UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~June~~September 30, 2017

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

For the transition period from ______ to ______

Commission File Number 033-37704-03

INDEPENDENCE TAX CREDIT PLUS L.P. II

(Exact name of registrant as specified in its charter)

Delaware		13-3646846
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1225 17th Street, Denver, Colorado		80202
(Address of principal executive offices)		(Zip Code)

(303) 927-5000

Registrant’s telephone number, including area code

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☑ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐		Accelerated filer ☐

Non-accelerated filer ☐ (Do not check if a smaller reporting company)		Smaller reporting company ☑
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the elected transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No

Table of Contents

		PageNumbers
Part I
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statement of Changes in Partners’ (Deficit) Equity	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1617
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	1819
Item 4.	Controls and Procedures	1820
Part II
Item 1.	Legal Proceedings	2021
Item 1A.	Risk Factors	2021
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2021
Item 3.	Defaults Upon Senior Securities	2021
Item 4.	Mine Safety Disclosures	2021
Item 5.	Other Information	2021
Item 6.	Exhibits	2021
Signatures		2122

Table of Contents

PART I – Financial Information

Item 1. Financial Statements.

INDEPENDENCE TAX CREDIT PLUS L.P. II

AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

	June 30,		March 31,
	September 30,		March 31,
	2017		2017
	(Unaudited)		(Audited)
ASSETS
Operating assets
Cash and cash equivalents	$	1,~~523~~432,~~795~~689	$	1,513,762
Other assets		~~3,347~~—		11,773
Total operating assets		1,~~527~~432,~~142~~689		1,525,535
Assets from discontinued operations (Note 5)
Other assets held for sale		—		433,398
Total assets from discontinued operations		—		433,398
Total assets	$	1,~~527~~432,~~142~~689	$	1,958,933
LIABILITIES AND PARTNERS’ (DEFICIT) EQUITY
Operating liabilities
Accounts payable	$	4512,~~001~~223	$	40,044
Due to general partner and affiliates		1,~~902~~923,~~808~~277		1,878,558
Total operating liabilities		1,~~947~~935,~~809~~500		1,918,602
Liabilities from discontinued operations (Note 5)
Mortgage notes payable		—		6,641,508
Other liabilities held for sale		—		8,945,245
Total liabilities from discontinued operations		—		15,586,753
Total liabilities		1,~~947~~935,~~809~~500		17,505,355
Commitments and contingencies (Note 6)
Partners’ (deficit) equity
Limited partners (58,928 BACs issued and outstanding)		(4,~~144~~226,~~754~~076)		(18,553,228)
General partner		3,~~724~~723,~~087~~265		3,578,547
Independence Tax Credit Plus L.P. II total		(~~420~~502,~~667~~811)		(14,974,681)
Noncontrolling interests		—		(571,741)
Total partners’ (deficit) equity		(420,667)		(15,546,422)
Total partners’ deficit		(502,811)		(15,546,422)
Total liabilities and partners’ (deficit) equity	$	1,527,142	$	1,958,933
Total liabilities and partners’ deficit	$	1,432,689	$	1,958,933

See accompanying notes to condensed consolidated financial statements.

Table of Contents

INDEPENDENCE TAX CREDIT PLUS L.P. II

AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)

	Three months ended
	Three Months Ended				Six Months Ended
	June 30,
	September 30,				September 30,
	2017		2016		2017		2016
Total revenues	$	—	$	—	$	—	$	—
Expenses
General and administrative		3061,~~271~~433		7035,~~250~~607		91,704		105,857
General and administrative-related parties (Note 2)		2320,~~903~~471		2341,~~070~~718		44,374		64,788
Total expenses		5481,~~174~~904		9377,~~320~~325		136,078		170,645
Loss from operations		(5481,~~174~~904)		(9377,~~320~~325)		(136,078)		(170,645)
Income (loss) from discontinued operations		15,179,929		(126,422)
(Loss) income from discontinued operations		(240)		(103,660)		15,179,689		(230,082)
Net income (loss)		15,125,755		(219,742)
Net (loss) income		(82,144)		(180,985)		15,043,611		(400,727)
Less: net (income) loss attributable to noncontrolling interests from discontinued operations		(571,741)		1,277
Less: net loss (income) attributable to noncontrolling interests from discontinued operations		—		1,048		(571,741)		2,324
Net income (loss) attributable to Independence Tax Credit Plus L.P. II	$	14,554,014	$	(218,465)
Net (loss) income attributable to Independence Tax Credit Plus L.P. II	$	(82,144)	$	(179,937)	$	14,471,870	$	(398,403)
Loss from operations – limited partners		(5381,~~632~~085)		(9276,~~387~~552)		(134,717)		(168,939)
Income (loss) from discontinued operations – limited partners		14,462,106		(123,894)
(Loss) income from discontinued operations – limited partners		(238)		(101,586)		14,461,869		(225,480)
Net income (loss) – limited partners	$	14,408,474	$	(216,280)
Net (loss) income – limited partners	$	(81,323)	$	(178,138)	$	14,327,152	$	(394,419)
Number of BACs outstanding		58,928		58,928		58,928		58,928
Loss from operations per weighted average BAC	$	(01.9138)	$	(13.5702)	$	(2.29)	$	(2.87)
Income (loss) from discontinued operations per weighted average BAC		~~245~~(0.4200)		(21.1072)		245.42		(3.82)
Net income (loss) per weighted average BAC	$	~~244~~(1.5138)	$	(34.6774)	$	243.13	$	(6.69)

See accompanying notes to condensed consolidated financial statements.

