UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________

FORM 10-K

______________

(Mark One)

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

For the fiscal year ended March 31, ~~2008~~2009

[o ] 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

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Beneficial Assignment Certificates (including underlying Limited Partnership Interests)

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ~~[ ]~~o No xþ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ~~[ ]~~o No xþ

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 xþ No ~~[ ]~~o

Indicate by check mark ifwhether ~~disclosure of~~the ~~delinquent~~registrant ~~filers~~has ~~pursuant~~submitted toelectronically ~~Item~~and ~~405~~posted ofon ~~Regulation~~its ~~S-K~~corporate ~~(§229.405~~Web ofsite, ~~this~~if ~~chapter)~~any, isevery ~~not~~Interactive ~~contained~~Data ~~herein,~~File ~~and~~required ~~will~~to ~~not~~ be ~~contained,~~submitted toand ~~the~~posted ~~best~~pursuant ofto ~~registrant’s~~Rule ~~knowledge,~~405 inof ~~definitive~~Regulation ~~proxy~~S-T or(§229.405 ~~information~~of ~~statements incorporated~~this bychapter) ~~reference~~during inthe preceding ~~Part~~12 ~~III~~months of(or ~~this~~for ~~Form~~such ~~10-K~~shorter orperiod ~~any~~that ~~amendment~~the toregistrant ~~this~~was required ~~Form~~to ~~10-K.~~submit ~~[X]~~and post such files). Yes o No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

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. (Check one):

Large accelerated filer ~~[ ]~~ o Accelerated filer ~~[ ]~~ o Non-accelerated filer xo Smaller reporting company ~~[ ]~~þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [o ] No xþ

The approximate aggregate book value of the voting and non-voting common equity held by non-affiliates of the Registrant as of September 30, ~~2007~~2008 was $(2126,~~571~~787,000), based on Limited Partner equity (deficit) as of such date.

DOCUMENTS INCORPORATED BY REFERENCE

None

PART I

Item 1. Business

General

Liberty Tax Credit Plus II L.P. (the “Partnership”) is a limited partnership which was formed under the laws of the State of Delaware on March 25, 1988. The general partners of the Partnership are Related Credit Properties II L.P., a Delaware limited partnership (the “Related General Partner”), Liberty Associates II L.P., a Delaware limited partnership (“Liberty Associates”), and Liberty GP II Inc. (formerly Shearson Liberty GP II Inc.), a Delaware corporation (the “Liberty General Partner” and together with the Related General Partner and Liberty Associates, the “General Partners”). The general partner of the Related General Partner is Related Credit Properties II Inc., a Delaware corporation. The general partners of Liberty Associates are Related Credit Properties II Inc., and the Liberty General Partner. Liberty Associates is also the special limited partner of the Partnership. The ultimate parent of the General Partners is Centerline Holding Company (“Centerline”).

On July 20, 1988 the Partnership commenced a public offering (the “Offering”) of Beneficial Assignment Certificates (“BACs”) representing assignments of limited partnership interests in the Partnership (“Limited Partnership Interests”).

As of January 9, 1989 (the date on which the Partnership held the final closing of the sale of BACs and on which the Offering was terminated), the Partnership had received $115,917,500 of gross proceeds of the Offering from 8,431 investors.

The Partnership was formed to invest, as a limited partner, in other limited partnerships (referred to herein as “Local Partnerships” or “subsidiary partnerships”) each of which ~~owns~~owned one or more leveraged low-income multifamily residential complexes (“Apartment Complexes”) that ~~are~~were eligible for the low-income housing tax credit (“Tax Credit”) enacted in the Tax Reform Act of 1986, and to a lesser extent, in Local Partnerships owning properties (“Rehabilitation Projects” and together with the Apartment Complexes, the “Properties”) that ~~are~~were eligible for the historic rehabilitation tax credit (the “Historic Rehabilitation Tax Credit”). Some of the Apartment Complexes would benefit from one or more other forms of federal and state ~~housing~~ housing assistance. As ~~The~~of ~~Partnership’s~~March ~~investment~~31, in2009, ~~each~~the ~~Local~~ Partnership ~~represents~~has ~~from~~disposed ~~73.52%~~of toall ~~98%~~ of ~~the~~its ~~partnership~~original ~~interests in the Local Partnership. The Partnership had originally acquired interests in~~ twenty-seven Local Partnerships~~. The~~ ~~Partnership~~(Note is10 ~~currently~~ in ~~the~~Item ~~process~~8). See ofItem ~~disposing of its investments and through March 31~~2, ~~2008 had disposed of 22 of its investments~~Properties. ~~During~~ ~~the~~Subsequently, ~~fiscal~~on ~~year~~June ~~ended~~30, ~~March 31~~2009, ~~2008,~~ the ~~property and the related assets and liabilities of one Local~~ Partnership ~~and~~collected ~~the~~$1,400,000 ~~limited~~for ~~partnership~~the ~~interest~~sale ~~in two Local Partnerships were sold. In addition, as~~ of ~~March~~Spring ~~31,~~Creek ~~2008,~~Note ~~one Local Partnership has~~receivable, ~~entered~~relating ~~into an agreement~~ to ~~sell~~ its ~~property~~sale ~~and~~in ~~the~~2006 ~~related assets and liabilities, which was subsequently sold~~ (see Note 1413 in Item 8). ~~See Item 2, Properties.~~

Liberty Associates iswas the special limited partner in all ~~remaining~~the ~~seven~~ Local Partnerships, asand ~~well~~is the ~~as a~~ general partner of the Partnership. Liberty Associates ~~has~~had certain rights and obligations in its role as special limited partner which would permit it to execute control over the management and policies of the Local Partnerships.

Investment Objectives, Tax Credits

The investment objectives of the Partnership ~~are~~were to:

Entitle qualified BACs holders to Tax Credits (and to a lesser extent Historic Rehabilitation Tax Credits) over the period of the Partnership’s entitlement to claim Tax Credits (for each Property, ten years from the date of investment or, if later, the date the Property is placed in service referred to herein as the “Tax Credit Period”);

2.	Preserve and protect the Partnership’s capital;

3.	Participate in any capital appreciation in the value of the Properties and provide distributions of sale or refinancing proceeds upon the disposition of the Properties;

4.	Provide cash distributions when available from the operations of Properties; and

5.	Allocate passive losses to individual BACs holders to offset passive income that they may realize from rental real estate investments and other passive activities, and allocate passive losses to corporate BACs holders to offset active business income.

One of the Partnership’s objectives iswas to entitle qualified BACs holders to Tax ~~Credits~~ Credits over the period of the Partnership’s entitlement to claim Tax Credits. Each of the Local Partnerships in which the Partnership ~~has~~had acquired an interest ~~has~~had been allocated by the relevant state credit agency the authority to recognize Tax Credits during the Tax Credit Period provided that the Local Partnership ~~satisfies~~satisfied the rent restriction, minimum set-aside and other requirements for recognition of the Tax Credits at all times during the 15-year period (the “Compliance Period”) commencing at the beginning of the Tax Credit Period. Once a Local Partnership ~~has~~had become eligible to recognize Tax Credits, it ~~may~~could ~~lose~~have lost such eligibility and ~~suffer~~suffered an event of “recapture” if (i) the Local Partnership ~~ceases~~ceased to meet qualification requirements, (ii) there iswas a decrease in the qualified basis of a Property, or (iii) there iswas a reduction in its interest in the Property at any time during the Compliance Period. None of the Local Partnerships in which the Partnership had ~~has~~ acquired an interest ~~has~~ suffered an event of recapture.

The Partnership has met its primary objective of generating Tax Credits for qualified BACs holders. As of March 31, ~~2008~~2009, the Tax Credit Periods and Compliance Periods for all of the Properties have expired.

The Partnership ~~continues~~met ~~to meet~~ its objective of allocating passive losses to individual BACs holders to offset passive income that they may realize from rental real estate investments and other passive activities, and allocating passive losses to corporate BACs holders to offset business income. ~~At this time, there can be no assurance that the Partnership will continue to meet this investment objective.~~

The Partnership has not made distributions sufficient to return to BACs holders their original capital contributions and has only made cash distributions upon the disposition of Properties. The Partnership has not met this investment objective. During the fiscal year ended March 31, 2009, distributions from sales proceeds were made to the BACs holders of approximately $1,816,000 and to the General Partners of approximately $18,000. Through the fiscal year ended March 31, 2009, distributions from sales proceeds were made to the BACs holders of approximately $11,761,000 and to the General Partners of approximately $119,000. In accordance with the provisions of the Partnership Agreement, a final cash distribution is expected to be made during 2009 from available cash less costs incurred to terminate the Partnership.

- 2 -

AsA ofloss on ~~March~~impairment ~~31,~~of ~~2008,~~assets ~~the~~was ~~Partnership~~recorded ~~has~~when ~~not~~management ~~met~~estimated ~~its~~amounts ~~investment objective of~~recoverable ~~providing~~through ~~cash~~future ~~distributions~~operations ~~from~~and ~~the~~sale ~~operations~~ of the ~~Properties.~~property ~~The Partnership~~on ~~does~~an ~~not~~undiscounted ~~anticipate~~basis ~~providing cash distributions to BACs holders~~were ~~other~~below ~~than~~depreciated ~~distributions~~cost. ofAt ~~sale~~that ortime ~~refinancing~~the ~~proceeds~~Property ~~upon~~investments ~~the~~themselves ~~disposition of~~were ~~Properties.~~reduced ~~Furthermore,~~to atestimated ~~this~~fair ~~time~~value ~~there~~(generally ~~can~~using bethe nodiscounted ~~assurance~~cash ~~that the~~flow ~~Partnership~~valuation ~~will achieve this investment objective~~method). ~~During~~For the ~~fiscal~~ year ended March 31, ~~2008~~2009, ~~distributions from sales proceeds were made to~~ the Partnership ~~BACs~~had ~~holders~~not ofrecorded ~~approximately~~any ~~$1,019,000~~loss ~~and~~on toimpairment ~~the General Partners~~ of ~~approximately~~ ~~$10,000~~fixed assets. Through ~~the fiscal year ended~~ March 31, ~~2008~~2009, ~~distributions~~ ~~from sales proceeds were made to~~ the ~~BACs~~Partnership ~~holders~~had ofrecorded approximately $915,~~945~~022,000 ~~and~~as toan aggregate ~~the~~loss ~~General~~on ~~Partners~~impairment of ~~approximately~~assets ~~$100,000~~or reduction to estimated fair value.

The General Partners generally required, in connection with certain investments in Local Partnerships, that the general partners of the Local Partnership (“Local General Partners”) undertake the funding of operating deficits (up to a stated maximum amount) of the Local Partnership during a limited period of time following the Partnership’s investment (“Guarantee Period”). Generally the amounts funded pursuant to the operating deficit guarantee (the “Operating Deficit Guarantee”) were treated as Operating Loans, did not bear interest and were repaid only out of 50% of available cash flow or out of available net sale or refinancing proceeds. See Item 8, Note 8 - Related Party Transactions. As of March 31, 2008, all Operating Deficit Guarantees have expired.

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. At that time the Property investments themselves are reduced to estimated fair value (generally using the discounted cash flow valuation method). For the year ended March 31, 2008, the Partnership recorded approximately $0 as a loss on impairment of fixed assets. Through March 31, 2008, the Partnership has recorded approximately $15,022,000 as an aggregate loss on impairment of assets or reduction to estimated fair value.

Government Regulations

The Partnership iswas subject to the risks incident to potential losses arising from the management and ownership of improved real estate. As ~~The~~of ~~Partnership~~March ~~can also~~31, be2009, ~~affected~~the byPartnership ~~poor~~has ~~economic~~disposed ~~conditions~~of ~~generally.~~all ~~However,~~of noits ~~more~~investments ~~than~~in ~~40% of~~subsidiary ~~the~~partnerships ~~Properties~~(see ~~are~~Note ~~located~~10 in ~~any~~Item ~~single state~~8).

The Partnership iswas the beneficiary of certain subsidy agreements pursuant to which the United States Department of Housing and Urban Development (“HUD”) subsidizes the amount of rent that the Local Partnerships ~~earn~~earned. There ~~are~~ were substantial risks associated with owning properties receiving government assistance, such as the possibility that Congress may not appropriate funds to enable HUD to make rental assistance payments. HUD also restricts annual cash distributions to partners based on operating results and a percentage of the owner’s equity contribution. As of March 31, ~~2008~~2009, ~~there~~the ~~were~~Partnership ~~four~~has ~~Local Partnerships subsidized by~~disposed ~~HUD. The~~of ~~Partnership~~all ~~cannot~~of ~~sell or substantially liquidate~~ its ~~investments~~ inoriginal twenty-seven Local Partnerships ~~during the period that the subsidy agreements are in existence without HUD’s approval~~. ~~Furthermore, there may not be market demand for apartments at full market rents when the rental assistance contracts expire.~~

Segments

The Partnership ~~operates~~operated in one segment, which iswas the investment in multi-family residential properties. Financial information about this segment is set forth in Item 8 hereto.

Sale of Properties

~~The Partnership~~As ~~is currently in the process~~ of ~~disposing of its~~ ~~investments. During the fiscal year ended~~ March 31, ~~2008~~2009, the ~~property~~ ~~and~~Partnership ~~the~~has ~~related~~disposed ~~assets~~of ~~and~~all ~~liabilities~~twenty-seven of ~~one~~its ~~Local Partnership and the~~original ~~limited partnership interest in two Local Partnerships were sold~~investments. ~~As of~~During ~~March 31, 2008,~~ the ~~property~~fourth ~~and~~fiscal ~~the~~quarter ~~related~~ending ~~assets and liabilities of fourteen Local Partnerships and the limited partnership interest in eight Local Partnerships were sold. In addition, as of~~ March 31, ~~2008~~2009, ~~one Local~~ ~~Partnership has entered into an agreement to sell its property and~~ the ~~related assets and liabilities, which was subsequently sold (see Note 14 in Item 8). There can be no assurance as to when the~~ Partnership ~~will~~commenced ~~dispose of its remaining investments or~~ the ~~amount~~process of ~~proceeds~~winding ~~which~~down ~~may be~~its ~~received~~operations. However, based on the historical operating results of the Local Partnerships and the current economic conditions, including changes in tax laws, it is unlikely that the proceeds from such sales received by the Partnership will be sufficient to return to the limited partners their original investment.

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 resulted in a gain of approximately $798,000, resulting from the write-off of the deficit basis in property at the date of sale.

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 consisted 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 $8,547,000 resulting from the write-off of the deficit basis in the Local Partnership of approximately $8,474,000 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 consisted 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 $7,555,000 resulting from the write-off of the deficit basis in the Local Partnership of approximately $7,403,000 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 $110,000 resulting from the write-off of the basis in the Local Partnership of approximately $198,000 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 $168,000 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.

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 June 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.

- 3 -

On ~~December~~ 19April 20, ~~2006~~2007, the property and the related assets and liabilities of ~~West 107th~~Whittier ~~Street~~Plaza Associates, L.P. (“~~West 107th Street~~Whittier”) were sold to an unaffiliated third party purchaser for a sales price of $~~200~~1,~~000~~444, ~~which was used to pay closing costs and other liabilities~~500. ~~During~~The ~~the~~Partnership ~~quarter~~received ~~ended December 31~~$162,800 ~~2006 and prior to~~as ~~the~~a ~~date~~distribution offrom ~~the~~this sale, inafter ~~accordance~~the ~~with~~repayment ~~Statement~~ of ~~Financial Accounting Standards No. 144~~mortgages, ~~“Accounting for the Impairment or Disposal of Long-Lived~~other ~~Asset”~~liabilities ~~(“SFAS No. 144”), the Partnership deemed the building impaired~~ and ~~wrote it~~closing ~~down~~costs toof ~~its~~approximately ~~fair value which resulted in a loss on impairment of~~ $1,~~500~~282,000. The sale resulted in a ~~loss~~gain of approximately $~~319~~1,053,000 resulting from the write-off of the deficit basis in the property at the date of the sale, which was ~~recorded~~ recognized during the quarter ended ~~December~~September 3130, ~~2006. An~~ ~~adjustment~~2007 toand ~~the~~a ~~loss~~forgiveness of ~~approximately $(104,000) and~~indebtedness ~~$33,000~~income ~~was~~resulting ~~recorded~~from ~~during~~ the ~~quarters~~forgiveness ~~ended~~of ~~March~~one ~~31,~~of ~~2007~~Whittier’s ~~and~~mortgage ~~March~~notes ~~31, 2008, respectively, resulting~~ in anthe amount ~~overall loss~~ of ~~approximately~~ $~~248~~568,000~~. The~~ ~~sale~~at ~~also~~the ~~resulted~~time inof asale. An ~~net~~adjustment ~~non-cash contribution~~ to the ~~Partnership~~gain of approximately $~~265~~(382,000) aswas arecorded ~~result~~during of the ~~write-off~~quarter ~~of advances~~ended ~~owed~~March by31, ~~West 107th Street~~2008, toresulting in an ~~affiliate~~overall gain of ~~the~~approximately ~~General Partner~~$671,000.

On December 19, 2006, the property and the related assets and liabilities of General Atlantic Second Avenue Associates, L.P. (“96th Street”) were sold to an unaffiliated third party purchaser for a sales price of $25,000, which was used to pay closing costs and other liabilities. During the quarter ended September 30, 2006, in accordance with SFAS No. 144, the Partnership deemed the building impaired and wrote it down to its fair value which resulted in a loss on impairment of $1,160,000. The sale resulted in a loss of approximately $238,000 resulting from the write-off of the basis in the property at the date of the sale, which was recorded during the quarter ended December 31, 2006. An adjustment to the loss of approximately $(38,000) was recorded during the quarter ended March 31, 2007, resulting in an overall loss of approximately $200,000. The sale also resulted in a non-cash contribution to the Partnership of approximately $597,000 as a result of the write-off of advances owed by 96th Street to an affiliate of the General Partner.

On December 12, 2006, the property and the related assets and liabilities of Spring Creek Associates II, L.P. (“Spring Creek") were sold to an unaffiliated third party purchaser for a sales price of $16,950,000 including a note receivable in the amount of $2,500,000. The Partnership received $12,280,115, as a distribution from this sale after the repayment of other liabilities and closing costs of approximately $2,170,000. During the quarter ended March 31, 2006, in accordance with SFAS No. 144, the Partnership deemed the building impaired and wrote it down to its fair value which resulted in a loss on impairment of $5,225,000. The sale resulted in a loss of approximately $1,606,000 resulting from the write-off of the basis in the property at the date of the sale, which was recorded during the quarter ended December 31, 2006. During the year ended March 31, 2007, the sale also resulted in a net non-cash distribution to the Partnership of approximately $1,176,000 as a result of the write-off of loans owed to Spring Creek from an affiliate of the General Partner. Adjustments to the loss of approximately $(1,751,000) and $326,000 were recorded during the years ended March 31, 2007 and March 31, 2008, respectively, resulting in an overall loss of approximately $2,681,000. In addition, during the year ended March 31, 2008, the $2,500,000 note receivable was written-off due to non-collectability.

On October 25, 2006, the Partnership’s limited partnership interest in Rolling Green Limited Partnership (“Rolling Green”) was sold to the Local General Partner for a sales price of $399,990. The Partnership received $399,990 as a distribution from the sale. The sale resulted in a gain of approximately $1,540,000, resulting from the write-off of the deficit basis in the property at the date of sale.

On August 1, 2006, the Partnership’s limited partnership interest in Metropolitan Towers Associates, L.P. (“Metropolitan”) was sold to the Local General Partner for a sales price of $892,490. The Partnership received proceeds of $42,490 and the remaining $850,000 is to be paid in guaranteed payments payable on certain dates through December 31, 2008, which is included in other assets at March 31, 2007. The sale resulted in a gain of approximately $1,155,000 as a result of the write-off of the deficit basis in the property of approximately $262,000 at the date of the sale and the $892,490 cash and guaranteed payments receivable from the sale, which was recognized on the Partnership’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2006. An adjustment to the gain of approximately $22,000 and $(31,000) was recorded during the quarters ended March 31, 2007 and March 31, 2008, respectively, resulting in an overall gain of approximately $1,102,000.

On July 6, 2006, the property and the related assets and liabilities of 235 East 14th Street Associates, L.P. (“14th Street”) were sold to an unaffiliated third party purchaser for a sales price of $75,758, which was used to pay closing costs and other liabilities. During the quarter ended June 30, 2006, in accordance with SFAS No. 144, the Partnership deemed the building impaired and wrote it down to its fair value which resulted in a loss on impairment of $880,000. The sale resulted in a loss of approximately $614,000 resulting from the write-off of the basis in the property at the date of the sale. An adjustment to the loss of approximately $350,000 was recorded during the quarter ended March 31, 2007, resulting an overall loss of approximately $964,000. The sale also resulted in a net non-cash contribution to the Partnership of approximately $539,000 as a result of the write-off of advances owed by 14th Street to an affiliate of the General Partner.

On June 5, 2006, the property and the related assets and liabilities of Willoughby/Wyckoff Housing Associates, L.P. ("Willoughby") were sold to an unaffiliated third party purchaser for a sales price of $4,800,000. There was no distribution from this sale after the repayment of mortgages, other liabilities and closing costs of approximately $4,800,000. The sale resulted in a gain of approximately $2,033,000 resulting from the write-off of the deficit basis in the property at the date of the sale.

On May 1, 2006, the property and the related assets and liabilities of 2051 Grand Concourse Housing Associates, L.P. ("Grand Concourse") were sold to an unaffiliated third party purchaser for a sales price of $4,937,500. The Partnership received $200,066 as a distribution from this sale after the repayment of mortgages, other liabilities, distributions to minority interests and closing costs of approximately $4,737,000. The sale resulted in a gain of approximately $2,491,000 resulting from the write-off of the deficit basis in the property at the date of the sale. An adjustment to the gain of approximately $(5,000) was recorded during the quarter ended March 31, 2008, resulting in an overall gain of approximately $2,487,000.

On May 1, 2006, the property and the related assets and liabilities of Concourse Artists Housing Associates, L.P. ("Concourse Artists") were sold to an unaffiliated third party purchaser for a sales price of $1,797,500. The Partnership received $66,147 as a distribution from this sale after the repayment of mortgages, other liabilities, distributions to minority interests and closing costs of approximately $1,731,000. The sale resulted in a gain of approximately $704,000 resulting from the write-off of the deficit basis in the property at the date of the sale.

On May 1, 2006, the property and the related assets and liabilities of Robin Housing Associates, L.P. ("Robin Housing") were sold to an unaffiliated third party purchaser for a sales price of $7,265,000. The Partnership received $443,807 as a distribution from this sale after the repayment of mortgages, other liabilities, distributions to minority interests and closing costs of approximately $6,821,000. The sale resulted in a gain of approximately $3,339,000 resulting from the write-off of the deficit basis in the property at the date of the sale. An adjustment to the gain of approximately $(24,000) was recorded during the quarter ended March 31, 2008, resulting in an overall gain of approximately $3,315,000.

- 4 -

On January 17, 2006, the remaining 80% of the Partnership’s remaining 80% of its limited partnership interest in Santa Juanita II Limited Partnership (“Santa Juanita”) was sold to the Local General Partner for a purchase sales price of $375,000 cash plus 50% of the amount, if any, by which the aggregate sales price for the apartment units exceeds the actual conversion cost, as defined in the transfer agreement, from the Local General Partner’s conversion of the property to condominium ownership, resulting in a Local General Partner distribution of approximately $881,000. The Partnership received proceeds of $375,000 from this sale. The sale resulted in a loss of approximately $907,000 resulting from the write-off of the basis in the property of approximately $1,282,000 and the $375,000 cash received from the sale.

On October 20, 2005, the Partnership’s limited partnership interest in Gramco Development Limited Dividend Partnership, L.P. (“Bayamon”) was sold to the Local General Partner and one of its affiliates for a sale price of $3,000,000. The Partnership received proceeds of $3,000,000 from this sale. The sale resulted in a gain of approximately $2,728,000 resulting from the write-off of the basis in the property of approximately $272,000 and the $3,000,000 cash received from the sale.

On July 27, 2005, the property and the related assets and liabilities of Penn Alto Associates, L.P. (“Penn Alto”) were sold to an unaffiliated third party purchaser for $1,625,000, which was used for the repayment of mortgages, other liabilities and closing costs. During the quarter ended September 30, 2005, in accordance with SFAS No. 144, the Partnership deemed the building impaired and wrote it down to its fair value, which resulted in a loss on impairment of $850,000. The sale resulted in a gain of approximately $50,000, resulting from the write-off of the basis in the property which was recognized during the quarter ended December 31, 2005. An adjustment to the gain of approximately $(190,000) was recorded during the quarter ended March 31, 2006, resulting in overall loss of approximately $140,000. The sale resulted in the liquidation of Penn Alto.

On July 15, 2005, the Partnership sold 20% of its limited partnership interest in Santa Juanita to the Local General Partner for $100,000. The sale resulted in a gain of $100,000 which was recognized during the quarter ended September 30, 2005. The remaining 80% of limited partnership interest was sold on January 17, 2006 (see above for discussion).

On May 11, 2005, the Partnership’s limited partnership interest in Upper Fifth Avenue Residential Associates, L.P. (“Upper Fifth”) was sold to the Local General Partner for a sales price of $10. The sale resulted in a gain of approximately $5,192,000 which was recognized during the quarter ended December 31, 2005. An additional gain of approximately $120,000 was recorded during the quarter ended March 31, 2006, resulting in a total gain of approximately $5,312,000, resulting from the write-off of the deficit basis in the property. An adjustment to the gain of approximately $(20,000) was recorded during the quarter ended March 31, 2007, resulting in an overall gain of approximately $5,292,000.

Asset Held for Sale

Williamsburg is currently subject to a foreclosure action by the mortgage lender. 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 will require 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. In light of the pending foreclosure, Williamsburg is being held as an asset held for sale as of March 31, 2008. As of December 31, 2007, Williamsburg had property and equipment, at cost, of approximately $2,778,000, accumulated depreciation of approximately $1,211,000 and mortgage debt of approximately $1,804,000. Williamsburg was subsequently sold on May 9, 2008 (see Note 14 in Item 8).

Competition

The real estate business is highly competitive and substantially all of the Properties acquired by the Partnership ~~are~~were subject to competition from similar properties in their respective vicinities. ~~In addition, various other limited partnerships may, in the future, be formed by the General Partners and/or their affiliates to engage in business which may compete with the Partnership.~~

Employees

The Partnership does not have any direct employees. All services are performed for the Partnership by its General Partners and their affiliates. The General Partners receive compensation in connection with such activities as set forth in Items 11 and 13. In addition, the Partnership reimburses the General Partners and certain of their affiliates for expenses incurred in connection with the performance by their employees of services for the Partnership in accordance with the Partnership’s Amended and Restated Agreement of Limited Partnership (the “Partnership Agreement”).

