,140		$	2,464,342		$	3,805,480

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND II LTD.

(A Florida Limited Partnership)

STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

	SERIES 2						SERIES 3						SERIES 4
	2011			2010			2011			2010			2011			2010
Revenues:
Distribution Income	$	-		$	4,250		$	-		$	-		$	1,720		$	4,486
Total Revenues		-			4,250			-			-			1,720			4,486

Expenses:
Asset Management Fee - General Partner		-			7,541			-			9,361			3,321			5,385
General and Administrative:
General Partner		-			7,879			-			11,256			-			7,307
Other		9,564			8,594			10,288			1,952			11,743			6,941

Total Expenses		9,564			24,014			10,288			22,569			15,064			19,633

Loss Before Gain on Sale of Project Partnerships
and Interest Income		(9,564	)		(19,764	)		(10,288	)		(22,569	)		(13,344	)		(15,147	)
Gain on Sale of Project Partnerships		1,000			86,699			-			19,875			-			-
Interest Income		13			17			21			4			14			6

Net (Loss) Income	$	(8,551	)	$	66,952		$	(10,267	)	$	(2,690	)	$	(13,330	)	$	(15,141	)

Allocation of Net (Loss) Income:
Assignees	$	(8,466	)	$	66,283		$	(10,165	)	$	(3,612	)	$	(13,196	)	$	(14,989	)
General Partners		(85	)		669			(102	)		922			(134	)		(152	)

	$	(8,551	)	$	66,952		$	(10,267	)	$	(2,690	)	$	(13,330	)	$	(15,141	)
Net (Loss) Income Per Beneficial
Assignee Certificate	$	(1.38	)	$	10.80		$	(1.86	)	$	(0.66	)	$	(1.91	)	$	(2.17	)
Number of Beneficial Assignee
Certificates Outstanding		6,136			6,136			5,456			5,456			6,915			6,915

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND II LTD.

(A Florida Limited Partnership)

STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

	SERIES 5						SERIES 6						TOTAL SERIES 2 - 6
	2011			2010			2011			2010			2011			2010
Revenues:
Distribution Income	$	-		$	4,106		$	3,647		$	4,594		$	5,367		$	17,436
Total Revenues		-			4,106			3,647			4,594			5,367			17,436

Expenses:
Asset Management Fee - General Partner		7,391			13,547			16,194			20,232			26,906			56,066
General and Administrative:
General Partner		-			-			-			24,957			-			51,399
Other		13,072			12,101			15,543			13,447			60,210			43,035

Total Expenses		20,463			25,648			31,737			58,636			87,116			150,500

Loss Before Gain on Sale of Project Partnerships
and Interest Income		(20,463	)		(21,542	)		(28,090	)		(54,042	)		(81,749	)		(133,064	)
Gain on Sale of Project Partnerships		9,465			64,356			51,557			172,250			62,022			343,180
Interest Income		36			24			19			9			103			60

Net (Loss) Income	$	(10,962	)	$	42,838		$	23,486		$	118,217		$	(19,624	)	$	210,176

Allocation of Net (Loss) Income:
Assignees	$	(10,853	)	$	42,409		$	23,251		$	116,138		$	(19,429	)	$	206,229
General Partners		(109	)		429			235			2,079			(195	)		3,947

	$	(10,962	)	$	42,838		$	23,486		$	118,217		$	(19,624	)	$	210,176
Net (Loss) Income Per Beneficial
Assignee Certificate	$	(1.26	)	$	4.92		$	2.30		$	11.49
Number of Beneficial Assignee
Certificates Outstanding		8,616			8,616			10,105			10,105

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND II LTD.

(A Florida Limited Partnership)

STATEMENTS OF OPERATIONS

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

	SERIES 2						SERIES 3						SERIES 4
	2011			2010			2011			2010			2011			2010
Revenues:
Distribution Income	$	750		$	5,482		$	-		$	-		$	3,190		$	4,486
Total Revenues		750			5,482			-			-			3,190			4,486

Expenses:
Asset Management Fee - General Partner		-			15,081			-			18,721			6,641			10,769
General and Administrative:
General Partner		-			17,692			-			23,522			-			14,667
Other		13,095			10,594			14,083			4,511			16,050			9,615

Total Expenses		13,095			43,367			14,083			46,754			22,691			35,051

Loss Before Gain on Sale of Project Partnerships
and Interest Income		(12,345	)		(37,885	)		(14,083	)		(46,754	)		(19,501	)		(30,565	)
Gain on Sale of Project Partnerships		1,000			86,699			-			19,875			-			-
Interest Income		26			28			41			7			25			10

Net (Loss) Income	$	(11,319	)	$	48,842		$	(14,042	)	$	(26,872	)	$	(19,476	)	$	(30,555	)

Allocation of Net (Loss) Income:
Assignees	$	(11,206	)	$	48,354		$	(13,902	)	$	(27,551	)	$	(19,281	)	$	(30,249	)
General Partners		(113	)		488			(140	)		679			(195	)		(306	)

	$	(11,319	)	$	48,842		$	(14,042	)	$	(26,872	)	$	(19,476	)	$	(30,555	)
Net (Loss) Income Per Beneficial
Assignee Certificate	$	(1.83	)	$	7.88		$	(2.55	)	$	(5.05	)	$	(2.79	)	$	(4.37	)
Number of Beneficial Assignee
Certificates Outstanding		6,136			6,136			5,456			5,456			6,915			6,915

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND II LTD.