Table of Contents

INDEPENDENCE TAX CREDIT PLUS L.P. II

AND SUBSIDIARIES

Condensed Consolidated Statement of Changes in Partners’ (Deficit) Equity

For The Six Months Ended September 30, 2017

(Unaudited)

			Limited		General		Noncontrolling
	Total		Partners		Partner		Interests
Partners’ (deficit) equity – April 1, 2017	$	(15,546,422)	$	(18,553,228)	$	3,578,547	$	(571,741)
Net income		15,~~125~~043,~~755~~611		14,~~408~~327,~~474~~151		~~145~~144,~~540~~719		571,741
Partners’ (deficit) equity – June 30, 2017	$	(420,667)	$	(4,144,754)	$	3,724,087	$	—
Partners’ (deficit) equity – September 30, 2017	$	(502,811)	$	(4,226,077)	$	3,723,266	$	—

See accompanying notes to condensed consolidated financial statements.

Table of Contents

INDEPENDENCE TAX CREDIT PLUS L.P. II

AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Three months ended
	Six Months Ended
	June 30,
	September 30,
	2017		2016
Cash flows from operating activities:
Net income (loss)	$	15,~~125~~043,~~755~~611	$	(~~219~~400,~~742~~727)
Adjustments to reconcile net loss to net cash used in operating activities:
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Gain on sale of property		(15,254,~~923~~683)		—
Changes in operating assets and liabilities:
Increase in accounts payable		1,882		58,262
(Decrease) increase in accounts payable		(30,896)		53,793
Increase (decrease) in security deposit payable		429		(~~375~~3,225)
Increase in accrued interest payable		101,471		~~101~~136,~~461~~599
Increase in cash held in escrow		(17,026)		(2139,~~536~~310)
Decrease in other assets		3538,~~557~~904		1944,~~389~~359
Decrease in due to local general partners and affiliates		(4,703)		(5,699)
(Decrease) increase in due to general partner and affiliates		(7050,~~750~~281)		2770,~~378~~346
Total adjustments		(15,~~208~~216,~~063~~785)		~~178~~256,~~880~~863
Net cash used in operating activities		(82173,~~308~~174)		(40143,~~862~~864)
Cash flows from investing activities:
Increase in cash held in escrow		(9,216)		(918,~~217~~433)
Proceeds from sale of property		35,000		—
Net cash provided by (used in) investing activities		25,784		(9,217)
Costs paid related to sale of property		(240)		—
Net cash provided by (used in) investing activities		25,544		(18,433)
Cash flows from financing activities:
Principal payments of mortgage notes		(5,100)		(49,~~785~~647)
Net cash used in financing activities		(5,100)		(49,~~785~~647)
Net decrease in cash and cash equivalents		(61152,~~624~~730)		(54171,~~864~~944)
Cash and cash equivalents at beginning of year		1,585,419		1,943,788
Cash and cash equivalents at beginning of period		1,585,419		1,943,788
Cash and cash equivalents at end of year	$	1,523,795	$	1,888,924
Cash and cash equivalents at end of period	$	1,432,689	$	1,771,844
Summarized below are the components of the gain on sale of property:
Proceeds from sale of property	$	(35,000)	$	—
Costs paid relating to sale of property		240
Other assets		29,759		—
Cash held in escrow		331,093		—
Accounts payable and other liabilities		(22,986)		—
Mortgage payable		(6,636,408)		—
Accrued interest		(8,747,012)		—
Security deposits		(49,369)		—
Due to local general partners and affiliates		(120,000)		—
Due to general partners and affiliates		(5,000)		—

See accompanying notes to condensed consolidated financial statements.

Table of Contents

INDEPENDENCE TAX CREDIT PLUS L.P. II

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

~~June~~September 30, 2017

(Unaudited)

NOTE 1 –Summary of Significant Accounting Policies

Basis of Presentation

The condensed consolidated financial statements as of ~~June~~September 30, 2017 , include the accounts of Independence Tax Credit Plus L.P. II (the “Partnership”) and one remaining (of an original fifteen) ~~other~~ limited partnership (“subsidiary partnership”, “subsidiary” or “Local Partnership”) owning affordable apartment complexes (“Properties”) that are eligible for the low-income housing tax credit. The Partnership sold its last remaining investment on May 15, 2017. The general partner of the Partnership is Related Independence Associates L.P., a Delaware limited partnership (the “General Partner”). The general partner of the General Partner is Independent Associates GP LLC, a Delaware limited liability company. Centerline Holding Company (“Centerline”) was the ultimate parent of Centerline Affordable Housing Advisors LLC (“CAHA”), the sole member of the Manager of the General Partner. On April 15, 2015, Alden Torch Financial, LLC, a newly formed Delaware limited liability company (“ATF”), became the indirect owner of 100% of the equity interests in Centerline. Since April 15, 2015, ATF has been the ultimate parent and indirect owner of 100% of the equity interests in CAHA.

For financial reporting purposes, the Partnership’s fiscal quarter ends ~~June~~September 30. The remaining Local Partnership’s fiscal quarter ends ~~March~~June ~~31st~~30th. Accounts of the remaining Local Partnership have been adjusted for intercompany transactions from ~~April~~July 1 through ~~June~~September 30. The Partnership’s fiscal quarter ends on ~~June~~ September 30 in order to allow adequate time for the remaining Local Partnership’s financial statements to be prepared and consolidated. All intercompany accounts and transactions with the subsidiary partnership ~~has~~have been eliminated in consolidation.

