September 30, March 31, 2007 2007 ------------ ------------ (Unaudited) (Audited) ASSETS Operating assets Property and equipment, at cost, net of accumulated depreciation of $31,343,484 and $34,809,639, respectively $ 18,525,121 $ 25,652,480 Cash and cash equivalents 2,813,902 4,001,566 Cash held in escrow 2,371,991 2,453,458 Deferred costs, net of accumulated amortization of $284,226 and $290,528, respectively 777,204 1,290,276 Other assets 1,200,851 1,514,685 ------------ ------------ Total operating assets 25,689,069 34,912,465 ------------ ------------ Assets from discontinued operations (Note 5) Property and equipment held for sale, net of accumulated depreciation of $5,804,014 and $2,137,910, respectively 7,641,077 2,370,180 Net assets held for sale 4,990,290 3,644,409 ------------ ------------ Total assets from discontinued operations 12,631,367 6,014,589 ------------ ------------ $ 38,320,436 $ 40,927,054 Total assets ============ ============ LIABILITIES AND PARTNERS' (DEFICIT) CAPITAL Operating liabilities Mortgage notes payable $ 27,490,225 $ 34,049,829 Accounts payable 2,258,861 1,787,747 Accrued interest payable 2,902,517 2,944,857 Security deposits payable 224,011 257,600 Due to local general partners and affiliates 2,877,761 3,103,199 Due to general partners and affiliates 531,107 644,814 Due to selling partners 888,750 885,000 ------------ ------------ Total operating liabilities 37,173,232 43,673,046 ------------ ------------ Liabilities from discontinued operations (Note 5) Mortgage notes payable of assets held for sale 8,115,675 3,412,534 Net liabilities held for sale (including minority interest) 3,294,213 3,038,175 ------------ ------------ Total liabilities from discontinued operations 11,409,888 6,450,709 ------------ ------------ Total liabilities 48,583,120 50,123,755 ------------ ------------ Minority interests (20,710) (19,986) ------------ ------------ Commitments and contingencies (Note 6) Partners' (deficit) capital: Limited partners (115,917.5 BACs issued and outstanding) (21,571,081) (20,516,475) General partners 11,329,107 11,339,760 ------------ ------------ Total partners' (deficit) capital (10,241,974) (9,176,715) ------------ ------------ Total liabilities and partners' (deficit) capital $ 38,320,436 $ 40,927,054 ============ ============UNITED STATES

~~Three~~SECURITIES AND ~~Months~~EXCHANGE Ended Six Months Ended September 30, September 30, -------------------------- -------------------------- 2007 2006* 2007 2006* ----------- ----------- ----------- ----------- Operations: Revenues Rental income $ 1,641,672 $ 1,637,174 $ 3,297,955 $ 3,256,242 Other 82,892 32,553 159,792 115,991 ----------- ----------- ----------- ----------- Total revenues 1,724,564 1,669,727 3,457,747 3,372,233 ----------- ----------- ----------- ----------- Expenses General and administrative 470,750 292,828 910,991 636,031 General and administrative - related parties (Note 2) 178,957 423,676 416,669 848,612 Repairs and maintenance 759,842 649,298 1,652,050 1,345,660 Operating 177,550 157,450 414,281 350,766 Taxes 105,973 104,816 200,946 198,791 Insurance 83,705 84,399 161,972 162,422 Financial 401,649 415,792 764,751 784,152 Depreciation and amortization 491,064 470,948 966,128 932,390 ----------- ----------- ----------- ----------- Total expenses from operations 2,669,490 2,599,207 5,487,788 5,258,824 ----------- ----------- ----------- ----------- Loss from operations before minority interest (944,926) (929,480) (2,030,041) (1,886,591) Minority interest in loss of subsidiaries from operations 0 (475) 0 0 ----------- ----------- ----------- ----------- Loss from operations $ (944,926) $ (929,955) $(2,030,041) $(1,886,591) Discontinued operations: (Loss) income from discontinued operations (including gain on sale of properties and minority interest) (Note 5) (66,293) 3,647,961 964,782 1,201,351 ----------- ----------- ----------- ----------- Net (loss) income $(1,011,219) $ 2,718,006 $(1,065,259) $ (685,240) =========== =========== =========== =========== Loss from operations - limited partners $ (935,477) $ (920,655) $(2,009,740) $(1,867,725) (Loss) income from discontinued operations (including gain on sale of properties and minority interest) - limited partners (65,630) 3,611,481 955,134 1,189,337 ----------- ----------- ----------- ----------- Net (loss) income - limited partners $(1,001,107) $ 2,690,826 $(1,054,606) $ (678,388) =========== =========== =========== =========== Number of BACs outstanding 115,917.5 115,917.5 115,917.5 115,917.5 =========== =========== =========== =========== Loss from operations per BAC $ (8.07) $ (7.94) $ (17.34) $ (16.11) (Loss) income from discontinued operations (including gain on sale of properties and minority interest) per BAC (0.57) 31.16 8.24 10.26 ----------- ----------- ----------- ----------- Net (loss) income per BAC $ (8.64) $ 23.22 $ (9.10) $ (5.85) =========== =========== =========== ===========COMMISSION

~~Limited General Total Partners Partner ------------ ------------ ------------ Partners' (deficit) capital - April 1~~Washington, D.C. 2007 $ (9,176,715) $(20,516,475) $ 11,339,760 Net loss (1,065,259) (1,054,606) (10,653) ------------ ------------ ------------ Partners' (deficit) capital - September 30, 2007 $(10,241,974) $(21,571,081) $ 11,329,107 ============ ============ ============20549