(A Florida Limited Partnership)

STATEMENTS OF OPERATIONS

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

	SERIES 5						SERIES 6						TOTAL SERIES 2 - 6
	2011			2010			2011			2010			2011			2010
Revenues:
Distribution Income	$	5,024		$	7,898		$	13,626		$	12,909		$	22,590		$	30,775
Total Revenues		5,024			7,898			13,626			12,909			22,590			30,775

Expenses:
Asset Management Fee - General Partner		14,783			27,622			33,261			40,464			54,685			112,657
General and Administrative:
General Partner		-			-			-			48,672			-			104,553
Other		18,353			14,135			21,030			16,062			82,611			54,917

Total Expenses		33,136			41,757			54,291			105,198			137,296			272,127

Loss Before Gain on Sale of Project Partnerships
and Interest Income		(28,112	)		(33,859	)		(40,665	)		(92,289	)		(114,706	)		(241,352	)
Gain on Sale of Project Partnerships		9,465			280,963			83,432			172,250			93,897			559,787
Interest Income		65			40			34			15			191			100

Net (Loss) Income	$	(18,582	)	$	247,144		$	42,801		$	79,976		$	(20,618	)	$	318,535

Allocation of Net (Loss) Income:
Assignees	$	(18,397	)	$	244,672		$	42,373		$	78,279		$	(20,413	)	$	313,505
General Partners		(185	)		2,472			428			1,697			(205	)		5,030

	$	(18,582	)	$	247,144		$	42,801		$	79,976		$	(20,618	)	$	318,535
Net (Loss) Income Per Beneficial
Assignee Certificate	$	(2.14	)	$	28.40		$	4.19		$	7.75
Number of Beneficial Assignee
Certificates Outstanding		8,616			8,616			10,105			10,105

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND II LTD.

(A Florida Limited Partnership)

STATEMENTS OF PARTNERS’ EQUITY (DEFICIT)

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

	SERIES 2									SERIES 3
				General									General
	Assignees			Partners			Total			Assignees			Partners			Total

Balance at March 31, 2010	$	(902,393	)	$	142,993		$	(759,400	)	$	(622,304	)	$	(490	)	$	(622,794	)

Net Income (Loss)		48,354			488			48,842			(27,551	)		679			(26,872	)

Distributions		(86,699	)		-			(86,699	)		(19,875	)		-			(19,875	)

Balance at September 30, 2010	$	(940,738	)	$	143,481		$	(797,257	)	$	(669,730	)	$	189		$	(669,541	)


Balance at March 31, 2011	$	(948,611	)	$	144,474		$	(804,137	)	$	(680,027	)	$	8,321		$	(671,706	)

Net Loss		(11,206	)		(113	)		(11,319	)		(13,902	)		(140	)		(14,042	)

Distributions		(1,000	)		-			(1,000	)		-			-			-

Balance at September 30, 2011	$	(960,817	)	$	144,361		$	(816,456	)	$	(693,929	)	$	8,181		$	(685,748	)

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND II LTD.

(A Florida Limited Partnership)

STATEMENTS OF PARTNERS’ EQUITY (DEFICIT)

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

	SERIES 4									SERIES 5
				General									General
	Assignees			Partners			Total			Assignees			Partners			Total

Balance at March 31, 2010	$	(727,551	)	$	4,758		$	(722,793	)	$	(887,385	)	$	3,984		$	(883,401	)

Net (Loss) Income		(30,249	)		(306	)		(30,555	)		244,672			2,472			247,144

Distributions		-			-			-			(280,963	)		-			(280,963	)

Balance at September 30, 2010	$	(757,800	)	$	4,452		$	(753,348	)	$	(923,676	)	$	6,456		$	(917,220	)


Balance at March 31, 2011	$	(772,011	)	$	7,413		$	(764,598	)	$	(945,128	)	$	11,693		$	(933,435	)

Net Loss		(19,281	)		(195	)		(19,476	)		(18,397	)		(185	)		(18,582	)

Distributions		-			-			-			(9,391	)		(74	)		(9,465	)

Balance at September 30, 2011	$	(791,292	)	$	7,218		$	(784,074	)	$	(972,916	)	$	11,434		$	(961,482	)

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND II LTD.