The net loss (income) ~~loss~~ attributable to noncontrolling interests from discontinued operations amounted to $0 ~~approximately~~and $1,048 and $(571,741) and $12,~~277~~324 for the three and six months ended ~~June~~September 30, 2017 and 2016, respectively. The Partnership’s investment in the subsidiary partnership is equal to the respective subsidiary’s partnership equity less noncontrolling interest capital, if any.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with ~~generally accepted~~ accounting principles generally accepted in the United States of America (GAAP) and applicable rules and regulations of the Security and Exchange Commission regarding interim financial reporting. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been omitted or condensed pursuant to such regulations. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Partnership’s Annual Report on Form 10-K for the year ended March 31, 2017.

~~The books and records of the Partnership are maintained on the accrual basis of accounting in accordance with GAAP.~~ In the opinion of the General Partner of the Partnership, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position of the Partnership as of ~~June~~September 30, 2017, the results of its operations for the three and six months ended ~~June~~September 30, 2017 and 2016 and its cash flows for the ~~three~~six months ended ~~June~~September 30, 2017 and 2016. However, the operating results and cash flows for the ~~three~~six months ended ~~June~~September 30, 2017 may not be indicative of the results for the entire year.

~~Recently~~On ~~Issued~~May ~~Accounting~~15, ~~Pronouncements~~ 2017, the Partnership sold its last remaining investment. Liquidation of the Partnership in accordance with Section 8.1(ii) of the Limited Partnership Agreement requires the Partnership to dissolve 150 days following the sale of the Partnership’s last remaining investment. Following dissolution, the General Partner will cause the Partnership to liquidate as soon thereafter as possible at which time the remaining assets (i.e. cash) of the Partnership will be used to first pay any remaining liabilities of the Partnership and the costs of liquidation with the remaining balance, if any, distributed to the General Partner and the BACs holders in accordance with the Partnership Agreement. Dissolution is expected to

Table of Contents

INDEPENDENCE TAX CREDIT PLUS L.P. II

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

~~June~~September 30, 2017

(Unaudited)

intake place on or about November 30, 2017, with the ~~statements~~liquidation and termination of ~~cash~~the ~~flows~~Partnership to follow shortly thereafter. ~~ASU~~At ~~2016-09~~this istime, ~~affective~~the ~~for~~amount ~~annual~~of ~~periods~~reserves ~~beginning~~to ~~after~~be ~~December~~set ~~15,~~aside ~~2016~~for the payment of accrued operating expenses and ~~early~~liquidation ~~adoption~~expenses ishas ~~permitted~~not yet been determined. ~~The~~There ~~new~~can ~~guidance~~be ~~does~~no ~~not~~assurance ~~have~~that anthere ~~impact~~will be any remaining funds available for distributions to BACs holders. However, based on current estimates the ~~Partnership’s~~General ~~condensed~~Partner ~~consolidated~~does ~~financial~~not ~~statements.~~believe such amounts will be substantial.

Recently Issued Accounting Pronouncements

In March of 2016, the Financial Accounting Standards Board issued Accounting Standards Update ASU No. 2016-09, “Compensation – Stock Compensation: Improvements to Employee Shared Based Payment Accounting: Topic 718” (“ASU 2016-09”). ASU 2016-09 simplifies several aspects of how companies account for share-based compensation, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statements of cash flows. ASU 2016-09 was effective for annual periods beginning after December 15, 2016. The new guidance does not have an impact on the Partnership’s condensed consolidated financial statements.

In February 2016, the Financial Accounting Standards Board issued ASU No. 2016-02 “Leases – Topic 842” (“ASU 2016-02”). ASU 2016-02 requires recognition of lease assets and lease liabilities by lessees for all leases greater than one year in duration and classified as operating leases under previous GAAP. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and for interim periods within that fiscal year. The new guidance did not have an impact on the Partnership’s condensed consolidated financial statements.

In May 2015, the Financial Accounting Standards Board issued Accounting Standards Update No. 2015-07 ("ASU 2015-07") regarding ASC Topic 820 "Fair Value Measurement: Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)." The amendments in ASU 2015-07 remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The amendments also limit certain disclosures to investments for which the entity has elected to measure at fair value using the net asset value per share practical expedient. The amendments in ASU 2015-07 ~~are~~were effective for annual and interim periods beginning after December 15, 2015. ~~Early adoption is permitted.~~ The ~~amendments should be applied retrospectively by removing from the fair value hierarchy any investments for which fair value is measured using the net asset value per share practical expedient. The~~ new guidance did not have an impact on the Partnership’s consolidated financial statements.

On April 7, 2015, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2015-03, which changed the presentation of deferred financing costs. The new standard requires these costs to be presented as a reduction of the carrying amount of the associated debt. The new guidance required the amortization of the deferred financing costs to be reported as interest expense. The ASU was effective for periods beginning after December 15, 2015 and required retrospective application. The new guidance did not have an impact on the Partnership’s consolidated financial statements.

In February 2015, the Financial Accounting Standards Board issued Accounting Standard Update 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. The ASU modifies existing consolidation guidance related to (i) limited partnerships and similar legal entities, (ii) the evaluation of variable interests for fees paid to decision makers or service providers, (iii) the effect of fee arrangements and related parties on the primary beneficiary determination, and (iv) certain investment funds. These changes are expected to limit the number of consolidation models and place more emphasis on risk of loss when determining a controlling financial interest. The ASU iswas effective for fiscal years and interim periods within those years beginning after December 15, 2015 ~~and early adoption is permitted~~. The new guidance did not have an impact on the Partnership’s consolidated financial statements.