Six Months Ended September 30, ---------------------------- 2007 2006 ------------ ------------ Net loss $ (1,065,259) $ (685,240) ------------ ------------ Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation and amortization 1,114,415 1,862,304 Gain on sale of properties (1,052,687) (7,983,373) Loss on impairment of property and equipment 0 2,040,000 Minority interest in (loss) income of subsidiaries (770) 4,085,830 (Increase) decrease in cash held in escrow (16,958) 199,831 Decrease (increase) in other assets 232,958 (720,598) Increase in due from general partners and affiliates 0 (1,091,785) Increase in accounts payable and other liabilities 619,574 1,637,268 (Decrease) increase in accrued interest payable (6,797) 114,565 (Decrease) increase in security deposits payable (16,976) 3,491 Increase in due to local general partners and affiliates 1,453 347,611 Decrease in due to local general partners and affiliates (136,827) (744,054) (Decrease) increase in due to general partners and affiliates (117,742) 1,087,597 ------------ ------------ Total adjustments 619,643 838,687 ------------ ------------ Net cash (used in) provided by operating activities (445,616) 153,447 ------------ ------------ Cash flows from investing activities: Proceeds from sale of properties 1,444,500 19,175,000 Costs paid relating to sale of properties (100,668) (5,544,886) Increase in cash held in escrow (361,709) (80,829) Improvements to property and equipment (4,062) (54,615) ------------ ------------ Net cash provided by investing activities 978,061 13,494,670 ------------ ------------ Cash flows from financing activities: Repayments of mortgage notes (1,293,368) (13,847,144) Increase in due to selling partner 3,750 3,750 ------------ ------------ Net cash used in financing activities (1,289,618) (13,843,394) ------------ ------------ Net decrease in cash and cash equivalents (757,173) (195,277) Cash and cash equivalents at beginning of period 4,475,744 1,584,050 ------------ ------------ Cash and cash equivalents at end of period* $ 3,718,571 $ 1,388,773 ============ ============ Summarized below are the components of the loss on sale of properties: Net proceeds from sale of property $ (1,343,832) $(13,630,114) Decrease in property and equipment, net of accumulated depreciation 764,028 10,554,523 Decrease in deferred costs 15,396 400,438 Decrease in other assets 6,089 357,247 Decrease in cash held in escrow 99,288 1,812,822 Decrease in accounts payable and other liabilities (12,515) (1,382,946) Decrease in accrued interest (4,521) (65,128) Decrease in security deposits payable (10,517) (144,771) Decrease in mortgage notes payable (563,095) (1,475,012) Decrease in due to local general partners and their affiliates 0 (231,358) Decrease in due to general partners and their affiliates (3,008) 0 Decrease in capitalization of consolidated subsidiaries attributable to minority interest 0 (4,179,074) Non-cash investing activities: Increase in accounts payable and other liabilities - deferred revenues from sale of limited partnership interest $ 0 $ 850,000 Increase in other assets - proceeds receivable from sale of limited partnership interest 0 (850,000)______________

~~Three Months Ended Six Months Ended September 30, September 30,~~ FORM 10------------------- ------------------- 2007 2006* 2007 2006* -------- -------- -------- -------- Partnership management fees (a) $ 35,317 $283,750 $129,317 $567,500 Expense reimbursement (b) 51,584 51,923 105,426 106,520 Local administrative fee (d) 3,125 2,500 6,250 5,000 -------- -------- -------- -------- Total general and administrative-General Partners 90,026 338,173 240,993 679,020 -------- -------- -------- -------- Property management fees incurred to affiliates of the Local General Partners (c) 88,931 85,503 175,676 169,592 -------- -------- -------- -------- Total general and administrative-related parties $178,957 $423,676 $416,669 $848,612 ======== ======== ======== ========Q

Three Months Ended Six Months Ended September 30, September 30, ------------------- ------------------- 2007 2006* 2007 2006* -------- -------- -------- -------- Property management fees incurred to affiliates of the General Partners (c) $ 0 $111,879 $ 0 $226,475 Local administrative fee (d) 1,875 4,750 3,750 9,500 -------- -------- -------- -------- Total general and administrative-General Partners 1,875 116,629 3,750 235,975 -------- -------- -------- -------- Property management fees incurred to affiliates of the Local General Partners (c) 22,945 66,503 39,946 140,626 -------- -------- -------- -------- Total general and administrative-related parties $ 24,820 $183,132 $ 43,696 $376,601 ======== ======== ======== ========______________

September 30, March 31, 2007 2007 ------------ ----------- Assets Property and equipment, net of accumulated depreciation of $5,804,014 and $2,137,910, respectively $ 7,641,077 $ 2,370,180 Cash and cash equivalents 904,669 474,178 Cash held in escrow 536,357 175,511 Deferred costs, net of accumulated amortization of $222,961 and $241,287, respectively 495,732 15,975 Other assets 3,053,532 2,978,745 ----------- ----------- Total assets $12,631,367 $ 6,014,589 =========== =========== Liabilities Mortgage notes payable $ 8,115,675 $ 3,412,534 Accounts payable 541,566 405,619 Accrued interest payable 51,967 20,945 Security deposits payable 35,947 29,851 Due to local general partners and their affiliates 280,010 189,946 Due to general partners and affiliates 1,666,804 1,673,847 Minority interest 717,919 717,967 ----------- ----------- Total liabilities $11,409,888 $ 6,450,709 =========== ===========(Mark One)

~~Three~~x ~~Months~~QUARTERLY ~~Ended~~REPORT ~~Six~~PURSUANT ~~Months~~TO ~~Ended~~SECTION ~~September~~13 ~~30,~~OR September 30, ---------------------------- --------------------------- 2007 2006* 2007 2006* ------------ ------------ ------------ ------------ Revenues Rental income $ 484,234 $ 2,684,764 $ 993,769 $ 5,913,993 Other 11,737 38,128 35,507 109,929 Gain on sale of properties 15(~~Note 3~~d) 0OF ~~8,026,307~~THE ~~1,052,687~~SECURITIES ~~7,983,373~~EXCHANGE ~~------------~~ACT ~~------------~~OF ------------ ------------ Total revenue 495,971 10,749,199 2,081,963 14,007,295 ------------ ------------ ------------ ------------ Expenses General and administrative 91,694 580,890 196,580 1,341,920 General and administrative-related parties (Note 2) 24,820 183,132 43,696 376,601 Repairs and maintenance 114,985 525,528 211,068 1,268,842 Operating 49,126 271,681 81,609 1,188,268 Taxes 29,776 123,076 62,219 249,689 Insurance 16,040 163,100 35,337 359,161 Interest 163,195 440,284 339,155 965,719 Depreciation and amortization 73,177 358,745 148,287 929,914 Loss on impairment of fixed assets 0 1,160,000 0 2,040,000 ------------ ------------ ------------ ------------ Total expenses 562,813 3,806,436 1,117,951 8,720,114 ------------ ------------ ------------ ------------ (Loss) income before minority interest (66,842) 6,942,763 964,012 5,287,181 Minority interest in loss (income) of subsidiaries from discontinued operations 549 (3,294,802) 770 (4,085,830) ------------ ------------ ------------ ------------ Net (loss) income from discontinued operations (including minority interest) $ (66,293) $ 3,647,961 $ 964,782 $ 1,201,351 ============ ============ ============ ============ (Loss) income - limited partners from discontinued operations (including minority interest) $ (65,630) $ 3,611,481 $ 955,134 $ 1,189,337 ============ ============ ============ ============ Number of BACs outstanding 115,917.5 115,917.5 115,917.5 115,917.5 ============ ============ ============ ============ (Loss) income from discontinued operations (including minority interest) per BAC $ (0.57) $ 31.16 $ 8.24 $ 10.26 ============ ============ ============ ============1934

~~Six~~For the ~~Months~~quarterly ~~Ended~~period ~~September~~ended ~~30,~~December ~~--------------------------- 2007 2006* ------------ ------------ Net cash provided by (used in) operating activities $ 129~~31,~~563~~ $ (1,189,833) ------------ ------------ Net cash (used in) provided by investing activities $ (5,160,751) $ 15,899,617 ------------ ------------ Net cash provided by (used in) financing activities $ 4,768,140 $(12,883,499) ------------ ------------2008

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

Commission File Number 0-24660

LIBERTY TAX CREDIT PLUS II L.P.