(A Florida Limited Partnership)

STATEMENTS OF PARTNERS’ EQUITY (DEFICIT)

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

	SERIES 6									TOTAL SERIES 2 - 6
				General									General
	Assignees			Partners			Total			Assignees			Partners			Total

Balance at March 31, 2010	$	(1,076,356	)	$	16		$	(1,076,340	)	$	(4,215,989	)	$	151,261		$	(4,064,728	)

Net Income		78,279			1,697			79,976			313,505			5,030			318,535

Distributions		(172,250	)		-			(172,250	)		(559,787	)		-			(559,787	)

Balance at September 30, 2010	$	(1,170,327	)	$	1,713		$	(1,168,614	)	$	(4,462,271	)	$	156,291		$	(4,305,980	)


Balance at March 31, 2011	$	(1,201,691	)	$	4,079		$	(1,197,612	)	$	(4,547,468	)	$	175,980		$	(4,371,488	)

Net Income (Loss)		42,373			428			42,801			(20,413	)		(205	)		(20,618	)

Distributions		(82,957	)		(475	)		(83,432	)		(93,348	)		(549	)		(93,897	)

Balance at September 30, 2011	$	(1,242,275	)	$	4,032		$	(1,238,243	)	$	(4,661,229	)	$	175,226		$	(4,486,003	)

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND II LTD.

(A Florida Limited Partnership)

STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

	SERIES 2						SERIES 3
	2011			2010			2011			2010
Cash Flows from Operating Activities:
Net (Loss) Income	$	(11,319	)	$	48,842		$	(14,042	)	$	(26,872	)
Adjustments to Reconcile Net (Loss) Income
to Net Cash Used in Operating Activities:
Gain on Sale of Project Partnerships		(1,000	)		(86,699	)		-			(19,875	)
Distribution Income		(750	)		(5,482	)		-			-
Changes in Operating Assets and Liabilities:
Increase in Payable - Other		5,703			-			5,192			-
(Decrease) Increase in Payable to General Partners		(799	)		12,213			(2,893	)		16,041
Net Cash Used in Operating Activities		(8,165	)		(31,126	)		(11,743	)		(30,706	)

Cash Flows from Investing Activities:
Distributions Received from Project Partnerships		750			5,482			-			-
Net Proceeds from Sale of Project Partnerships		1,000			86,699			-			19,875
Net Cash Provided by Investing Activities		1,750			92,181			-			19,875

Cash Flows from Financing Activities:
Distributions		(541,593	)		-			(836,342	)		-
Net Cash Used in Financing Activities		(541,593	)		-			(836,342	)		-

(Decrease) Increase in Cash and Cash Equivalents		(548,008	)		61,055			(848,085	)		(10,831	)
Cash and Cash Equivalents at Beginning of Year		614,473			451,096			921,155			112,146

Cash and Cash Equivalents at End of Period	$	66,465		$	512,151		$	73,070		$	101,315

Supplemental disclosure of non-cash activities:
Increase in Distribution Payable	$	1,000		$	86,699		$	-		$	19,875
Distribution to Assignees		(1,000	)		(86,699	)		-			(19,875	)
Increase in Receivable - Other		-			5,000			-			719,207
Increase in Deferred Gain on Sale of Project Partnerships		-			(3,475	)		-			(711,852	)
Decrease in Payable to General Partners		-			(1,525	)		-			(7,355	)
	$	-		$	-		$	-		$	-

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND II LTD.

(A Florida Limited Partnership)

STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

	SERIES 4						SERIES 5
	2011			2010			2011			2010
Cash Flows from Operating Activities:
Net (Loss) Income	$	(19,476	)	$	(30,555	)	$	(18,582	)	$	247,144
Adjustments to Reconcile Net (Loss) Income
to Net Cash Used in Operating Activities:
Gain on Sale of Project Partnerships		-			-			(9,465	)		(280,963	)
Distribution Income		(3,190	)		(4,486	)		(5,024	)		(7,898	)
Changes in Operating Assets and Liabilities:
Increase (Decrease) in Payable to General Partners		6,674			5,497			12,655			(16,617	)
Net Cash Used in Operating Activities		(15,992	)		(29,544	)		(20,416	)		(58,334	)

Cash Flows from Investing Activities:
Distributions Received from Project Partnerships		3,190			4,486			5,024			7,898
Net Proceeds from Sale of Project Partnerships		-			-			9,465			280,963
Net Cash Provided by Investing Activities		3,190			4,486			14,489			288,861

Cash Flows from Financing Activities:
Distributions		(18,958	)		-			(104,718	)		-
Net Cash Used in Financing Activities		(18,958	)		-			(104,718	)		-

(Decrease) Increase in Cash and Cash Equivalents		(31,760	)		(25,058	)		(110,645	)		230,527
Cash and Cash Equivalents at Beginning of Year		453,463			175,323			1,247,249			479,047

Cash and Cash Equivalents at End of Period	$	421,703		$	150,265		$	1,136,604		$	709,574

Supplemental disclosure of non-cash activities:
Increase in Distribution Payable	$	-		$	-		$	9,465		$	280,963
Distribution to Assignees		-			-			(9,465	)		(280,963	)
Increase in Receivable - Other		20,850			309,811			104,150			107,000
Increase in Deferred Gain on Sale of Project Partnerships		(20,668	)		(306,336	)		(102,781	)		(106,140	)
Decrease in Payable to General Partners		(182	)		(3,475	)		(1,369	)		(860	)
	$	-		$	-		$	-		$	-

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND II LTD.