Item 1A. Risk Factors

The Partnership iswas subject to risks incident to potential losses arising from the management and ownership of improved real estate. The Partnership can also be affected by poor economic conditions generally, however no more than 40% of the Properties are located in any single state. There are also substantial risks associated with owning properties receiving government assistance; for example, the possibility that Congress may not appropriate funds to enable HUD to make rental assistance payments. HUD also restricts annual cash distributions to partners based on operating results and a percentage of the owners’ equity contribution. As of March 31, ~~2008~~ 2009, ~~there~~the ~~were four Local Partnerships subsidized by HUD. The~~ Partnership ~~cannot~~has ~~sell~~disposed ~~or substantially~~of ~~liquidate~~all of its investments in subsidiary partnerships ~~during~~(see ~~the period~~Note ~~that~~10 ~~the subsidy agreements are~~ in ~~existence~~Item ~~without HUD’s approval~~8). ~~Furthermore, there may not be market demand for apartments at full market rents when the rental assistance contract expires.~~

Item 1B. Unresolved Staff Comments

None

- 54 -

Item 2. Properties

The Partnership had originally acquired an interest as a limited partner in twenty-seven Local Partnerships. As ~~During the fiscal year ended March 31, 2008, the property and the related assets and liabilities~~ of ~~one Local Partnership and the limited partnership interest in two Local Partnerships were sold. Through the fiscal year ended~~ March 31, ~~2008~~2009, the ~~property and the related assets and~~ ~~liabilities of fourteen Local Partnerships and the limited partnership interest in eight Local Partnerships were sold. In addition, as of March 31, 2008, one Local~~ Partnership has ~~entered~~disposed ~~into~~of anall ~~agreement~~of ~~to sell~~ its ~~properties and~~twenty-seven ~~the related assets and liabilities~~Local Partnerships. Set forth below is a schedule of these Local Partnerships including certain information concerning the Apartment Complexes (the “Local Partnership Schedule”). Further information concerning these Local Partnerships and their Properties, including any encumbrances affecting the Properties, may be found in Item 15, Schedule III.

Except for the one Local Partnership listed below, the following is the allocation of ownership percentage as of March 31, 2008 for each of the five remaining Local Partnerships:

Local General Partner	1	%
Special Limited Partner	1	%
Limited Partner - Liberty Tax Credit Plus II L.P.	98	%

	Local General Partner(s)			Special Limited Partner			Liberty Tax Credit Plus II L.P.			Other Limited Partners*
United Glen Arden I		1	%		1	%		73.52	%		24.48	%
* Each is an affiliate of the Partnership with the same management.

Local Partnership Schedule

Name and Location (Number of Units)

Date Acquired

% of Units Occupied at May 1,

2008

2007

2006

2005

2004

Name and Location (Number of Units)

Date Acquired

2009

2008

2007

2006

2005

Polynesian Apartments Associates, Ltd. (a Limited Partnership)

Homestead, FL (84)

July 1988

(b)

Seagrape Village Associates, Ltd. (a Limited Partnership)

Homestead, FL (112)

July 1988

(b)

Metropolitan Towers Associates, L.P.

Rio Piedras, PR (150)

December 1988

(h)

91(h)

9891

9698

Westminster Place II - Olive Site, L.P.

St. Louis, MO (84)

October 1988

99(l)

9899

7698

9876

Property Development Associates, L.P.

Kansas City, MO (232)

December 1988

(c)

82(c)

Whittier Plaza Associates Limited Partnership

St. Louis, MO (27)

December 1988

(i)

81(i)

9581

8995

~~100~~89

United-Glen Arden I Limited Partnership

Glen Arden, MD (354)

December 1988

83(l)

9183

9791

9497

9594

United-Glen Arden II Limited Partnership

Glen Arden, MD (238)

December 1988

89(l)

9789

9997

9699

9996

Rolling Green Limited Partnership

Chicago, IL (224)

December 1988

(h)

99(h)

9399

9993

Santa Juanita II Limited Partnership

Bayamon, PR (46)

December 1988

(f)

91(f)

9691

Spring Creek Associates, L.P. (a Delaware Limited Partnership)

Brooklyn, NY (582)

December 1988

(g)

98(g)

~~100~~98

East Two Thirty-Five Associates (a Delaware Limited Partnership)

New York, NY (17)

December 1988

(g)

94(g)

Upper Fifth Avenue Residential Associates, L.P.

New York, NY (151)

January 1989

(f)

94(f)

9894

West 107th Street Associates, L.P. (a Delaware Limited Partnership)

New York, NY (25)

January 1989

(g)

~~100~~(g)

100

General Atlantic Second Avenue Associates, L.P. (a Delaware Limited Partnership)

New York, NY (18)

January 1989

(g)

~~100~~(g)

100

94100

Church Lane Associates

Germantown, PA (40)

February 1989

(j)

~~100~~(j)

98100

~~100~~98

98100

Campeche Isle Apartments Limited Partnership

Galveston, TX (208)

May 1989

(a)

Robin Housing Associates (a Limited Partnership)

Bronx, NY (100)

November 1988

(g)

100

Concourse Artists Housing Associates (a Limited Partnership)

Bronx, NY (23)

November 1988

(g)

100

2051 Grand Concourse Housing Associates (a Limited Partnership)

Bronx, NY (63)

November 1988

(g)

Willoughby-Wyckoff Housing Associates (a Limited Partnership)

Brooklyn, NY (68)

November 1988

(g)

Goodfellow Place Limited Partnership

St. Louis, MO (71)

May 1989

(k)

Penn Alto Associates Limited Partnership

Altoona, PA (150)

June 1989

(e)

Gramco Development Limited Dividend Partnership, L.P.

Bayamon, PR (300)

July 1989

(f)

- 65 -

Local Partnership Schedule

(continued)

% of Units Occupied at May 1,

Name and Location (Number of Unites)

Date Acquired

2008

2007

2006

2005

2004

Name and Location (Number of Units)

Date Acquired

2009

2008

2007

2006

2005

Campeche Isle Apartments Limited Partnership

Galveston, TX (208)

May 1989

(a)

Robin Housing Associates (a Limited Partnership)

Bronx, NY (100)

November 1988

(g)

100

Concourse Artists Housing Associates (a Limited Partnership)

Bronx, NY (23)

November 1988

(g)

100

2051 Grand Concourse Housing Associates (a Limited Partnership)

Bronx, NY (63)

November 1988

(g)

Willoughby-Wyckoff Housing Associates (a Limited Partnership)

Brooklyn, NY (68)

November 1988

(g)

Goodfellow Place Limited Partnership

St. Louis, MO (71)

May 1989

Penn Alto Associates Limited Partnership

Altoona, PA (150)

June 1989

(e)

Gramco Development Limited Dividend Partnership, L.P.

Bayamon, PR (300)

July 1989

(f)

Alexis Park Apartments A Louisiana Partnership in Commendam

Bossier City, LA (280)

July 1989

(d)

Williamsburg Residential, L.P.

Wichita, KS (76)

August 1989

(k)

Victory Apartments

Chicago, IL (107)

September 1989

(j)

100

(a)The property and the related assets and liabilities were sold during the fiscal year ended March 31, 2002 (see Item 7 below). (b)The property and the related assets and liabilities were sold during the fiscal year ended March 31, 2004 (see Item 7 below). (c)The property and the related assets and liabilities were sold during the fiscal year ended March 31, 2005 (see Item 7 below). (d)The limited partnership interest was sold during the fiscal year ended March 31, 2005 (see Item 7 below). (e)The property and the related assets and liabilities were sold during the fiscal year ended March 31, 2006 (see Item 7 below). (f)The limited partnership interest was sold during the fiscal year ended March 31, 2006 (see Item 7 below). (g)The property and the related assets and liabilities were sold during the fiscal year ended March 31, 2007 (see Item 7 below). (h)The limited partnership interest was sold during the fiscal year ended March 31, 2007 (see Item 7 below). (i)The property and the related assets and liabilities were sold during the fiscal year ended March 31, 2008 (see Item 7 below). (j)The limited partnership interest was sold during the fiscal year ended March 31, 2008 (see Item 7 below). (k)The property and the related assets and liabilities were subsequently sold (see Note 14 in Item 8).

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

Alexis Park Apartments A Louisiana Partnership in Commendam

Bossier City, LA (280)

July 1989

(d)

Williamsburg Residential, L.P.

Wichita, KS (76)

August 1989

(k)

Victory Apartments

Chicago, IL (107)

September 1989

(j)

100

(a) The property and the related assets and liabilities were sold during the fiscal year ended March 31, 2002 (see Item 7 below).

(b) The property and the related assets and liabilities were sold during the fiscal year ended March 31, 2004 (see Item 7 below).

(c) The property and the related assets and liabilities were sold during the fiscal year ended March 31, 2005 (see Item 7 below).

(d) The limited partnership interest was sold during the fiscal year ended March 31, 2005 (see Item 7 below).

(e) The property and the related assets and liabilities were sold during the fiscal year ended March 31, 2006 (see Item 7 below).

(f) The limited partnership interest was sold during the fiscal year ended March 31, 2006 (see Item 7 below).

(g) The property and the related assets and liabilities were sold during the fiscal year ended March 31, 2007 (see Item 7 below).

(h) The limited partnership interest was sold during the fiscal year ended March 31, 2007 (see Item 7 below).

(i) The property and the related assets and liabilities were sold during the fiscal year ended March 31, 2008 (see Item 7 below).

(j) The limited partnership interest was sold during the fiscal year ended March 31, 2008 (see Item 7 below).

(k) The property and the related assets and liabilities were sold during the fiscal year ended March 31, 2009 (see Item 7 below).

(l) The limited partnership interest was sold during the fiscal year ended March 31, 2009 (see Item 7 below).

~~Rents~~All ~~from~~leases ~~commercial~~were ~~tenants~~generally ~~(to which average rental per square foot applies) comprise less than 5% of the rental revenues of the Partnership. Maximum rents~~ for ~~the~~periods ~~residential~~not ~~units~~exceeding ~~are~~one ~~determined~~to ~~annually~~two byyears ~~HUD~~ and ~~reflect increases/decreases~~no ~~in consumer price indices in various geographic areas.~~tenant ~~Market~~occupied ~~conditions,~~more ~~however,~~than ~~determine~~10% of the ~~amount~~rentable ofsquare ~~rent actually charged~~footage.

~~Management~~Rents ~~periodically~~from ~~reviews~~commercial ~~the~~tenants ~~physical~~(to ~~state~~which average rental per square foot applies) comprised less than 5% of the ~~Properties~~rental ~~and~~revenues ~~suggests~~of to the Partnership. Maximum rents ~~respective~~for ~~Local~~the ~~General~~residential ~~Partners~~units ~~budget~~were ~~improvements,~~determined ~~which~~annually ~~are~~by ~~generally~~HUD and reflected ~~funded~~increases/decreases ~~from~~in ~~cash~~consumer ~~flow~~price ~~from~~indices ~~operations~~in orvarious ~~release~~geographic ofareas. Market ~~replacement~~conditions, ~~reserve~~however, ~~escrows to~~determined the ~~extent~~amount ~~available~~of rent actually charged.

Management periodically ~~reviews~~reviewed the ~~insurance~~physical ~~coverage~~state of the Properties and ~~subject~~suggested to ~~budget~~ ~~constraints recommends to~~ the respective Local General Partners budget improvements, which were generally ~~additional~~funded ~~coverage~~from ifcash ~~warranted.~~flow ~~Management~~from ~~believes~~operations ~~that~~or ~~coverage~~release isof ~~presently~~replacement reserve escrows ~~adequate~~to the extent available.

Management periodically reviewed the insurance coverage of the Properties and subjected to budget constraints recommended to the respective Local General Partners additional coverage if warranted. Management believed that coverage was presently adequate.

See Item 1, Business, above for the general competitive conditions to which the Local Partnerships and the Properties described above are subject.

Real estate taxes ~~are~~were calculated using rates and assessed valuations determined by the township or city in which the property iswas located. Such taxes ~~have~~had approximated 1% of the aggregate cost of the Properties as shown in Schedule III to the financial statements included herein.

- 7 -

Item 3. Legal Proceedings

None

Item 4. Submission of Matters to a Vote of Stockholders

None

- 86 -

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The Partnership had issued and has outstanding 115,917.5 Limited Partnership Interests, each representing a $1,000 capital contribution to the Partnership, or an aggregate capital contribution of $115,917,500. All of the issued and outstanding Limited Partnership Interests have been issued to Liberty Credit Assignor Inc. (the “Assignor Limited Partner”), which has in turn issued 115,917.5 BACs to the purchasers thereof for an aggregate purchase price of $115,917,500. Each BAC represents all of the economic and virtually all of the ownership rights attributable to a Limited Partnership Interest held by the Assignor Limited Partner. BACs may be converted into Limited Partnership Interests at no cost to the holder (other than payment of transfer costs not to exceed $100), but Limited Partnership Interests so acquired are not thereafter convertible into BACs.

Neither the BACs nor the Limited Partnership Interests are traded on any established public trading market. Because of the provisions of the Revenue Act of 1987, unless there are further changes in such law, the Partnership does not intend to include the BACs for quotation on NASDAQ or for listing on any national or regional stock exchange or any other established securities market. The Revenue Act of 1987 contained provisions which have an adverse impact on investors in “publicly traded partnerships.” Accordingly, the General Partners have imposed limited restrictions on the transferability of the BACs and the Limited Partnership Interests in secondary market transactions. Implementation of these restrictions should prevent a public trading market from developing and may adversely affect the ability of an investor to liquidate his or her investment quickly. It is expected that such procedures will remain in effect until such time, if ever, as further revision of the Revenue Act of 1987 may permit the Partnership to lessen the scope of the restrictions.

As of May 28, ~~2008~~2009, the Partnership had 7,~~583~~556 registered holders of an aggregate of 115,917.5 BACs.

All of the Partnership’s general partnership interests, representing an aggregate capital contribution of $2,000, are held by the three General Partners.

There are no material provisions in the Partnership Agreement that restrict the ability of the Partnership to make distributions. During the year ended March 31, ~~2008~~2009, distributions from sales proceeds were made to the BACs holders of approximately $1,~~019~~816,000 and to the General Partners of approximately $1018,000. Through the fiscal year ended March 31, ~~2008~~2009, distributions from sales proceeds were made to the BACs holders of approximately $911,~~945~~761,000 and to the General Partners of approximately $~~100~~119,000. The Partnership does not anticipate providing cash distributions to BACs holders other than distributions of sale or refinancing proceeds upon the disposition of Properties. The Partnership does not anticipate being able to make distributions sufficient to return to BACs holders their original capital contributions.

Transfer Procedures

The Partnership from time to time receives requests by unit holders and others to transfer BACs and/or limited partnership interests. Such requests may occur in connection with tender offers for the Partnership’s units. Such requests implicate the Partnership’s policies and procedures concerning transfers generally and tender offers in particular, which were adopted by the Partnership pursuant to the terms of its Partnership Agreement, to ensure compliance with applicable law, avoid adverse tax consequences for the Partnership and its investors, and preserve the Partnership’s advantageous tax status.

In prior years, the Partnership relied on the 5% safe harbor established by Internal Revenue Service (“IRS”) regulations to avoid being characterized as a “publicly-traded partnership” that is taxed as a corporation. The 5% safe harbor, however, expired and is no longer available as of December 31, 2005. Accordingly, the Partnership now relies on a 2% safe harbor established by another IRS regulation to avoid being characterized as a “publicly-traded partnership” that is taxed as a corporation.

A brief summary of certain of the Partnership’s key policies, practices and requirements with respect to transfers and tender offers is as follows:

·	No transfer (whether for substitution, assignment or otherwise) is effective or binding on the Partnership unless and until it is approved by the General Partners.

No transfer will be approved unless the transferor and transferee submit complete and properly executed forms of the Partnership’s own transfer documentation. The Partnership does not accept forms of transfer documentation other than its own and does not accept signatures made by power of attorney in lieu of original signatures by each of the transferors and transferees.

The Partnership will not approve transfers that in the cumulative aggregate for any tax year exceed the IRS 2% safe harbor, unless a financially responsible person provides the Partnership and its partners with (i) an indemnity (in form and substance in all ways acceptable to the General Partners) for all liability (including, without limitation, any adverse tax consequences) arising from or relating to exceeding the 2% safe harbor and (ii) a legal opinion (in form and substance in all ways acceptable to the General Partners) that there will be no adverse tax consequences to the Partnership and its partners from exceeding the 2% safe harbor.

In order to avoid the undesirable situation of one or more tender offers consuming the entire safe harbor limitation early in the tax year and leaving the Partnership’s remaining investors with no liquidity opportunity for the rest of that tax year, the Partnership restricts the cumulative aggregate total of transfers made pursuant to all tender offers to 1.5% of its outstanding units in each tax year, unless a financially responsible person conducting such tender offer provides the Partnership with an acceptable indemnity and legal opinion of the type described above. At the end of each tax year, the General Partners, in their discretion, may allow the cumulative total number of transfers (including those by tender offer) to reach the 2% safe harbor limit.

·	The Partnership requires that all tender offers for its units be conducted in accordance with all applicable law including, without limitation, the federal securities laws.

The foregoing is solely a summary of the Partnership’s policies, requirements and practices with respect to transfers and tender offers. More complete information, including a copy of the Partnership’s transfer documentation package, may be obtained from the Partnership.

- 97 -

Item 6. Selected Financial Data

The information set forth below presents selected financial data of the Partnership. Additional financial information is set forth in the audited financial statements in Item 8 hereof.

OPERATIONS	Years Ended March 31,
	2008			2007*			2006*			2005*			2004*
Revenues	$	6,429,598		$	6,529,912		$	6,244,592		$	6,208,935		$	6,056,656
Operating expenses		(9,561,730	)		(9,343,960	)		(9,973,269	)		(9,076,933	)		(9,744,338	)
Loss from operations		(3,132,132	)		(2,814,048	)		(3,728,677	)		(2,867,998	)		(3,687,682	)
(Loss) income from discontinued operations including gain (loss) on sale and minority interest		(1,821,617	)		(3,027,022	)		(3,027,106	)		(1,755,825	)		(3,782,320	)
Net loss	$	(4,953,749	)	$	(5,841,070	)	$	(701,571	)	$	(4,623,823	)	$	(7,470,002	)
Per unit amounts:
Loss from operations per BAC	$	(26.75	)	$	(24.04	)	$	(31.84	)	$	(24.49	)	$	(31.50	)
(Loss) income from discontinued operations including gain (loss) on sale and minority interest per BAC		(15.56	)		(25.85	)		25.85			(15.00	)		(32.30	)
Net loss per BAC	$	(42.31	)	$	(49.89	)	$	(5.99	)	$	(39.49	)	$	(63.80	)
* Reclassified for comparative purposes.
FINANCIAL POSITION	March 31,
	2008			2007			2006			2005			2004
Total assets	$	24,772,187		$	40,927,054		$	84,456,842		$	121,633,650		$	138,055,440
Total liabilities	$	39,122,861		$	50,123,755		$	93,899,077		$	127,239,339		$	137,513,369
Minority interest	$	(8,094	)	$	(19,986	)	$	(2,573,125	)	$	561,850		$	2,123,287
Total partners’ (deficit) capital	$	(14,342,580	)	$	(9,176,715	)	$	(6,869,110	)	$	(6,167,539	)	$	(1,581,216	)

During the years ended March 31, 2003 through 2005, total assets and liabilities decreased primarily due to the sale of Local Partnerships. During the years ended March 31, 2007 and 2006, total assets and liabilities decreased due to the sale of Local Partnerships as well as losses on impairment of property and equipment. During the year ended March 31, 2008, total assets and liabilities decreased primarily due to the sale of Local Partnerships.

- 10 -

Item 7. 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. ~~During~~As ~~the~~of ~~fiscal year ended~~ March 31, ~~2008~~2009, the ~~property~~ ~~and the related assets and liabilities of one Local~~ Partnership ~~and~~has ~~the limited~~disposed ~~partnership interest in two Local Partnerships were sold. Through the year ended March 31, 2008, the properties and the related assets and liabilities~~ of ~~fourteen Local Partnerships and the limited~~ ~~partnership~~all ~~interest~~twenty-seven ~~in eight Local Partnerships were sold. In addition, as~~ of ~~March 31, 2008, one Local Partnership has entered into an agreement to sell~~ its ~~property~~original ~~and the related assets and liabilities, which was subsequently sold (see Note 14 in Item 8)~~investments. For a discussion of ~~these~~ these sales, see Sale of Properties (Item 8, Note 10).

Short-Term

During the year ended March 31, ~~2008~~2009, the Partnership’s primary sources of funds included: (i) working capital reserves; (ii) interest earned on the working capital reserves; (iii) ~~cash distributions from operations of the Local Partnerships; and (iv)~~ sales proceeds and distributions. Such funds are available to meet the obligations of the Partnership. The Partnership ~~does~~has not ~~anticipate~~made ~~providing~~and ~~cash~~will not make cash distributions to BACs holders in circumstances other than refinancing or sales. During the years ended March 31, ~~2008,~~2009 ~~2007~~ and ~~2006~~2008, cash distributions received from the Local Partnerships were approximately $0 and $2,928,000, ~~$12,993,000 and $246,000,~~ respectively, which included distributions from sales amounting to ~~approximately~~ approximately $0 and $2,928,000, ~~$12,990,000 and $0,~~ respectively. Additionally, during the years ended March 31, ~~2008,~~2009 ~~2007~~ and ~~2006~~2008, approximately $~~662~~760,000~~, $1,667,000~~ and $3662,~~100,~~000, respectively, of sales proceeds were received by the Partnership from the sale of partnership interest. The Partnership had a working capital of approximately $31,~~116~~111,000 on March 31, ~~2008~~ 2009.

~~The~~Certain ~~Partnership~~fees isand ~~not~~expense ~~expected~~reimbursements owed to ~~have~~the ~~access~~General toPartners ~~additional~~amounting ~~sources~~to approximately ~~of financing~~$4, 000 and in$1,264,000 ~~particular~~were ~~will~~accrued ~~not~~and ~~have~~unpaid ~~the~~as ~~ability~~of toMarch ~~access~~31, ~~BACs holders for~~2009 ~~additional~~and ~~capital~~2008, ~~contributions~~respectively. In toparticular, ~~provide~~partnership ~~capital~~management iffees owed ~~needed~~to by the ~~Partnership.~~ ~~There~~General ~~can~~Partners beamounting noto ~~assurance~~approximately ~~that~~$0 ~~additional~~and ~~funds~~$1,192,000 ~~will be available~~were toaccrued ~~the~~and ~~Partnership~~unpaid oras ~~any~~of ~~Local~~March ~~Partnership~~31, ~~nor~~2009 ~~that~~and 2008, respectively. During ifthe ~~any~~year ~~Property~~ended isMarch ~~sold~~31, ~~the~~ ~~proceeds~~2009 ofand 2008, the Partnership ~~sale~~deemed ~~will~~the beunpaid ~~sufficient~~partnership tomanagement ~~pay~~fees ~~outstanding~~that ~~balances~~were ~~due~~related onto ~~mortgage~~sold ~~loans~~properties oruncollectible ~~other~~and, ~~outstanding~~as ~~indebtedness~~a toresult, ~~which~~wrote them off in the ~~Property~~amount isof ~~subject. However~~approximately $1,127,000 ~~based~~and on$750,000, ~~the~~respectively, ~~historical~~resulting ~~operating~~in ~~results~~a ~~of the~~non-cash ~~Local~~General ~~Partnerships~~Partner ~~and~~contribution of the ~~current~~same ~~economic conditions~~amount. Furthermore, ~~including~~expense reimbursements ~~changes~~and inasset ~~tax laws,~~monitoring itfees isowed ~~unlikely~~to ~~that~~ the ~~proceeds~~General ~~from~~Partners ~~such~~amounting to ~~sales~~approximately ~~received~~$4,000 byand ~~the Partnership~~$72,000 ~~will~~were beaccrued ~~sufficient~~and tounpaid ~~return~~as toof ~~the~~March ~~limited~~31, ~~partners~~2009 and ~~their~~2008, ~~original investment~~respectively.

~~The~~During ~~General~~the ~~Partners~~year ~~believe~~ended ~~that~~March 31, 2009, cash ~~distributions~~and ~~received~~cash ~~from~~equivalents of the ~~operations~~Partnership ofand ~~the~~its consolidated Local Partnerships ~~are~~decreased ~~sufficient~~approximately $344,000. This decrease was due to ~~fund~~improvements ~~the~~to ~~Partnership’s~~property ~~ongoing~~and ~~operations~~equipment ~~for~~($269,000), ~~the~~costs ~~foreseeable~~paid ~~future~~relating to sale of properties (~~assuming~~$302,000), a decrease in capitalization of consolidated subsidiaries attributable to minority interests ($15,000), an increase in cash held in escrow relating to investing activities ($64,000) and repayments of mortgage notes ($2,062,000) , which exceeded net cash provided by operating activities ($42,000), proceeds from sales ($2,320,000) and an increase in due to selling partners ($6,000). In the ~~General~~adjustments ~~Partners~~to ~~continue~~reconcile the net income to net cash ~~defer~~provided ~~payment~~by operating activities are gain on sale of ~~their~~properties ~~management~~of ~~fees~~approximately ($17,271,000) and depreciation and amortization of approximately ($1,111,000).

~~Certain~~Total ~~fees~~expenses ~~and~~for ~~expense reimbursements owed to~~ the ~~General~~years ~~Partners~~ended ~~amounting to approximately $1,264,000 and $2,057,000 were accrued and unpaid as of~~ March 31, ~~2008~~ ~~and~~2009 ~~2007, respectively. In particular, partnership management fees owed to the General Partners amounting to approximately $1,192,000~~ and ~~$2,023,000~~ ~~were accrued and unpaid as of March 31,~~ 2008 ~~and 2007~~, ~~respectively. During~~ ~~the~~excluding ~~year~~general ~~ended March 31, 2008~~ and ~~2007, the~~ ~~Partnership~~administrative ~~deemed~~– ~~the unpaid partnership management fees that were~~ related ~~to sold properties uncollectible and~~parties, astotaled ~~a result, wrote them off in the amount of approximately~~ $~~750~~209,~~000~~284 and $12326,~~325~~840,~~000, respectively. Furthermore,~~ ~~expense reimbursements and asset monitoring fees owed to the General Partners amounting to approximately $72,000 and $33,000 were accrued and unpaid as of March 31, 2008 and 2007,~~ respectively. Without the General Partners’ continued accrual without payment of the partnership management fees, the Partnership will not be in the position to meet its obligations. The General Partners have allowed for the accrual without payment of the partnership management fees but are under no obligation to continue to do so.