In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-08 “Reporting Discontinued Operations and Disclosures of Disposal of Components of an Entity.” ASU 2014-08 provides narrower definition of discontinued operations than under existing accounting principles generally accepted in the United States of America (“GAAP”). The standard update requires that only disposal of components of an entity (or group of components) that represent a strategic shift that has or will have a major effect on the reporting entity’s operations are reported in the financial statements as discontinued operations. The standard also provides guidance on the financial statement presentation and disclosures of discontinued operations. The ASU is effective prospectively for disposals (or classifications of business as held-for-sale) or components of an entity that occur in an annual or interim periods beginning after December 15, 2014. As such the net amount of assets amounting to $433,398 and net amount of liabilities amounting to $15,586,753 at March 31, 2017 have been reclassified as discontinued operations. The result of implementing the ASU had no effect on 2016 net income as previously reported.

Table of Contents

INDEPENDENCE TAX CREDIT PLUS L.P. II

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

~~June~~September 30, 2017

(Unaudited)

Innarrower ~~May~~definition ~~14,~~of ~~2014,~~discontinued ~~FASB~~operations ~~and~~than ~~IASB~~under ~~issued~~existing aaccounting ~~new~~principles ~~joint~~generally ~~revenue~~accepted ~~recognition~~in ~~standard~~the ~~that~~United ~~supersedes~~States ~~nearly~~of ~~all~~America US (“GAAP”). ~~guidance~~The onstandard ~~revenue~~update ~~recognition.~~requires ~~The~~that ~~core~~only ~~principal~~disposal of ~~the~~components ~~standard~~of isan ~~that~~entity ~~revenue~~(or ~~recognition~~group ~~should~~of ~~depict~~components) ~~the~~that ~~transfer~~represent ofa ~~goods~~strategic ~~and~~shift ~~services~~that tohas ~~customers~~or inwill anhave ~~amount~~a ~~that~~major ~~reflects~~effect on the ~~consideration~~reporting toentity’s ~~which~~operations are reported in the ~~entity~~financial ~~expects~~statements toas bediscontinued ~~entitled~~operations. inThe ~~exchange~~standard ~~for~~also ~~those~~provides ~~goods~~guidance on the financial statement presentation and ~~services~~disclosures of discontinued operations. The ~~new~~ASU ~~standard~~was is effective prospectively for ~~the~~disposals ~~Partnership~~(or classifications of business as held-for-sale) ~~the~~or ~~fiscal~~components ~~year~~of an entity that occur in an annual or interim periods beginning ~~April~~after 1December 15, ~~2018~~2014. ~~and~~As such the ~~effects~~net amount of ~~the~~assets ~~standard~~amounting onto ~~the~~$433,398 ~~Partnership’s~~and ~~condensed~~net ~~consolidated~~amount ~~financial~~of ~~statements~~liabilities ~~are~~amounting ~~not~~to ~~known~~$15,586,753 at ~~this~~March ~~time~~31, 2017, have been reclassified as discontinued operations. The result of implementing the ASU had no effect on 2016 net income as previously reported.

In ~~August~~May 14, 2014, FASB ~~issued~~and ~~ASU~~IASB Noissued ~~2014-15,~~a ~~Disclosure~~new ofjoint ~~Uncertainties~~revenue ~~About~~recognition anstandard ~~Entity’s~~that ~~Ability~~supersedes tonearly ~~Continue~~all asGAAP aguidance ~~Going~~on ~~Concern~~revenue recognition. ~~This~~The core principal of the standard ~~update~~is ~~provides~~that ~~guidance~~revenue ~~about~~recognition ~~management’s~~should ~~responsibility~~depict tothe ~~evaluate~~transfer ~~whether~~of ~~there~~goods isand aservices ~~substantial~~to ~~doubt~~customers ~~about~~in an ~~entity’s~~amount ~~ability~~that toreflects ~~continue~~the asconsideration ~~going~~to ~~concern~~which ~~and~~the entity expects to ~~provide~~be ~~related~~entitled ~~footnote~~in ~~disclosure~~exchange for those goods and services. The new ~~guidance~~standard is effective for ~~all~~the ~~annual~~Partnership ~~and~~for ~~interim~~the ~~periods~~fiscal ~~ending~~year ~~after~~beginning ~~December~~April 161, ~~2016.~~2018 ~~The~~and ~~new~~the ~~guidance~~effects ~~did~~of ~~not~~the ~~have~~standard ~~an impact~~ on the Partnership’s condensed consolidated financial statements are not known at this time.

In August 2014, FASB issued ASU No 2014-15, Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern. This standard update provides guidance about management’s responsibility to evaluate whether there is a substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosure. The new guidance was effective for all annual and interim periods ending after December 16, 2016. The new guidance did not have an impact on the Partnership’s consolidated financial statements.

Use of Estimates

The preparation of condensed consolidated financial statements in ~~conformity~~accordance with GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

NOTE 2 – Related Party Transactions

An affiliate of the General Partner, Independence SLP L.P., had a 0.01% interest as a special limited partner in each of the subsidiary partnerships. An affiliate of the General Partner also had a minority interest in certain local partnerships.

A)Other Related Party Expenses

The costs incurred to related parties for the three and six months ended ~~June~~September 30, 2017 and 2016 were as follows:

	Three Months Ended				Six Months Ended
	June 30,
	September 30,				September 30,
	2017		2016		2017		2016
Partnership management fees (a)	$	~~8,901~~—	$	16,750	$	8,901	$	33,500
Expense reimbursement (b)		1520,~~000~~471		624,~~320~~968		35,471		31,288
Total general and administrative - General Partner	$	2320,~~901~~471	$	2341,~~070~~718	$	44,372	$	64,788

The cost incurred to related parties from discontinued operations for the three months ended June 30, 2017 and 2016 were as follows:

	Three Months Ended
	June 30,
	2017		2016
Local administrative fee (c)	$	—	$	1,250
Total general and administrative-General Partner		—		1,250
Property management fees incurred to affiliates of the subsidiary partnerships' general partners		13,248		14,026
Total general and administrative-related parties	$	13,248	$	15,276