(A Florida Limited Partnership)

STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

	SERIES 6						TOTAL SERIES 2 - 6
	2011			2010			2011			2010
Cash Flows from Operating Activities:
Net Income (Loss)	$	42,801		$	79,976		$	(20,618	)	$	318,535
Adjustments to Reconcile Net Income (Loss)
to Net Cash Used in Operating Activities:
Gain on Sale of Project Partnerships		(83,432	)		(172,250	)		(93,897	)		(559,787	)
Distribution Income		(13,626	)		(12,909	)		(22,590	)		(30,775	)
Changes in Operating Assets and Liabilities:
Increase in Payable - Other		-			-			10,895			-
Increase in Payable to General Partners		30,374			23,320			46,011			40,454
Net Cash Used in Operating Activities		(23,883	)		(81,863	)		(80,199	)		(231,573	)

Cash Flows from Investing Activities:
Distributions Received from Project Partnerships		13,626			12,909			22,590			30,775
Net Proceeds from Sale of Project Partnerships		83,432			172,250			93,897			559,787
Net Cash Provided by Investing Activities		97,058			185,159			116,487			590,562

Cash Flows from Financing Activities:
Distributions		(815	)		-			(1,502,426	)		-
Net Cash Used in Financing Activities		(815	)		-			(1,502,426	)		-

Increase (Decrease) in Cash and Cash Equivalents		72,360			103,296			(1,466,138	)		358,989
Cash and Cash Equivalents at Beginning of Year		569,140			229,672			3,805,480			1,447,284

Cash and Cash Equivalents at End of Period	$	641,500		$	332,968		$	2,339,342		$	1,806,273

Supplemental disclosure of non-cash activities:
Increase in Distribution Payable	$	83,432		$	172,250		$	93,897		$	559,786
Distribution to Assignees		(83,432	)		(172,250	)		(93,897	)		(559,786	)
Increase in Receivable - Other		-			-			125,000			1,141,018
Increase in Deferred Gain on Sale of Project Partnerships		-			-			(123,449	)		(1,127,803	)
Decrease in Payable to General Partners		-			-			(1,551	)		(13,215	)
	$	-		$	-		$	-		$	-

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND II LTD.

(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2011

(Unaudited)

NOTE 1 - ORGANIZATION:

Gateway Tax Credit Fund II Ltd. (“Gateway”), a Florida Limited Partnership, was formed September 12, 1989, under the laws of Florida. Operations commenced on September 14, 1990 for Series 2, September 28, 1990 for Series 3, February 1, 1991 for Series 4, July 1, 1991 for Series 5 and January 1, 1992 for Series 6. Each Series has invested, as a limited partner, in other limited partnerships (“Project Partnerships”), each of which owns and operates one or more apartment complexes eligible for Low-Income Housing Tax Credits (“Tax Credits”), provided for in Section 42 of the Internal Revenue Code of 1986. Gateway will terminate on December 31, 2040 or sooner, in accordance with the terms of the limited partnership agreement (the “Agreement”). As of September 30, 2011, Gateway had received capital contributions of $195,410 from the General Partners and $37,228,000 from Beneficial Assignee Certificate investors (the “Assignees”). The fiscal year of Gateway for reporting purposes ends on March 31.

Pursuant to the Securities Act of 1933, Gateway filed a Form S-11 Registration Statement with the Securities and Exchange Commission, effective September 12, 1989, which covered the offering of Gateway’s Beneficial Assignee Certificates (“BACs”) representing assignments of units for the beneficial interest of the limited partnership interest of the Assignor Limited Partner. The Assignor Limited Partner was formed for the purpose of serving in that capacity for Gateway and will not engage in any other business.

Raymond James Partners, Inc. and Raymond James Tax Credit Funds, Inc., wholly owned subsidiaries of Raymond James Financial, Inc., are the General Partner and Managing General Partner, respectively and collectively the General Partners.

Gateway offered BACs in five series. BACs in the amounts of $6,136,000, $5,456,000, $6,915,000, $8,616,000 and $10,105,000 for Series 2, 3, 4, 5 and 6, respectively, had been issued as of September 30, 2011. Each Series is treated as though it were a separate partnership, investing in a separate and distinct pool of Project Partnerships. Net proceeds from each Series are used to acquire Project Partnerships which are specifically allocated to such Series. Income or loss and all tax items from the Project Partnerships acquired by each Series are specifically allocated among the Assignees of such Series.

Operating profits and losses, cash distributions from operations and Tax Credits are allocated 99% to the Assignees and 1% to the General Partners. Profit or loss and cash distributions from sales of properties are allocated as specified in the Agreement.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:

Basis of Accounting

Gateway utilizes the accrual basis of accounting whereby revenues are recognized when earned and expenses are recognized when obligations are incurred.