~~During~~Accounts ~~the~~payable ~~year~~and ~~ended~~other ~~March~~liabilities ~~31,~~totaled ~~2008~~$114,129 ~~cash~~ and ~~cash~~$2,151,546, ~~equivalents~~as of ~~the~~March ~~Partnership~~31, 2009 and ~~its~~ ~~consolidated Local Partnerships decreased approximately $1~~2008,~~165,000~~ respectively. ~~This~~Accounts ~~decrease~~payable ~~was~~are ~~due~~short ~~to net cash used in operating~~term ~~activities~~liabilities ~~($868,000),~~which ~~improvements~~are expected to ~~property~~be ~~and~~paid ~~equipment~~from ~~($567,000),~~operating ~~a decrease in~~ cash ~~held in escrow ($5~~flows,~~000),~~ ~~repayments~~working capital ofbalances ~~mortgage~~at ~~notes ($1,488,000)~~the ~~and~~Local ~~distributions~~Partnership ~~($1~~level,~~019,000),~~ ~~which~~local ~~exceeded~~general ~~proceeds~~partner ~~from sales~~advances ~~($2,775,000)~~ and ~~an increase~~ in ~~due~~certain tocircumstances ~~selling~~advances ~~partners~~from ~~($8,000)~~the Partnership. InThe ~~the~~Partnership ~~adjustments~~believes toit ~~reconcile~~(and the ~~net~~applicable ~~loss~~Local toPartnerships) ~~net~~has ~~cash used in operating~~sufficient ~~activities~~liquidity ~~are~~and ~~loss~~ability onto ~~sale~~generate ofcash ~~properties~~and ofto ~~approximately~~meet ~~($2,152,000), depreciation~~existing and ~~amortization~~known ofor reasonably ~~approximately~~likely ~~($2,141,000)~~future ~~and~~cash arequirements ~~loss~~until ~~on impairment~~termination of ~~fixed assets of ($0)~~the Partnership.

~~Total~~Accrued ~~expenses~~interest ~~for~~payable ~~the~~as ~~years~~of ~~ended~~ March 31, ~~2008,~~2009 ~~2007~~ and ~~2006,~~2008 ~~excluding depreciation~~was $0 and ~~amortization~~$1,904,958, respectively. Accrued interest ~~and~~payable ~~general~~represented ~~and~~the ~~administrative~~accrued interest –on ~~related parties,~~all ~~totaled~~mortgage $5loans,~~420,620,~~ ~~$4,558,130~~which include primary and ~~$4,091,074,~~secondary ~~respectively~~loans.

~~Accounts~~For a ~~payable~~discussion ~~and other liabilities totaled $2,151,546 and $1,787,747, as~~ of ~~March~~contingencies ~~31, 2008~~that ~~and~~affected ~~2007,~~certain ~~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~~Partnerships, ~~local general partner advances~~see ~~and~~Results ~~in certain circumstances advances from the Partnership. Because the provisions~~ of ~~the~~Operations ~~secondary loans defer the payment~~ of ~~accrued~~Certain ~~interest of the respective~~ Local Partnerships, 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 over both the short and long termbelow.

Accrued interest payable as of March 31, 2008 and 2007 was $1,904,958 and $2,944,857, respectively. Accrued interest payable represents the accrued interest on all mortgage loans, which include primary and secondary loans. Certain secondary loans have provisions such that interest is accrued but not payable until a future date. The Partnership anticipates the payment of accrued interest on the secondary loans (which make up the majority of the accrued interest payable amount indicated in the above table and which have been accumulating since the Partnership’s investment in the respective Local Partnership) will be made from future refinancings or sales proceeds of the respective Local Partnerships. In addition, each Local Partnership’s mortgage notes are collateralized by the land and buildings of the respective Local Partnership, and are without further recourse to the Partnership.

Long-Term

For a discussion of contingencies affecting certain Local Partnerships, see Results of Operations of Certain Local Partnerships below. Since the maximum loss the Partnership would be liable for is its net investment in the respective Local Partnerships, the resolution of the existing contingencies are not anticipated to impact future results of operations, liquidity or financial condition in a material way and will not result in recapture of Tax Credits as the Compliance Periods for all the Properties have ended.

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Except as described above, management is not aware of any trends or events, commitments or uncertainties which have not otherwise been disclosed that will or are likely to impact liquidity in a material way. Management believes the only impact would be from laws that have not yet been adopted. The portfolio is diversified by the location of the Properties around the United States so that if one area of the country is experiencing downturns in the economy, the remaining Properties in the portfolio may be experiencing upswings. However, the geographic diversification of the portfolio may not protect against a general downturn in the national economy.

Sale of Underlying Properties/Local Partnership Interests

For a discussion of the sale of Properties in which the Partnership ~~owns~~owned direct and indirect interests, see Note 10 in Item 8.

Discontinued Operations

For a discussion of discontinued operations, see Note 13 in Item 8.

~~Tabular~~Off-Balance ~~Disclosure of~~Sheet ~~Contractual Obligations~~Arrangements

The following table summarizes the Partnership’s commitments from operations as of March 31, 2008 to make future payments under its debt agreements and other contractual obligations.

		Total			Less than 1 Year			1 – 3 Years			3 -5 Years			More than 5 Years
Mortgage notes payable (a)		$	25,744,882		$	5,079,738		$	863,843		$	985,966		$	18,815,335

(a) The mortgage notes are payable in aggregate monthly installments of approximately $127,000 including principal and interest at rates varying from 1% to 9% per annum, through 2032. Each subsidiary partnership’s mortgage note payable is collateralized by the land and buildings of the respective subsidiary partnership and the assignment of certain subsidiary partnership’s rents and leases and is without further recourse.

The following table summarizes the Partnership’s commitments from discontinued operations as of March 31, 2008 to make future payments under its debt agreements and other contractual obligations.

		Total			Less than 1 Year			1 – 3 Years			3 -5 Years			More than 5 Years
Mortgage notes payable (a)		$	1,803,564		$	1,803,564		$	0		$	0		$	0

(a) This mortgage note for Williamsburg Residential L.P. (“Williamsburg”) is payable in aggregate monthly installments of approximately $19,000 including principal and interest with a rate of 10.75% per annum and maturity date of 2007. 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 will require 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. See discussion below regarding Williamsburg.

Off Balance Sheet Arrangements

The Partnership has no off-balance sheet arrangements.

Critical Accounting Policies

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 in Item 8.

Basis of Accounting

On December 31, 2008, the Partnership sold its last remaining investment in subsidiary partnerships. The Partnership is in the process of winding down its operations. To fairly present the financial position of the Partnership, management has prepared the March 31, 2009 financial statements using the liquidation basis of accounting. The remaining assets were written down to their estimated net realizable value of approximately $2,513,000, and the remaining liabilities were written down to their estimated net settlement value of approximately $118,000. Management plans to distribute the remaining assets after all remaining expenses and accrued expenses have been settled. The accompanying financial statements for the year ended March 31, 2008 is presented on the accrual basis of accounting.

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Property and Equipment

Property and equipment to be held and used ~~are~~were carried at cost which ~~includes~~included 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 iswas depreciated over their estimated useful lives using accelerated and straight-line methods. Expenditures for repairs and maintenance ~~are~~were charged to expense as incurred; major renewals and betterments ~~are~~were capitalized. At the time property and equipment ~~are~~were retired or ~~otherwise~~ otherwise disposed of, the cost and accumulated depreciation ~~are~~were eliminated from the assets and accumulated depreciation accounts and the profit or loss on ~~such~~ such disposition iswas reflected in earnings. The Partnership ~~complies~~ complied with Statement of Financial Accounting Standards No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS No. 144”). A loss on impairment of assets is was recorded when management ~~estimates~~estimated amounts recoverable through future operations and sale of the Property on an undiscounted basis ~~are below~~were below depreciated cost. Property investments themselves ~~are~~were reduced to estimated fair value (generally using discounted cash flows) when the Property was is considered to be impaired and the depreciated cost ~~exceeds~~exceeded estimated fair value. During the year ended March 31, ~~2008~~2009, the Partnership ~~recorded~~did not $0record asany a loss on impairment of fixed assets. Through March 31, ~~2008,~~ 2009, the Partnership ~~has~~ recorded approximately $15,022,000 as a loss on impairment of fixed assets.

-In accordance 12with 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 in Item 8. 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. See Notes 10 and 12 in Item 8 regarding discontinued operations.

~~In accordance~~At ~~with SFAS No. 144,~~ the time ~~results~~management ofcommits ~~discontinued~~to ~~operations are reported as~~ a ~~separate~~plan ~~component~~to dispose of ~~income~~assets, ~~before~~said ~~extraordinary~~assets ~~items~~are onadjusted to the ~~Consolidated~~ ~~Statements~~lower of ~~Operations. Discontinued~~carrying ~~operations include~~amount ~~the~~or ~~results~~fair ofvalue ~~operations~~less ~~and~~costs ~~any~~to ~~gain~~sell. orSuch ~~loss recognized for Local~~assets ~~Partnerships~~would ~~that~~be ~~have~~classified ~~been~~as ~~disposed~~property ofand ~~or are~~ equipment-held for sale~~. A~~ ~~gain or~~and ~~loss recognized on the disposal is disclosed in the Notes in Item 8. Adjustments to amounts previously reported in operations that~~ are ~~directly~~ ~~related to the disposal of a Local Partnership are reclassified in the~~not ~~current period as discontinued operations for comparability purposes~~depreciated. ~~Assets~~As ~~and liabilities~~ of aMarch ~~Local Partnership that are classified as held for sale are presented separately in the asset and liability sections~~31, ~~respectively~~2009, of the ~~Consolidated~~Partnership ~~Balance~~has ~~Sheets. See~~sold ~~Note~~all 13twenty-seven inof ~~Item~~its 8remaining ~~regarding discontinued operations~~investments.

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. There is one asset classified as property and equipment-held for sale at March 31, 2008. See Notes 10 and 13 in Item 8 regarding assets held for sale and discontinued operations.

Revenue Recognition

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

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.

Other revenues from operations include the following amounts at ~~both~~ the Partnership ~~and Local Partnership~~ level:

Years Ended March 31,

2008

2007*

2006*

2009

2008*

Interest

~~201~~56,~~420~~908

$155,808

~~252,247~~

~~53,690~~

Other

~~127~~4,~~700~~150

10,233

~~132,406~~

~~102,865~~

Total other revenue

~~329~~61,~~120~~058

$166,041

~~384,653~~

~~156,555~~

* Reclassified for comparative purposes.

Other revenues from discontinued operations include the following amounts at both the Partnership and Local Partnership level:

Years Ended March 31,

2008

2007*

2006*

2009

2008*

Interest

2317,~~712~~074

$69,324

~~221,917~~

~~168,594~~

Other

~~136~~91,~~077~~972

253,544

~~498,543~~

~~726,596~~

Total other revenue

~~159~~109,~~789~~046

$322,868

~~720,460~~

~~895,190~~

* Reclassified for comparative purposes.

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.

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New Accounting Pronouncements

In ~~September~~ ~~2006~~April 2009, the Financial Accounting Standards Board (“FASB”) issued ~~SFAS~~FSP No. ~~157~~FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value ~~Measurements,~~of Financial ~~which~~Instruments”. This ~~established~~FSP aamends ~~framework~~FASB ~~for~~Statement ~~measuring~~No. ~~the~~107 to require disclosures about fair ~~value~~values of ~~assets~~financial ~~and~~instruments for interim reporting ~~liabilities~~periods as ~~required~~well byas ~~numerous~~in ~~other~~annual ~~accounting~~financial ~~pronouncements,~~statements. The ~~and~~FSP ~~expands~~also ~~disclosure~~amends ~~requirements~~APB ~~for~~Opinion ~~the~~No. ~~fair~~28 ~~values~~to ofrequire ~~certain~~those ~~assets~~disclosures ~~and~~in summarized financial ~~liabilities~~information at interim reporting periods. This ~~statement~~FSP isbecomes effective for ~~the~~interim ~~Partnership’s~~reporting ~~year~~periods ending after June 15, 2009, with early adoption permitted for periods ending after March 3115, 2009. The ~~provisions~~adoption of this ~~statement~~FSP ~~will~~is not expected to have a material impact on the Partnership’s consolidated financial statements.

In ~~February~~ ~~2007~~April 2009, the FASB issued ~~SFAS~~FSP NoNO. ~~159~~FAS 157-4, ~~The~~“Determining Fair Value ~~Option~~When ~~for~~the ~~Financial~~Volume ~~Assets~~and Level of Activity for the Asset or Liability Have Significantly Decreased and ~~Financial~~Identifying ~~Liabilities.~~Transactions That Are Not Orderly”. This ~~statement~~FSP ~~was~~provides additional ~~issued~~guidance ~~with~~on determining fair value when the volume and level of ~~intent~~activity tofor ~~provide~~the anasset ~~alternative~~or ~~measurement~~liability ~~treatment~~have ~~for~~significantly ~~certain~~decreased ~~financial~~when compared ~~assets~~with ~~and~~normal ~~liabilities~~market activity for the asset or liability. A ~~The~~significant decrease ~~alternative~~in ~~measurement~~the ~~would~~volume ~~permit~~or ~~fair~~level ~~value~~of toactivity for the asset of liability is an beindication ~~used~~that ~~for~~transactions ~~both~~or ~~initial~~quoted ~~and~~prices ~~subsequent~~may ~~measurement,~~not ~~with~~be ~~changes~~determinative inof fair ~~value~~ ~~recognized~~value inbecause ~~earning~~transactions asmay ~~those~~not ~~changes~~be ~~occur~~orderly. ~~This~~In ~~“Fair~~that ~~Value~~circumstance, ~~Option”~~further ~~would~~analysis beof ~~available~~transactions onor aquoted ~~contract~~prices byis ~~contract~~needed, ~~basis~~and an adjustment to the transactions or quoted prices may be necessary to estimate fair value. This ~~statement~~ isFSP becomes effective for ~~the~~interim ~~Partnerships’~~reporting ~~year~~periods ending after June 15, 2009, with early adoption permitted for periods ending after March 3115, 2009. The ~~provisions~~adoption of this ~~statement~~FSP ~~will~~is not expected to have a material impact on the Partnership’s consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, ~~Noncontrolling~~“Non-controlling Interests in Consolidated Financial Statements”. This statement was issued ~~with~~ with the intent to improve the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements for those entities that have outstanding ~~noncontrolling~~non-controlling interest in one or more subsidiaries. The effective date for this provision is for fiscal ~~year~~years ~~ends~~ beginning after December 15, 2008. The adoption ~~Partnership~~of isthis ~~currently~~FASB ~~evaluating~~is ~~the~~not ~~impact~~expected ofto ~~the provisions~~have ofa ~~this~~material ~~statement~~impact on the Partnership’s consolidated financial statements.

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Results of Operations

The ~~net~~ ~~loss~~Partnership ~~for~~has ~~the~~disposed ~~years~~of ~~ended~~all ~~March~~of ~~31,~~its ~~2008,~~remaining ~~2007 and 2006 (the 2007~~assets. Therefore, ~~2006 and 2005~~ ~~Fiscal~~all ~~Years,~~operations ~~respectively)~~have ~~totaled~~been ~~$(4,953,749), $(5,841,070) and $(701,571), respectively~~discontinued.

The majority of the Local Partnerships’ revenues continue to be in the form of rental income with the corresponding expenses divided among operations, depreciation and mortgage interest.

As of December 31, 2003 all the Local Partnerships had completed their Tax Credit Periods and the Partnership has met its primary objective of generating Tax Credits for qualified BACs holders. As of March 31, 2008, the Compliance Periods for all the Properties have ended.

The following is a summary of the results of operations of the Partnership for the 2007, 2006 and 2005 Fiscal Years, respectively, excluding the results of its discontinued operations which are not reflected in the following discussions (see Item 8, Note 13).

2007 vs. 2006

Rental income decreased approximately 1% for the 2007 Fiscal Year as compared to 2006 Fiscal Year, primarily due to a decrease in occupancy at one Local Partnership affected by two fires in 2006, partially offset by a decrease in vacancies and increase in rental rates at a second Local Partnership.

Other income decreased approximately $56,000 for the 2007 Fiscal Year as compared to 2006 Fiscal Year, primarily due to a decrease in interest income earned on sales proceeds being invested at the Partnership level, offset by an increase in interest earned on the replacement reserve account at one Local Partnership and an increase in tenants’ charges at a second Local Partnership.

Total expenses, excluding general and administrative, general and administrative-related parties, repairs and maintenance and operating, remained fairly consistent with an increase of 2% for the 2007 Fiscal Year as compared to 2006 Fiscal Year.

General and administrative expenses increased approximately $373,000 for the 2007 Fiscal Year as compared to 2006 Fiscal Year, primarily due to an increase in accounting and legal fees at the Partnership level, increases in office salaries, payroll taxes and health insurance, legal costs and license permits at one Local Partnership, an increase in bad debt expenses, management salaries, payroll taxes and licenses at a second Local Partnership and an increase in office salaries and payroll taxes at a third Local Partnership.

General and administrative-related parties expenses decreased approximately $733,000 for the 2007 Fiscal Year as compared to 2006 Fiscal Year, primarily due to a decrease in partnership management fees at the Partnership level resulting from the sale of properties partially offset by an increase in expense reimbursements at the Partnership level.

Repairs and maintenance expenses increased approximately $416,000 for the 2007 Fiscal Year as compared to the 2006 Fiscal Year, primarily due to increases in maintenance and repair contracts, including painting and decorating, and repairs relating to fire damage at one Local Partnership, increases in plumbing, janitorial and painting contracts, maintenance and other repairs at a second Local Partnership and an increase in carpet replacements at a third Local Partnership.

Operating expenses increased approximately $80,000 for the 2007 Fiscal Year as compared to 2006 Fiscal Year, primarily due to increases in electricity costs at two Local Partnerships.

2006 vs. 2005

Rental income increased approximately 1% for the 2006 Fiscal Year as compared to the 2005 Fiscal Year, primarily due to increases in rental rates and a decrease in vacancy at one Local Partnership partially offset by a decrease in occupancy at a second Local Partnership.

Other income increased approximately $228,000 for the 2006 Fiscal Year as compared to the 2005 Fiscal Year, primarily due to an increase in interest income at the Partnership level resulting from the increase in proceeds from the sale of properties.

Total expenses, excluding general and administrative and general and administrative-related parties, remained fairly consistent with a decrease of approximately 1% for the 2006 Fiscal Year as compared to the 2005 Fiscal Year. For the year ended March 31, 2007, the Partnership recorded $3,540,000 as a loss on impairment of fixed assets.

General and administrative expenses decreased approximately $156,000 for the 2006 Fiscal Year as compared to the 2005 Fiscal Year primarily due to a decrease in legal costs at the Partnership level, a decrease in management salaries and legal expenses at one Local Partnership, offset by decreases in incentive management fees at a second and third Local Partnership.

General and administrative-related parties expenses decreased approximately $474,000 for the 2006 Fiscal Year as compared to the 2005 Fiscal Year, primarily due to a decrease in partnership management fees and expense reimbursement charges at the Partnership level resulting from the sale of properties.

Results of Operations of Certain Local Partnerships

(a) Subsidiary Partnerships - Going Concerns and Uncertainties

- 14 -

United – Glenarden I Limited Partnership (“Glenarden I”)

The financial statements for Glenarden I have been prepared assuming that Glenarden I will 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 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 do not include any adjustments that might result from the outcome of this uncertainty.

The Partnership’s investment in Glenarden I has been written down to $0 by prior years’ losses and the minority interest balance was $0 at both March 31, 2008 and 2007. Glenarden I’s net loss after minority interest amounted to approximately $1,614,000, $905,000 and $1,013,000 for the 2007, 2006 and 2005 Fiscal Years, respectively.

United – Glenarden II Limited Partnership (“Glenarden II”)

The financial statements for Glenarden II have been prepared assuming that Glenarden II will 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. HUD can 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 II’s ability to continue as a going concern. The financial statements for Glenarden II do 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 March 31, 2008 and 2007. Glenarden II’s net loss after minority interest amounted to approximately $657,000, $443,000 and $506,000 for the 2007, 2006 and 2005 Fiscal Years, respectively.

Williamsburg Residential, L.P. (“Williamsburg”)

The financial statements of Williamsburg have been prepared assuming that Williamsburg will continue as a going concern. Williamsburg is currently subject to a foreclosure action by the mortgage lender which raises substantial doubt about its ability to continue as a going concern. The financial statements of Williamsburg do not include any adjustments that might result 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 will require 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 subsequently sold on May 9, 2008 (see Note 14 in Item 8).

The Partnership’s investment in Williamsburg has been written down to $0 by prior years’ losses and the minority interest balance was approximately $720,000 and $718,000 at March 31, 2008 and 2007, respectively. Williamsburg’s net income (loss) after minority interest amounted to approximately $100,000, $(82,000) and $(241,000) for the 2007, 2006, and 2005 Fiscal Years, respectively. (See Item 8, Note 10).

b) Subsidiary Partnerships - Other

Goodfellow Place Limited Partnership (“Goodfellow”)

In recent years, Goodfellow has experienced significant cash flow deficiencies. In addition there is $522,770 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 have informally indicated that they will continue to advance funds to Goodfellow in 2008, as needed, with an unsecured loan that will strengthen Goodfellow’s overall financial position. Management believes that this action will allow Goodfellow to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of the sale of the Property and subsequent liquidation of the Local Partnership.

Other

The Partnership’s investments, as a limited partner in the Local Partnerships, are subject to the risks incident to potential losses arising from management and ownership of improved real estate. The Partnership’s investments also could be adversely affected by poor economic conditions generally, which could increase vacancy levels, rental payment defaults, and increased operating expenses, any or all of which could threaten the financial viability of one or more of the Local Partnerships.

There also are substantial risks associated with the operation of Properties receiving government assistance. These include governmental regulations concerning tenant eligibility, which may make it more difficult to rent apartments in the complexes, difficulties in obtaining government approval for rent increases, limitations on the percentage of income which low and moderate-income tenants may pay as rent, the possibility that Congress may not appropriate funds to enable HUD to make the rental assistance payments it has contracted to make, and the possibility that when the rental assistance contracts expire, there may not be market demand for apartments at full market rents in a Local Partnership’s Property.

The Local Partnerships are impacted by inflation in several ways. Inflation allows for increases in rental rates generally to reflect the impact of higher operating and replacement costs. Furthermore, inflation generally does not impact the fixed long-term financing with which real property investments were purchased. Inflation also affects the Local Partnerships adversely by increasing operating costs as, for example, for such items as fuel, utilities and labor.

- 15 -

Item 7A. Quantitative and Qualitative Disclosure about Market Risk

The Partnership ~~has~~had mortgage notes that ~~are~~were payable in aggregate monthly installments including principal and interest at rates varying from 1% to 10.75% per annum. The Partnership ~~does~~did not believe there iswas a material risk associated with the various interest rates associated with the mortgage notes as the majority of the Local Partnership mortgage notes ~~have~~had fixed rates. The Partnership currently discloses in Item 8, Note 3, the fair value of the mortgage notes payable. As of March 31, 2009, there are no mortgage notes payable.

The Partnership does not have any other market risk sensitive instruments.

- 1610 -

Item 8.	Financial Statements and Supplementary Data
		Sequential Page
	Consolidated Financial Statements
	Report of Independent Registered Public Accounting Firm	1812
	Consolidated Balance Sheets at March 31, 2008 and 2007	46
	Consolidated Statement of Net Assets in Liquidation as of March 31, 2009 and Consolidated Balance Sheet as of March 31, 2008	20
	Consolidated Statements of Operations for the Years Ended March 31, 2008, 2007 and 2006	47
	Consolidated Statements of Operations for the Period April 1, 2008 through December 31, 2008 and for the Year Ended March 31, 2008	21
	Consolidated Statements of Changes in Partners’ (Deficit) Capital for the Years Ended March 31, 2008, 2007 and 2006	48
	Consolidated Statement of Changes in Net Assets in Liquidation for the Period January 1, 2009 through March 31, 2009	22
	Consolidated Statements of Cash Flows for the Years Ended March 31, 2008, 2007 and 2006	49
	Consolidated Statements of Changes in Partners’ (Deficit) Capital for the Period April 1, 2008 through December 31, 2008 and for the Year Ended March 31, 2008	23
	Notes to Consolidated Financial Statements	51
	Consolidated Statements of Cash Flows for the Period April 1, 2008 through December 31, 2008 and for the Year Ended March 31, 2008	24
	Notes to Consolidated Financial Statements	26

- 1711 -

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners of

Liberty Tax Credit Plus II L.P. and Subsidiaries

(A Delaware Limited Partnership)

We have audited the consolidated ~~balance~~statement ~~sheets~~of net assets in liquidation (liquidation basis) of Liberty Tax Credit Plus II L.P. and Subsidiaries (A Delaware Limited Partnership) as of March 31, ~~2008~~2009 and ~~2007,~~the ~~and~~related consolidated statement of changes in net assets in liquidation for the ~~related~~period from January 1, 2009 through March 31, 2009, and the consolidated ~~statements~~statement of ~~operations~~income, changes in partners’ (deficit~~) capital~~, and cash flows for the ~~years~~period ended ~~March~~April 1, 2008 through December 31, 2008 (the 2008 Fiscal Year). In addition, ~~2007~~we ~~and~~have audited the ~~2006~~consolidated (balance sheet as of March 31, 2008 and the ~~2007~~related consolidated statements of operations, ~~2006~~changes in partners’ (deficit) capital, and ~~2005~~cash ~~Fiscal~~flows for ~~Years~~the year ended March 31, ~~respectively~~2008 (the 2007 Fiscal Year). These ~~financial~~ financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the financial statements for ~~seven~~two (~~2007~~2008 Fiscal Year), ~~twelve (2006 Fiscal Year),~~ and ~~thirteen~~six (~~2005~~2007 Fiscal Year) subsidiary partnerships whose income (losses) ~~income~~ aggregated $~~(401~~775,~~936),~~942 ~~$6,108,161~~ and $(7$401,~~418,882~~936) for the ~~2007,~~2008 ~~2006~~ and ~~2005~~ 2007 Fiscal Years, respectively, and whose assets constituted 69 0% and 6869% of the Partnership’s assets at March 31, ~~2008~~2009 and ~~2007~~2008, respectively, presented in the accompanying consolidated financial statements. The ~~financial~~ financial statements of these subsidiary partnerships were audited by other auditors whose reports thereon have been furnished to us and our opinion expressed herein, insofar as it relates to the amounts included for these subsidiary partnerships, is based solely upon the reports of the other auditors. The financial statements for one (2007 Fiscal Year) of these subsidiary partnerships were unaudited.