Table of Contents

INDEPENDENCE TAX CREDIT PLUS L.P. II

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

~~June~~September 30, 2017

(Unaudited)

~~(a)~~ The ~~General~~cost ~~Partner~~incurred ~~is entitled~~ to ~~receive~~related aparties ~~partnership~~from ~~management~~discontinued ~~fee,~~operations after payment of all Partnership expenses, which together with the annual local administrative fees will not exceed a maximum of 0.05% per annum of invested assets (as defined in the Partnership Agreement), for ~~administering~~ the ~~affairs~~three of the Partnership. Subject to the foregoing limitation, the partnership management fee will be determined by the General Partner in its sole discretion based upon its review of the Partnership’s investments. Unpaid partnership management fees for any year will be accrued without interest and ~~will~~six bemonths ~~payable~~ended ~~from~~September working capital reserves or to the extent of available funds after the Partnership has made distributions to the limited partners of sale or refinancing proceeds equal to their original capital contributions plus a 10% priority return thereon (to the extent not theretofore paid out of cash flow). Partnership management fees owed to the General Partner amounting to approximately $1,850,000 and $1,842,000 were accrued and unpaid as of June 30, 2017 and ~~March~~2016 ~~31,~~were 2017, respectively, and are included in the line item Due to general partner and affiliates in the accompanying condensed consolidated balance sheets. Current year partnership management fees may be paid out of operating reserves or refinancing and sales proceeds. As such, the General Partner cannot demand payment of the deferred fees except as ~~noted above.~~follows:

(b) The Partnership reimburses the General Partner and its affiliates for actual Partnership operating expenses incurred by the General Partner and its 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 Partner 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 the General Partner and its affiliates amounting to approximately $52,000 and $37,000 were accrued and unpaid as of June 30, 2017 and March 31, 2017, respectively. The General Partner does not intend to demand payment of the deferred payables beyond the Partnership’s ability to pay them. The Partnership anticipates that these will be paid, if at all, from working capital reserves.



	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Local administrative fee (c)	$	—	$	1,250	$	—	$	2,500

Total general and administrative-General Partner		—		1,250		—		2,500

Property management fees incurred to affiliates of the subsidiary partnerships' general partners		—		13,871		13,248		27,897

Total general and administrative-related parties	$	—	$	15,121	$	13,248	$	30,397

(ca) ~~Independence~~The ~~SLP~~General ~~L.P.,~~Partner is entitled to receive a ~~special~~partnership ~~limited~~management ~~partner~~fee, after payment of ~~the~~all ~~subsidiary~~Partnership ~~partnerships~~expenses, iswhich ~~entitled~~together towith ~~receive~~the aannual local administrative ~~fee~~fees ofwill upnot toexceed ~~$5,000~~a ~~per~~maximum ~~year~~of ~~from~~0.05% ~~each~~per ~~subsidiary~~annum ~~partnership.~~of Asinvested ofassets ~~June~~(as ~~30,~~defined ~~2017~~in ~~and~~the ~~March~~Partnership 31Agreement), ~~2017,~~for administering the ~~subsidiary~~affairs ~~partnerships~~of ~~owed~~the ~~approximately~~Partnership. $0Subject ~~and~~to ~~$100,000,~~the ~~respectively~~foregoing limitation, ofthe ~~these~~partnership ~~fees~~management tofee ~~Independence~~will ~~SLP~~be ~~L.P.~~determined ~~These~~by ~~fees~~the ~~have~~General ~~been~~Partner ~~deferred~~ in ~~certain~~its ~~cases~~sole ~~and~~discretion based upon its review of the Partnership’s ~~anticipates~~investments. ~~that~~Unpaid ~~they~~partnership management fees for any year will be ~~paid,~~accrued ifwithout atinterest ~~all,~~and will be payable from working capital reserves or ~~future~~to ~~sales~~the extent of available funds after the Partnership has made distributions to the limited partners of sale or refinancing proceeds. Onequal ~~May~~to ~~15,~~their ~~2017,~~original capital contributions plus a 10% priority return thereon (to the extent not theretofore paid out of cash flow). Partnership ~~sold~~management ~~its~~fees ~~last~~owed ~~remaining~~to ~~investment~~the General Partner amounting to approximately $1,850,000 and $951,842,000 were accrued and unpaid as of ~~these~~September 30, 2017 and March 31, 2017, respectively, and are included in the line item Due to general partner and affiliates in the accompanying condensed consolidated balance sheets. Current year partnership management fees ~~were~~may be paid out of ~~sale~~operating reserves or refinancing and sales proceeds. As such, the General Partner cannot demand payment of the deferred fees except as noted above.

As(b) ofThe ~~June 30,~~Partnership ~~2017~~reimburses the General Partner and ~~March~~its ~~31,~~affiliates ~~2017,~~for actual Partnership operating expenses incurred by the General Partner and its 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 Partner 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 the General Partner and its affiliates amounting to approximately $~~349~~72,000 and $037,000 ~~respectively~~were accrued and unpaid as of September 30, to2017 ~~the~~and March 31, 2017, respectively. The General Partner ~~for~~does ~~expenses~~not intend to demand payment of the deferred payables beyond the Partnership’s ability to pay them. The Partnership anticipates that these will be paid, onif ~~its~~at ~~behalf~~all, from working capital reserves.