(Exact name of registrant as specified in its charter)

Delaware		13-3458180
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

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

Registrant’s telephone number, including area code (212) 317-5700

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 is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions 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 [ ] (Do not check if a smaller reporting company)		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

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

Consolidated Balance Sheets

	December 31, 2008				March 31, 2008
	(Unaudited)				(Audited)

ASSETS
Operating assets
Property and equipment, at cost, net of accumulated depreciation of $0 and $29,544,930, respectively		$	0			$	16,695,129
Cash and cash equivalents			2,998,263				3,307,869
Cash held in escrow			0				1,551,815
Deferred costs, net of accumulated amortization of $0 and $271,333, respectively			149,390				753,830
Other assets			4,181				632,903
Total operating assets			3,151,834				22,941,546
Assets from discontinued operations (Note 5)
Property and equipment held for sale, net of accumulated depreciation of $608,447 and $1,242,564, respectively			570,628				1,604,951
Net assets held for sale			1,543,161				225,690
Total assets from discontinued operations			2,113,789				1,830,641
Total assets		$	5,265,623			$	24,772,187

LIABILITIES AND PARTNERS’ (DEFICIT) CAPITAL
Operating liabilities
Mortgage notes payable		$	0			$	25,744,882
Accounts payable			95,000				2,151,546
Accrued interest payable			0				1,904,958
Security deposits payable			0				197,467
Due to local general partners and affiliates			0				4,099,138
Due to general partners and affiliates			36,108				1,428,228
Due to selling partners			0				892,500
Total operating liabilities			131,108				36,418,719
Liabilities from discontinued operations (Note 5)
Mortgage notes payable of assets held for sale			1,748,126				1,803,564
Net liabilities held for sale (including minority interest)			1,095,842				900,578
Total liabilities from discontinued operations			2,843,968				2,704,142
Total liabilities			2,975,076				39,122,861
Minority interests			0				(8,094	)
Commitments and contingencies (Note 6)
Partners’ (deficit) capital:
Limited partners (115,917.5 BACs issued and outstanding)			(11,087,772	)			(26,439,216	)
General partners			13,378,319				12,096,636
Total partners’ (deficit) capital			2,290,547				(14,342,580	)
Total liabilities and partners’ (deficit) capital		$	5,265,623			$	24,772,187


See accompanying notes to consolidated financial statements.

- 2 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

Consolidated Statements of Operations

(Unaudited)

	Three Months Ended December 31,						Nine Months Ended December 31,
	2008			2007*			2008			2007*
Operations:
Revenues
Other	$	16,908		$	39,998		$	61,058		$	128,564
Total revenues		16,908			39,998			61,058			128,564
Expenses
General and administrative		49,552			(31,241	)		209,284			287,421
General and administrative - related parties (Note 2)		(100,916	)		190,538			40,464			425,281
Total expenses from operations		(51,364	)		159,297			249,748			712,702
Income (loss) from operations	$	68,272		$	(119,299	)	$	(188,690	)	$	(584,138	)
Discontinued operations:
Income (loss) from discontinued operations (including gain on sale of properties and minority interest) (Note 5)		15,789,813			(736,212	)		15,695,199			(1,336,632	)
Net income (loss)	$	15,858,085		$	(855,511	)	$	15,506,509		$	(1,920,770	)
Income (loss) from operations – limited partners	$	67,589		$	(118,106	)	$	(186,803	)	$	(578,297	)
Income (loss) from discontinued operations (including gain on sale of properties and minority interest) – limited partners		15,631,915			(728,850	)		15,538,247			(1,323,265	)
Net income (loss) – limited partners	$	15,699,504		$	(846,956	)	$	15,351,444		$	(1,901,562	)
Number of BACs outstanding		115,917.5			115,917.5			115,917.5			115,917.5
Income (loss) from operations per BAC	$	0.58		$	(1.02	)	$	(1.61	)	$	(4.99	)
Income (loss) from discontinued operations (including gain on sale of properties and minority interest) per BAC		134.85			(6.29	)		134.04			(11.42	)
Net income (loss) per BAC	$	135.43		$	(7.31	)	$	132.43		$	(16.41	)


* Reclassified for comparative purposes.
See accompanying notes to consolidated financial statements.

- 3 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

Consolidated Statement of Changes in Partners’ (Deficit) Capital

(Unaudited)

	Total			Limited Partners			General Partner


Partners’ (deficit) capital – April 1, 2008	$	(14,342,580	)	$	(26,439,216	)	$	12,096,636
Net income		15,506,509			15,351,444			155,065
Contribution – write-off of partnership management fees related to sold properties		1,126,618			0			1,126,618
Partners’ (deficit) capital – December 31, 2008	$	2,290,547		$	(11,087,772	)	$	13,378,319


See accompanying notes to consolidated financial statements.

- 4 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended December 31,
	2008			2007

Net income (loss)	$	15,506,509		$	(1,920,770	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		892,322			1,630,651
Gain on sale of properties		(16,483,212	)		(1,121,420	)
Minority interest in (loss) income of subsidiaries		(818,879	)		11,699
Increase in cash held in escrow		(74,612	)		(16,510	)
Decrease in other assets		228,116			293,526
Increase in accounts payable and other liabilities		1,464,770			251,426
Increase in accrued interest payable		27,909			15,827
Decrease in security deposits payable		(13,195	)		(19,900	)
Decrease in due to local general partners and affiliates		(1,061,917	)		(139,156	)
Increase (decrease) in due to general partners and affiliates		98,460			(170,496	)
Total adjustments		(15,740,238	)		735,647
Net cash used in operating activities		(233,729	)		(1,185,123	)
Cash flows from investing activities:
Proceeds from sale of properties		2,598,016			2,118,677
Costs paid relating to sale of investments		(168,363	)		(100,668	)
(Increase) decrease in cash held in escrow		(28,675	)		25,447
Acquisition of property and equipment		0			(32,662	)
Net cash provided by investing activities		2,400,978			2,010,794
Cash flows from financing activities:
Repayments of mortgage notes		(2,094,302	)		(1,431,109	)
Increase in due to selling partner		5,625			5,625
Distributions		(10,288	)		0
Net cash used in financing activities		(2,098,965	)		(1,425,484	)
Net increase (decrease) in cash and cash equivalents		68,284			(599,813	)
Cash and cash equivalents at beginning of period		3,311,185			4,475,744
Cash and cash equivalents at end of period*	$	3,379,469		$	3,875,931
Summarized below are the components of the loss on sale of properties:
Net proceeds from sale of property	$	(2,429,653	)	$	(2,018,009	)
Decrease in property and equipment, net of accumulated depreciation		16,859,055			8,096,371
Capital contribution – General Partner		0			2,500
Decrease in deferred costs		523,830			518,651
Decrease in other assets		394,327			130,597
Decrease in cash held in escrow		1,766,699			646,987
(Decrease) increase in accounts payable and other liabilities		(4,541,023	)		293,241
Decrease in accrued interest		(1,970,513	)		(39,159	)
Decrease in security deposits payable		(186,911	)		(38,231	)
Decrease in mortgage notes payable		(23,706,018	)		(8,435,347	)
Decrease in due to local general partners and their affiliates		(3,037,221	)		(228,318	)
Decrease in due to selling partners		(898,125	)		0
Increase (decrease) in due to general partners and their affiliates		635,365			(50,703	)
Decrease in capitalization of consolidated subsidiaries attributable to minority interest		106,976			0
Supplemental disclosures of non-cash investing and financing activities:
Contribution from the write-off of partnership management fees related to sold properties	$	1,126,618		$	0

*Cash and cash equivalents, end of period, includes cash equivalents from discontinued operations of $381,206 and $187,438.