Gateway accounts for its investments as the limited partner in Project Partnerships (“Investments in Project Partnerships”) using the equity method of accounting, because management believes that Gateway does not have a majority control of the major operating and financial policies of the Project Partnerships in which it invests, and reports the equity in loss of the Project Partnerships on a 3-month lag in the Statements of Operations. Under the equity method, the Investments in Project Partnerships initially include:

1)	Gateway’s capital contribution,

2)	Acquisition fees paid to the General Partner for services rendered in selecting properties for acquisition,

3)	Acquisition expenses including legal fees, travel and other miscellaneous costs relating to acquiring properties.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued):

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

1)	Increased for equity in income or decreased for equity in loss of the Project Partnerships,

2)	Decreased for cash distributions received from the Project Partnerships,

3)	Decreased for the amortization of the acquisition fees and expenses,

4)	Decreased, where appropriate, for impairment.

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

Since Gateway invests as a limited partner, and therefore is not obligated to fund losses or make additional capital contributions, it does not recognize losses from individual Project Partnerships to the extent that these losses would reduce the investment in those Project Partnerships below zero. The suspended losses will be used to offset future income from the individual Project Partnerships. Any cash distributions received from Project Partnerships which have a zero investment balance are accounted for as distribution income in the period the cash distribution is received by Gateway.

Gateway reviews its investments in Project Partnerships to determine if there has been any permanent impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. If the sum of the expected remaining low-income housing tax credits and other tax benefits is less than the carrying amount of the investment, Gateway recognizes an impairment loss. As part of its analysis, Gateway has historically considered the residual value of the Project Partnerships as one key component of its estimate of future cash flows. Gateway is continuing to execute its process of disposition of its interest in Project Partnerships that have reached the end of their Tax Credit compliance period, refer to Note 5 - Summary of Disposition Activities for the most recent update of those on-going activities. No impairment expense was recognized during each of the six month periods ended September 30, 2011 or 2010.

Gateway, as a limited partner in the Project Partnerships, is subject to risks inherent in the ownership of property which are beyond its control, such as fluctuations in occupancy rates and operating expenses, variations in rental schedules, proper maintenance and continued eligibility for Tax Credits. If the cost of operating a property exceeds the rental income earned thereon, Gateway may deem it in its best interest to voluntarily provide funds in order to protect its investment. However, Gateway does not guarantee any of the mortgages or other debt of the Project Partnerships. No such funding to Project Partnerships occurred during each of the six month periods ended September 30, 2011 or 2010.

Cash and Cash Equivalents

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

Concentration of Credit Risk

Financial instruments which potentially subject Gateway to concentrations of credit risk consist of cash investments in a money market mutual fund.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates that affect certain reported amounts and disclosures. These estimates are based on management’s knowledge and experience. Accordingly, actual results could differ from these estimates.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued):

Income Taxes

No provision for income taxes has been made in these financial statements, as income taxes are a liability of the partners rather than of Gateway. Gateway files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. Gateway is no longer subject to U.S. federal examination by tax authorities for years prior to calendar year 2008. The income tax returns subject to state examination by tax authorities are generally consistent with the federal period.

Distribution Payable

Distribution Payable represents net proceeds from the sale of Project Partnership interests. These amounts, net of the applicable state tax withholding, are due and payable to the Assignees and will be distributed at such time that state tax withholding liabilities have been settled. See further discussion related to distribution payments in Note 5.

State Tax Withholding

Certain state tax jurisdictions impose a capital gains tax on the taxable gains associated with the sale of investments in partnerships. It is Gateway’s obligation to calculate and withhold the applicable state taxes that are payable by the Partners of Gateway when Project Partnerships are sold or otherwise disposed by Gateway. In most cases, the state taxes are due regardless if proceeds are received from the sale of Project Partnerships. Therefore, Gateway has estimated the withholding taxes payable and the amount is included in Distribution Payable on the Balance Sheet. State tax payments related to some of the sales of Project Partnerships were paid during the period ended September 30, 2011. See further discussion related to state tax payments in Note 5.

Variable Interest Entities

In June 2009, the FASB issued new consolidation guidance applicable to variable interest entities. Gateway adopted this new guidance as of April 1, 2010. The adoption of this new guidance had no impact on Gateway’s financial statements.

Generally, a variable interest entity, or VIE, is an entity with one or more of the following characteristics, (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (b) as a group the holders of the equity investment at risk lack (i) the power to direct the activities of the entity that most significantly affect its economic performance, (ii) the obligation to absorb the expected losses or the right to receive the expected benefits of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. GAAP requires a VIE to be consolidated in the financial statements of the entity that is determined to be the primary beneficiary of the VIE. Determination of the primary beneficiary of each VIE requires judgment and is based on an analysis of control of the entity and economic factors. A VIE would be required to be consolidated if 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 possibly be significant to the VIE. In the design of Project Partnership VIEs, the overriding concept centers around the premise that the limited partner invests solely for tax attributes associated with the property held by the VIE, while the general partner of the Project Partnership is responsible for overseeing its operations. Based upon its analysis of all the relevant facts and considerations, Gateway has concluded that the general partner of the Project Partnership has the power to direct the activities of the Project Partnership that most significantly impact its economic performance, and the obligation to absorb losses or receive benefits that could be significant to the Project Partnership and therefore, Gateway is not the primary beneficiary.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued):