B(c)~~Due~~ Independence SLP L.P., a special limited partner of the subsidiary partnerships, is entitled to ~~Local~~receive ~~General~~a ~~Partners~~local administrative fee of up to $5,000 per year from each subsidiary partnership. As of September 30, 2017 and ~~Affiliates~~ March 31, 2017, the subsidiary partnerships owed approximately $0 and $100,000, respectively, of these fees to Independence SLP L.P. These fees have been deferred in certain cases and the Partnership anticipates that they will be paid, if at all, from working capital reserves or future sales proceeds. On May 15, 2017, the Partnership sold its last remaining investment and $95,000 of these fees were paid out of sale proceeds.

~~Due~~As toof ~~local~~September 30, ~~general~~2017 ~~partners~~ and ~~affiliates~~March ~~from~~31, ~~discontinued~~2017, ~~operations~~the atPartnership ~~June 30, 2017~~owed approximately $349 and ~~March 31~~$0, ~~2017~~ ~~consists~~respectively, ofto the ~~following:~~General Partner for expenses paid on its behalf.

	June 30,		March 31,
	2017		2017
Construction costs payable	$	—	$	120,000
Management and other operating advances		—		4,703
	$	—	$	124,703

Table of Contents

INDEPENDENCE TAX CREDIT PLUS L.P. II

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

~~June~~September 30, 2017

(Unaudited)

B)Due to Local General Partners and Affiliates

Due to local general partners and affiliates from discontinued operations at September 30, 2017 and March 31, 2017, which are reported as a component of other liabilities held for sale in the accompanying condensed consolidated balance sheet, consists of the following:


	September 30,		March 31,
	2017		2017

Construction costs payable	$	—	$	120,000
Management and other operating advances		—		4,703
	$	—	$	124,703

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 and Cash Held in Escrow

The Partnership’s cash and cash equivalents include cash on hand and deposits in bank. Due to their short term nature, the carrying amounts reported in the condensed consolidated balance sheets approximate fair value.

Mortgage Notes Payable

The Partnership has categorized the fair value of financial assets and liabilities based upon the fair value hierarchy specified by ASC Topic 820, Fair Value Measurements (“ASC 820”). This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). This standard provides for a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

Level 1:		Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2:		Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3:		Unobservable inputs that reflect the Partnership’s own assumptions.

The estimated fair value of mortgage notes payable has been determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop ~~estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange.~~

	At June 30, 2017				At March 31, 2017
	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value
LIABILITIES:
Mortgage notes	$	—	$	—	$	6,641,508	$	3,669,108

Fair value for the mortgage notes have been estimated using Level 3 inputs.

For the mortgage notes, fair value is calculated using present value cash flow models based on a discount rate. It was determined that the Tender Option Bond market, through which these bonds have been securitized in the past, continued to see a dramatic slowdown with limited liquidity and significantly reduced transaction levels. To assist in valuing these notes, the Partnership held separate discussions with various third party investment banks who are leaders in the municipal bond business. The discussions produced assumptions that were based on market conditions as well as the credit quality of the underlying property partnerships, which held the mortgage notes, to determine what discount rates to utilize.

Table of Contents

INDEPENDENCE TAX CREDIT PLUS L.P. II

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

~~June~~September 30, 2017

(Unaudited)

estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange.


	At September 30, 2017				At March 31, 2017
	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value

LIABILITIES:
Mortgage notes	$	—	$	—	$	6,641,508	$	3,669,108

Fair value for the mortgage notes have been estimated using Level 3 inputs.

Due to General Partner and Affiliates and Due to/from Local General Partners and Affiliates

Management believes it is not practical to estimate the fair value of due to General Partner and affiliates and due to/from Local General Partners and affiliates because market information on such obligations is not currently available.

NOTE 4 – Sale of Properties

On May 15, ~~2015~~2017, the Partnership sold its limited partnership interest in Renaissance Plaza ’93 Associates LP., (“Renaissance”) to an affiliate of the Local General Partner for a sale price of $35,000. The sale resulted in a gain of approximately $15,255,000 resulting from the write off of the deficit basis in the Local Partnership of the same amount at the date of the sale, which was recorded during the quarter ended June 30, 2017.

NOTE 5 – Discontinued Operations

The following table summarizes the financial position of the last remaining Local Partnership which was sold on May 15, 2017 and has been classified as discontinued operations in the consolidated financial statements.

	June 30,		March 31,
	2017		2017
	(Unaudited)		(Audited)
ASSETS
Assets
Cash and cash equivalents	$	—	$	71,657
Cash held in escrow		—		304,851
Other assets		—		56,890
Total assets	$	—	$	433,398
Liabilities
Mortgage notes payable	$	—	$	6,641,508
Accounts payable		—		26,061
Accrued interest payable		—		8,645,541
Security deposits payable		—		48,940
Due to local general partners and affiliates (Note 2)		—		224,703
Total liabilities	$	—	$	15,586,753

Table of Contents

INDEPENDENCE TAX CREDIT PLUS L.P. II

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

~~June~~September 30, 2017

(Unaudited)

~~The~~NOTE ~~following~~5 ~~table~~– ~~summarizes~~Discontinued the results of operations of the last remaining Local Partnership that is classified as discontinued operations. For the three months ended June 30, 2017, Renaissance Plaza which was sold on May 15, 2017, was classified as discontinued operations in the consolidated financial statements. In order to present comparable results for the three months ended June 30, 2016, Renaissance Plaza was classified as discontinued operations in the consolidated financial statements.Operations