See accompanying notes to consolidated financial statements.

- 5 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2008

(Unaudited)

NOTE 1 – General

The consolidated financial statements for the nine months ended December 31, 2008 and 2007 include the accounts of Liberty Tax Credit Plus II L.P. (the "Partnership") and five and eleven subsidiary partnerships ("subsidiaries", "subsidiary partnerships" or "Local Partnerships"), respectively, in which the Partnership is the limited partner. Through the rights of the Partnership and/or Related Credit Properties II L.P., a Delaware limited partnership, Liberty Associates II L.P., a Delaware limited partnership, or Liberty GP II Inc., a Delaware corporation (each a "General Partner" and collectively, the "General Partners"), which General Partners have a contractual obligation to act on behalf of the Partnership, to remove the general partner of the subsidiary partnerships (each, a "Local General Partner"), and to approve certain major operating and financial decisions, the Partnership has a controlling financial interest in each of the subsidiary partnerships. As of December 31, 2008, the Partnership has disposed of all twenty-seven of its investments (see Note 4).

For financial reporting purposes, the Partnership's fiscal quarter ends on December 31 in order to allow adequate time for the subsidiaries' financial statements to be prepared and consolidated. All subsidiary partnerships have fiscal quarters ending September 30. Accounts of the subsidiary partnerships have been adjusted for intercompany transactions from October 1 through December 31.

All intercompany accounts and transactions have been eliminated in consolidation.

Increase (decrease) in capitalization of consolidated subsidiary partnerships attributable to minority interest arise from cash contributions from and cash distributions to the minority interest partners.

Losses attributable to minority interests which exceed the minority interests' investment in a subsidiary partnership have been charged to the Partnership. Such losses aggregated approximately $0 and $145,000 and $0 and $363,000 for the three and nine months ended December 31, 2008 and 2007, respectively. The Partnership's investment in each subsidiary is equal to the respective subsidiary partners' equity less minority interest capital, if any.

The books and records of the Partnership are maintained on the accrual basis in accordance with accounting principles generally accepted in the United States of America ("GAAP"). In the opinion of each of the General Partners, the accompanying unaudited financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position of the Partnership as of December 31, 2008, the results of its operations for the three and nine months ended December 31, 2008 and 2007 and its cash flows for the nine months ended December 31, 2008 and 2007. However, the operating results for the nine months ended December 31, 2008 may not be indicative of the results for the year.

Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been omitted or condensed. These consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Partnership's Annual Report on Form 10-K for the year ended March 31, 2008.

Recent Accounting Pronouncements

In October 2008, the Financial Accounting Standards Board (“FASB”) issued FSP FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active, which addresses the application of Statement of Financial Accounting Standards (“SFAS”) No.157 for illiquid financial instruments. FSP FAS 157-3 clarifies that approaches to determining fair value other than the market approach may be appropriate when the market for a financial asset is not active. We do not expect the adoption of FSP FAS 157-3 to have a material effect on our consolidated financial statements.

NOTE 2 – Related Party Transactions

One of the General Partners has a 1% interest, as a special limited partner, in each of the Local Partnerships. An affiliate of the General Partners also has a minority interest in certain Local Partnerships.

- 6 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2008

(Unaudited)

The costs incurred to related parties from operations for the three and nine months ended December 31, 2008 and 2007 were as follows:

	Three Months Ended December 31,					Nine Months Ended December 31,
	2008			2007*		2008		2007*

Partnership management fees (a)	$	(96,214	)	$	94,000	$	8,607	$	223,317
Expense reimbursement (b)		(4,702	)		96,538		31,857		201,964
Total general and administrative-General Partners	$	(100,916	)	$	190,538	$	40,464	$	425,281
* Reclassified for comparative purposes.

The costs incurred to related parties from discontinued operations for the three and nine months ended December 31, 2008 and 2007 were as follows:

	Three Months Ended December 31,				Nine Months Ended December 31,
	2008		2007*		2008		2007*
Local administrative fee (d)	$	2,500	$	5,000	$	7,500	$	15,000
Total general and administrative-General Partners		2,500		5,000		7,500		15,000
Property management fees incurred to affiliates of the Local General Partners (c)		74,938		99,418		224,246		315,040
Total general and administrative-related parties	$	77,438	$	104,418	$	231,746	$	330,040
* Reclassified for comparative purposes.

(a) The General Partners are entitled to receive a partnership management fee, after payment of all Partnership expenses, which together with the local annual administrative fees will not exceed a maximum of 0.5% per annum of invested assets (as defined in the limited partnership agreement of the Partnership (the “Partnership Agreement”), for administering the affairs of the Partnership. The partnership management fee, subject to the foregoing limitation, will be determined by the General Partners in their sole discretion based upon their review of the Partnership’s investments. Unpaid partnership management fees for any year will be accrued without interest and will be payable from working capital reserves or to the extent of available funds after the Partnership has made distributions to the limited partners and BACs holders of sale or refinancing proceeds equal to their original capital contributions plus a 10% priority return thereon (to the extent not theretofore paid out of cash flow). Partnership management fees owed to the General Partners amounting to approximately $25,000 and $1,192,000 were accrued and unpaid as of December 31, 2008 and March 31, 2008, respectively. During the quarter ended December 31, 2008, management deemed the unpaid partnership management fees related to sold properties uncollectible and wrote off approximately $1,127,000, resulting in a non-cash General Partner contribution of the same amount.

(b) The Partnership reimburses the General Partners and their affiliates for actual Partnership operating expenses incurred by the General Partners and their affiliates on the Partnership’s behalf. The amount of reimbursement from the Partnership is limited by the provisions of the Partnership Agreement. Another affiliate of the General Partners performs asset monitoring for the Partnership. These services include site visits and evaluations of the subsidiary partnerships’ performance. Expense reimbursements and asset monitoring fees owed to affiliates of the General Partners amounting to approximately $0 and $72,000 were accrued and unpaid as of December 31, 2008 and March 31, 2008, respectively.

(c) Property management fees incurred by subsidiary partnerships in operations amounted to $80,833 and $113,253 and $248,272 and $356,121 for three and nine months ended December 31, 2008 and 2007, respectively. Of these fees $74,938 and $99,418 and $224,246 and $315,040, respectively, were incurred to affiliates of the Local General Partners, all of which related to discontinued operations.