Gateway holds variable interests in 32 VIEs, which consist of Project Partnerships (Refer to Note 1 - Organization for information about Gateway’s involvement in the Project Partnerships). Gateway is not the primary beneficiary of the VIEs. Since its inception, Gateway’s maximum exposure to loss as a result of its involvement with unconsolidated VIEs is limited to Gateway’s capital contributions to those VIEs, which is approximately $5,559,951 at September 30, 2011. Over the course of the investment and Tax Credit Cycle, this maximum exposure to loss was offset by actual losses experienced by the Project Partnerships recorded by Gateway in its equity accounting. Accordingly, at the current stage of the investment and Tax Credit Cycle, the carrying value of Gateway’s interest in the VIEs has been reduced to $0. Tabular disclosures within Note 4 - Investments in Project Partnerships detail total capital contributions to VIEs, the carrying amount of assets and liabilities related to Gateway’s VIEs and the aggregate assets, liabilities and Gateway’s exposure to loss from those VIEs. Gateway may be subject to additional losses to the extent of any financial support that Gateway voluntarily provides to those Project Partnerships in the future. Gateway does not currently intend to provide future financial support to the Project Partnerships.

Basis of Preparation

The unaudited financial statements presented herein have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles. These statements should be read in conjunction with the financial statements and notes thereto included with Gateway’s report on Form 10-K for the year ended March 31, 2011. In the opinion of management, these financial statements include adjustments, consisting only of normal recurring adjustments, necessary to fairly summarize Gateway’s financial position and results of operations. The results of operations for the periods may not be indicative of the results to be expected for the year.

NOTE 3 - RELATED PARTY TRANSACTIONS:

The Payable to General Partners primarily represents the asset management fees and general and administrative expenses owed to the General Partners at the end of the period. It is unsecured, due on demand and, in accordance with the Agreement, non-interest bearing.

For the six months ended September 30, 2011 and 2010, the General Partners and affiliates are entitled to compensation and reimbursement for costs and expenses incurred by Gateway as follows:

Asset Management Fee - The Managing General Partner is entitled to receive an annual asset management fee equal to 0.25% of the aggregate cost of Gateway’s interest in the projects owned by the Project Partnerships. The asset management fee will be paid only after all other expenses of Gateway have been paid. These fees are included in the Statements of Operations.

	2011		2010
Series 2	$	-	$	15,081
Series 3		-		18,721
Series 4		6,641		10,769
Series 5		14,783		27,622
Series 6		33,261		40,464
Total	$	54,685	$	112,657

General and Administrative Expenses - The Managing General Partner is reimbursed for general and administrative expenses of Gateway on an accountable basis. This expense is included in the Statements of Operations. During fiscal year 2011, the General Partner ceased further allocations of general and administrative expenses to Gateway.

	2011		2010
Series 2	$	-	$	17,692
Series 3		-		23,522
Series 4		-		14,667
Series 5		-		-
Series 6		-		48,672
Total	$	-	$	104,553

Refer to the discussion of net profit on re-syndication transactions contributed to Gateway by the Managing General Partner in Note 5, Summary of Disposition Activities herein.

NOTE 4 - INVESTMENTS IN PROJECT PARTNERSHIPS:

As of September 30, 2011, Gateway had acquired a 99% interest in the profits, losses, and Tax Credits as a limited partner in Project Partnerships (Series 4 - 4 and Series 5 - 7) which own and operate government assisted multi-family housing complexes. Gateway has disposed of all interests held in Series 2 and 3. Cash flows from operations are allocated according to each Project Partnership agreement. Upon dissolution, proceeds will be distributed according to each Project Partnership agreement.

The following is a summary of Investments in Project Partnerships as of:

	SERIES 4						SERIES 5
	September 30,			March 31,			September 30,			March 31,
	2011			2011			2011			2011
Capital Contributions to Project Partnerships
and purchase price paid for limited partner
interests in Project Partnerships	$	618,869		$	809,456		$	1,169,403		$	1,951,046

Cumulative equity in losses of Project
Partnerships (1)		(644,757	)		(849,257	)		(1,233,039	)		(1,978,250	)

Cumulative distributions received from
Project Partnerships		(25,705	)		(29,665	)		(28,121	)		(95,992	)

Investment in Project Partnerships before
Adjustment		(51,593	)		(69,466	)		(91,757	)		(123,196	)

Excess of investment cost over the underlying
assets acquired:
Acquisition fees and expenses		68,135			89,059			122,220			202,650
Accumulated amortization of acquisition
fees and expenses		(16,542	)		(19,593	)		(30,463	)		(79,454	)

Investments in Project Partnerships	$	-		$	-		$	-		$	-

(1) In accordance with Gateway's accounting policy to not carry investments in Project Partnerships below zero, cumulative suspended losses of $1,151,198 in Series 4 and $2,187,244 in Series 5 for the period ended September 30, 2011 and cumulative suspended losses of $1,423,462 in Series 4 and $2,626,278 in Series 5 for the year ended March 31, 2011 are not included.