	Three Months Ended
	June 30,
	2017		2016
Revenues	$	—	$	—
Rental income		188,906		204,609
Other		3,585		4,754
Gain on sale of property (Note 4)		15,254,923		—
Total revenue		15,447,414		209,363
Expenses
General and administrative		58,947		126,477
General and administrative-related parties (Note 2)		13,248		15,276
Repairs and maintenance		40,464		45,505
Operating and other		29,286		21,038
Real estate taxes		13,626		14,021
Insurance		7,500		8,750
Interest		104,414		104,718
Depreciation and amortization		—		—
Total expenses		267,485		335,785
Income (loss) from discontinued operations		15,179,929		(126,422)
Noncontrolling interest in (income) loss of subsidiaries from discontinued operations		(571,741)		1,277
Income (loss) from discontinued operations – Independence Tax Credit Plus L.P. IV	$	14,608,188	$	(125,144)
Income (loss) from discontinued operations – limited partners	$	14,462,106	$	(123,894)
Number of BACs outstanding		58,928		58,928
Income (loss) from discontinued operations per weighted average BAC	$	245.42	$	(2.10)


	September 30,		March 31,
	2017		2017
	(Unaudited)		(Audited)
ASSETS

Assets
Cash and cash equivalents	$	—	$	71,657
Cash held in escrow		—		304,851
Other assets		—		56,890
Total assets	$	—	$	433,398

Liabilities
Mortgage notes payable	$	—	$	6,641,508
Accounts payable		—		26,061
Accrued interest payable		—		8,645,541
Security deposits payable		—		48,940
Due to general partners and affiliates (Note 2)		—		224,703
Total liabilities	$	—	$	15,586,753

Table of Contents

INDEPENDENCE TAX CREDIT PLUS L.P. II

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

~~June~~September 30, 2017

(Unaudited)

The following table summarizes the results of operations of the last remaining Local Partnership that is classified as discontinued operations. For the six months ended September 30, 2017, Renaissance Plaza which was sold on May 15, 2017, was classified as discontinued operations in the consolidated financial statements. In order to present comparable results for the six months ended September 30, 2016, Renaissance Plaza was classified as discontinued operations in the consolidated financial statements.


	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2017		2016		2017		2016

Revenues	$	—	$	—	$	—	$	—

Rental income		—		200,801		188,906		405,410
Other		—		—		3,585		10,662
(Loss) gain on sale of property (Note 4)		(240)		5,908		15,254,683		—

Total revenue		(240)		206,709		15,447,174		416,072

Expenses
General and administrative		—		85,015		58,947		211,492
General and administrative-related parties (Note 2)		—		15,121		13,248		30,397
Repairs and maintenance		—		62,299		40,464		107,804
Operating and other		—		20,313		29,286		41,351
Real estate taxes		—		14,152		13,626		28,173
Insurance		—		8,750		7,500		17,500
Interest		—		104,719		104,414		209,437
Depreciation and amortization		—		—		—		—

Total expenses		—		310,369		267,485		646,154

Income (loss) from discontinued operations		(240)		(103,660)		15,179,689		(230,082)

Noncontrolling interest in (income) loss of subsidiaries from discontinued operations		—		1,048		(571,741)		2,324

Income (loss) from discontinued operations – Independence Tax Credit Plus L.P. II	$	(240)	$	(102,612)	$	14,607,948	$	(227,758)

Income (loss) from discontinued operations – limited partners	$	(238)	$	(101,586)	$	14,461,869	$	(225,480)

Number of BACs outstanding		58,928		58,928		58,928		58,928

Income (loss) from discontinued operations per weighted average BAC	$	(0.00)	$	(1.72)	$	245.42	$	(3.82)

Table of Contents

INDEPENDENCE TAX CREDIT PLUS L.P. II

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2017

(Unaudited)

Cash flows from discontinued operations:

	Three Months Ended
	Six Months Ended
	June 30,
	September 30,
	2017		2016
Net cash provided by operating activities	$	6,383,620	$	10,081
Net cash provided by (used in) operating activities	$	6,383,380	$	(18,564)
Net cash provided by (used in) investing activities	$	186,~~231~~471	$	(918,~~217~~433)
Net cash used in financing activities	$	(6,641,508)	$	(49,~~785~~647)

NOTE 6 – Commitments and Contingencies

a) Liquidity

At ~~June~~September 30, 2017, the Partnership’s liabilities exceeded its assets by $~~420~~502,~~667~~811 and for the ~~three~~six months ended ~~June~~September 30, 2017, the Partnership had a net gain of $15,~~125~~043,~~755~~611. As discussed in Note 2, partnership management fees of approximately $1,850,000 will be payable out of sales or refinancing proceeds only to the extent of available funds after payments on all other Partnership liabilities have been made and after the Limited Partners have received a 10% return on their capital contributions. As such, the General Partner cannot demand payment of these deferred fees beyond the Partnership’s ability to pay them. In addition, where the Partnership has unpaid partnership management fees related to sold properties, such management fees are written off and recorded as capital contributions.

The Partnership has cash reserves of approximately $1,~~524~~433,000 at ~~June~~September 30, 2017. Such amount is considered sufficient to cover the Partnership’s ~~day~~accrued ~~to day~~ operating expenses, ~~excluding~~and ~~fees~~liquidation toexpenses ~~the~~until ~~General Partner, for at least~~ the ~~next~~Partnership’s ~~year~~liquidation. The Partnership’s operating expenses, excluding the Local Partnerships’ expenses and related party expenses, amounted to approximately $3092,000 for the ~~three~~six months ended ~~June~~September 30, 2017.

b) Uninsured Cash and Cash Equivalents

The Partnership maintains its cash and cash equivalents in various high quality credit institutions. The accounts at each bank are guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per entity per institution. At times, the balances exceed the FDIC insurance limit.

c) Property Management Fees

Property management fees incurred by the last remaining Local Partnership amounted to $0 and $13,871 and $13,248 and $1427,~~026~~897 for the three and six months ended ~~June~~September 30, 2017 and 2016, respectively. Of these fees $0 and $13,871 and $13,248 and $14,026 were earned by an affiliate of the remaining Local General Partner and related to discontinued operations for the three and six months ended ~~June~~September 30, 2017 and 2016, respectively.