(d) Liberty Associates II, L.P., a special limited partner of the subsidiary partnerships, is entitled to receive a local administrative fee of up to $2,500 per year from each subsidiary partnership.

NOTE 3 – Fair Value Measurements

In the first quarter of 2008, we adopted SFAS No. 157, “Fair Value Measurements”, for financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The statement provides for a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

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LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2008

(Unaudited)

Level 1:

Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2:

Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3:

Unobservable inputs that reflect our own assumptions.

As permitted, we chose not to elect the fair value option as prescribed by FASB SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” – Including an Amendment of FASB Statement No. 115, for our financial assets and liabilities that had not been previously carried at fair value. Therefore, we did not elect to fair value any additional items under SFAS No. 159. We, in accordance with Financial Accounting Standards Board Staff Position No. 157-2, “The Effective Date of FASB Statement No. 157”, will defer application on SFAS No. 157 for nonfinancial assets and nonfinancial liabilities until first quarter 2009.

The estimated fair value of financial instruments has been determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange. At December 31, 2008, the carrying amount of the Partnership’s mortgage notes payable approximated fair value as their contractual interest rates approximated market yields for similar debt instruments.

	At December 31, 2008						Fair Value Measurements at December 31, 2008 using Fair Value Hierarchy
	Cost			Fair Value			Level 1			Level 2			Level 3
LIABILITIES:
Mortgage notes		$	1,748,126		$	1,748,126		$	0		$	0		$	1,748,126

NOTE 4 – Sale of Properties

As of December 31, 2008, the Partnership has disposed of all twenty-seven of its original investments. During the fourth fiscal quarter ending March 31, 2009, the Partnership will commence the process of winding up its operations. In accordance with the provisions of the Partnership Agreement, a cash distribution is expected to be made during 2009 from available cash less costs incurred to terminate the Partnership.

On December 31, 2008, the property and the related assets and liabilities of Goodfellow Place Limited Partnership (“Goodfellow”) were sold to an unaffiliated third party purchaser for a sales price of $1,693,436, which approximates the mortgage debt, accrued interest and other fees at the date of closing. The sale will result in a gain of approximately $633,000, resulting from the write-off of the deficit basis in property at the date of sale, which will be recorded during the quarter ending March 31, 2009.

On October 21, 2008, the Partnership sold its limited partnership interest in United – Glenarden I, L.P. (“Glenarden I”) to an unaffiliated third party purchaser for a sales price of $123,563, which consists of a promissory note. Such note had an optional prepayment with a discount of $50,843 and was paid on December 19, 2008. The sale resulted in a gain of approximately $8,613,000 resulting from the write-off of the deficit basis in the Local Partnership of approximately $8,540,000 at the date of the sale and the $73,000 received from the sale.

On October 21, 2008, the Partnership sold its limited partnership interest in United – Glenarden II, L.P. (“Glenarden II”) to an unaffiliated third party purchaser for a sales price of $235,294, which consists of a promissory note. Such note had an optional prepayment with a discount of $83,015 and was paid on December 19, 2008. The sale resulted in a gain of approximately $7,661,000 resulting from the write-off of the deficit basis in the Local Partnership of approximately $7,509,000 at the date of the sale and the $152,000 received from the sale.

On October 6, 2008, the Partnership sold its limited partnership interest in Westminster Place II – Olive Site, L.P. (“Westminster”) to an affiliate of the Local General Partner for a sales price of $87,500. The sale resulted in a loss of approximately $223,000 resulting from the write-off of the basis in the Local Partnership of approximately $310,000 at the date of the sale and the $87,500 received from the sale.

On May 9, 2008, in connection with foreclosure proceedings, the court sold the property and the related assets and liabilities of Williamsburg Residential, L.P. (“Williamsburg”) to its lender for a sales price of $1,971,927, which approximates the mortgage debt, accrued interest and other fees at the date of the closing. The sale resulted in a gain of approximately $118,000 resulting from the write-off of the deficit basis in the property at the date of sale.

On May 2, 2008, the Partnership received $313,589 of proceeds from the contingent portion of the sale of Santa Juanita II Limited Partnership (“Santa Juanita”), which is included in gain on sale of properties for the period ended September 30, 2008. The Partnership’s limited partnership interest in Santa Juanita was sold on January 17, 2006 to the Local General Partner for a sales price of $375,000 cash plus 50% of the amount, if any, by which the aggregate sales price for the apartment units exceeded the actual conversion cost, as defined in the transfer agreement, from the Local General Partner’s conversion of the property to condominium ownership.

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LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2008

(Unaudited)

On December 31, 2007, the Partnership’s limited partnership interest in Victory Apartments, L.P. (“Victory”) was sold to the Local General Partner for a sales price of $700,000. The sale resulted in a loss of approximately $96,000 which was recognized during the quarter ended December 31, 2007, resulting from the write-off of the basis in the property of approximately $750,000 at the date of the sale and the $654,177 cash received from the sale. An adjustment to the loss of approximately $10,000 was recorded during the quarter ended March 31, 2008, resulting in an overall loss of approximately $106,000.

On December 28, 2007, the Partnership’s limited partnership interest in Church Lane Associates (“Church Lane”) was sold to the Local General Partner for a sales price of $20,000. The sale resulted in a gain of approximately $164,000 as a result of the write-off of the deficit basis in the property of approximately $144,000 at the date of the sale and the $20,000 cash received from the sale. The sale also resulted in a non-cash contribution to the Local Partnership from the General Partner of approximately $2,500 as a result of the write-off of fees owed by the Local Partnership to an affiliate of the General Partner.

On April 20, 2007, the property and the related assets and liabilities of Whittier Plaza Associates, L.P. (“Whittier”) were sold to an unaffiliated third party purchaser for a sales price of $1,444,500. The Partnership received $162,800 as a distribution from this sale after the repayment of mortgages, other liabilities and closing costs of approximately $1,282,000. The sale resulted in a gain of approximately $1,053,000 resulting from the write-off of the deficit basis in the property at the date of the sale, which was recognized during the quarter ended September 30, 2007 and a forgiveness of indebtedness income resulting from the forgiveness of one of Whittier’s mortgage notes in the amount of $568,000 at the time of sale. An adjustment to the gain of approximately $(382,000) was recorded during the quarter ended March 31, 2008, resulting in an overall gain of approximately $671,000.

NOTE 5 – Discontinued Operations

The following table summarizes the financial position of the Local Partnerships that are classified as discontinued operations because the respective Local Partnerships were classified as assets held for sale. As of December 31, 2008, Westminster, Glenarden I, Glenarden II, Goodfellow and Williamsburg were classified as discontinued operations in the consolidated balance sheets. As of March 31, 2008, Williamsburg was classified as discontinued operations in the consolidated balance sheets.