~~In our~~As ~~opinion,~~described ~~based~~in ~~upon~~Note ~~our audits~~1(a), ~~and~~ the ~~reports~~Partnership ofis currently in the ~~other~~process ~~auditors~~of ~~referred~~winding toup ~~above,~~its ~~the~~operations. The ~~accompanying~~Partnership ~~consolidated~~intends ~~financial statements referred~~ to indistribute ~~the~~its ~~first~~available ~~paragraph~~cash ~~present~~less ~~fairly,~~costs into ~~all~~terminate. As ~~material~~a ~~respects~~result, the ~~financial position~~Partnership ofhas ~~Liberty~~changed ~~Tax~~its ~~Credit~~basis ~~Plus~~of IIaccounting ~~L.P.~~for ~~and~~periods ~~Subsidiaries~~subsequent atto ~~March~~December 31, 2008 ~~and 2007,~~ ~~and~~to ~~the~~a ~~results~~liquidation ~~of their operations and their cash flows for the years ended March 31, 2008, 2007 and 2006, in conformity with U~~basis.~~S. generally accepted accounting principles.~~

AsIn our ~~discussed~~opinion, inbased ~~Note~~upon ~~12(a)~~our audits, and the ~~consolidated~~reports ~~financial~~of ~~statements~~the ~~include~~other ~~the~~auditors referred to above, the accompanying consolidated financial statements ofreferred ~~three~~to ~~limited~~in ~~partnerships~~the first ~~with~~paragraph ~~significant contingencies~~present ~~and~~fairly, ~~uncertainties. The~~in ~~financial~~all ~~statements~~material ofrespects, ~~these~~the consolidated net ~~subsidiary~~assets ~~partnerships~~in ~~were~~liquidation ~~prepared~~(liquidation ~~assuming~~basis) ~~that~~of ~~each~~Liberty ~~will~~Tax ~~continue~~Credit asPlus ~~a going~~II ~~concern~~L. ~~The~~P. ~~three~~and Subsidiaries ~~subsidiary~~as ~~partnerships’~~of ~~net~~March ~~losses aggregated~~31, $22009,~~271,355~~ ~~(Fiscal~~the ~~Year~~consolidated ~~2007),~~changes ~~$1,348,125~~in ~~(Fiscal~~its ~~Year~~net ~~2006)~~assets ~~and~~in ~~$1,518,328~~liquidation ~~(Fiscal~~for ~~Year~~the ~~2005)~~period ~~and~~from ~~their~~January ~~assets~~1, ~~aggregated~~2009 ~~$14~~to March 31,~~486~~ 2009,~~355~~ ~~and~~the ~~$16,260,150~~consolidated atfinancial position as of March 31, 2008, and ~~2007,~~the ~~respectively. These~~results ~~matters~~of their ~~raise~~operations ~~substantial~~and ~~doubt~~their ~~about~~cash ~~these~~flows ~~subsidiary~~and ~~partnerships’~~for ~~abilities~~the ~~to continue~~year asended ~~going~~March ~~concerns. Management’s~~31, ~~plans~~2008 inand ~~regard to these~~for ~~matters~~the ~~are~~period ~~also~~April ~~described~~1, in2008 ~~Note~~through ~~12(a). The~~December ~~accompanying consolidated~~31, ~~financial~~2008 ~~statements~~in doconformity ~~not~~with ~~include~~U.S. generally ~~any~~accepted ~~adjustments~~accounting ~~that~~principles ~~might result~~applied ~~from~~on the ~~outcome~~basis ofdescribed ~~these~~in ~~uncertainties~~the preceding paragraph.

TRIEN ROSENBERG ROSENBERG

WEINBERG CIULLO & FAZZARI LLP

New York, New York

~~June 23~~July 9, ~~2008~~2009

- 1812 -

[Letterhead of JOSE E. ROSARIO & CO.]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners

Metropolitan Towers Associates, L.P.

Rio Piedras, Puerto Rico

I have audited the accompanying balance sheet of Metropolitan Towers Associates, LP as of July 31, 2006, and the related statement of loss and changes in partners’ deficit and cash flows for the seven months period then ended. These financial statements are the responsibility of the Partnership's management. My responsibility is to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Metropolitan Towers Associates, LP as of July 31, 2006, and the results of its operations and changes in partners’ deficit and cash flows for the seven month period then ended in conformity with accounting principles generally accepted in the United State of America and Puerto Rico.

/s/ Jose E. Rosario & Co.

License No. 961

Expires December 1, 2007

San Juan, Puerto Rico

September 21, 2006

Stamp No. 2198027 of the Puerto Rico Society of Certified Public Accountants is affixed to the original of this report.

- 19 -

[Letterhead of JOSE E. ROSARIO & CO.]

INDEPENDENT AUDITOR'S REPORT

To the Partners

Metropolitan Towers Associates, L.P.

I have audited the accompanying balance sheets of Metropolitan Towers Associates, LP as of December 31, 2005 and 2004, and the related statements of loss, changes in partners’ capital, and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. My responsibility is to express an opinion on these financial statements based on my audits.

I conducted my audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor I was engaged to perform, an audit of its internal control over financial reporting. My audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, I express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Metropolitan Towers Associates, LP as of December 31, 2005 and 2004 and the results of its operations, changes in partners’ capital and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United State of America.

/s/ Jose E. Rosario & Co.

License No. 961

Expires December 1, 2007

San Juan, Puerto Rico

January 31, 2006

Stamp No. 2114029 of the Puerto Rico College of CPA was affixed to the original.

- 20 -

[Letterhead of RubinBrown]

S2100-020

Report of Independent Registered Public Accounting Firm

To The Partners

Westminster Place II - Olive Site, L.P.

St. Louis, Missouri

We have audited the accompanying balance sheet of Westminster Place II - Olive Site, L.P., a limited partnership, as of December 31, 2005 and 2004 and the related statements of income, partners' equity and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Westminster Place II - Olive Site, L.P. as of December 31, 2005 and 2004 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Partnership will continue as a going concern. As discussed in Note 7 to the financial statements, the Partnership’s rental subsidy was depleted during 2004 and the rent increases have not been sufficient to cover the loss of the subsidy payments. This situation raises substantial doubt about the Partnership’s ability to continue as a going concern. Management’s plans regarding these matters are described in Note 7. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ RubinBrown LLP

St. Louis, Missouri

February 8, 2006

- 21 -

[Letterhead of RubinBrown]

S2100-020

Report of Independent Registered Public Accounting Firm

To The Partners

Whittier Plaza Associates Limited Partnership

St. Louis, Missouri

We have audited the accompanying balance sheet of Whittier Plaza Associates Limited Partnership, a limited partnership (the Partnership), as of December 31, 2005 and 2004, and the related statements of income, partners' equity and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Whittier Plaza Associates Limited Partnership as of December 31, 2005 and 2004, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Partnership will continue as a going concern. As discussed in Note 5 to the financial statements, the Partnership has sustained recurring losses from operations, lower than anticipated rental income, and has continually required a general partner to fund deficits. These items raise substantial doubt about the Partnership’s ability to continue as a going concern. Management’s plans regarding these matters are described in Note 5. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ RubinBrown LLP

St. Louis, Missouri

January 31, 2006

- 22 -

[Letterhead of Habif, Arogeti & Wynne, LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners

United - Glenarden I Limited Partnership

We have audited the accompanying balance sheet of United - Glenarden I Limited Partnership as of December 31, 2007, and the related statements of operations, changes in partners' deficit, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of United - Glenarden I Limited Partnership as of December 31, 2007, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles in the United States of America.

The accompanying financial statements have been prepared assuming that the Partnership will continue as a going concern. As disclosed in Note E to the financial statements, HUD performed a review of the operations of the Project 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 demand payment of the mortgage. Management has submitted an appeal but cannot predict the outcome. This condition raises substantial doubt about the Partnership’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Habif, Arogeti & Wynne, P.C.

Atlanta, Georgia

March 3121, 2008

- 2313 -

[Letterhead of Habif, Arogeti & Wynne, LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners

United - Glenarden I Limited Partnership

We have audited the accompanying balance sheet of United - Glenarden I Limited Partnership as of December 31, 2006, and the related statements of operations, changes in partners' deficit, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of United - Glenarden I Limited Partnership as of December 31, 2006, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles in the United States of America.

/s/ Habif, Arogeti & Wynne, P.C.

Atlanta, Georgia

February 28, 2007

- 24 -

[Letterhead of Habif, Arogeti & Wynne, LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners

United - Glenarden II Limited Partnership

We have audited the accompanying balance sheet of UNITED - GLENARDEN II LIMITED PARTNERSHIP as of December 31, 2007, and the related statements of operations, changes in partners' deficit, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of UNITED - GLENARDEN II LIMITED PARTNERSHIP as of December 31, 2007, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles in the United States of America.

The accompanying financial statements have been prepared assuming that the Partnership will continue as a going concern. As disclosed in Note E to the financial statements, HUD performed a review of the operations of the Project 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. HUD can demand payment of the mortgage. Management has submitted an appeal but cannot predict the outcome. This condition raises substantial doubt about the Partnership’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Habif, Arogeti & Wynne, P.C.

Atlanta, Georgia

March 21, 2008

- 2514 -

[Letterhead of Habif, Arogeti & Wynne, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners of

United - Glenarden II Limited Partnership

We have audited the accompanying balance of UNITED - GLENARDEN II LIMITED PARTNERSHIP as of December 31, 2006, and the related statements of operations, changes in partners' deficit, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of UNITED - GLENARDEN II LIMITED PARTNERSHIP as of December 31, 2006, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles in the United States of America.

/s/ Habif, Arogeti & Wynne, P.C.

Atlanta, Georgia

February 28, 2007

- 26 -

[Letterhead of BAERSON, WITONSKI, PATEL, BERKOWITZ & RUBIN LLC]

INDEPENDENT AUDITORS' REPORT

To the Partners of

ROLLING GREEN LIMITED PARTNERSHIP

D/B/A Prairie View Apartments

Libertyville, IL

We have audited the accompanying balance sheets of Rolling Green Limited Partnership as of October 25, 2006 and December 31, 2005, and the related statements of operations, partners' equity (deficit), and cash flows for the periods then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Rolling Green Limited Partnership as of October 25, 2006 and December 31, 2005, and the results of its operations, changes in partner’s equity (deficit) and its cash flows for the period from January 1, 2006 through October 25, 2006 and for the year ended December 31, 2005, in conformity with accounting principles generally accepted in the United States of America.

/s/ BAERSON, WITONSKI, PATEL, BERKOWITZ & RUBIN, LLC

Chicago, IL

January 4, 2007

- 27 -

[Letterhead of ZAYAS, MORAZZANI & CO.]

Independent Auditors' Report

To the Partners

Santa Juanita II Limited Partnership:

We have audited the accompanying balance sheet of Santa Juanita II Limited Partnership, as of December 31, 2005, and the related statements of profit and loss, partners' equity and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor we were engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Santa Juanita II Limited Partnership as of December 31, 2005, and the results of its operations, changes in partners' equity and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/ Zayas, Morazzani & Co.

February 16, 2006

San Juan, Puerto Rico

Stamp No. 2107202 of the Puerto Rico Society of Certified Public Accountants was affixed to original.

Federal Employer Identification Number: 66-0365844

- 28 -

[Letterhead of REZNICK GROUP, P.C.]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners

Church Lane Associates

We have audited the accompanying balance sheet of Church Lane Associates as of November 9, 2007, and the related statements of profit and loss, changes in partners' equity (deficit) and cash flows for the period January 1, 2007 through November 9, 2007 (date of investor transfer). These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Church Lane Associates as of November 9, 2007, and the results of its operations, the changes in partners’ equity (deficit) and its cash flows for the period January 1, 2007 through November 9, 2007 (date of investor transfer), in conformity with accounting principles generally accepted in the United States of America.

/s/ Reznick Group, P.C.

Baltimore, Maryland

March 2825, 2008

- 2915 -

[Letterhead of REZNICK GROUP, P.C.]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners

Church Lane Associates

We have audited the accompanying balance sheet of Church Lane Associates as of December 31, 2006 and the related statements of operations, changes in partners' equity (deficit) and cash flows for the year then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Church Lane Associates as of December 31, 2006, and the results of its operations, the changes in partners’ equity (deficit) and cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/ Reznick Group, P.C.

Baltimore, Maryland

March 29, 2007

- 30 -

[Letterhead of MARDEN, HARRISON & KREUTER]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners

Robin Housing Associates

3743-A White Plains Road

Bronx, New York 10467

We have audited the accompanying balance sheet of Robin Housing Associates (a limited partnership) as of November 30, 2006, and the related statements of income, partners' capital (deficiency), and cash flows for the eleven months then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Robin Housing Associates as of November 30, 2006, and the results of its operations and its cash flows for the eleven months then ended in conformity with accounting principles generally accepted in the United States of America.

Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying information is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

As discussed in Note 8 to the financial statements, on April 28, 2006, the Partnership sold its apartment building for a sale price of $7,265,000. In addition, as discussed in Note 9 to the financial statements, the General Partner is in discussions with the Limited Partners with respect to certain distributions and allocations of cash flow that were made during the period.

/s/ MARDEN, HARRISON & KREUTER

Certified Public Accountants, P.C.

White Plains, New York

February 16, 2007

- 31 -

[Letterhead of MARDEN, HARRISON & KREUTER]

INDEPENDENT AUDITORS' REPORT

To the Partners

Robin Housing Associates

3743-A White Plains Road

Bronx, New York 10467

We have audited the accompanying balance sheets of Robin Housing Associates (a limited partnership) as of December 31, 2005 and 2004, and the related statements of operations, partners' deficiency, and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Robin Housing Associates as of December 31, 2005 and 2004, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Our audits were made for the purpose of forming an opinion on the basic financial statements take as a whole. The accompanying information is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

/s/ Marden, Harrison & Kreuter

Certified Public Accountants, P.C.

White Plains, New York

January 27, 2006

- 32 -

[Letterhead of MARDEN, HARRISON & KREUTER]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners

Concourse Artists Housing Associates

3743-A White Plains Road

Bronx, New York 10467

We have audited the accompanying balance sheet of Concourse Artists Housing Associates (a limited partnership) as of November 30, 2006, and the related statements of income, partners' capital (deficiency), and cash flows for the eleven months then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Concourse Artists Housing Associates as of November 30, 2006, and the results of its operations and its cash flows for the eleven months then ended in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 8 to the financial statements, on April 28, 2006, the Partnership sold its apartment building for a sale price of $1,797,500. In addition, as discussed in Note 9 to the financial statements, the General Partner is in discussions with the Limited Partners with respect to certain distributions and allocations of cash flow that were made during the period.

/s/ MARDEN, HARRISON & KREUTER

Certified Public Accountants, P.C.

White Plains, New York

February 16, 2007

- 33 -

[Letterhead of MARDEN, HARRISON & KREUTER]

INDEPENDENT AUDITORS' REPORT

To the Partners

Concourse Artists Housing Associates

3743-A White Plains Road

Bronx, New York 10467

We have audited the accompanying balance sheets of Concourse Artists Housing Associates (a limited partnership) as of December 31, 2005 and 2004, and the related statements of operations, partners' deficiency, and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Concourse Artists Housing Associates as of December 31, 2005 and 2004, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ Marden, Harrison & Kreuter

Certified Public Accountants, P.C.

White Plains, New York

January 27, 2006

- 34 -

[Letterhead of MARDEN, HARRISON & KREUTER]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners

2051 Grand Concourse Housing Associates

3743-A White Plains Road

Bronx, New York 10467

We have audited the accompanying balance sheet of 2051 Grand Concourse Housing Associates (a limited partnership) as of November 30, 2006, and the related statements of income, partners' capital (deficiency), and cash flows for the eleven months then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of 2051 Grand Concourse Housing Associates as of November 30, 2006, and the results of its operations and its cash flows for the eleven months then ended in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 8 to the financial statements, on April 28, 2006, the Partnership sold its apartment building for a sale price of $4,937,500. In addition, as discussed in Note 9 to the financial statements, the General Partner is in discussions with the Limited Partners with respect to certain distributions and allocations of cash flow that were made during the period.

/s/ MARDEN, HARRISON & KREUTER

Certified Public Accountants, P.C.

White Plains, New York

February 16, 2007

- 35 -

[Letterhead of MARDEN, HARRISON & KREUTER]

INDEPENDENT AUDITORS' REPORT

To the Partners

2051 Grand Concourse Housing Associates

3743-A White Plains Road

Bronx, New York 10467

We have audited the accompanying balance sheets of 2051 Grand Concourse Housing Associates (a limited partnership) as of December 31, 2005 and 2004, and the related statements of operations, partners' deficiency, and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of 2051 Grand Concourse Housing Associates as of December 31, 2005 and 2004, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ Marden, Harrison & Kreuter

Certified Public Accountants, P.C.

White Plains, New York

January 27, 2006

- 36 -

[Letterhead of MARDEN, HARRISON & KREUTER]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners

Willoughby-Wyckoff Housing Associates

3743-A White Plains Road

Bronx, New York 10467

We have audited the accompanying balance sheet of Willoughby-Wyckoff Housing Associates (a limited partnership) as of November 30, 2006, and the related statements of income, partners' deficiency, and cash flows for the eleven months then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Willoughby-Wyckoff Housing Associates as of November 30, 2006, and the results of its operations and its cash flows for the eleven months then ended in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 7 to the financial statements, on June 5, 2006, the Partnership sold its apartment building for a sale price of $4,800,000.

/s/ MARDEN, HARRISON & KREUTER

Certified Public Accountants, P.C.

White Plains, New York

February 16, 2007

- 37 -

[Letterhead of MARDEN, HARRISON & KREUTER]

INDEPENDENT AUDITORS' REPORT

To the Partners

Willoughby-Wyckoff Housing Associates

3743-A White Plains Road

Bronx, New York 10467

We have audited the accompanying balance sheets of Willoughby-Wyckoff Housing Associates (a limited partnership) as of December 31, 2005 and 2004, and the related statements of operations, partners' deficiency, and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Willoughby-Wyckoff Housing Associates as of December 31, 2005 and 2004, and the results of its operations and its cash flows for the years then ended in conformity with conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1B to the financial statements, the Partnership has had operating losses and equity deficiencies. These conditions raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Marden, Harrison & Kreuter

Certified Public Accountants, P.C.

White Plains, New York

January 27, 2006

- 38 -

[Letterhead of WOLFE NILGES NAHORSKI]

INDEPENDENT AUDITORS' REPORT

To the Partners

Goodfellow Place Limited Partnership

St. Louis, Missouri

We have audited the accompanying balance sheets of Goodfellow Place Limited Partnership as of December 31, ~~2007~~2008 and ~~2006~~2007, and the related statements of income (loss), partners' equity (deficit), and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have nor we were engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Goodfellow Place Limited Partnership as of December 31, ~~2007~~2008 and ~~2006~~2007, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

~~Our~~As ~~report~~discussed onfurther ~~our~~in ~~audits~~Note of13, ~~Goodfellow~~the ~~Place Limited~~ Partnership ~~for~~sold ~~2007~~its ~~and~~rental ~~2006 were~~property ~~made for the purpose of forming an opinion~~ on ~~the basic financial~~ ~~statements~~December ~~taken~~31, ~~as a whole~~2008. The ~~schedule~~Partnership ofthen ~~operating~~liquidated ~~expenses is presented for purposes of additional analysis~~ and ~~are~~terminated ~~not a required part of the~~as ~~basic financial statements. Such information for 2007 and 2006 has been subjected to the auditing procedures applied in the audit~~ of ~~the~~December ~~basic financial statements and~~31, ~~in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole~~2008.

Our report on our audits of Goodfellow Place Limited Partnership for 2008 and 2007 were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedule of operating expenses is presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information for 2008 and 2007 has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

/s/ Wolfe Nilges Nahorski

A Professional Corporation

March 2119, ~~2008~~2009

St. Louis, Missouri

- 3916 -

[Letterhead of WOLFE NILGES NAHORSKI]

INDEPENDENT AUDITORS' REPORT

To the Partners

Goodfellow Place Limited Partnership

St. Louis, Missouri

We have audited the accompanying balance sheets of Goodfellow Place Limited Partnership as of December 31, 2006 and 2005, and the related statements of income (loss), partners' equity (deficit), and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have nor we were engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Goodfellow Place Limited Partnership as of December 31, 2006 and 2005, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Our report on our audits of Goodfellow Place Limited Partnership for 2006 and 2005 were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedule of operating expenses is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information for 2006 and 2005 has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basis financial statements taken as a whole.

/s/ Wolfe Nilges Nahorski

A Professional Corporation

March 7, 2007

St. Louis, Missouri

- 40 -

[Letterhead of HAMILTON & MUSSER, P.C.]

INDEPENDENT AUDITORS’ REPORT

To the Partners of

Penn Alto Associates, Limited Partnership

Altoona, Pennsylvania 16601

We have audited the accompanying balance sheets of Penn Alto Associates, Limited Partnership as of December 31, 2005 (FINAL) and 2004, and the related statements of operations, partners' equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Penn Alto Associates, Limited Partnership as of December 31, 2005 (FINAL) and 2004, and the results of its operations, changes in partners’ equity (deficit) and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The partnership ceased operations in September 2005 and more fully explained in Note 1.

/s/ Hamilton & Musser

Certified Public Accountants

Mechanicsburg, Pennsylvania

January 27, 2006

- 41 -

[Letterhead of Dickey, Wolf & Humbard, LLC]

INDEPENDENT AUDITOR'S REPORT

To the Partners

Williamsburg Residential, L.P.

We have audited the balance sheets of Williamsburg Residential, L.P. (a Kansas Limited Partnership) as of December 31, ~~2007 and 2006~~2008, and the related statements of ~~operations,~~ income, partners' equity/(deficit), and cash flows for the ~~years~~year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Williamsburg Residential, L.P. as of December 31, ~~2007 and 2006~~2008, and the results of its operations and its cash flows for the ~~years~~year then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Partnership will continue as a going concern. As discussed in Note 10 to the financial statements, the Partnership is currently subject to a foreclosure action by the mortgage lender which raises substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Dickey, Wolf & Humbard, LLC

Certified Public Accountants

Harrisonville, MO

March 16, ~~2008~~2009

- 4217 -

[Letterhead of Dickey, Wolf & Humbard, LLC]

INDEPENDENT AUDITOR'S REPORT

To the Partners

Williamsburg Residential, L.P.

We have audited the balance sheets of Williamsburg Residential, L.P. (a Kansas Limited Partnership) as of December 31, ~~2006~~2007 and ~~2005~~2006, and the related statements of operations, partners' equity/(deficit), and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Williamsburg Residential, L.P. as of December 31, ~~2006~~2007 and ~~2005~~2006, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ Dickey, Wolf & Humbard, LLC

Certified Public Accountants

Harrisonville, MO

~~February 19,~~March ~~2007~~1, 2008

- 4318 -

[Letterhead of MAYER HOFFMAN MCCANN P.C.]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners

Victory Apartments

We have audited the accompanying balance sheets of Victory Apartments - F.H.A. Project No. 071-35701 as of December 31, 2007 and 2006, and the related statements of income, changes in partners' capital, and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Victory Apartments – F.H.A. Project No. 071-35701 as of December 31, 2007 and 2006, and the results of its operations and its cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued a report dated February 28, 2008, on our consideration of the Partnership's internal control over financial reporting. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and the results of that testing and not to provide an opinion on the internal control over financial reporting. In accordance with Government Auditing Standards, we have also issued an opinion dated February 28, 2007, on the Partnership’s compliance with certain provisions of laws, regulations, contracts, and grant agreements, and other matters that could have a direct and material effect on a major HUD-assisted program. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and important for assessing the results of our audit.

/s/ Mayer Hoffman McCann P.C.

Chicago, Illinois

February 28, 2008

- 4419 -

[Letterhead of MAYER HOFFMAN MCCANN P.C.]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners

Victory Apartments

We have audited the accompanying balance sheets of Victory Apartments - F.H.A. Project No. 071-35701 as of December 31, 2006 and 2005, and the related statements of income, changes in partners' capital, and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Victory Apartments – F.H.A. Project No. 071-35701 as of December 31, 2006 and 2005, and the results of its operations and its cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued a reports dated February 22, 2007, on our consideration of the Partnership's internal control over financial reporting. The purpose of those reports is to describe the scope of our testing of internal control over financial reporting and the results of that testing and not to provide an opinion on the internal control over financial reporting. In accordance with Government Auditing Standards, we have also issued an opinion dated February 22, 2007, on the Partnership’s compliance with certain provisions of laws, regulations, contracts, and grant agreements, and other matters that could have a direct and material effect on a major HUD-assisted program. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.

/s/ Mayer Hoffman McCann P.C.

Chicago, Illinois

February 22, 2007

- 45 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

CONSOLIDATED ~~BALANCE~~STATEMENT ~~SHEETS~~OF NET ASSETS IN LIQUIDATION AS OF MARCH 31, 2009 AND

	March 31,
	2008			2007
ASSETS
Operating assets:
Property and equipment, at cost, less accumulated depreciation (Notes 2, 4 and 7)	$	16,695,129		$	25,652,480
Cash and cash equivalents (Notes 2, 3 and 12)		3,307,869			4,001,566
Cash held in escrow (Notes 2, 3 and 5)		1,551,815			2,453,458
Deferred costs - less accumulated amortization (Notes 2 and 6)		753,830			1,290,276
Other assets		632,903			1,514,685
Total operating assets		22,941,546			34,912,465
Assets of discontinued operations (Note 13):
Property and equipment held for sale, net of accumulated depreciation (Note 4)		1,604,951			2,370,180
Net assets held for sale		225,690			3,644,409
Total discontinued assets		1,830,641			6,014,589
Total assets	$	24,772,187		$	40,927,054
LIABILITIES AND PARTNERS’ (DEFICIT ) CAPITAL
Operating liabilities:
Mortgage notes payable (Notes 3 and 7)	$	25,744,882		$	34,049,829
Accounts payable and other liabilities		2,151,546			1,787,747
Accrued interest payable		1,904,958			2,944,857
Security deposit payable		197,467			257,600
Due to local general partners and affiliates (Note 8)		4,099,138			3,103,199
Due to general partners and affiliates (Note 8)		1,428,228			644,814
Due to selling partners		892,500			885,000
Total operating liabilities		36,418,719			43,673,046
Liabilities of discontinued operations (Note 13):
Mortgage notes payable of assets held for sale (Note 7)		1,803,564			3,412,534
Net liabilities held for sale (including (loss) gain on sale of properties and minority interest)		900,578			3,038,175
Total discontinued liabilities		2,704,142			6,450,709
Total liabilities		39,122,861			50,123,755
Minority interests (Note 2)		(8,094	)		(19,986	)
Commitments and contingencies (Notes 8 and 12)
Partners’ (deficit) capital
Limited partners ( 115,917.5 BACs issued and outstanding) (Note 1)		(26,439,216	)		(20,516,475	)
General partners		12,096,636			11,339,760
Total partners’ (deficit) capital		(14,342,580	)		(9,176,715	)
Total liabilities and partners’ (deficit) capital	$	24,772,187		$	40,927,054
See accompanying notes to consolidated financial statements.

CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2008

- 46 -

	March 31,
	2009		2008

ASSETS

Operating assets:
Property and equipment, at cost, less accumulated depreciation (Notes 2 and 4)	$	0	$	16,695,129
Cash and cash equivalents (Notes 2, 3 and 11)		1,111,330		3,307,869
Cash held in escrow (Notes 2, 3 and 5)		0		1,551,815
Deferred costs - less accumulated amortization (Notes 2 and 6)		0		753,830
Note receivable (Note 13)		1,400,000		0
Other assets		1,537		632,903

Total operating assets		2,512,867		22,941,546

Assets of discontinued operations (Note 12):
Property and equipment held for sale, net of accumulated depreciation (Note 4)		0		1,604,951
Net assets held for sale		0		225,690
Total discontinued assets		0		1,830,641

Total assets	$	2,512,867	$	24,772,187

LIABILITIES AND PARTNERS’ (DEFICIT ) CAPITAL AND NET ASSETS IN LIQUIDATION

Operating liabilities:
Mortgage notes payable (Notes 3 and 7)	$	0	$	25,744,882
Accounts payable and other liabilities		114,129		2,151,546
Accrued interest payable		0		1,904,958
Security deposit payable		0		197,467
Due to local general partners and affiliates (Note 8)		0		4,099,138
Due to general partners and affiliates (Note 8)		4,000		1,428,228
Due to selling partners		0		892,500

Total operating liabilities		118,129		36,418,719

Liabilities of discontinued operations (Note 12):
Mortgage notes payable of assets held for sale (Note 7)		0		1,803,564
Net liabilities held for sale (including (loss) gain on sale of properties and minority interest)		0		900,578
Total discontinued liabilities		0		2,704,142

Total liabilities		118,129		39,122,861

Minority interests (Note 2)		0		(8,094	)

Commitments and contingencies (Notes 8 and 11)

Partners’ (deficit) capital
Limited partners ( 115,917.5 BACs issued and outstanding) (Note 1)		0		(26,439,216	)
General partners		0		12,096,636

Total partners’ (deficit) capital		0		(14,342,580	)
Net assets in liquidation	$	2,394,738	$	0
Total liabilities and partners’ (deficit) capital			$	24,772,187



See accompanying notes to consolidated financial statements.

- 20 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Years Ended March 31,
	For the Period April 1, 2008 through December 31, 2008*			For the Year Ended March 31, 2008*
	2008				2007*			2006*
Operations:
Operations:
Revenues
Revenues
Other (Note 11)	$	61,058		$	166,041
Rental income	$	6,100,478			$	6,145,259		$	6,088,037
Total revenues		61,058			166,041
Other (Note 11)		329,120				384,653			156,555
Expenses
Total revenues		6,429,598				6,529,912			6,244,592
General and administrative		209,284			326,840
Expenses
General and administrative-related parties (Note 8)		40,464			453,369
General and administrative		1,455,142				1,081,993			1,237,899
Total expenses		249,748			780,209
General and administrative-related parties (Note 8)		769,220				1,502,588			1,976,094
Loss from operations		(188,690	)		(614,168	)
Repairs and maintenance		2,587,003				2,171,358			2,230,359
Discontinued operations:
Operating and other		707,961				627,503			632,940
Income (loss) from discontinued operations (including minority interest and gain (loss) on sale of properties) (Note 12)		16,207,742			(4,339,581	)
Real estate taxes		405,024				388,069			371,774
Net income (loss)	$	16,019,052		$	(4,953,749	)
Insurance		265,490				289,206			285,408
Loss from operations – limited partners	$	(186,804	)	$	(608,026	)
Financial, primarily interest		1,543,674				1,469,610			1,510,176
Income (loss) from discontinued operations (including minority interest and gain (loss) on sale of properties) – limited partners		16,045,665			(4,296,186	)
Depreciation and amortization		1,828,216				1,813,633			1,728,619
Net income (loss) – limited partners	$	15,858,861		$	(4,904,212	)
Total expenses		9,561,730				9,343,960			9,973,269
Number of BACs outstanding		115,917.5			115,917.5
Loss from operations before minority interest		(3,132,132	)			(2,814,048	)		(3,728,677	)
Loss from operations per BAC	$	(1.61	)	$	(5.25	)
Minority interest in loss of subsidiaries from operations		0				0			0
Income (loss) from discontinued operations (including minority interest and gain (loss) on sale of properties) per BAC		138.42			(37.06	)
Loss from operations		(3,132,132	)			(2,814,048	)		(3,728,677	)
Income (loss) per BAC	$	136.81		$	(42.31	)
Discontinued operations:
* Reclassified for comparative purposes. See accompanying notes to consolidated financial statements.
(Loss) income from discontinued operations (including minority interest and (loss) gain on sale of properties) (Note 13)		(1,821,617	)			(3,027,022	)		3,027,106
Net loss	$	(4,953,749	)		$	(5,841,070	)	$	(701,571	)
Loss from operations – limited partners	$	(3,100,811	)		$	(2,785,907	)	$	(3,691,390	)
(Loss) income from discontinued operations (including minority interest and (loss) gain on sale of properties) – limited partners		(1,803,401	)			(2,996,752	)		2,996,835
Net loss – limited partners	$	(4,904,212	)		$	(5,782,659	)	$	(694,555	)
Number of BACs outstanding		115,917.5				115,917.5			115,917.5
Loss from operations per BAC	$	(26.75	)		$	(24.04	)	$	(31.84	)
(Loss) income from discontinued operations (including minority interest and (loss) gain on sale of properties) per BAC		(15.56	)			(25.85	)		25.85
Loss per BAC	$	(42.31	)		$	(49.89	)	$	(5.99	)
* Reclassified for comparative purposes. See accompanying notes to consolidated financial statements.

- 4721 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES

IN NET ASSETS IN LIQUIDATION

FOR THE PERIOD JANUARY 1, 2009 THROUGH MARCH 31, 2009

Net assets in liquidation at January 1, 2009	$	1,016,721
Increase in liquidation value of note receivable		1,400,000
Decrease in due to general partners and affiliates		(4,000	)
Decrease in other revenues		11,288
Decrease in general and administrative expenses		(29,271	)
Net assets in liquidation at March 31, 2009	$	2,394,738
Limited Partners Share:
Increase in net assets in liquidation per limited partner unit	$	1,378,017
Number of units outstanding	$	115,917.5
Decrease in net assets in liquidation per limited partner unit	$	11.89
See accompanying notes to consolidated financial statements.

- 22 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ (DEFICIT) CAPITAL

	Total			Limited Partners			General Partners
Partners’ (deficit) capital April 1, 2005	$	(6,167,539	)	$	(5,112,305	)	$	(1,055,234	)
Partners’ (deficit) capital – April 1, 2007	$	(9,176,715	)	$	(20,516,475	)	$	11,339,760
Net loss		(701,571	)		(694,555	)		(7,016	)
Partners’ (deficit) capital – March 31, 2006		(6,869,110	)		(5,806,860	)		(1,062,250	)
Contribution – write-off of partnership management fees related to sold properties		12,325,256			0			12,325,256
Contribution – write-off of related party debt		2,339,116			0			2,339,116
Distribution – write-off of related party receivable		(2,113,793	)		0			(2,113,793	)
Distributions		(9,017,114	)		(8,926,956	)		(90,158	)
Net loss		(5,841,070	)		(5,782,659	)		(58,411	)
Partners’ (deficit) capital – March 31, 2007		(9,176,715	)		(20,516,475	)		11,339,760
Contribution – write-off of partnership management fees related to sold properties		750,312			0			750,312
Contribution – write-off of related party debt		66,389			0			66,389
Distributions		(1,028,817	)		(1,018,529	)		(10,288	)
Net loss		(4,953,749	)		(4,904,212	)		(49,537	)
Partners’ (deficit) capital – March 31, 2008	$	(14,342,580	)	$	(26,439,216	)	$	12,096,636
Contribution – write-off of partnership management fees related to sold properties		1,126,618			0			1,126,618
Contribution – write-off of related party debt		47,500			0			47,500
Distributions		(1,833,869	)		(1,815,534	)		(18,335	)
Net loss for the period April 1, 2008 through December 31, 2008		16,019,052			15,858,861			160,191
Partners’ (deficit) capital – December 31, 2008	$	1,016,721		$	(12,395,889	)	$	13,412,610
See accompanying notes to consolidated financial statements.

- 4823 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

	Years Ended March 31,
	For the Period April 1, 2008 through December 31, 2008			Year Ended March 31, 2008
	2008			2007			2006
Net income (loss)	$	16,019,052		$	(4,953,749	)
Net loss	$	(4,953,749	)	$	(5,841,070	)	$	(701,571	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
(Gain) loss on sale of properties		(17,271,460	)		2,151,576
Loss (gain) on sale of properties		2,151,576			(9,413,765	)		(7,900,514	)
Forgiveness of indebtedness income		0			(568,000	)
Forgiveness of indebtedness income		(568,000	)		0			0
Depreciation and amortization		1,111,323			2,141,550
Loss on impairment of fixed assets		0			3,540,000			6,075,000
Minority interest in loss of subsidiaries		(697,149	)		(162,767	)
Depreciation and amortization		2,141,550			3,046,168			5,617,541
Decrease in cash held in escrow		257,379			219,289
Minority interest in loss of subsidiaries		(162,767	)		6,588,907			(2,764,829	)
Increase in other assets		(68,524	)		(55,969	)
Accrued interest added to principal of mortgage note payable		0			0			50,876
Increase in accounts payable and other liabilities		472,274			330,584
Decrease (increase) in cash held in escrow		219,289			2,249,748			(782,797	)
Increase (decrease) in accrued interest payable		33,290			(973,362	)
Decrease (increase) in other assets		(55,969	)		209,417			(251,806	)
Decrease in security deposits payable		(14,661	)		(39,811	)
Increase in accounts payable and other liabilities		330,584			122,993			253,385
Increase in due to local general partners and affiliates		395,860			1,260,558
Increase (decrease) in accrued interest payable		(973,362	)		1,203,665			(73,571	)
Decrease in due to local general partners and affiliates		0			(205,498	)
Increase in security deposits payable		(39,811	)		29,336			55,255
Increase (decrease) in due to general partners and affiliates		(195,713	)		(12,887	)
Increase in due to local general partners and affiliates		1,260,558			192,987			1,366,799
Total adjustments		(15,977,381	)		4,085,263
Decrease in due to local general partners and affiliates		(205,498	)		(2,108,797	)		0
Net cash provided by (used in) operating activities		41,671			(868,486	)
(Decrease) increase in due to general partners and affiliates		(12,887	)		(1,019,676	)		(2,267,341	)
Cash flows from investing activities:
Total adjustments		4,085,263			4,640,983			(622,002	)
Proceeds from sale of properties		2,319,526			2,775,487
Net cash (used in) provided by operating activities		(868,486	)		(1,200,087	)		(1,323,573	)
Cost paid relating to sale of properties		(301,721	)		0
Cash flows from investing activities:
Increase in cash held in escrow		(63,816	)		(5,171	)
Proceeds from sale of properties		2,775,487			33,668,248			4,725,000
Improvements to property and equipment		(268,862	)		(567,252	)
Cost paid relating to sale of properties		0			(2,148,378	)		0
Net cash provided by investing activities		1,685,127			2,203,064
(Increase) decrease in cash held in escrow		(5,171	)		(146,813	)		137,819
Cash flows from financing activities:
Improvements to property and equipment		(567,252	)		(536,351	)		(1,140,093	)
Repayments of mortgage notes		(2,062,090	)		(1,488,108	)
Net cash provided by (used in) investing activities		2,203,064			30,836,706			3,722,726
Increase in due to selling partner		6,041			7,500
Cash flows from financing activities:
Distributions		0			(1,018,529	)
Increase in deferred costs		0			0			(122,024	)
Decrease in capitalization of consolidated subsidiaries attributable to minority interest		(14,752	)		0
Proceeds from mortgage notes		0			0			1,500,000
Net cash used in financing activities		(2,070,801	)		(2,499,137	)
Repayments of mortgage notes		(1,488,108	)		(14,255,427	)		(3,470,980	)
Net decrease in cash and cash equivalents		(344,003	)		(1,164,559	)
(Decrease) increase in due to selling partner		7,500			7,500			(1,404,772	)
Cash and cash equivalents at beginning of period		3,311,185			4,475,744
Distributions		(1,018,529	)		(9,017,114	)		0
Cash and cash equivalents at end of period**	$	2,967,182		$	3,311,185
(Decrease) increase in capitalization of consolidated subsidiaries attributable to minority interest		0			(3,479,884	)		(371,916	)
Supplemental disclosure of cash flows information: Cash paid during the year for interest	$	943,295		$	1,795,430
Net cash used in financing activities		(2,499,137	)		(26,744,925	)		(3,869,692	)
Net (decrease) increase in cash and cash equivalents		(1,164,559	)		2,891,694			(1,470,539	)
Cash and cash equivalents at beginning of period		4,475,744			1,584,050			3,054,589
Cash and cash equivalents at end of period**	$	3,311,185		$	4,475,744		$	1,584,050
Supplemental disclosure of cash flows information: Cash paid during the year for interest	$	1,795,430		$	3,612,241		$	3,553,771

- 4924 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

(continued)

	Years Ended March 31,
	For the Period April 1, 2008 through December 31, 2008			Year Ended March 31, 2008
	2008			2007			2006
Summarized below are the components of the gain (loss) on sale of properties:
Summarized below are the components of the gain on sale of properties:
Proceeds from sale of properties – net	$	(2,017,805	)	$	(2,775,487	)
Proceeds from sale of properties – net	$	(2,775,487	)	$	(31,519,870	)	$	(4,725,000	)
Decrease in property and equipment, net of accumulated depreciation		17,687,603			8,183,530
Decrease in property and equipment, net of accumulated depreciation		8,183,530			37,200,647			22,640,201
Decrease in deferred costs		523,846			517,173
Decrease in deferred costs		517,173			231,064			123,211
(Increase) decrease in other assets		725,691			3,890,695
(Increase) decrease in other assets		3,890,695			(2,526,819	)		2,635,835
Decrease in cash held in escrow		1,554,825			666,463
Decrease in cash held in escrow		666,463			3,154,424			773,382
Decrease in accounts payable and other liabilities		(2,619,563	)		(268,820	)
Decrease in accounts payable and other liabilities		(268,820	)		(2,659,063	)		(231,725	)
Decrease in accrued interest		(1,986,635	)		(39,095	)
Decrease in accrued interest		(39,095	)		(68,451	)		(5,179	)
Decrease in security deposits payable		(201,130	)		(31,849	)
Decrease in security deposits payable		(31,849	)		(631,949	)		(257,123	)
Decrease in mortgage notes payable		(25,486,356	)		(7,857,809	)
Decrease in mortgage notes payable		(7,857,809	)		(11,939,981	)		(19,345,982	)
Decrease in due to local general partners and their affiliates		(4,494,998	)		(249,067	)
Decrease in due to local general partners and their affiliates		(249,067	)		(1,349,552	)		(9,570,635	)
Decrease in due to general partners and affiliates		(105,897	)		(60,845	)
Decrease in due to general partners and affiliates		(60,845	)		825,391			(37,500	)
Decrease in due to selling partners		(898,541	)		0
Decrease in due to selling partners		0			(418,935	)		0
Capital contribution – general partners		47,500			0
Capital contribution – general partners		0			225,323			0
Increase in capitalization of consolidated subsidiaries attributable to minority interest		0			176,687
Increase in capitalization of consolidated subsidiaries attributable to minority interest		176,687			64,006			100,001
Supplemental disclosures of non-cash investing and financing activities:
Supplemental disclosures of non-cash investing and financing activities:
Contribution from write-off of partnership management fees related to sold properties	$	1,126,618		$	795,312
Contribution from write-off of partnership management fees related to sold properties	$	795,312		$	12,325,256		$	0
Increase in other assets – proceeds receivable from sale of partnership limited interest		0			(700,000	)		0
Distributions payable		10,288			0			0

** Cash and cash equivalents, at end of period, includes cash and cash equivalents from discontinued operations of $~~3,316,~~0 ~~$474,178~~ and $~~266~~3,~~521~~316, respectively.

- 5025 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, ~~2008~~2009

NOTE 1 -– General

Liberty Tax Credit Plus II L.P., a Delaware limited partnership (the “Partnership”), was organized on March 25, 1988, but had no activity until July 1, 1988 (which date is considered to be inception for financial accounting purposes). The Partnership had no operations until commencement of the public offering on July 20, 1988.

As of March 31, 2009, the Partnership has disposed of all twenty-seven of its original investments (see Note 10).

The general partners of the Partnership are Related Credit Properties II L.P., a Delaware limited partnership (the “Related General Partner”), Liberty Associates II L.P., a Delaware limited partnership (“Liberty Associates”), and Liberty GP II Inc. (formerly Shearson Liberty GP II Inc.), a Delaware corporation (the “Liberty General Partner” and together with the Related General Partner and Liberty Associates, the “General Partners”). The general partner of the Related General Partner is Related Credit Properties II Inc., a Delaware corporation. The general partners of Liberty Associates are Related Credit Properties II Inc., and the Liberty General Partner. Liberty Associates is also the special limited partner of the Partnership. The ultimate parent of the General Partners is Centerline Holding Company (“Centerline”).

The Partnership’s business iswas to invest in other limited partnerships (“Local Partnerships”, “subsidiaries” or “subsidiary partnerships”) owning leveraged low-income multifamily residential complexes (“Apartment Complexes”) that are eligible for the low-income housing tax credit (“Housing Tax Credit”) enacted in the Tax Reform Act of 1986, and to a lesser extent in Local Partnerships owning properties (“Rehabilitation Projects” and together with the Apartment Complexes, the “Properties”) that are eligible for the historic rehabilitation tax credit. The Partnership’s investment in each Local Partnership represents from a 73.52% to a 98% interest in that Local Partnership. The Partnership originally invested in twenty-seven Local Partnerships. During the year ended March 31, 2008, the property and the related assets and liabilities of one Local Partnership and the limited partnership interest in two Local Partnerships were sold. Through the year ended March 31, 2008, the properties and the related assets and liabilities of fourteen Local Partnerships and the limited partnership interest in eight Local Partnerships were sold. In addition, as of March 31, 2008, one Local Partnership has entered into an agreement to sell its property and the related assets and liabilities (see Note 10), which was subsequently sold (see Note 14).

The Partnership was authorized to issue a total of 200,000 Beneficial Assignment Certificates (“BACs”), of which 120,000 have been registered with the Securities and Exchange Commission for sale to the public. The public offering was completed on January 9, 1989 with a total of 115,917.5 BACs sold and $115,917,500 of proceeds received by the Partnership. The Partnership is in the process of winding down its operations having sold its last remaining investment in Local Partnership on December 31, 2008.

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

NOTE 2 -– Summary of Significant Accounting Policies

a) Basis of ~~Consolidation~~Accounting

~~The~~On ~~consolidated~~December ~~financial~~31, ~~statements~~2008, ~~include~~ the ~~accounts of the~~ Partnership ~~and~~sold ~~9, 19~~its ~~and~~last 22remaining investment in subsidiary partnerships. The inPartnership ~~which~~is in the ~~Partnership~~process isof awinding down ~~limited~~its ~~partner for~~operations. To fairly present the ~~years~~financial ~~ended~~position ~~March~~of 31the Partnership, ~~2008,~~management ~~2007~~has ~~and~~prepared ~~2006 (~~the ~~2007~~March 31, ~~2006~~2009 ~~and~~financial ~~2005~~statements ~~“Fiscal~~using ~~Years”), respectively. Through~~ the ~~rights~~liquidation basis of ~~the~~accounting. The ~~Partnership~~remaining ~~and/or~~assets awere ~~General~~written ~~Partner~~down ~~(which~~to ~~has~~their aestimated ~~contractual~~net ~~obligation~~realizable tovalue ~~act~~of onapproximately $2,513,000, ~~behalf~~and of the ~~Partnership)~~ remaining liabilities were written down to ~~remove~~their ~~the~~estimated net ~~general~~settlement ~~partner~~value of ~~the~~approximately ~~subsidiary~~$118,000. Management ~~local~~plans ~~partnerships~~to (distribute the ~~“Local~~remaining ~~General~~assets, ~~Partner”)~~if ~~and~~any, toafter ~~approve~~all ~~certain~~remaining ~~major~~expenses ~~operating~~ and accrued expenses have been settled. The accompanying financial statements ~~decisions,~~for the ~~Partnership~~year ~~has~~ended aMarch ~~controlling~~31, ~~financial~~2008 ~~interest~~are inpresented on the ~~subsidiary~~ ~~local~~accrual ~~partnerships~~basis of accounting.

b) Basis of Consolidation

The consolidated financial statements include the accounts of the Partnership and 0 and 9 subsidiary partnerships in which the Partnership was a limited partner for the years ended March 31, 2009 and 2008 (the 2008 and 2007 “Fiscal Years”), respectively.

For financial reporting purposes, the Partnership’s fiscal year ends on March 31, in order to allow adequate time for the subsidiaries’ financial statements to be prepared and consolidated. The books and records of the Partnership are maintained on the accrual basis of accounting, in accordance with U.S. generally accepted accounting principles (“GAAP”). All subsidiaries have fiscal years ending December 31. Accounts of the subsidiaries have been adjusted for intercompany transactions from January 1 through March 31. All intercompany accounts and transactions with the subsidiary partnerships have been eliminated in consolidation.

Increases (decreases) in the capitalization of consolidated subsidiaries attributable to minority interest arise from cash contributions and cash distributions to the minority interest partners.

The Partnership’s investment in each subsidiary partnership iswas equal to the respective subsidiary partners’ equity less minority interest capital, if any. Losses attributable to minority interests which ~~exceed~~exceeded the minority interest’s investment in a subsidiary partnership ~~have~~were ~~been~~ charged to the Partnership. ~~Such~~ Such losses aggregated approximately $~~290,000,~~0 and $~~403~~290,000 ~~and $0~~ for the years ended March 31, 2009 ~~2008, 2007~~ and ~~2006~~2008, respectively. In consolidation, all subsidiary partnership losses were ~~are~~ included in the Partnership’s capital account except for losses allocated to minority interest capital.

bc) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, cash in banks, and investments in short-term highly liquid instruments purchased with original maturities of three months or less.

~~c) Property and~~- ~~Equipment~~26 -

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 Statement of Financial Accounting Standards 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 year ended March 31, 2008, the Partnership has recorded $0 as a loss on impairment of fixed assets. Through March 31, 2008, the Partnership has recorded approximately $15,022,000 as a loss on impairment of fixed assets.

- 51 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, ~~2008~~2009

~~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.~~d) ~~Discontinued operations include the results of operations~~Property 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. See Note 13 regarding discontinued operations.Equipment

AtProperty and equipment to be held and used were carried at cost which included the ~~time~~purchase ~~management~~price, ~~commits~~acquisition tofees aand ~~plan~~expenses, toconstruction ~~dispose~~period interest and any other costs incurred in acquiring such property and equipment. The cost of property ~~assets,~~and ~~said~~equipment ~~assets~~was ~~are~~depreciated ~~adjusted~~over their estimated useful lives using accelerated and straight-line methods. Expenditures for repairs and maintenance were charged to expense as incurred; major renewals and betterments were capitalized. At the ~~lower~~time property and equipment were retired or otherwise disposed of, ~~carrying~~the ~~amount~~cost and accumulated depreciation were eliminated from the assets and accumulated depreciation accounts and the profit or ~~fair~~loss ~~value~~on ~~less~~such disposition ~~costs~~was toreflected ~~sell~~in earnings. The ~~Such~~Partnership ~~assets~~complied with ~~would~~Statement beof ~~classified~~Financial asAccounting ~~property~~Standards ~~and~~No. ~~equipment-held~~144 “Accounting for ~~sale~~the Impairment or Disposal of Long-Lived Assets” (“SFAS No. 144”). A loss on impairment of assets was recorded when management estimated amounts recoverable through future operations and ~~are~~sale ~~not~~of the Property on an undiscounted basis were below depreciated cost. ~~There~~Property isinvestments themselves ~~one~~were ~~asset~~reduced ~~classified~~to asestimated ~~property~~fair value (generally using discounted cash flows) when the Property was considered to be impaired and the depreciated cost ~~equipment-held~~exceeded ~~for~~estimated ~~sale~~fair atvalue. During the year ended March 31, ~~2008~~2009, the Partnership did not record any loss on impairment of fixed assets. ~~See~~Through ~~Notes~~March 1031, ~~and~~2009, ~~13 regarding~~the ~~assets~~Partnership ~~held~~recorded ~~for~~a ~~sale~~cumulative loss ~~and~~on ~~discontinued~~impairments ~~operations~~of approximately $15,022,000.

d)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. ~~Revenue~~Discontinued operations ~~Recognition~~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. See Note 12 regarding discontinued operations.

~~Rental~~At the ~~income~~time ismanagement ~~earned~~commits ~~primarily~~to ~~under~~a ~~standard~~plan ~~residential~~to ~~operating~~dispose ~~leases and is typically due the first day~~ of ~~each month~~assets, ~~but~~said ~~can~~assets ~~vary~~are ~~by Property due~~ adjusted to the ~~terms~~ lower of ~~the~~carrying ~~tenant~~amount ~~leases.~~or ~~Rental~~fair ~~income~~value isless ~~recognized~~costs ~~when~~to ~~earned~~sell. ~~and~~Such ~~charged~~assets towould ~~tenants’~~be ~~accounts~~classified ~~receivable~~as ifproperty ~~not~~and ~~received~~equipment-held byfor ~~the~~sale ~~due~~and ~~date.~~are ~~Rental payments~~not ~~received~~depreciated. As ~~in advance~~ of ~~the~~March ~~due~~31, ~~date~~2009, ~~are~~the ~~deferred~~Partnership ~~until~~has ~~earned.~~sold ~~Rental subsidies~~all ~~are~~twenty-seven ~~recognized~~of asits ~~rental~~remaining ~~income~~investments. See ~~during~~Notes ~~the~~10 ~~month~~and in12 regarding ~~which~~discontinued ~~it is earned~~operations.

e) Revenue Recognition

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

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.

Other revenues from operations include the following amounts at ~~both~~ the Partnership ~~and Local Partnership~~ level:

Years Ended March 31,

2008

2007*

2006*

2009

2008*

Interest

~~201~~56,~~420~~908

$155,808

~~252,247~~

~~53,690~~

Other

~~127~~4,~~700~~150

10,233

~~132,406~~

~~102,865~~

Total other revenue

~~329~~61,~~120~~058

$166,041

~~384,653~~

~~156,555~~

* Reclassified for comparative purposes.