NOTE 4 - INVESTMENTS IN PROJECT PARTNERSHIPS:

As of September 30, 2011, Gateway had acquired a 99% interest in the profits, losses, and Tax Credits as a limited partner in Project Partnerships (Series 6 - 21) which own and operate government assisted multi-family housing complexes. Gateway has disposed of all interests held in Series 2 and 3. Cash flows from operations are allocated according to each Project Partnership agreement. Upon dissolution, proceeds will be distributed according to each Project Partnership agreement.

The following is a summary of Investments in Project Partnerships as of:

	SERIES 6						TOTAL SERIES 2 - 6
	September 30,			March 31,			September 30,			March 31,
	2011			2011			2011			2011
Capital Contributions to Project Partnerships
and purchase price paid for limited partner
interests in Project Partnerships	$	3,771,679		$	4,532,944		$	5,559,951		$	7,293,446

Cumulative equity in losses of Project
Partnerships (1)		(3,881,494	)		(4,661,281	)		(5,759,290	)		(7,488,788	)

Cumulative distributions received from
Project Partnerships		(129,762	)		(152,419	)		(183,588	)		(278,076	)

Investment in Project Partnerships before
Adjustment		(239,577	)		(280,756	)		(382,927	)		(473,418	)

Excess of investment cost over the underlying
assets acquired:
Acquisition fees and expenses		400,960			455,613			591,315			747,322
Accumulated amortization of acquisition
fees and expenses		(138,544	)		(152,018	)		(185,549	)		(251,065	)

Reserve for Impairment of Investment in
Project Partnerships		(22,839	)		(22,839	)		(22,839	)		(22,839	)

Investments in Project Partnerships	$	-		$	-		$	-		$	-

(1) In accordance with Gateway's accounting policy to not carry investments in Project Partnerships below zero, cumulative suspended losses of $4,379,904 in Series 6 for the period ended September 30, 2011 and cumulative suspended losses of $5,068,051 in Series 6 for the year ended March 31, 2011 are not included.

NOTE 4 - INVESTMENTS IN PROJECT PARTNERSHIPS (Continued):


In accordance with Gateway's policy of presenting the financial information of the Project Partnerships on a three month lag, below are the summarized balance sheets for the Project Partnerships of Series 2 and Series 3 as of June 30 and the respective summarized statements of operations for the three months ended June 30 of each year. As of June 30, 2011, Gateway has disposed of all Project Partnership interests held in Series 2 and 3.

	SERIES 2					SERIES 3
	2011		2010			2011		2010
SUMMARIZED BALANCE SHEETS
Assets:
Current assets	$	-	$	751,226		$	-	$	912,059
Investment properties, net		-		3,595,897			-		2,301,901
Other assets		-		18,210			-		20,541
Total assets	$	-	$	4,365,333		$	-	$	3,234,501

Liabilities and Partners' Deficit:
Current liabilities	$	-	$	228,646		$	-	$	167,563
Long-term debt		-		5,987,190			-		5,550,575
Total liabilities		-		6,215,836			-		5,718,138

Partners' deficit
Limited Partner		-		(1,624,819	)		-		(2,356,282	)
General Partners		-		(225,684	)		-		(127,355	)
Total partners' deficit		-		(1,850,503	)		-		(2,483,637	)

Total liabilities and partners' deficit	$	-	$	4,365,333		$	-	$	3,234,501

SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income	$	-	$	469,866		$	-	$	522,997
Expenses:
Operating expenses		-		361,549			-		394,605
Interest expense		-		63,065			-		46,239
Depreciation and amortization		-		111,798			-		149,644

Total expenses		-		536,412			-		590,488

Net loss	$	-	$	(66,546	)	$	-	$	(67,491	)

Other partners' share of net loss	$	-	$	(665	)	$	-	$	(675	)

Gateway's share of net loss	$	-	$	(65,881	)	$	-	$	(66,816	)
Suspended losses		-		65,881			-		66,816

Equity in Loss of Project Partnerships	$	-	$	-		$	-	$	-

NOTE 4 - INVESTMENTS IN PROJECT PARTNERSHIPS (Continued):


In accordance with Gateway's policy of presenting the financial information of the Project Partnerships on a three month lag, below are the summarized balance sheets for the Project Partnerships of Series 4 and Series 5 as of June 30 and the respective summarized statements of operations for the three months ended June 30 of each year:

	SERIES 4						SERIES 5
	2011			2010			2011			2010
SUMMARIZED BALANCE SHEETS
Assets:
Current assets	$	648,739		$	626,782		$	1,098,476		$	1,904,091
Investment properties, net		2,316,682			2,416,505			3,875,659			7,006,327
Other assets		6,177			10,733			5,358			19,538
Total assets	$	2,971,598		$	3,054,020		$	4,979,493		$	8,929,956

Liabilities and Partners' Deficit:
Current liabilities	$	153,558		$	159,888		$	149,640		$	292,390
Long-term debt		4,490,516			4,525,961			7,882,787			13,341,835
Total liabilities		4,644,074			4,685,849			8,032,427			13,634,225

Partners' deficit
Limited Partner		(1,540,347	)		(1,520,858	)		(2,824,917	)		(4,638,520	)
General Partners		(132,129	)		(110,971	)		(228,017	)		(65,749	)
Total partners' deficit		(1,672,476	)		(1,631,829	)		(3,052,934	)		(4,704,269	)