Consolidated Balance Sheets of Discontinued Operations:

	December 31, 2008		March 31, 2008

Assets
Property and equipment, net of accumulated depreciation of $608,447 and $1,242,564, respectively	$	570,628	$	1,604,951
Cash and cash equivalents		381,206		3,316
Cash held in escrow		84,976		196,573
Deferred costs, net of accumulated amortization of $51,324 and $0, respectively		58,685		0
Other assets		1,018,294		25,801
Total assets	$	2,113,789	$	1,830,641

Liabilities
Mortgage notes payable	$	1,748,126	$	1,803,564
Accounts payable		70,089		113,873
Accrued interest payable		10,741		48,387
Security deposits payable		15,685		18,324
Due to general partners and affiliates		999,327		0
Minority interest		0		719,994
Total liabilities	$	2,843,968	$	2,704,142

The following table summarizes the results of operations of the Local Partnerships that are classified as discontinued operations. For the three and nine months ended December 31, 2008, Williamsburg, Westminster, Goodfellow, Glenarden I and Glenarden II, which were sold during the nine months ended December 31, 2008, were all classified as discontinued operations on the consolidated financial statements. For the three and nine months ended December 31, 2007, Whittier, Victory and Church Lane, which were sold during the nine months ended December 31, 2007, Williamsburg, which was classified as an asset held for sale, and, in order to present comparable results to the three and nine months ended December 31, 2008, Westminster, Goodfellow, Glenarden I and Glenarden II, were all classified as discontinued operations on the consolidated financial statements.

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LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2008

(Unaudited)

Consolidated Statements of Discontinued Operations:

	Three Months Ended December 31,					Nine Months Ended December 31,
	2008		2007*			2008		2007*

Revenues
Rental income	$	1,754,906	$	2,006,287		$	4,882,301	$	6,298,011
Other		44,646		58,521			111,211		165,254
Gain on sale of properties (Note 3)		16,051,191		68,733			16,483,212		1,121,420
Total revenue		17,850,743		2,133,541			21,476,724		7,584,685
Expenses
General and administrative		337,082		384,870			989,890		1,173,781
General and administrative-related parties (Note 2)		77,438		104,418			231,746		330,040
Repairs and maintenance		886,695		928,026			2,195,705		2,791,144
Operating		162,064		183,063			491,602		678,953
Taxes		137,097		126,408			349,354		389,573
Insurance		82,017		88,252			222,699		285,561
Interest		458,505		526,010			1,227,086		1,629,916
Depreciation and amortization		18,940		516,237			892,322		1,630,650
Total expenses		2,159,838		2,857,284			6,600,404		8,909,618
Income (loss) before minority interest		15,690,905		(723,743	)		14,876,320		(1,324,933	)
Minority interest in loss (income) of subsidiaries from discontinued operations		98,908		(12,469	)		818,879		(11,699	)
Net income (loss) from discontinued operations (including minority interest)	$	15,789,813	$	(736,212	)	$	15,695,199	$	(1,336,632	)
Income (loss) – limited partners from discontinued operations (including minority interest)	$	15,631,915	$	(728,850	)	$	15,538,247	$	(1,323,265	)
Number of BACs outstanding		115,917.5		115,917.5			115,917.5		115,917.5
Income (loss) from discontinued operations (including minority interest) per BAC	$	134.85	$	(6.29	)	$	134.04	$	(11.42	)

Cash Flows from Discontinued Operations:

	Nine Months Ended December 31,
	2008			2007*

Net cash provided by operating activities	$	(452,745	)	$	(611,958	)
Net cash provided by investing activities	$	2,308,858		$	1,784,337
Net cash used in financing activities	$	(2,195,653	)	$	(1,425,484	)

* Reclassified for comparative purposes.

NOTE 6 – Commitments and Contingencies

a) Subsidiary Partnerships - Going Concerns and Uncertainties

Glenarden I

The financial statements for Glenarden I were prepared assuming that Glenarden I would continue as a going concern. HUD performed a review of the operations of Glenarden I and deemed certain expenses to be in excess of those allowable under the Mark-to-Market program, which resulted in a technical default of the second mortgage and a demand for payment of accrued interest totaling $217,406. HUD can also demand payment of the mortgage. The Local General Partner has submitted an appeal but cannot predict the outcome. This condition raises substantial doubt about Glenarden I’s ability to continue as a going concern. The financial statements for Glenarden I did not include any adjustments that might result from the outcome of this uncertainty.

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LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2008

(Unaudited)

The Partnership’s investment in Glenarden I was written down to $0 by prior years’ losses and the minority interest balance was $0 at both December 31, 2008 and March 31, 2008. Glenarden I’s net loss after minority interest amounted to approximately $1,056,000, excluding gain on sale of approximately $8,559,000, and $1,331,000 for the nine months ended December 31, 2008 and 2007, respectively. On October 21, 2008, the Partnership sold its limited partnership interest in Glenarden I (see Note 4).

Glenarden II

The financial statements for Glenarden II were prepared assuming that Glenarden II would continue as a going concern. HUD performed a review of the operations of Glenarden II and deemed certain expenses to be in excess of those allowable under the Mark-to-Market program, which resulted in a technical default of the second mortgage and a demand for payment of accrued interest totaling $288,505. This condition raises substantial doubt about Glenarden II’s ability to continue as a going concern. The financial statements for Glenarden II did not include any adjustments that might result from the outcome of this uncertainty.

The Partnership’s investment in Glenarden II has been written down to $0 by prior years’ losses and the minority interest balance was $0 at both December 31, 2008 and March 31, 2008. Glenarden II’s net loss after minority interest amounted to approximately $474,000, excluding gain on sale of approximately $7,527,000, and $703,000 for the nine months ended December 31, 2008 and 2007, respectively. On October 21, 2008, the Partnership sold its limited partnership interest in Glenarden II (see Note 4).

Williamsburg

The financial statements of Williamsburg were prepared assuming that Williamsburg would continue as a going concern. Williamsburg was subject to a foreclosure action by the mortgage lender which raised substantial doubt about its ability to continue as a going concern. The financial statements of Williamsburg did not include any adjustments that might have resulted from the outcome of this uncertainty.

During November 2007, Williamsburg discontinued payment of required principal and interest payments to the mortgage holder and the mortgage lender notified Williamsburg that it had failed to make required payments and the mortgage loan was due. During December 2007, a real estate foreclosure action was initiated by the mortgage lender and agreed to among Williamsburg and the mortgage lender which required the sale of the property and equipment securing the mortgage loan. In addition, a receiver was appointed by the court to provide management of the property until sale. Williamsburg was sold by the court on May 9, 2008 (see Note 4).

b) Subsidiary Partnerships - Other

Goodfellow Place Limited Partnership (“Goodfellow”)

In recent years, Goodfellow had experienced significant cash flow deficiencies. In addition there was $594,993 due to the General Partners and their affiliates. During 2007, the General Partners advanced Goodfellow $206,540 in the form of a long term interest free loan. The General Partners had informally indicated that they would continue to advance funds to Goodfellow in 2008, as needed, with an unsecured loan that would strengthen Goodfellow’s overall financial position. Management believes that this action allowed Goodfellow to continue as a going concern. The financial statements did not include any adjustments that might result from the outcome of this uncertainty. On December 31, 2008, the property and the related assets and liabilities of Goodfellow were sold (see Note 4).

c) Uninsured Cash and Cash Equivalents

The Partnership maintains its cash and cash equivalents in various banks. Accounts at each bank are guaranteed by the Federal Deposit Insurance Corporation up to $250,000.

d) Cash Distributions

Cash distributions from the Local Partnerships to the Partnership are restricted by the provisions of the respective Local Partnership Agreements and/or U.S. Department of Housing and Urban Development (“HUD”). Such cash distributions are typically made from surplus cash flow.

e) Tax Credits

The Tax Credit Periods and Compliance Periods for each Local Partnership have expired with each Local Partnership having utilized its full Tax Credits without recapture.

f) Other

The Partnership is subject to the risks incident to potential losses arising from the management and ownership of improved real estate. As of December 31, 2008, the Partnership has disposed of all of its investments in subsidiary partnerships (see Note 4).