Other revenues from discontinued operations include the following amounts at both the Partnership and Local Partnership level:

Years Ended March 31,

2008

2007*

2006*

2009

2008*

Interest

2317,~~712~~074

$69,324

~~221,917~~

~~168,594~~

Other

~~136~~91,~~077~~972

253,544

~~498,543~~

~~726,596~~

Total other revenue

~~159~~109,~~789~~046

$322,868

~~720,460~~

~~895,190~~

* Reclassified for comparative purposes.

ef) Offering Costs

Costs incurred to sell BACs, including brokerage and the nonaccountable expense allowance, ~~are~~were considered selling and offering expenses. These costs ~~are~~were charged directly to limited partners’ capital.

~~f) Income~~- 27 ~~Taxes~~-

- 52 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, ~~2008~~2009

g) ~~Loss~~Income ~~Contingencies~~Taxes

The Partnership ~~records~~is ~~loss~~not ~~contingencies~~required asto aprovide ~~charge~~for, toor ~~income~~pay, ~~when~~any ~~information~~federal income taxes. ~~becomes~~Net ~~available~~income ~~which~~or ~~indicates~~loss ~~that~~generated itby isthe ~~probable~~Partnership ~~that~~is anpassed ~~asset~~through ~~has~~to ~~been~~the ~~impaired~~partners orand ais ~~liability~~required ~~has~~to ~~been~~be ~~incurred~~reported asby ofthem. ~~the~~The ~~date~~Partnership ofmay ~~the~~be ~~financial~~subject ~~statements~~to state and ~~the~~local ~~amount~~taxes ofin ~~loss~~jurisdictions ~~can~~in bewhich ~~reasonably~~it ~~estimated~~operates. InFor ~~addition~~income tax purposes, the Partnership ~~evaluates~~has a ~~potential~~fiscal ~~environmental~~year ~~liability~~ending ~~independently~~December ~~from~~31 ~~any~~(Note ~~potential claim for recovery~~9).

h) ~~Use~~Loss ~~of Estimates~~Contingencies

The Partnership recorded loss contingencies as a charge to income when information becomes available which indicates that it is probable that an asset has been impaired or a liability has been incurred as of the date of the financial statements and the amount of loss can be reasonably estimated. In addition, the Partnership evaluated a potential environmental liability independently from any potential claim for recovery.

i) Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

ij) New Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 160, ~~Noncontrolling~~“Non-controlling Interests in Consolidated Financial Statements”. This statement was issued ~~with~~ with the intent to improve the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements for those entities that have outstanding ~~noncontrolling~~non-controlling interest in one or more subsidiaries. The effective date for this provision is for fiscal ~~year~~years ~~ends~~ beginning after December 15, 2008. The adoption ~~Partnership~~of isthis ~~currently~~FASB ~~evaluating~~is ~~the~~not ~~impact~~expected ofto ~~the provisions~~have ofa ~~this~~material ~~statement~~ impact on the Partnerships the consolidated financial statements.

NOTE 3 -– Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of each class of financial instruments (all of which are held for nontrading purposes) for which it is practicable to estimate that value:

Cash and Cash Equivalents, Investments Available-for-Sale and Cash Held in Escrow

The carrying amount approximates fair value.

Mortgage Notes Payable

~~The fair~~During ~~value~~the first quarter of ~~mortgage~~2008, ~~notes~~we ~~payable~~adopted isthe ~~estimated~~provisions required by SFAS No. 157 relating to financial assets and liabilities. SFAS No. 157 defines fair value, ~~where~~establishes ~~practicable~~a framework for measuring fair value, ~~based~~and onexpands disclosures about fair value measurements. SFAS No. 157 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not ~~borrowing~~require ~~rate~~any ~~currently~~new ~~available~~fair ~~for~~value ~~similar~~measurements ~~loans~~of reported balances.

~~The~~As ~~estimated~~permitted, ~~fair~~we ~~values~~chose ofnot to elect the ~~Partnership’s~~fair ~~mortgage~~value ~~notes~~option ~~payable~~as ~~from~~prescribed ~~operating~~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 ~~are~~had asnot ~~follows:~~been previously carried at fair value. Therefore, we did not elect to fair value any additional items under SFAS No. 159.

	March 31, 2008				March 31, 2007
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Mortgage notes payable for which it is:
Practicable to estimate fair value	$	0	$	0	$	0	$	0
Not practicable	$	25,744,882		*	$	34,049,829		*

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. The following are financial instruments for which the Partnership’s estimate of fair value differs from the carrying amounts:

~~The estimated~~- ~~fair values of the Partnership’s mortgage notes payable from~~28 ~~discontinued liabilities are as follows (see Note 7):~~-

	March 31, 2008				March 31, 2007
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Mortgage notes payable for which it is:
Practicable to estimate fair value	$	1,803,564	$	1,803,564	$	1,833,341	$	1,833,341
Not practicable	$	0		*	$	1,579,193		*

- 53 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, ~~2008~~2009

* Management believes it is not practicable to estimate the fair value of the mortgage notes payable because mortgage programs with similar characteristics are not currently available to the Local Partnerships.

	At March 31, 2009				At March 31, 2008
	Carrying Amount		Fair Estimated Value		Carrying Amount		Fair Estimated Value
ASSETS:
Note receivable	$	1,400,000	$	1,400,000	$	0	$	0

The carrying amount of other financial instruments that require such disclosure approximates fair value.

	At March 31, 2009				At March 31, 2008
	Carrying Amount		Fair Estimated Value		Carrying Amount		Fair Estimated Value
LIABILITIES:
Mortgage notes	$	0	$	0	$	27,548,446	$	27,548,446

NOTE 4 -– Property and Equipment

The components of property and equipment and their estimated useful lives from operating assets ~~are~~were as follows:

	March 31,						Estimated Useful Lives (Years)	~~Estimated Useful Lives (Years)~~
	2008				2007
	2009			2008
Land	$	~~3,928,356~~0		$	$3,928,356	~~4,123,660~~	-	-
Building and improvements		~~39,657,511~~0			39,657,511	~~53,491,274~~	15 to 40	~~15 to 40~~
Other		~~2,654,192~~0			2,654,192	~~2,847,185~~	5 to 15	~~5 to 15~~
		46,240,059				60,462,119
		0			46,240,059
Less: Accumulated depreciation		~~(29,544,930~~0	)		(29,544,930	~~(34,809,639~~)	)
	$	~~16,695,129~~0		$	$16,695,129	~~25,652,480~~

The initial cost to the Partnership, asincluded ~~shown on Schedule III in Item 15, includes~~ $6,955,050 of acquisition fees paid or accrued to the General Partners, $1,606,014 of acquisition expenses and $7,015,991 of capitalized interest.

In connection with the rehabilitation of the Properties, the subsidiary partnerships ~~have~~ incurred developer’s fees of $20,563,695 to the local general partners and affiliates. Such fees ~~have~~were ~~been~~ included in the cost of property ~~and~~ and equipment.

~~Depreciation~~There was no depreciation expense from operations for the years ended March 31, ~~2008,~~2009 ~~2007~~ and ~~2006 amounted to~~ ~~$1,799,478, $1,784,894 and $1,699,880, respectively~~2008.

During the ~~2007~~2008 and ~~2006~~2007 Fiscal Years, there were write-offs of accumulated depreciation in the amounts of $831,~~266~~668,~~357~~837 and $~~50,092,640, respectively, and $~~8,266,357, ~~and $49~~respectively,~~914,170~~ all of which ~~these write-offs~~ were related to the discontinued assets.

The components of property and equipment held for sale and their estimated useful lives from discontinued assets ~~are~~were as follows:

	March 31,						Estimated Useful Lives (Years)	~~Estimated Useful Lives (Years)~~
	2008			2007
	2009			2008
Land	$	~~673,429~~0		$	~~705~~673,~~690~~429		-	-
Building and improvements		~~2,174,086~~0			32,~~765~~174,~~499~~086		15 to 40	~~15 to 40~~
Other		0			36,901			5 to 15
		0			2,847,515
		2,847,515			4,508,090
Less: Accumulated depreciation		0			(1,242,564	)
Less: Accumulated depreciation		(1,242,564	)		(2,137,910	)
	$	0		$	1,604,951
	$	1,604,951		$	2,370,180

Depreciation expense from discontinued operations for the years ended March 31, ~~2008,~~2009 ~~2007~~ and ~~2006~~ 2008 amounted to $~~306~~881,~~824,~~341 ~~$695,404~~ and $32,~~806~~106,~~422~~302, respectively.

- 5429 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, ~~2008~~2009

NOTE 5 -– Cash Held in Escrow

Cash held in escrow from operating assets iswas restricted and ~~consists~~consisted of the following:

	March 31,
	2008			2007
	2009		2008
Real estate taxes, insurance, reconstruction and other	$	~~252,773~~0	$	$252,773	~~677,138~~
Reserve for replacements		~~1,082,570~~0		1,082,570	~~1,504,880~~
Tenant security deposits		~~216,472~~0		216,472	~~271,440~~
	$	~~1,551,815~~0	$	$1,551,815	~~2,453,458~~

Cash held in escrow from discontinued assets iswas restricted and ~~consists~~consisted of the following:

	March 31,
	2008			2007
	2009		2008
Real estate taxes, insurance, reconstruction and other	$	~~173,501~~0	$	$173,501	~~67,020~~
Reserve for replacements		~~4,505~~0		4,505	~~71,204~~
Tenant security deposits		~~18,567~~0		18,567	~~37,287~~
	$	~~196,573~~0	$	$196,573	~~175,511~~

NOTE 6 -– Deferred Costs

The components of deferred costs and their periods of amortization from operating assets ~~are~~were as follows:

	March 31,
	2008				2007			Period
	2009			2008			Period
Financing expenses	$	~~1,025,163~~0		$	$1,025,163	~~1,580,804~~	*	*
Less: Accumulated amortization		~~(271,333~~0	)		(271,333	~~(290,528~~)	)
	$	~~753,830~~0		$	$753,830	~~1,290,276~~
* Over the life of the respective mortgages

~~Amortization~~There was no amortization expense from operations for the years ended March 31, ~~2008,~~2009 ~~2007~~ and ~~2006 amounted to $28,738,~~ ~~$28,739 and $28,739, respectively~~2008.

During the years ended March 31, ~~2008~~2009 and ~~2007~~2008, there were decreases in deferred costs of $~~613~~1,~~584~~075,092 and $1613,~~386,141~~584 and decreases in accumulated amortization of $96551,~~411~~244 and $196,~~155~~411,~~078,~~ respectively, ~~due~~all toof ~~the~~which ~~write-offs~~were ~~and~~related ~~reclasses~~to ~~into~~ discontinued ~~operations~~ assets.

~~The~~Amortization ~~components~~expense offrom ~~deferred~~discontinued ~~costs~~operations ~~and~~for ~~their~~the ~~periods~~years ofended ~~amortization~~March ~~from~~31, ~~discontinued~~2009 and 2008 ~~assets~~amounted ~~are~~to as$229,982 ~~follows:~~and $35,248, respectively.

	March 31,
	2008			2007			Period
Financing expenses	$	199,319		$	257,262		*
Less: Accumulated amortization		(199,319	)		(241,287	)
	$	0		$	15,975
* Over the life of the respective mortgages

Amortization expense from discontinued operations for the years ended March 31, 2008, 2007 and 2006 amounted to $6,510, $537,131 and $82,500, respectively.

- 55 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2008

NOTE 7 – Mortgage Notes Payable

~~The~~Mortgage ~~mortgage~~ notes ~~are~~ payable inamounted ~~aggregate~~to ~~monthly~~$0 ~~installments~~and ~~of approximately~~ $~~127~~25,~~000~~744,882 ~~including~~at ~~principal~~March ~~and~~31, ~~interest~~2009 atand ~~rates~~2008 respectively. Mortgage ~~varying~~notes ~~from~~payable 1%for tothe 9%discontinued ~~per~~liabilities ~~annum~~at March 31, ~~through~~2009 ~~2032.~~and 2008 was approximately $0 and $1,804,000, respectively. Each subsidiary partnership’s mortgage note payable iswas collateralized by the land and buildings of the respective subsidiary partnership and the assignment of certain subsidiary partnerships’ rents and leases and iswas without further recourse.

~~Annual~~Accrued ~~principal~~interest ~~payment~~payable ~~requirements~~at ofMarch ~~the~~31, ~~subsidiary~~2009 ~~partnerships~~and ~~for~~2008 ~~each~~was of$0 and $1,904,958, respectively. Accrued interest payable for the discontinued ~~next~~liabilities ~~five~~at ~~years~~March 31, 2009 and ~~thereafter~~2008 ~~are~~was asapproximately ~~follows:~~$0 and $48,000, respectively. Interest accrued on all mortgage loans, which included primary and secondary loans. Certain secondary loans had provisions such that interest was accrued but not payable until a future date.

December 31,	Amount
2008	$	5,079,738
2009		417,656
2010		446,187
2011		476,684
2012		509,282
Thereafter		18,815,335
	$	25,744,882

Accrued interest payable at March 31, 2008 and 2007 was approximately $1,905,000 and $2,945,000, respectively. Interest accrues on all mortgage loans, which include primary and secondary loans. Certain secondary loans have provisions such that interest is accrued but not payable until a future date. The Partnership anticipates the payment of accrued interest on the secondary loans (which make up the majority of the accrued interest payable amount and which have been accumulating since the Partnership’s investment in the respective Local Partnership) will be made from future refinancings or sales proceeds of the respective Local Partnerships.

United – Glenarden I Limited Partnership (“Glenarden I”)

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 demand payment of the mortgage. The Local General Partner has submitted an appeal but cannot predict the outcome.

United – Glenarden II Limited Partnership (“Glenarden II”)

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. HUD can demand payment of the mortgage. The Local General Partner has submitted an appeal but cannot predict the outcome.

The mortgage note from discontinued operations is payable in aggregate monthly installments of approximately $19,000 including principal and interest with a rate of 10.75% per annum and a maturity date of 2007. See discussion below regarding this mortgage note for Williamsburg.

Annual principal payment requirements of the subsidiary partnerships for each of the next five years and thereafter are as follows:

December 31,	Amount
2008	$	1,803,564
2009		0
2010		0
2011		0
2012		0
Thereafter		0
	$	1,803,564

Accrued interest payable for the discontinued liabilities at March 31, 2008 and 2007 was approximately $48,000 and $21,000, respectively. Interest accrues on all mortgage loans, which include primary and secondary loans. Certain secondary loans have provisions such that interest is accrued but not payable until a future date. The Partnership anticipates the payment of accrued interest on the secondary loans (which make up the majority of the accrued interest payable amount and which have been accumulating since the Partnership’s investment in the respective Local Partnership) will be made from future refinancings or sales proceeds of the respective Local Partnerships.

Williamsburg Residential L.P. (“Williamsburg”)

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 ~~will~~required ~~require~~ the sale of the property and equipment ~~securing~~ securing the mortgage loan. In addition, a receiver was appointed by the court to provide management of the property until sale ~~(see Note 10)~~. Williamsburg was ~~subsequently~~ sold on May 9, 2008 (see Note 14 10).

- 5630 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, ~~2008~~2009

United – Glenarden I Limited Partnership (“Glenarden I”)

In 2007, 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 could have demanded payment of the mortgage. The Local General Partner submitted an appeal but could not predict the outcome. On October 21, 2008, the Partnership sold its limited partnership interest in Glenarden I (see Note 10).

United – Glenarden II Limited Partnership (“Glenarden II”)

In 2007, 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. HUD could have demanded payment of the mortgage. The Local General Partner submitted an appeal but could not predict the outcome. On October 21, 2008, the Partnership sold its limited partnership interest in Glenarden II (see Note 10).

NOTE 8 – Related Party Transactions

Related Party Fees

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

The General Partners and their affiliates perform services for the Partnership. The costs incurred to related parties from operations for the years ended March 31, ~~2008,~~2009 ~~2007~~ and ~~2006~~2008 ~~are~~were as follows:

	Years Ended March 31,
	2008			2007*		2006*
	2009		2008*
Partnership management fees (a)	$	~~235~~8,~~994~~607	$	$235,994	~~1,016,511~~	$	~~1,257,250~~
Expense reimbursement (b)		~~217~~31,~~375~~857		217,375	~~168,130~~		~~374,999~~
Local administrative fee (d)		10,000			10,000		10,000
Total general and administrative-related parties	$	40,464	$	453,369
Total general and administrative-General Partners		463,369			1,194,641		1,642,249
* Reclassified for comparative purposes.
Property management fees incurred to Affiliates of the Local General Partners (c)		305,851			307,947		333,845
Total general and administrative-related parties	$	769,220		$	1,502,588	$	1,976,094

* ReclassifiedThe costs incurred to related parties from discontinued operations for ~~comparative~~the ~~purposes.~~years ended March 31, 2009 and 2008 were as follows:

The costs incurred to related parties from discontinued operations for the years ended March 31, 2008, 2007 and 2006 are as follows:

	Years Ended March 31,
	2009		2008*

Local administrative fee (d)	$	9,375	$	15,816
Total general and administrative-General Partners		9,375		15,816
Property management fees incurred to Affiliates of the Local General Partners (c)		238,652		402,190
Total general and administrative-related parties	$	248,027	$	418,006

* Reclassified for comparative purposes.

	Years Ended March 31,
	2008		2007*		2006*
Local administrative fee (d)	$	5,816	$	10,000	$	21,500
Total general and administrative-General Partners		5,816		10,000		21,500
Property management fees incurred to Affiliates of the Local General Partners (c)		96,339		703,510		850,903
Total general and administrative-related parties	$	102,155	$	713,510	$	872,403
* 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 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). During the year ended March 31, 2009 and 2008, management deemed the unpaid partnership management fees related to sold properties uncollectible and wrote off approximately $1,127,000 and $750,000, respectively, resulting in a non-cash General Partner contribution of the same amount. Partnership management fees owed to the General Partners amounting to approximately $0 and $1,192,000 were accrued and unpaid as of March 31, 2009 and March 31, 2008.

(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 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). During the year ended March 31, 2008 and 2007, management deemed the unpaid partnership management fees related to sold properties uncollectible and wrote off approximately $750,000 and $12,325,000, respectively, resulting in a non-~~cash~~ ~~General Partner contribution of the same amount. Partnership management fees owed to the General Partners amounting to approximately $1,192,000 and $2,023,000 were accrued and unpaid as of March~~ 31~~, 2008 and March 31, 2007. In the~~ ~~absence of the General Partner’s continued accrual without payment, the Partnership will not be in a position to meet its obligations.~~-

(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 $72,000 and $33,000 were accrued and unpaid as of March 31, 2008 and 2007, respectively.

(c) Property management fees incurred by subsidiary partnerships in operations amounted to $456,832, $1,131,298 and $1,430,711 for the 2007, 2006 and 2005 Fiscal Years, respectively. Of these fees $402,190, $1,011,457 and $1,184,748 were incurred to affiliates of the Local General Partners. Included in amounts incurred to affiliates of the Local General Partners are $0, $441,513 and $425,268, respectively, which were also incurred to affiliates of the General Partners. Also included in these fees are $96,339, $703,510 and $850,903, respectively, which were incurred to affiliates of the Local General Partners of Properties classified as discontinued operations.

- 57 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, ~~2008~~2009

(db) ~~Liberty~~ The ~~Associates,~~Partnership areimburses ~~special~~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 ~~partner~~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,’ isperformance. Expense ~~entitled~~reimbursements toand ~~receive~~asset amonitoring ~~local~~fees ~~administrative~~owed ~~fee~~to affiliates of upthe General Partners amounting to approximately $24,~~500~~000 ~~per~~and ~~year~~$72,000 ~~from~~were accrued and unpaid ~~each~~as ~~subsidiary~~of ~~partnership~~March 31, 2009 and 2008, respectively.

(ec) ~~Liberty~~ Property ~~Associates~~management ~~has~~fees aincurred 1%by ~~interest~~subsidiary aspartnerships ~~the~~in ~~special~~operations ~~limited~~amounted ~~partner~~to $270,259 inand ~~each~~$456,832 offor the ~~subsidiary~~ ~~partnerships. Liberty~~2008 ~~Associates~~and ~~received~~2007 ~~cash~~Fiscal Years, ~~distributions~~respectively. Of ofthese ~~approximately~~fees $0238,652 ~~$4,000~~ and $5402,~~000~~190 ~~during~~were incurred to affiliates of the ~~2007~~Local General Partners, ~~2006~~all ~~and 2005~~of ~~Fiscal~~which ~~Years,~~were ~~respectively~~related to discontinued operations.

(fd) ~~During~~ Liberty ~~the~~Associates, ~~years~~a ~~ended~~special ~~March~~limited ~~31,~~partner ~~2008,~~of ~~2007~~the ~~and~~subsidiary ~~2006~~partnerships, ~~two Local Partnerships (having~~was ~~common~~entitled ~~ownership) accrued or paid~~ to ~~its~~receive ~~managing~~a ~~agent~~local ~~salary~~administrative ~~reimbursements and~~fee ~~bookkeeping~~of ~~fees~~up into ~~the amount of~~ $~~797~~2,~~149,~~500 ~~$692,886~~per ~~and~~year ~~$819,726,~~from ~~respectively~~each subsidiary partnership.

(e) Liberty Associates had a 1% interest as the special limited partner in each of the subsidiary partnerships. Liberty Associates did not receive any cash distributions during both the 2008 and 2007 Fiscal Years.

(f) During the years ended March 31, 2009 and 2008, two Local Partnerships (having common ownership) accrued or paid to its managing agent salary reimbursements and bookkeeping fees in the amount of $206,754 and $797,149, respectively.

Pursuant to the Partnership Agreement and the partnership agreements of the Local Partnerships (the “Local Partnership Agreements”), the General Partners and Liberty Associates received their allocable share of profits, losses and tax credits allocated by the Partnership and the Local Partnerships, respectively.

(g) Due to Local General Partners and affiliates at March 31, ~~2008~~2009 and ~~2007~~2008 consists of the following:

	March 31,
	2008		2007
	2009		2008
Operating advances	$	~~438,362~~0	$	~~616~~438,~~542~~362
Development fee payable		~~2,354,644~~0		2,354,644
Operating deficit advances		~~81,537~~0		81,537
Management and other fees		~~1,224,595~~0		501,~~476~~224,595
	$	~~4,099,138~~0	$	34,~~103~~099,~~199~~138

Due to Local General Partners and affiliates from discontinued liabilities at March 31, 2008 and 2007 consists of the following:

	March 31,
	2008		2007
Operating advances	$	0	$	65,546
General partner loans receivable		0		0
Management and other fees		0		124,400
	$	0	$	189,946

Advances to Local Partnerships

During the fiscal years ended March 31, ~~2008~~2009 and ~~2007~~2008, net advances to certain Local Partnerships by the General Partners amounted to $~~135~~495,~~175~~425 and $~~208~~135,~~724~~175, respectively. During the fiscal ~~year~~years ended March 31, 2009 and 2008, $973,195 and $1,571,030 of previously advanced funds ~~to Williamsburg~~ were ~~considered unrecoverable, and as such, were~~ written off byas uncollectible ~~the Partnership~~ and ~~were~~eliminated ~~considered~~in ~~a capital contribution by the Local Partnership (See Notes 7 and 12)~~consolidation. As of March 31, ~~2008~~ 2009 and ~~2007~~2008, the amounts due to the General Partners from Local ~~Partnerships~~ Partnerships totaled $~~477,770~~0 and $1477,~~913~~770,~~625,~~ respectively, and ~~are~~were recorded in due to general partners and affiliates on the consolidated balance sheets.

Due to General Partners and affiliates from the Local Partnerships consists of the following:

	March 31,
	2008		2007
	2009		2008
Goodfellow Place Limited Partnership	$	~~477,770~~0	$	~~342~~477,~~595~~770
Williamsburg Residential, L.P.		0		1,571,030
	$	477,770	$	1,913,625

- 5832 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, ~~2008~~2009

NOTE 9 – Taxable Net Loss

A reconciliation of the financial statement net loss to the taxable net loss for the Partnership and its consolidated subsidiaries is as follows:

	Years Ended December 31,
	Years Ended March 31,
	2008				2007			2006
	2009			2008
Financial statement
Net loss	$	(4,953,749	)		$	(5,841,070	)	$	(701,571	)
Net income (loss)	$	16,019,052		$	(4,953,749	)
Difference resulting from parent company having a different fiscal year for income tax and financial reporting purposes		(~~134~~2,~~813~~028,002	)		(134,813	~~(251,103~~)	)		~~117,657~~
Difference between depreciation and amortization expense recorded for financial reporting purposes and the accelerated cost recovery system utilized for income tax purposes		(~~307~~236,~~766~~238	)		(307,766	~~(4,071,448~~)	)		~~(2,232,945~~	)
Difference between gain/loss on sale of properties reported for financial reporting purposes and income tax purposes		512,~~544~~026,~~561~~354			5,544,561	~~(1,416,803~~	)		~~(11,702,920~~	)
Losses allocated to minority interest for income tax purposes		0			0	~~6,104,078~~			~~489,946~~
Non-deductible loss on impairment of property		0			0	~~3,540,000~~			~~6,075,000~~
Difference resulting from forgiveness of related-party debt considered a General Partner contribution for financial purposes and income for tax purposes		~~750~~1,~~312~~126,618			750,312	~~12,325,256~~			0
Tax exempt interest earned		~~251,578~~0			251,578	~~75,487~~			0
Other		~~360~~2,~~532~~151,406			360,532	~~518,171~~			~~(338,745~~	)
Taxable net income (loss) as shown on the income tax return for the calendar year ended	$	1,510,655			$	10,982,568		$	(8,293,578	)
Taxable net income as shown on the income tax return for the calendar year ended	$	29,059,190		$	1,510,655

NOTE 10 – Sale of Properties

~~The Partnership~~As ~~is currently in the process~~ of ~~disposing of its~~ ~~investments. During the fiscal year ended~~ March 31, ~~2008~~2009, the ~~property~~ ~~and~~Partnership ~~the~~has ~~related~~disposed ~~assets~~of ~~and~~all ~~liabilities~~twenty-seven of ~~one~~its ~~Local Partnership and the~~original ~~limited partnership interest in two Local Partnerships were sold~~investments. ~~As of~~During ~~March 31, 2008,~~ the ~~property~~fourth ~~and~~fiscal ~~the~~quarter ~~related~~ending ~~assets and liabilities of fourteen Local Partnerships and the limited partnership interest in eight Local Partnerships were sold. In addition, as of~~ March 31, ~~2008~~2009, ~~one Local~~ ~~Partnership has entered into an agreement to sell its property and~~ the ~~related assets and liabilities, which was subsequently sold (see Note 14). There can be no assurance as to when the~~ Partnership ~~will dispose~~commenced ~~of its remaining investments or~~ the ~~amount~~process of ~~proceeds~~winding ~~which~~down ~~may be~~its ~~received~~operations. ~~However,~~In ~~based~~accordance onwith the ~~historical~~provisions ~~operating results~~ of the ~~Local~~ ~~Partnerships and the current economic conditions~~Partnership Agreement, ~~including~~a ~~changes~~cash indistribution ~~tax laws,~~is itexpected isto ~~unlikely~~be ~~that~~made ~~the~~during ~~proceeds~~2009 from ~~such sales received by the~~available ~~Partnership~~cash ~~will~~less becosts ~~sufficient~~incurred to ~~return~~terminate to the ~~limited partners their original investment~~Partnership.