Total liabilities and partners' deficit	$	2,971,598		$	3,054,020		$	4,979,493		$	8,929,956

SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income	$	361,581		$	363,348		$	665,324		$	1,110,848
Expenses:
Operating expenses		273,296			268,865			526,351			895,272
Interest expense		45,536			49,473			83,900			141,587
Depreciation and amortization		96,071			94,665			190,902			286,912

Total expenses		414,903			413,003			801,153			1,323,771

Net loss	$	(53,322	)	$	(49,655	)	$	(135,829	)	$	(212,923	)

Other partners' share of net loss	$	(1,909	)	$	(1,505	)	$	(1,359	)	$	(2,129	)

Gateway's share of net loss	$	(51,413	)	$	(48,150	)	$	(134,470	)	$	(210,794	)
Suspended losses		51,413			48,150			134,470			210,794

Equity in Loss of Project Partnerships	$	-		$	-		$	-		$	-

NOTE 4 - INVESTMENTS IN PROJECT PARTNERSHIPS (Continued):


In accordance with Gateway's policy of presenting the financial information of the Project Partnerships on a three month lag, below are the summarized balance sheets for the Project Partnerships of Series 6 and Total Series 2 - 6 as of June 30 and the respective summarized statements of operations for the three months ended June 30 of each year:

	SERIES 6						TOTAL SERIES 2 - 6
	2011			2010			2011			2010
SUMMARIZED BALANCE SHEETS
Assets:
Current assets	$	3,282,565		$	3,449,995		$	5,029,780		$	7,644,153
Investment properties, net		12,845,332			15,327,629			19,037,673			30,648,259
Other assets		16,223			21,460			27,758			90,482
Total assets	$	16,144,120		$	18,799,084		$	24,095,211		$	38,382,894

Liabilities and Partners' Deficit:
Current liabilities	$	632,175		$	614,331		$	935,373		$	1,462,818
Long-term debt		21,536,417			24,802,088			33,909,720			54,207,649
Total liabilities		22,168,592			25,416,419			34,845,093			55,670,467

Partners' deficit
Limited Partner		(5,486,850	)		(6,047,108	)		(9,852,114	)		(16,187,587	)
General Partners		(537,622	)		(570,227	)		(897,768	)		(1,099,986	)
Total partners' deficit		(6,024,472	)		(6,617,335	)		(10,749,882	)		(17,287,573	)

Total liabilities and partners' deficit	$	16,144,120		$	18,799,084		$	24,095,211		$	38,382,894

SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income	$	1,794,770		$	2,001,005		$	2,821,675		$	4,468,064
Expenses:
Operating expenses		1,291,509			1,473,899			2,091,156			3,394,190
Interest expense		205,836			243,965			335,272			544,329
Depreciation and amortization		445,172			495,594			732,145			1,138,613

Total expenses		1,942,517			2,213,458			3,158,573			5,077,132

Net loss	$	(147,747	)	$	(212,453	)	$	(336,898	)	$	(609,068	)

Other partners' share of net loss	$	(2,122	)	$	(2,873	)	$	(5,390	)	$	(7,847	)

Gateway's share of net loss	$	(145,625	)	$	(209,580	)	$	(331,508	)	$	(601,221	)
Suspended losses		145,625			209,580			331,508			601,221

Equity in Loss of Project Partnerships	$	-		$	-		$	-		$	-

NOTE 4 - INVESTMENTS IN PROJECT PARTNERSHIPS (Continued):

The aggregate assets, liabilities and exposure to loss from the VIEs in which Gateway holds a variable interest, but has concluded that it is not the primary beneficiary, are provided in the table below (refer to Note 2 for discussion of variable interest entities).

	June 30, 2011						June 30, 2010
	Aggregate Assets		Aggregate Liabilities		Our Risk Of Loss		Aggregate Assets		Aggregate Liabilities		Our Risk Of Loss
Series 2	$	-	$	-	$	-	$	4,365,333	$	6,215,836	$	-
Series 3		-		-		-		3,234,501		5,718,138		-
Series 4		2,971,598		4,644,074		-		3,054,020		4,685,849		-
Series 5		4,979,493		8,032,427		-		8,929,956		13,634,225		-
Series 6		16,144,120		22,168,592		-		18,799,084		25,416,419		-
Total	$	24,095,211	$	34,845,093	$	-	$	38,382,894	$	55,670,467	$	-

NOTE 5 - SUMMARY OF DISPOSITION ACTIVITIES:

Gateway at one time held investments in 148 Project Partnerships (22 in Series 2, 23 in Series 3, 29 in Series 4, 36 in Series 5, and 38 in Series 6). As of September 30, 2011, Gateway has sold or otherwise disposed of its interest in 116 Project Partnerships (22 in Series 2, 23 in Series 3, 25 in Series 4, 29 in Series 5 and 17 in Series 6). A summary of the sale or disposition transactions for the Project Partner

GATEWAY TAX CREDIT FUND II LTD 10-Q