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Liquidity and Capital Resources

The Partnership’s capital was originally invested in twenty-seven Local Partnerships. As of December 31, 2008, the Partnership has sold all of its remaining investments. During the fourth fiscal quarter ending March 31, 2009, the Partnership will commence the process of winding up its operations. In accordance with the provisions of the Partnership Agreement, a cash distribution is expected to be made during 2009 from available cash less costs incurred to terminate the Partnership.

The Partnership’s primary sources of funds have included: (i) working capital reserves; (ii) interest earned on the working capital reserves; and (iii) sales proceeds and distributions. Such funds are available to meet the obligations of the Partnership but are not expected to be significant. During the nine months ended December 31, 2008 and 2007, cash distributions received from the Local Partnerships were approximately $0 and $428,000, respectively, which included distributions from sales amounting to approximately $0 and $428,000, respectively. In addition, during the nine months ended December 31, 2008 and 2007, approximately $626,000 and $674,000, respectively, in proceeds were received by the Partnership from the sale of partnership interests.

During the nine months ended December 31, 2008, cash and cash equivalents of the Partnership and its consolidated Local Partnerships increased approximately ($68,000). This increase was due to net proceeds from sale of properties ($2,598,000) and an increase in due to selling partner ($6,000), which exceeded cash used in operating activities ($234,000), repayments of mortgage notes ($2,094,000), costs paid relating to sale of investments ($168,000), increase in cash held in escrow relating to investing activities ($29,000) and distributions ($10,000). In the adjustments to reconcile the net income to net cash used in operating activities are gain on sale of properties of approximately ($16,483,000) and depreciation and amortization of approximately ($892,000).

The Partnership is not expected to have access to additional sources of financing, and in particular will not have the ability to access Beneficiary Assignments Certificates (“BACs”) holders for additional capital contributions to provide capital if needed by the Partnership. There can be no assurance that additional funds will be available to the Partnership or any Local Partnership. The Partnership had a working capital reserve of approximately $2,998,000 at December 31, 2008.

Total expenses for the three and nine months ended December 31, 2008 and 2007, excluding depreciation and amortization, interest, general and administrative – related parties and provision for impairment of fixed assets, totaled $49,552 and $0 and $209,284 and $287,421, respectively.

Accounts payable totaled $95,000 and $2,151,546 as of December 31, 2008 and March 31, 2008, respectively. Accounts payable are short term liabilities which are expected to be paid from operating cash flows, working capital balances at the Local Partnership level, Local General Partner advances and, in certain circumstances, advances from the Partnership. The Partnership believes it (and the applicable Local Partnerships) has sufficient liquidity and ability to generate cash and to meet existing and known or reasonably likely future cash requirements until termination of the Partnership. In addition, accounts payable from discontinued operations as of December 31, 2008 and March 31, 2008 totaled $70,089 and $113,873, respectively.

Accrued interest payable as of December 31, 2008 and March 31, 2008 was $0 and $1,904,958, respectively. Accrued interest payable represented the accrued interest on all mortgage loans, which included primary and secondary loans. In addition, accrued interest payable from discontinued operations, as of December 31, 2008 and March 31, 2008, totaled $10,741 and $48,387, respectively.

Partnership management fees owed to the General Partners amounting to approximately $25,000 and $1,192,000 were accrued and unpaid as of December 31, 2008 and March 31, 2008, respectively. During the quarter ended December 31, 2008, management deemed the unpaid partnership management fees related to sold properties uncollectible and wrote off approximately $1,127,000 resulting in a non-cash General Partner contribution of the same amount.

For a discussion of contingencies that affected certain Local Partnerships prior to their disposition, see Item 1, Note 7. The Tax Credit Periods and Compliance Periods for each Local Partnership have expired with each Local Partnership having utilized its full Tax Credits without recapture. As of December 31, 2008, the Partnership has disposed of all of its remaining investments in subsidiary partnerships (see Note 4).

Except as described above, management is not aware of any trends, events, commitments or uncertainties which have not otherwise been disclosed that will or are likely to impact liquidity in a material way. Management believes the only impact would be from laws that have not yet been adopted. The Partnership has sold its portfolio and is in the final stages of winding up its affairs.

Off-Balance Sheet Arrangements

The Partnership has no off-balance sheet arrangements.

Tabular Disclosure of Contractual Obligations

The Partnership disclosed in Note 8 to the financial statements in the Partnership’s Annual Report on Form 10-K for the year ended March 31, 2008, the Partnership’s commitments to make future payments under its debt agreements and other contractual obligations. There are no material changes to such disclosure or amounts as of December 31, 2008.

Fair Value Measurements

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Level 1:

Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2:

Level 3:

Unobservable inputs that reflect our own assumptions.

	At December 31, 2008						Fair Value Measurements at December 31, 2008 using Fair Value Hierarchy
	Cost			Fair Value			Level 1			Level 2			Level 3
LIABILITIES:
Mortgage notes		$	1,748,126		$	1,748,126		$	0		$	0		$	1,748,126

Critical Accounting Policies and Estimates

In preparing the consolidated financial statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Set forth below is a summary of the accounting policies that management believes are critical to the preparation of the consolidated financial statements. The summary should be read in conjunction with the more complete discussion of the Partnership’s accounting policies included in Note 2 to the consolidated financial statements in the Partnership’s Annual Report on Form 10-K for the year ended March 31, 2008.

Property and Equipment

Property and equipment to be held and used are carried at cost which includes the purchase price, acquisition fees and expenses, construction period interest and any other costs incurred in acquiring such property and equipment. The cost of property and equipment is depreciated over their estimated useful lives using accelerated and straight-line methods. Expenditures for repairs and maintenance are charged to expense as incurred; major renewals and betterments are capitalized. At the time property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are eliminated from the assets and accumulated depreciation accounts and the profit or loss on such disposition is reflected in earnings. The Partnership complies with SFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS No. 144”). A loss on impairment of assets is recorded when management estimates amounts recoverable through future operations and sale of the Property on an undiscounted basis are below depreciated cost. Property investments themselves are reduced to estimated fair value (generally using discounted cash flows) when the Property is considered to be impaired and the depreciated cost exceeds estimated fair value. During the nine months ended December 31, 2008, the Partnership has not recorded any loss on impairment of assets or reduction to estimated fair value. Through December 31, 2008, the Partnership has recorded approximately $15,022,000 as a loss on impairment of fixed assets.