On December 31, ~~2007~~2008, the ~~Partnership’s~~property ~~limited~~and ~~partnership~~the ~~interest~~related inassets ~~Victory~~and liabilities of ~~Apartments,~~Goodfellow ~~L.P.~~Place Limited Partnership (“~~Victory~~Goodfellow”) ~~was~~were sold to ~~the~~an ~~Local~~unaffiliated third ~~General~~party ~~Partner~~purchaser for a sales price of $~~700~~1,~~000. The sale resulted in a loss of approximately $96~~693,~~000~~436, which ~~was~~approximates ~~recognized during~~ the mortgage ~~quarter ended December 31~~debt, ~~2007,~~accrued asinterest ~~was a~~and ~~result~~other offees at the ~~write-off~~date of closing. The ~~the~~sale ~~basis~~resulted in ~~the~~a ~~property~~gain of approximately $~~750~~798,000, atresulting ~~the date of the sale and the $654,177 cash received~~ from the ~~sale. An~~ ~~adjustment~~write-off ~~to the loss~~ of ~~approximately $10,000 was recorded during~~ the ~~quarter~~deficit ~~ended~~basis ~~March 31, 2008, resulting~~ in anproperty ~~overall~~at ~~loss~~the date of ~~approximately $106,000~~sale.

On ~~December~~October 2821, ~~2007~~2008, the Partnership’s sold its limited partnership interest in United ~~Church~~– ~~Lane Associates~~Glenarden I, L.P. (“~~Church~~Glenarden ~~Lane~~I”) ~~was sold~~ to ~~the~~an ~~Local~~unaffiliated ~~General~~third ~~Partner~~party purchaser for a sales price of $20123,~~000. The~~563, ~~sale~~which ~~resulted~~consisted inof a ~~gain of approximately~~promissory ~~$164,000~~note. Such asnote ahad ~~result~~an ofoptional ~~the~~prepayment ~~write-off~~with ofa ~~the~~discount ~~deficit basis in the property~~ of ~~approximately~~ $~~144~~50,~~000~~843 and atwas ~~the~~paid ~~date~~on ofDecember ~~the sale and the $20~~19,~~000~~ ~~cash received from the sale~~2008. The sale ~~also~~ resulted in a ~~non-cash~~gain ~~contribution to~~of ~~the~~approximately ~~Local~~$8,547,000 ~~Partnership~~resulting from the ~~General~~write-off ~~Partner~~ of ~~approximately~~the ~~$2,500~~deficit asbasis ain ~~result~~the ofLocal ~~write-off~~Partnership of ~~fees~~approximately ~~owed~~$8,474,000 byat the ~~Local~~date ~~Partnership~~of tothe ansale ~~affiliate~~and the of$73,000 received from the ~~General~~ ~~Partner~~sale.

On ~~April~~ 20October 21, ~~2007~~2008, the ~~property~~Partnership ~~and~~sold ~~the~~its ~~related~~limited ~~assets~~partnership ~~and~~interest ~~liabilities~~in United of– ~~Whittier~~Glenarden ~~Plaza Associates~~II, L.P. (“~~Whittier~~Glenarden II”) ~~were sold~~ to an unaffiliated third party ~~purchaser~~ purchaser for a sales price of $1235,~~444~~294,~~500. The~~ ~~Partnership~~which ~~received~~consisted ~~$162,800~~of as a ~~distribution~~promissory note. Such ~~from~~note ~~this~~had ~~sale~~an ~~after~~optional ~~the~~prepayment ~~repayment~~with a discount of ~~mortgages~~$83, ~~other~~015 ~~liabilities~~ and ~~closing~~was ~~costs~~paid ofon ~~approximately~~December $119,~~282,000~~ 2008. The sale resulted in a gain of approximately $17,~~053~~555,000 resulting from the write-off of the deficit basis in ~~the property at the date of the sale, which was recognized~~ ~~during~~ the ~~quarter~~Local ~~ended~~Partnership ~~June 30, 2007 and a forgiveness~~ of ~~indebtedness~~approximately ~~income resulting from the forgiveness of one of Whittier’s mortgage notes in the amount of~~ $~~568~~7,403,000 at the ~~time~~date of ~~sale. An adjustment to~~ the ~~gain~~sale ofand ~~approximately~~the $~~(382~~152,000) ~~was~~received ~~recorded~~from ~~during~~ the ~~quarter ended March 31, 2008, resulting in an overall gain of approximately $671,000~~sale.

-On October 596, 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 $110,000 resulting from the write-off of the basis in the Local Partnership of approximately $198,000 at the date of the sale and the $87,500 received from the sale.

- 33 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, ~~2008~~2009

On December 1931, ~~2006~~2007, the ~~property~~Partnership’s ~~and~~limited ~~the~~partnership ~~related~~interest ~~assets~~in ~~and liabilities of~~Victory ~~General Atlantic Second Avenue Associates~~Apartments, L.P. (“~~96th Street~~Victory”) ~~were~~was sold to anthe ~~unaffiliated~~Local ~~third~~General ~~party~~Partner ~~purchaser~~ for a sales price of $25700,000~~, which was used to pay closing costs and other liabilities~~. ~~During~~The ~~the~~sale ~~quarter ended September 30, 2006, in accordance with SFAS No. 144, the Partnership deemed the building impaired and wrote it down to its fair value which~~ resulted in a loss ~~on impairment~~ of approximately $196,~~160,~~000~~. The~~ ~~sale~~which ~~resulted~~was inrecognized aduring ~~loss~~the ofquarter ~~approximately~~ended ~~$238~~December 31,~~000~~ 2007, resulting from the write-off of the basis in the property of approximately $750,000 at the date of the sale, ~~which~~and ~~was recorded during~~ the ~~quarter~~$654,177 ~~ended~~cash ~~December~~received ~~31,~~from the ~~2006~~sale. An adjustment to the loss of approximately $~~(38~~10,000) was ~~recorded~~ recorded during the quarter ended March 31, ~~2007~~2008, resulting in an overall loss of ~~approximately $200,000. The sale also resulted in a non-cash contribution to the Partnership~~ of approximately $~~597~~106,000 ~~as a result of the write-off of advances owed by 96th Street to an affiliate of the General Partner~~.

On December 1228, ~~2006~~2007, the ~~property~~Partnership’s ~~and~~limited ~~the~~partnership ~~related~~interest ~~assets~~in ~~and~~Church ~~liabilities of Spring~~Lane ~~Creek~~ Associates ~~II, L.P.~~ (“~~Spring~~Church ~~Creek"~~Lane”) ~~were~~was sold to anthe ~~unaffiliated~~Local ~~third party~~General ~~purchaser~~Partner for a sales price of $1620,~~950,~~000 ~~including a note receivable in the amount of $2,500,000~~. The ~~Partnership received $12,280,115, as a distribution from this~~ sale after the repayment of other liabilities and closing costs of approximately $2,170,000. During the quarter ended March 31, 2006, in accordance with SFAS No. 144, the Partnership deemed the building impaired and wrote it down to its fair value which resulted in a ~~loss~~gain ~~on impairment~~ of approximately $5164,~~225,~~000~~. The~~ ~~sale~~as ~~resulted in~~ a ~~loss~~result of ~~approximately~~ ~~$1,606,000 resulting from~~ the write-off of the deficit basis in the property of approximately $144,000 at the date of the sale, ~~which~~and ~~was recorded during~~ the ~~quarter~~$20,000 ~~ended~~cash received ~~December~~from ~~31,~~the ~~2006~~sale. ~~During~~The ~~the year ended March 31, 2007, the~~ sale also resulted in a ~~net~~ non-cash ~~distribution~~contribution to the Local Partnership from the General Partner of approximately $12,~~176,000~~500 as a result of the write-off of ~~loans~~fees owed toby ~~Spring Creek from an affiliate of~~ the ~~General~~Local ~~Partner. Adjustments~~Partnership to ~~the loss of approximately $(1,751,000) and $326,000 were recorded during the years ended March 31, 2007 and March 31, 2008, respectively, resulting in~~ an ~~overall~~affiliate ~~loss~~ of ~~approximately $2,681,000. In addition, during~~ the ~~year~~General ~~ended March 31, 2008, the $2,500,000 note receivable was written-off due to non-collectability~~Partner.

On ~~October~~ 25April 20, ~~2006~~2007, the ~~Partnership’s~~property ~~limited~~and ~~partnership~~the ~~interest~~related inassets ~~Rolling Green~~and ~~Limited~~liabilities ~~Partnership~~of Whittier Plaza Associates, L.P. (“~~Rolling Green~~Whittier”) ~~was~~were sold to ~~the~~an ~~Local~~unaffiliated ~~General Partner~~third party purchaser for a sales price of $~~399~~1,~~990~~444,500. The Partnership received $~~399~~162,~~990~~800 as a distribution from ~~the~~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,~~540~~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.

OnNOTE ~~August 1,~~11 ~~2006, the Partnership’s limited partnership interest in Metropolitan Towers~~– ~~Associates,~~Commitments ~~L.P. (“Metropolitan”) was sold to the Local General Partner for a sales price of $892,490. The Partnership received proceeds of $42,490~~ and the remaining $850,000 is to be paid in guaranteed payments payable on certain dates through December 31, 2008, which is included in other assets at March 31, 2007. The sale resulted in a gain of approximately $1,155,000 as a result of the write-off of the deficit basis in the property of approximately $262,000 at the date of the sale and the $892,490 cash and guaranteed payments receivable from the sale, which was recognized on the Partnership’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2006. An adjustment to the gain of approximately $22,000 and $(31,000) was recorded during the quarters ended March 31, 2007 and March 31, 2008, respectively, resulting in an overall gain of approximately $1,102,000.Contingencies

~~On June~~The 5,Partnership ~~2006,~~is ~~the~~currently ~~property~~in ~~and~~ the ~~related~~process ~~assets and liabilities~~ of ~~Willoughby/Wyckoff~~ ~~Housing~~winding ~~Associates,~~up Lits operations.P. As ~~("Willoughby")~~of ~~were~~December ~~sold~~31, to2008, ~~an unaffiliated~~the ~~third~~Partnership ~~party~~has ~~purchaser~~disposed ~~for a sales price~~ of ~~$4,800,000. There~~all ~~was~~twenty-seven nooriginal ~~distribution~~investments ~~from~~and ~~this~~its ~~sale~~remaining ~~after~~net ~~the repayment~~assets consist of cash, ~~mortgages~~note receivable, ~~other~~interest ~~liabilities~~receivable and ~~closing~~operating ~~costs~~liabilities ofat ~~approximately~~the ~~$4,800,000~~Partnership level. The ~~sale~~realization ~~resulted~~of inthese aassets ~~gain~~and ~~of approximately $2,033,000~~their ~~resulting~~liquidation ~~from~~does ~~the~~not ~~write-off~~require of the ~~deficit~~Partnership ~~basis~~to inconduct ~~the~~any ~~property~~active ~~at the date of~~business ~~the sale~~operations.

OnUninsured ~~May~~Cash ~~1, 2006, the property~~ and ~~the related assets and liabilities of 2051 Grand~~Cash Concourse Housing Associates, L.P. ("Grand Concourse") were sold to an unaffiliated third party purchaser for a sales price of $4,937,500. The Partnership received $200,066 as a distribution from this sale after the repayment of mortgages, other liabilities, distributions to minority interests and closing costs of approximately $4,737,000. The sale resulted in a gain of approximately $2,491,000 resulting from the write-off of the deficit basis in the property at the date of the sale. An adjustment to the gain of approximately $(5,000) was recorded during the quarter ended March 31, 2008, resulting in an overall gain of approximately $2,487,000.Equivalents

-The Partnership 60maintains its cash and cash equivalents in various -banks. Accounts at each bank are guaranteed by the Federal Deposit Insurance Corporation up to $250,000.

~~LIBERTY TAX~~NOTE ~~CREDIT~~12 ~~PLUS~~– Discontinued ~~II L.P.~~Operations

~~AND~~The ~~SUBSIDIARIES~~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 March 31, 2009, the Partnership disposed of all of its Local Partnerships. As of March 31, 2008, Williamsburg was classified as discontinued operations in the consolidated balance sheets.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2008

Asset Held for Sale

Competition

The real estate business is highly competitive and substantially all of the Properties acquired by the Partnership are subject to competition from similar properties in their respective vicinities. In addition, various other limited partnerships may, in the future, be formed by the General Partners and/or their affiliates to engage in business which may compete with the Partnership.

Employees

- 61 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2008

NOTE 11 – Selected Quarterly Financial Data (Unaudited)

The following table summarizes the Partnership’s quarterly results of operations for the years ended March 31, 2008 and 2007. The fluctuations between the quarters are primarily due to the sales of Local Partnerships (see Note 10).

OPERATIONS	Quarter Ended
	June 30, 2007			September 30, 2007			December 31, 2007			March 31, 2008
Revenues	$	1,652,005		$	1,642,444		$	1,569,471		$	1,565,678
Operating expenses		(2,692,287	)		(2,574,976	)		(2,417,919	)		(1,876,548	)
Loss from operations		(1,040,282	)		(932,532	)		(848,448	)		(310,870	)
Income (loss) from discontinued operations including (loss) gain on sale and minority interest		986,242			(78,687	)		(7,063	)		(2,722,109	)
Net (loss) income	$	(54,040	)	$	(1,011,219	)	$	(855,511	)	$	(3,032,979	)
Per unit amounts:
Net loss per BAC from operations	$	(8.88	)	$	(7.96	)	$	(7.25	)	$	(2.66	)
Net (loss) income per BAC from discontinued operations		8.42			(0.67	)		(0.06	)		(23.25	)
Net (loss) income per BAC	$	(0.46	)	$	(8.64	)	$	(7.31	)	$	(25.90	)
OPERATIONS	Quarter Ended
	June 30, 2006*			September 30, 2006*			December 31, 2006*			March 31, 2007*
Revenues	$	1,622,997		$	1,583,701		$	1,672,616		$	1,650,598
Operating expenses		(2,555,921	)		(2,512,150	)		(2,501,464	)		(1,774,425	)
Loss from operations		(932,924	)		(928,449	)		(828,848	)		(123,827	)
(Loss) income from discontinued operations including gain (loss) on sale and minority interest		(2,470,322	)		3,646,455			(4,149,329	)		(53,826	)
Net (loss ) income	$	(3,403,246	)	$	2,718,006		$	(4,978,177	)	$	(177,653	)
Per unit amounts:
Net loss per BAC from operations	$	(7.97	)	$	(7.93	)	$	(7.08	)	$	(1.05	)
Net (loss) income per BAC from discontinued operations		(21.10	)		31.14			(35.44	)		(0.46	)
Net (loss ) income per BAC	$	(29.07	)	$	23.21		$	(42.52	)	$	(1.51	)
* Reclassified for comparative purposes.

- 62 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2008

NOTE 12 – Commitments and Contingencies

(a) Subsidiary Partnerships - Going Concerns and Uncertainties

United – Glenarden I Limited Partnership (“Glenarden I”)

United – Glenarden II Limited Partnership (“Glenarden II”)

Williamsburg Residential, L.P. (“Williamsburg”)

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 will require 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 (see Note 10). Williamsburg was subsequently sold on May 9, 2008 (see Note 14).

b) Subsidiary Partnerships - Other

Goodfellow Place Limited Partnership (“Goodfellow”)

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 (FDIC) up to $100,000. As of March 31, 2008, uninsured cash and cash equivalents approximated $4,573,000.

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 HUD. Such cash distributions are typically made from surplus cash flow.

- 63 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2008

e) Tax Credits

A portion of the Housing Tax Credits are subject still to recapture in future years if (i) a Local Partnership ceases to meet qualification requirements, or (ii) there is a decrease in the qualified basis of the Local Partnership’s Property, or (iii) there is a reduction in the Local Partnership interest in the Property at any time during the 15-year Compliance Period that began with the first tax year of the Tax Credit Period. The Partnership has met its primary objective of generating Tax Credits for qualified BACs holders. As of March 31, 2008, the Tax Credit Periods and Compliance Periods for all of the Properties have expired.

f) Other

The Partnership is subject to the risks incident to potential losses arising from the management and ownership of improved real estate. The Partnership can also be affected by poor economic conditions generally. However, no more than 40% of the Properties are located in any single state. There are also substantial risks associated with owning Properties receiving government assistance, such as the possibility that Congress may not appropriate funds to enable HUD to make rental assistance payments. HUD also restricts annual cash distributions to partners based on operating results and a percentage of the owner’s equity contribution. The Partnership cannot sell or substantially liquidate its investments in subsidiary partnerships during the period that the subsidy agreements are in existence without HUD’s approval. Furthermore, there may not be market demand for apartments at market rents when the rental assistance contracts expire.

NOTE 13 – 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 March 31, 2008, Williamsburg was classified as discontinued operations in the consolidated balance sheets. As of March 31, 2007, 14th Street, 96th Street, Concourse Artists, Grand Concourse, Metropolitan, Robin Housing, Rolling Green, Santa Juanita, Spring Creek, West 107th Street, Whittier, Williamsburg and Willoughby were classified as discontinued operations in the consolidated balance sheets.

Consolidated Balance Sheets:

	March 31,
	2008			2007
	2009			2008
Assets
Property and equipment – less accumulated depreciation of $1,242,564 and $2,137,910, respectively	$	1,604,951	$	2,370,180
Property and equipment – less accumulated depreciation of $0 and $1,242,564, respectively	$	0	$	1,604,951
Cash and cash equivalents		~~3,316~~0		~~474~~3,~~178~~316
Cash held in escrow		~~196,573~~0		~~175~~196,~~511~~573
Deferred costs, net of accumulated amortization of $199,319 and $241,287, respectively		0		15,975
Other assets		0		25,801
Other assets		25,801		2,978,745
Total assets	$	0	$	1,830,641
Total assets	$	1,830,641	$	6,014,589
Liabilities
Mortgage notes payable	$	~~1,803,564~~0	$	31,~~412~~803,~~534~~564
Accounts payable and other		~~132,197~~0		~~435~~132,~~470~~197
Accrued interest payable		~~48,387~~0		2048,~~945~~387
Due to local general partners and affiliates		0		189,946
Minority interest		0		719,994
Due to general partners and affiliates		0		1,673,847
Total liabilities	$	0	$	2,704,142
Minority interest		719,994		717,967
Total liabilities	$	2,704,142	$	6,450,709

~~The following~~- ~~table summarizes the results of operations of the Local Partnerships~~34 that are classified as discontinued operations. For the year ended March 31, 2008, Church Lane, Victory and Whittier, which were sold during the year, and Williamsburg, which was classified as an asset held for sale, were all classified as discontinued operations on the consolidated financial statements. For the year ended March 31, 2007, 14th Street, 96th Street, Concourse Artists, Grand Concourse, Metropolitan, Robin Housing, Rolling Green, Santa Juanita, Spring Creek, West 107th Street and Willoughby, which were sold during the year, Whittier and Williamsburg, which were classified as assets held for sale, and Church Lane and Victory, in order to present comparable results to the year ended March 31, 2008, were all classified as discontinued operations in the consolidated statements of operations. For the year ended March 31, 2006, Upper Fifth, Penn Alto and Bayamon, which were sold during the year, and Santa Juanita, Rolling Green, Concourse Artists, Grand Concourse, Robin Housing and Willoughby, which were classified as assets held for sale, and 14th Street, 96th Street, Spring Creek, West 107th Street, Metropolitan, Whittier, Williamsburg, Church Lane and Victory, in order to present comparable results to the year ended March 31, 2008, were all classified as discontinued operations in the consolidated statements of operations.-

- 64 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, ~~2008~~2009

The following table summarizes the results of operations of the Local Partnerships that are classified as discontinued operations. For the year ended March 31, 2009, Williamsburg, Westminster, Goodfellow, Glenarden I and Glenarden II, which were sold during the year, were all classified as discontinued operations on the consolidated financial statements. For the year ended March 31, 2008, Church Lane, Victory and Whittier, which were sold during the year, Williamsburg, which was classified as an asset held for sale, and Glenarden I, Glenarden II, Westminster and Goodfellow, in order to present comparable results to the year ended March 31, 2009. were all classified as discontinued operations on the consolidated financial statements.

Consolidated Statements of Discontinued Operations:

	Years Ended March 31,
	For the Period April 1, 2008 through December 31, 2008*			For the Year Ended March 31, 2008*
	2008				2007*			2006*
Revenues
Revenues
Rental income	$	4,972,257		$	8,268,561
Rental income	$	2,168,083			$	9,964,054		$	15,908,157
Other (Note 2)		109,046			322,868
Other (Note 2)		159,789				720,460			895,190
Forgiveness of indebtedness income (Note 10)		0			568,000
Forgiveness of indebtedness income (Note 10)		568,000				0			0
Gain (loss) on sale of properties (Note 10)		17,271,460			(2,151,576	)
(Loss) gain on sale of properties (Note 10)		(2,151,576	)			9,413,765			7,900,514
Total revenues		22,352,763			7,007,853
Total revenues		744,296				20,098,279			24,703,861
Expenses
Expenses
General and administrative		964,363			1,826,289
General and administrative		697,987				2,891,725			3,629,785
General and administrative-related parties (Note 8)		248,027			418,006
General and administrative-related parties (Note 8)		102,155				713,510			872,403
Repairs and maintenance		2,141,370			3,119,333
Repairs and maintenance		532,330				3,703,892			3,453,007
Operating and other		502,284			869,786
Operating and other		161,825				1,609,973			2,421,651
Real estate taxes		391,529			545,437
Real estate taxes		140,413				493,232			547,354
Insurance		233,645			344,899
Insurance		79,409				644,413			967,970
Financial, primarily interest		1,249,629			2,244,901
Financial, primarily interest		701,227				1,707,113			2,585,491
Depreciation and amortization		1,111,323			2,141,550
Depreciation and amortization		313,334				1,232,535			3,888,922
Total expenses		6,842,170			11,510,201
Loss on impairment of property		0				3,540,000			6,075,000
Income (loss) income before minority interest		15,510,593			(4,502,348	)
Total expenses		2,728,680				16,536,393			24,441,583
Minority interest in loss of subsidiaries from discontinued operations		697,149			162,767
(Loss) income before minority interest		(1,984,384	)			3,561,886			262,278
Total income (loss) from discontinued operations (including gain (loss) on sale of properties and minority interest)	$	16,207,742		$	(4,339,581	)
Minority interest in loss (income) of subsidiaries from discontinued operations		162,767				(6,588,908	)		2,764,828
Income (loss) – limited partners from discontinued operations (including gain (loss) on sale of properties and minority interest)	$	16,045,665		$	(4,296,186	)
Total (loss) income from discontinued operations (including (loss) gain on sale of properties and minority interest)	$	(1,821,617	)		$	(3,027,022	)	$	3,027,106
Number of BACs outstanding		115,917.5			115,917.5
(Loss) income – limited partners from discontinued operations (including (loss) gain on sale of properties and minority interest)	$	(1,803,401	)		$	(2,996,752	)	$	2,996,835
Income (loss) from discontinued operations (including gain (loss) on sale of properties and minority interest) per BAC	$	138.42		$	(37.06	)
Number of BACs outstanding		115,917.50				115,917.50			115,917.50
(Loss) income from discontinued operations (including (loss) gain on sale of properties and minority interest) per BAC	$	(15.56	)		$	(25.85	)	$	25.85

Cash Flows from Discontinued Operations

	Years Ended March 31,
	2009			2008*


Net cash (used in) provided by operating activities	$	(204,220	)	$	4,167,092
Net cash provided by (used in) investing activities	$	1,593,005		$	(16,959,611	)
Net cash (used in) provided by financing activities	$	(2,205,437	)	$	24,705,345

*	Reclassified for comparative purposes.

	Years Ended March 31,
	2008			2007*			2006*
Cash flows from discontinued operations
Net cash (used in) provided by operating activities	$	(2,966,220	)	$	(260,964	)	$	1,755,366
Net cash provided by investing activities	$	2,518,309		$	31,652,605		$	9,363,278
Net cash used in financing activities	$	(1,298,859	)	$	(13,976,869	)	$	(11,350,334	)

- 35 -

*LIBERTY TAX ~~Reclassified~~CREDIT ~~for~~PLUS ~~comparative~~II ~~purposes~~L.P.

~~NOTE 14 –~~AND ~~Subsequent Events~~SUBSIDIARIES

OnNOTES ~~May 9,~~TO ~~2008,~~CONSOLIDATED ~~the~~FINANCIAL court sold the property and the related assets and liabilities of Williamsburg to an unaffiliated third party purchaser for a sales price of $1,971,927. The sale will result in a gain of approximately $136,000 resulting from the write-off of the deficit basis in the property at the date of sale, which will be recognized during the Partnership’s quarter ending June 30, 2008. During December 2007, a real estate foreclosure action was initiated by the mortgage lender and agreed to among Williamsburg and mortgage lender which will require 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. As of December 31, 2007, Williamsburg had property and equipment, at cost, of approximately $2,778,000, accumulated depreciation of approximately $1,211,000 and mortgage debt of approximately $1,804,000.STATEMENTS

-MARCH 6531, -2009

NOTE 13 – Subsequent Event

In conjunction with the $2,500,000 note receivable from the December 12, 2006 sale of the property and the related assets and liabilities of Spring Creek Associates II, L.P. (“Spring Creek”), the Partnership initially did not expect to collect on the note and wrote-off the entire balance of this note during the year ended March 31, 2008. Subsequent to March 31, 2009, the Partnership sold the original note to an unaffiliated third party and on June 30, 2009 collected $1,400,000 on this note.

- 36 -

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None

Item 9A(T). Controls and Procedures

(a) Evaluation of Disclosure ~~Controls~~ Controls and Procedures. The Chief Executive Officer and 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. ~~Management~~ 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~~ 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 ~~the~~March ~~end~~31, ~~of the period covered by this report~~2009. 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 ~~the~~March ~~end of~~31, ~~the period covered by this report~~2009, (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~~ 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.

~~This~~The ~~annual~~Partnership’s ~~report~~Annual Report does not include an attestation report of the Partnership’s registered public accounting firm regarding internal control over ~~financial~~ 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 year ended March 31, ~~2008~~2009, 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.

Item 9B. Other Information

Not applicable.