In accordance with SFAS No. 144, the results of discontinued operations are reported as a separate component of income before extraordinary items on the consolidated statements of operations. Discontinued operations include the results of operations and any gain or loss recognized for Local Partnerships that have been disposed of or are held for sale. A gain or loss recognized on the disposal is disclosed in the notes to the financial statements. Adjustments to amounts previously reported in operations that are directly related to the disposal of a Local Partnership are reclassified in the current period as discontinued operations for comparability purposes. Assets and liabilities of a Local Partnership that are classified as held for sale are presented separately in the asset and liability sections, respectively, of the consolidated balance sheets.

At the time management commits to a plan to dispose of assets, said assets are adjusted to the lower of carrying amount or fair value less costs to sell. Such assets would be classified as property and equipment-held for sale and are not depreciated. As of December 31, 2008, the Partnership has sold all of its remaining investments.

Revenue Recognition

Rental income is earned primarily under standard residential operating leases and is typically due the first day of each month, but can vary by property due to the terms of the tenant leases. Rental income is recognized when earned and as rents become due and charged to tenants’ accounts receivable if not received by the due date. Rental payments received in advance of the due date are deferred until earned. Rental subsidies are recognized as rental income during the month in which it is earned.

- 13 -

Other revenues are recorded when earned and consist of the following items: Interest income earned on cash and cash equivalent balances and cash held in escrow balances, income from forfeited security deposits, late charges, laundry and vending income, and other rental related items.

Income Taxes

The Partnership is not required to provide for, or pay, any federal income taxes. Net income or loss generated by the Partnership is passed through to the partners and is required to be reported by them. The Partnership may be subject to state and local taxes in jurisdictions in which it operates. For income tax purposes, the Partnership has a fiscal year ending December 31.

Results of Operations

The Partnership has disposed of all of its remaining assets. Therefore, all operations have been discontinued.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The Partnership had mortgage notes that were payable in aggregate monthly installments including principal and interest at rates varying from 1% to 10.75% per annum. The Partnership does not believe there was a material risk associated with the various interest rates associated with the mortgage notes as the majority of the Local Partnership mortgage notes had fixed rates. The Partnership disclosed in Item 8, Note 3 to the financial statements in the Partnership’s Annual Report on Form 10-K for the year ended March 31, 2008, the fair value of the mortgage notes payable. The Partnership does not have any other market sensitive instruments. There are no material changes to such disclosure or amounts as of December 31, 2008. The Partnership does not have any market risk sensitive instruments.

Item 4T. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures. The Chief Executive Officer and the Chief Financial Officer of Related Credit Properties II Inc., the general partner of the Related General Partner, have evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”)), as of the end of the period covered by this report. Based on such evaluation, such officers have concluded that, as of the end of such period, the Partnership’s disclosure controls and procedures are effective.

(b) Management’s Annual Report on Internal Control over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). In evaluating the Partnership’s internal control over financial reporting, management has adopted the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring organizations of the Treadway Commission (the “COSO Framework”). Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer of the General Partner, the Partnership conducted an evaluation of the effectiveness of its internal control over financial reporting as of March 31, 2008. The Partnership’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Partnership; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Partnership are being made only in accordance with authorizations of management and directors of the Partnership; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Partnership’s assets that could have a material effect on the financial statements. However, because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Based on management’s evaluation under the COSO Framework, it has concluded that the Partnership’s internal control over financial reporting, was, as of March 31, 2008, (1) effective at the Partnership level, in that they provide reasonable assurance that information required to be disclosed by the Partnership in the reports it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (2) ineffective at the subsidiary level due to certain deficiencies noted in the audit reports for such subsidiaries. Management will attempt to cause the Local General Partner’s to remedy such deficiencies; however, the General Partner does not have control over the internal controls at the subsidiary level. Management believes they have sufficient controls at the Partnership level to mitigate these deficiencies, and such deficiencies do not have a material impact on the consolidated financial statements.

The Partnership’s annual report on Form 10-K did not include an attestation report of the Partnership’s registered public accounting firm regarding internal control over financial reporting. The Partnership’s of internal control over financial reporting was not subject to attestation by the Partnership’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Partnership to provide only this report.

(c) Changes in Internal Controls over Financial Reporting. Except as noted in (b) above, during the period ended December 31, 2008, there were no changes in the Partnership’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1.	Legal Proceedings – None

Item 1A.	Risk Factors – No changes

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds – None

Item 3.	Defaults upon Senior Securities – None

Item 4.	Submission of Matters to a Vote of Security Holders – None

Item 5.	Other Information – None

Item 6.	Exhibits

	(3A)	Form of Amended and Restated Agreement of Limited Partnership of Liberty Tax Credit Plus II L.P. (incorporated by reference to exhibits filed with Amendment No. 1 to Liberty Tax Credit Plus II L.P.'s Registration Statement on Form S-11 Registration No. 33-21429).

	(31.1)	Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a)

	(31.2)	Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a)

	(32.1)	Certification Pursuant to Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Title 18 of the United States Code (18 U.S.C. 1350)

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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.

LIBERTY TAX CREDIT PLUS II L.P.

(Registrant)

		By:	RELATED CREDIT PROPERTIES II L.P.,
			a General Partner

			By:	Related Credit Properties II Inc.,
				its general partner
Date:	February 4, 2009
				By:	/s/ Robert L. Levy
					Robert L. Levy
					Chief Financial Officer, Principal Accounting Officer and Director
Date:	February 4, 2009
				By:	/s/ Andrew J. Weil
					Andrew J. Weil
					President, Chief Executive Officer

			and

		By:	LIBERTY GP II, INC.,
			a General Partner
Date:	February 4, 2009
			By:	/s/ Robert L. Levy
				Robert L. Levy
				Chief Financial Officer, Principal Accounting Officer and Director
Date:	February 4, 2009
			By:	/s/ Andrew J. Weil
				Andrew J. Weil
				President, Chief Executive Officer

			and

		By:	LIBERTY ASSOCIATES II, L.P.,
			a General Partner

			By:	Related Credit Properties II, Inc.,
				a General Partner
Date:	February 4, 2009
				By:	/s/ Robert L. Levy
					Robert L. Levy
					Chief Financial Officer, Principal Accounting Officer and Director
Date:	February 4, 2009
				By:	/s/ Andrew J. Weil
					Andrew J. Weil
					President, Chief Executive Officer

			By:	Liberty GP II, Inc.,
				a General Partner
Date:	February 4, 2009
				By:	/s/ Robert L. Levy
					Robert L. Levy
					Chief Financial Officer, Principal Accounting Officer and Director
Date:	February 4, 2009
				By:	/s/ Andrew J. Weil
					Andrew J. Weil
					President, Chief Executive Officer

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Filing Compare · LIBERTY TAX CREDIT PLUS II L P