- 6637 -

PART III

Item 10. Directors and Executive Officers and Corporate Governance

The Partnership has no directors or executive officers. The general partners of the Partnership are Related Credit Properties II L.P., a Delaware limited partnership (the “Related General Partner”), Liberty Associates II L.P., a Delaware limited partnership (“Liberty Associates”), and Liberty GP II Inc. (formerly Shearson Liberty GP II Inc.), a Delaware corporation (the “Liberty General Partner” and together with the Related General Partner and Liberty Associates, the “General Partners”). The general partner of the Related General Partner is Related Credit Properties II Inc., a Delaware corporation. The general partners of Liberty Associates are Related Credit Properties II Inc., and the Liberty General Partner. Liberty Associates is also the special limited partner of the Partnership. The Partnership’s affairs are managed and controlled by the General Partners. The Partnership has not adopted a separate code of ethics because the Partnership has no directors or executive officers. However, the ultimate parent of the General Partners, Centerline Holding Company (“Centerline”), has adopted a code of ethics (see http://www.centerline.com).

Certain information concerning the director and executive officers of the Liberty General Partner and of Related Credit Properties II, Inc., is set forth below.

Related Credit Properties II, Inc.

Name		Position

Robert L. Levy		Director, Chief Financial Officer

Andrew J. Weil		President, Chief Executive Officer

Mark D. Schnitzer		Executive Vice President

ROBERT L. LEVY, 4243, is the Chief Financial Officer of Centerline. Mr. Levy is also the Chief Financial Officer of American Mortgage Acceptance Company (“AMAC”), a publicly traded real estate investment trust managed by an affiliate of Centerline. Mr. Levy is responsible for overseeing the Corporate Finance, Capital Markets, Accounting, Budgeting, Tax and Treasury departments. Mr. Levy joined Centerline’s predecessor in November of 2001 as the Director of Capital Markets. From 1998 through 2001, Mr. Levy was a Vice President in the Real Estate Equity Research and Investment Banking Departments at Robertson Stephens, an investment banking firm in San Francisco. Prior to 1998, Mr. Levy was employed by Prudential Securities in the Real Estate Equity Research Group and at Prudential Realty Group, the real estate investment arm of the Prudential Insurance Company. He received his Masters in Business Administration from the Leonard N. Stern School of Business at New York University and his Bachelor of Arts from Northwestern University.

ANDREW J. WEIL, 3738, is an Executive Managing Director of Centerline, and is the Head of Centerline’s Affordable Housing Group. Mr. Weil is responsible for overseeing the day to day operations of the Affordable Housing Group, including the acquisition of properties with Low-Income Housing Tax Credits and the origination and structuring of institutional funds. Prior to joining Centerline’s predecessor in January 1994, Mr. Weil was a Financial Analyst for the Heights Management Company, where he specialized in the analysis of potential investments and property management. Mr. Weil received a Bachelor of Science degree in Economics with a concentration in Finance from the Wharton School of the University of Pennsylvania.

MARC D. SCHNITZER, 4748, is the Chief Executive Officer of Centerline and is responsible both for financial restructuring of real estate properties and directing Centerline’s acquisitions of properties generating Housing Tax Credits. Mr. Schnitzer received a Masters of Business Administration from The Wharton School of the University of Pennsylvania in December 1987 before joining Centerline in January 1988. He held numerous positions with Centerline and its predecessors prior to being appointed CEO in March 2006. From 1983 to January 1986, he was a financial analyst for the First Boston Corporation in New York. Mr. Schnitzer graduated summa cum laude with a Bachelor of Science in Business Administration from the School of Management at Boston University in May 1983. Mr. Schnitzer also serves on the Board of Trustees of Centerline and AMAC.

Liberty GP II Inc.

Name		Position

Robert L. Levy		Director, Chief Financial Officer

Andrew J. Weil		President, Chief Executive Officer

Mark D. Schnitzer		Senior Vice President

Biographical information with respect to Messrs. Levy, Weil and Schnitzer is set forth above.

- 6738 -

Item 11. Executive Compensation

The Partnership has no officers or directors. The Partnership does not pay or accrue any fees, salaries or other forms of compensation to directors or officers of the Liberty General Partner or the general partner of the Related General Partner for their services. Certain directors and executive officers of the Liberty General Partner and the general partner of the Related General Partner receive compensation from the General Partners and their affiliates for services performed for various affiliated entities which may include services performed for the Partnership.

Under the terms of the Partnership Agreement, the General Partners and their affiliates are entitled to receive compensation from the Partnership in consideration of certain services rendered to the Partnership by such parties. Such arrangements include, but are not limited to, the payment of an accountable operating expense reimbursement, an annual partnership management fee not to exceed 0.5% of invested assets and subordinated disposition fees. In addition, the General Partners are entitled to 1% of all cash distributions and Housing Tax Credit allocations and a subordinated 15% interest in net sales or refinancing proceeds. Also see Note 8 in Item 8 for a presentation of the types and amounts of compensation paid to the General Partners and their affiliates, which is incorporated by reference thereto.

Tabular information concerning salaries, bonuses and other types of compensation payable to executive officers has not been included in this annual report. As noted above, the Partnership has no executive officers. The level of compensation payable to the General Partners and/or their affiliates is limited by the terms of the Partnership Agreement and may not be increased therefrom on a discretionary basis.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The general partnership interests and BACs in the Partnership are owned in the manner indicated on the chart below.

Liberty Associates II L.P. ~~holds~~held a 1% limited partnership interest in each Local Partnership.

Except as set forth in the table below, no person is known by the Partnership to be the beneficial owner of more than 5% percent of the Limited Partnership Interests and/or the BACs, and none of the General Partners nor any director or executive officer of the Liberty General Partner or of the general partner of the Related General Partner owns any Limited Partnership Interests or BACs, except as noted in the chart below.

Title of Class	Name and Address of Beneficial Ownership	Amount and Nature of Beneficial Ownership	Percentage of Class
General Partnership Interest in the Partnership	Related Credit Properties II L.P. 625 Madison Avenue New York, NY 10022	$500 capital contribution - directly owned	49%
General Partnership Interest in the Partnership	Liberty GP II, Inc. 625 Madison Avenue New York, NY 10022	$500 capital contribution - directly owned	49%
General Partnership Interest in the Partnership	Liberty Associates II L.P. 625 Madison Avenue New York, NY 10022	$1,000 capital contribution - directly owned	2%
BACs	Everest Housing Investors 2, LLC 199 S. Robles Avenue, Suite 200 Pasadena, CA 91101	6,328.75	5.5%
BACs	San Diego Gas & Electric Sempra Financial 101 Ash Street - HQ05D San Diego, CA 92101	10,588.75	9.1%
BACs	All directors and executive officers of the general partner of the Related General Partner (as a group three persons) 625 Madison Avenue New York, NY 10022

Item 13. Certain Relationships and Related Transactions; Director Independence

The Partnership has and will continue to have certain relationships with the General Partners and their affiliates, as discussed in Item 11 and also Note 8 to the Financial Statements in Item 8 above, which are incorporated herein by reference thereto. However, there have been no direct financial transactions between the Partnership, on the one hand, and the directors or executive officers of the Liberty General Partner or the general partner of the Related General Partner, on the other.

- 39 -

Item 14. Principal Accounting Fees and Services

Audit Fees

The aggregate fees billed by Trien Rosenberg Rosenberg Weinberg Ciullo and Fazzari LLP and its affiliates for professional services rendered for the audit of the Partnership’s annual financial statements for the years ended March 31, ~~2008~~2009 and ~~2007~~2008 and for the reviews of the financial statements included in the Partnership’s Quarterly Reports on Form 10-Q were $5244,~~000~~500 and $7652,~~800~~000, respectively.

- 68 -

Audit Related Fees

None

Tax Fees

The aggregate fees billed by Weiser LLP and its affiliates for professional services rendered for the preparation of the Partnership’s annual tax returns were ~~$4,000~~ ~~and~~ $1011,~~500~~800 for both the years ended December 31, ~~2007~~2008 and ~~2006, respectively~~2007.

All Other Fees

None

The Partnership is not required to have, and does not have, a stand-alone audit committee.

- 6940 -

PART IV

Item 15.	Exhibits and Financial Statements Schedules
		Sequential Page
(a) 1.	Financial Statements
	Report of Independent Registered Public Accounting Firm	1812
	Consolidated Balance Sheets at March 31, 2008 and 2007	46
	Consolidated Statement of Net Assets in Liquidation as of March 31, 2009 and Consolidated Balance Sheet as of March 31, 2008	20
	Consolidated Statements of Operations for the Years Ended March 31, 2008, 2007 and 2006	47
	Consolidated Statements of Operations for the Period April 1, 2008 through December 31, 2008 and for the Year Ended March 31, 2008	21
	Consolidated Statements of Changes in Partners’ (Deficit) Capital for the Years Ended March 31, 2008, 2007 and 2006	48
	Consolidated Statement of Changes in Net Assets in Liquidation for the Period January 1, 2009 through March 31, 2009	22
	Consolidated Statements of Cash Flows for the Years Ended March 31, 2008, 2007 and 2006	49
	Consolidated Statements of Changes in Partners’ (Deficit) Capital for the Period April 1, 2008 through December 31, 2008 and for the Year Ended March 31, 2008	23
	Notes to Consolidated Financial Statements	51
	Consolidated Statements of Cash Flows for the Period April 1, 2008 through December 31, 2008 and for the Year Ended March 31, 2008	24
	Notes to Consolidated Financial Statements	26
(a) 2.	Financial Statements Schedules
	Report of Independent Registered Public Accounting Firm	77
	All schedules have been omitted because they are not required or because the required information is contained in the financial statements and notes thereto.
	Schedule I - Condensed Financial Information of Registrant	78
	Schedule III - Real Estate and Accumulated Depreciation	81
	All other schedules have been omitted because they are not required or because the required information is contained in the financial statements and notes thereto.
(a) 3.	Exhibits
(3B)	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)
(21)	Subsidiaries of the Registrant	71
(31.1)	Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a)	74
(31.2)	Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a)	75
(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)	76

- 7041 -

Item 15. Exhibits and Financial Statements Schedules

	Subsidiaries of the Registrant (Exhibit 21)		Jurisdiction of Organization
	Westminster Place II - Olive Site, L.P.		MO
	United-Glen Arden I Limited Partnership		MD
	United-Glen Arden II Limited Partnership		MD
	Goodfellow Place Limited Partnership		MO
	Williamsburg Residential, L.P.		KS

- 71 -

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:	~~June~~July 2520, ~~2008~~2009
				By:	/s/ Robert L. Levy
					Robert L. Levy
					Chief Financial Officer, Principal Accounting Officer and Director
Date:	~~June~~July 2520, ~~2008~~2009
				By:	/s/ Andrew J. Weil
					Andrew J. Weil
					President, Chief Executive Officer
			and
		By:	LIBERTY GP II, INC.,
			a General Partner
Date:	~~June~~July 2520, ~~2008~~2009
			By:	/s/ Robert L. Levy
				Robert L. Levy
				Chief Financial Officer, Principal Accounting Officer and Director
Date:	~~June~~July 2520, ~~2008~~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:	~~June~~July 2520, ~~2008~~2009
				By:	/s/ Robert L. Levy
					Robert L. Levy
					Chief Financial Officer, Principal Accounting Officer and Director
Date:	~~June~~July 2520, ~~2008~~2009
				By:	/s/ Andrew J. Weil
					Andrew J. Weil
					President, Chief Executive Officer
			By:	Liberty GP II, Inc.,
				a General Partner
Date:	~~June~~July 2520, ~~2008~~2009
				By:	/s/ Robert L. Levy
					Robert L. Levy
					Chief Financial Officer, Principal Accounting Officer and Director
Date:	~~June~~July 2520, ~~2008~~2009
				By:	/s/ Andrew J. Weil
					Andrew J. Weil
					President, Chief Executive Officer

- 7242 -

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/ Robert L. Levy Robert L. Levy	Chief Financial Officer, Principal Accounting Officer and Director of Related Credit Properties II Inc., (general partner of each of Related Credit Properties II L.P. and Liberty Associates II, L.P., General Partners of Registrant) and Liberty GP II, Inc. (general partner of Liberty Associates II, L.P, a General Partner of Registrant)	~~June~~July 2520, ~~2008~~2009
/s/ Andrew J. Weil Andrew J. Weil	President, Chief Executive Officer of Related Credit Properties II Inc., (general partner of each of Related Credit Properties II L.P. and Liberty Associates II, L.P., General Partners of Registrant) and Liberty GP II, Inc. (general partner of Liberty Associates II, L.P., a General Partner of Registrant)	~~June~~July 2520, ~~2008~~2009

- 7343 -

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners of

Liberty Tax Credit Plus II L.P. and Subsidiaries

(A Delaware Limited Partnership)

In connection with our audits of the consolidated financial statements of Liberty Tax Credit Plus II L.P. and Subsidiaries (A Delaware Limited Partnership) included in this Form 10-K as presented in our opinion dated June 23, 2008 on page 18, and based on the reports of other auditors, we have also audited supporting Schedule I for the 2007, 2006 and 2005 Fiscal Years and Schedule III at March 31, 2008. In our opinion, and based on the reports of the other auditors, these consolidated schedules present fairly, when read in conjunction with the related consolidated financial statements, the financial data required to be set forth therein.

As discussed in Note 12(a), the consolidated financial statements include the financial statements of three limited partnerships with significant contingencies and uncertainties. The financial statements of these subsidiary partnerships were prepared assuming that each will continue as a going concern. The three subsidiary partnerships’ net losses aggregated $2,271,355 (Fiscal Year 2007), $1,348,125 (Fiscal Year 2006) and $1,518,328 (Fiscal Year 2005) and their assets aggregated $14,486,355 and $16,260,150 at March 31, 2008 and 2007, respectively. These matters raise substantial doubt about these subsidiary partnerships’ abilities to continue as going concerns. Management’s plans in regard to these matters are also described in Note 12(a). The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

TRIEN ROSENBERG ROSENBERG

WEINBERG CIULLO & FAZZARI LLP

New York, New York

June 23, 2008

- 77 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

Summarized condensed financial information of registrant (not including consolidated subsidiary partnerships)

CONDENSED BALANCE SHEETS

ASSETS

	March 31,
	2008		2007
Cash and cash equivalents	$	3,115,900	$	3,158,864
Investment and advances in subsidiary partnerships		266,772		4,339,876
Other assets		160,923		849,390
Total assets	$	3,543,595	$	8,348,130
LIABILITIES AND PARTNERS’ EQUITY
Due to general partner and affiliates	$	1,283,228	$	2,035,021
Other liabilities		62,205		72,754
Total liabilities		1,345,433		2,107,775
Partners’ equity		2,198,162		6,240,355
Total liabilities and partners’ equity	$	3,543,595	$	8,348,130
Investments in subsidiary partnerships are recorded in accordance with the equity method of accounting, wherein the investments are not reduced below zero. Accordingly, partners’ equity on the consolidated balance sheet will differ from partners’ equity shown above.

- 78 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

CONDENSED STATEMENTS OF OPERATIONS

	Years Ended March 31,
	2008			2007			2006
Revenues
Other	$	166,041		$	248,231		$	58,157
Expenses
Administrative and management		326,840			226,531			323,310
Administrative and management-related parties		453,369			1,184,641			1,632,249
Total expenses		780,209			1,411,172			1,955,559
Loss from operations		(614,168	)		(1,162,941	)		(1,897,402	)
(Loss) gain on sale of investments in subsidiary partnership		(14,060	)		151,713			2,789,968
Equity in loss of subsidiary partnerships (*)		(3,146,561	)		(14,471,339	)		(2,176,258	)
Net loss	$	(3,774,789	)	$	(15,482,567	)	$	(1,283,692	)
(*) Includes suspended prior year losses in excess of investment in accordance with the equity method of accounting amounting to $(3,806,474), $(8,319,332) and $(355,152) for the years ended March 31, 2008, 2007, and 2006, respectively.

- 79 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

CONDENSED STATEMENTS OF CASH FLOWS

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

	Years Ended March 31,
	2008			2007			2006
Cash flows from operating activities:
Net loss	$	(3,774,789	)	$	(15,482,567	)	$	(1,283,692	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Loss (gain) on sale of investment in subsidiary partnership		14,060			(151,713	)		(2,789,968	)
Equity in loss of subsidiary partnerships		3,146,561			14,471,339			2,176,258
Increase in assets:
Other assets		645,277			(300,000	)		0
Increase (decrease) in liabilities:
Due to general partners and affiliates		(751,793	)		(12,986,658	)		(2,138,160	)
Other liabilities		(10,549	)		(366,667	)		378,163
Total adjustments		3,043,556			666,301			(2,373,707	)
Net cash (used in) provided by operating activities		(731,233	)		(14,816,266	)		(3,657,399	)
Cash flows from investing activities:
Proceeds from sale of investment in subsidiary partnership		674,177			1,267,490			3,100,000
Distributions from subsidiaries		427,772			13,393,408			246,082
Distributions to partners		(1,028,817	)		(9,017,114	)		0
Contribution – partnership management fees		750,312			12,325,256			0
Advances and investments in subsidiary partnerships		(135,175	)		(208,724	)		(166,812	)
Net cash provided by investing activities		688,269			17,760,316			3,179,270
Net increase (decrease) in cash and cash equivalents		(42,964	)		2,944,050			(478,129	)
Cash and cash equivalents, beginning of year		3,158,864			214,814			692,943
Cash and cash equivalents, end of year	$	3,115,900		$	3,158,864		$	214,814

- 80 -

LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION

Partnership Property Pledged as Collateral

MARCH 31, 2008

Description	Encumbrances		Initial Cost to Partnership				Cost Capitalized Subsequent to Acquisition: Improvements (Disposals)			Gross Amount at which Carried at Close of Period						Accumulated Depreciation		Year of Construction/ Renovation	Date Acquired	Life on which Depreciation in Latest Income Statements is Computed (a)(b)
			Land		Buildings and Improvements					Land		Buildings and Improvements		Total
Apartment Complexes
Polynesian Apartments Associates, Ltd.
Homestead, FL (d)(g)	$	0	$	386,180	$	4,195,068	$	(4,581,248	)	$	0	$	0	$	0	$	0	1988	July 1988	27.5	years
Seagrape Village Associates, LTD.
Homestead, FL (d)(g)		0		1,270,000		6,123,373		(7,393,373	)		0		0		0		0	1988	July 1988	27.5	years
Metropolitan Towers Associates, Ltd.
Rio Piedras, PR (l)		0		322,000		2,434,303		(2,756,303	)		0		0		0		0	1987	Dec. 1988	40	years
Westminster Place II- Olive Site, L.P.
St. Louis, MO		3,923,298		928,979		5,382,740		22,318			916,669		5,417,368		6,334,037		2,846,058	1988	Oct. 1988	20 - 40	years
Property Development Associates, L.P.
Kansas City, MO (e)(g)(h)(k)		0		624,858		7,228,721		(7,853,579	)		0		0		0		0	1988	Dec. 1988	40	years
Whittier Plaza Associates, L.P.
St. Louis, MO (o)		0		26,920		2,015,030		(2,041,950	)		0		0		0		0	1987	Dec. 1988	20 - 40	years
United-Glen Arden I L.P.
Glen Arden, MO		11,455,775		1,770,000		6,577,720		14,269,373			1,775,293		20,841,800		22,617,093		15,283,677	1988	Dec. 1988	8 - 25	years
United-Glen Arden II L.P.
Glen Arden, MO		8,582,170		1,190,000		4,837,436		10,013,399			1,195,293		14,845,542		16,040,835		10,805,664	1988	Dec. 1988	15 - 25	years
Rolling Green L.P.
Chicago, IL (g)(h)(k)(l)		0		466,683		4,533,670		(5,000,353	)		0		0		0		0	1988	Dec. 1988	7 - 39	years
Santa Juanita II L.P.
Bayamon, PR (j)(k)		0		115,000		2,085,485		(2,200,485	)		0		0		0		0	1988	Dec. 1988	27.5	years
Spring Creek Associates, L.P.
Brooklyn, NY (m)		0		3,343,549		16,216,700		(19,560,249	)		0		0		0		0	1987	Dec. 1988	15 - 27.5	years
East Two Thirty-Five Associates L.P. (14th Street)
New York, NY (m)		0		950,000		2,542,604		(3,492,604	)		0		0		0		0	1988	Dec. 1988	27.5 - 31.5	years
Concourse Artists Housing Associates, L.P.
Bronx, NY (k)(m)		0		5,750		2,246,560		(2,252,310	)		0		0		0		0	1988	Nov. 1988	27.5	years
2051 Grand Concourse Housing Associates
Bronx, NY (k)(m)		0		31,500		5,221,117		(5,252,617	)		0		0		0		0	1988	Nov. 1988	27.5	years
Robin Housing Associates
Bronx, NY (k)(m)		0		26,750		8,186,055		(8,212,805	)		0		0		0		0	1988	Nov. 1988	27.5	years
Willoughby-Wyckoff Housing Associates
Bronx, NY (k)(m)		0		17,000		6,126,088		(6,143,088	)		0		0		0		0	1988	Nov. 1988	27.5	years
Upper Fifth Avenue Residential Associates, L.P.
Bronx, NY(g)(h)(j)(k)		0		159,861		21,096,862		(21,256,723	)		0		0		0		0	1987	Jan. 1989	40	years
West 107th Street Associates, L.P.
Bronx, NY (m)		0		305,813		3,850,928		(4,156,741	)		0		0		0		0	1987	Jan. 1989	27.5 - 31.5	years
General Atlantic Second Avenue Associates, L.P. (96th Street)
Bronx, NY (m)		0		246,495		2,689,395		(2,935,890	)		0		0		0		0	1988	Jan. 1989	27.5 - 31.5	years
Church Lane Associates
Germantown, PA (n)		0		20,000		4,009,983		(4,029,983	)		0		0		0		0	1988	Feb. 1989	15 - 27.5	years
Campeche Isle Apartments L.P.
Galveston, TX (c)		0		450,000		6,792,005		(7,242,005	)		0		0		0		0	1988	May 1989	27.5	years
Goodfellow Place L.P.
St. Louis, MO		1,783,639		160,000		4,581,787		(3,493,692	)		41,102		1,206,993		1,248,095		609,532	1988	May 1989	10 - 40	years
Penn Alto Associates L.P.
Altoona, PA (i)(k)		0		60,000		2,731,082		(2,791,082	)		0		0		0		0	1989	June 1989	27.5 - 40	years
Gramco Development Limited Dividend Partnership, L.P. (Bayamon)
Bayamon, PR (j)(k)		0		1,322,887		7,609,024		(8,931,911	)		0		0		0		0	1989	July 1989	25	years

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LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION

Partnership Property Pledged as Collateral

MARCH 31, 2008

(continued)

Description	Encumbrances			Initial Cost to Partnership						Cost Capitalized Subsequent to Acquisition: Improvements (Disposals)			Gross Amount at which Carried at Close of Period									Accumulated Depreciation			Year of Construction/ Renovation	Date Acquired	Life on which Depreciation in Latest Income Statements is Computed (a)(b)
				Land			Buildings and Improvements						Land			Buildings and Improvements			Total
Alexis Park Apartments
Bossier City, LA (f)(g)(h)(k)		0			640,000			7,297,925			(7,937,925	)		0			0			0			0		1986	July 1989	27.5	years
Williamsburg Residential
Wichita, KS(p)		1,803,564			136,974			831,584			1,878,957			673,429			2,174,086			2,847,515			1,242,564		1989	Aug. 1989	40	years
Victory Apartments
Chicago, IL(n)		0			161,500			4,929,133			(5,090,633	)		0			0			0			0		1988	Sept. 1989	40	years
Less Discontinued operations, impairments and dispositions		(1,803,564	)		(11,089,720	)		(130,992,695	)		139,234,900			(673,429	)		(2,174,086	)		(2,847515	)		(1,242,564	)
	$	25,744,882		$	4,048,979		$	21,379,683		$	20,811,398		$	3,928,356		$	42,311,703		$	46,240,059		$	29,544,930
(a) Since all properties were acquired as operating properties, depreciation is computed using primarily the straight-line method over the estimated useful lives determined by the partnership date of acquisition.
(b) Furniture and fixtures, included in building improvements, are depreciated primarily by the straight-line method over the estimated useful lives ranging from 5 to 15 years.
(c) The property and the related assets and liabilities of this Local Partnership were sold during the fiscal year ended March 31, 2002 and included in discontinued operations.
(d) The property and the related assets and liabilities of these Local Partnerships were sold during the fiscal year ended March 31, 2004.
(e) The property and the related assets and liabilities of this Local Partnership were sold during the fiscal year ended March 31, 2005.
(f) The limited partnership interest of this Local Partnership was sold during the fiscal year ended March 31, 2005.
(g) These properties are included in discontinued operations for the fiscal year ended March 31, 2004.
(h) These properties are included in discontinued operations for the fiscal year ended March 31, 2005.
(i) The property and the related assets and liabilities of this Local Partnership were sold during the fiscal year ended March 31, 2006.
(j) The limited partnership interest of this Local Partnership was sold during the fiscal year ended March 31, 2006.
(k) These properties are included in discontinued operations for the fiscal year ended March 31, 2006.
(l) The limited partnership interest of this Local Partnership was sold during the fiscal year ended March 31, 2007.
(m) The property and the related assets and liabilities of this Local Partnership were sold during the fiscal year ended March 31, 2007.
(n) The limited partnership interest of this Local Partnership was sold during the fiscal year ended March 31, 2008.
(o) The property and the related assets and liabilities of this Local Partnership were sold during the fiscal year ended March 31, 2008.
(p) These properties are included in discontinued operations for the fiscal year ended March 31, 2008.

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LIBERTY TAX CREDIT PLUS II L.P.

AND SUBSIDIARIES

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION

Partnership Property Pledged as Collateral

MARCH 31, 2008

(continued)

	Cost of Property and Equipment									Accumulated Depreciation
	Years Ended March 31,
	2008			2007			2006			2008			2007			2006
Balance at beginning of period	$	60,462,119		$	119,808,271		$	170,994,320		$	34,809,639		$	64,818,204		$	86,387,053
Additions during period:
Improvements		567,252			536,351			1,140,093
Depreciation expense											2,106,302			2,480,298			5,506,302
Deductions during period:
Discontinued operations, impairments and dispositions		(14,789,312	)		(59,882,503	)		(52,326,142	)		(7,371,011	)		(32,488,863	)		(27,075,151	)
Balance at close of period	$	46,240,059		$	60,462,119		$	119,808,271		$	29,544,930		$	34,809,639		$	64,818,204

At the time the local partnerships were acquired by Liberty Tax Credit Plus II Limited Partnership, the entire purchase price paid by Liberty Tax Credit Plus II Limited Partnership was pushed down to the local partnerships as property and equipment with an offsetting credit to capital. Since the projects were in the construction phase at the time of acquisition, the capital accounts were insignificant at the time of purchase. Therefore, there are no material differences between the original cost basis for tax and GAAP.

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Filing Compare · LIBERTY TAX CREDIT PLUS II L P