~~d) Subsequent Events~~15

The Partnership evaluated all subsequent events from the date of the condensed consolidated balance sheet through the issuance date of these condensed consolidated financial statements and determined that there were no events or transactions

Table of Contents

INDEPENDENCE TAX CREDIT PLUS L.P. II

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

~~June~~September 30, 2017

(Unaudited)

~~occurring~~ d) Subsequent ~~during the subsequent event reporting period which require recognition or disclosure in the condensed consolidated financial statements other than the following:~~Events

OnThe ~~May 15, 2017, the~~ Partnership ~~sold~~evaluated ~~its~~all ~~last~~subsequent ~~remaining~~events ~~investment.~~from ~~At this time,~~ the ~~amount~~date of ~~reserves~~the tocondensed beconsolidated ~~set~~balance ~~aside~~sheet ~~for~~through the ~~payment~~issuance date of ~~accrued~~these ~~operating~~condensed ~~expenses~~consolidated financial statements and ~~liquidation~~determined ~~expenses~~that ~~has~~there ~~not~~were ~~yet~~no ~~been~~events ~~determined.~~or ~~There~~transactions ~~can~~occurring beduring nothe ~~assurance~~subsequent ~~that~~event ~~there~~reporting ~~will~~period bewhich ~~any~~require ~~remaining~~recognition ~~funds~~or ~~available~~disclosure ~~for~~in ~~distributions~~the tocondensed ~~BACs~~consolidated ~~holders~~financial statements.

1516

Table of Contents

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

Liquidity and Capital Resources

The Partnership originally invested all of its net proceeds in fifteen Local Partnerships. The Partnership sold its last remaining investment on May 15, 2017. As of ~~June~~September 30, 2017, the Partnership had sold its limited partnership interests in fourteen Local Partnerships and one Local Partnership sold its property and the related assets and liabilities. All gains and losses on sales are included in discontinued operations.

Liquidation of the Partnership in accordance with Section 8.1(ii) of the Limited Partnership Agreement requires the Partnership to dissolve 150 days following the sale of the Partnership’s last remaining investment. Following dissolution, the General Partner will cause the Partnership to liquidate as soon thereafter as possible at which time the remaining assets (i.e. cash) of the Partnership will be used to first pay any remaining liabilities of the Partnership and the costs of liquidation with the remaining balance, if any, distributed to the General Partner and the BACs holders in accordance with the Partnership Agreement. Dissolution is expected to take place on or about ~~October~~November 1830, 2017, with the liquidation and termination of the Partnership to follow shortly thereafter. At this time, the amount of reserves to be set aside for the payment of accrued operating expenses and liquidation expenses has not yet been determined. There can be no assurance that there will be any remaining funds available for distributions to BACs holders. However, based on current estimates the General Partner does not believe such amounts will be substantial.

Short-Term

The Partnership’s primary sources of funds include: (i) working capital reserves; (ii) interest earned on the working capital reserves; (iii) cash distributions from operations of its remaining Local Partnership; and (iv) sales and/or refinance proceeds and distributions. Such funds are available to meet the obligations of the Partnership. The Partnership does not anticipate providing cash distributions to BACs holders in circumstances other than refinancing or sales. Cash distributions received from the Local Partnership, sale proceeds, as well as the working capital reserves referred to above, will be used ~~towards~~to pay first any remaining liabilities of the ~~future~~Partnership ~~operating~~and ~~expenses~~the costs of liquidation with the remaining balance, if any, distributed to the General Partner and the BACs holders in accordance with the Partnership Agreement. During the ~~three~~six months ended ~~June~~September 30, 2017 and 2016, distributions to the Partnership from sale proceeds amounted to $35,000 and $0, respectively.

During the ~~three~~six months ended ~~June~~September 30, 2017, cash and cash equivalents of the Partnership and its remaining consolidated Local Partnership decreased by approximately $61152,000. This decrease was due to net cash used in operating activities of approximately $82173,000, an increase in cash held in escrow relating to investing activities of approximately $9,000 and principal payments of mortgage notes of approximately $5,000 which exceeded sale proceeds received of approximately $35,000.

Total expenses from operations for the three and six months ended ~~June~~September 30, 2017 and 2016 excluding interest and general and administrative – related parties, totaled $3061,~~271~~433 and $7035,~~250~~607 and $91,704 and $105,857, respectively.

Accounts payable from operations as of ~~June~~September 30, 2017 and March 31, 2017 were $4512,~~001~~223 and $40,044, respectively. Accounts payable are short term liabilities which are expected to be paid from operating cash flows, working capital balances at the Local Partnership level, Local General Partner advances and in certain circumstances advances from the Partnership. Accounts payable from discontinued operations were $0 and $26,061 as of ~~June~~September 30, 2017 and March 31, 2017, respectively. Accrued interest payable from discontinued operations as of ~~June~~September 30, 2017 and March 31, 2017 was $0— and $8,645,541, respectively. Such amount represents the accrued interest on mortgage loans, which include primary and secondary loans. The remaining secondary loan had provisions such that interest was accrued but not payable until a future date. The Partnership anticipated the payment of accrued interest on the secondary loan (which made up the majority of the accrued interest payable amount and which had been accumulating since the Partnership’s investment in the remaining Local Partnership) ~~will~~would be made from future refinancing or sales proceeds of such Local Partnership. In addition, the remaining Local Partnership’s mortgage note was collateralized by its land and buildings, and was without further recourse to the Partnership.

At June 30, 2017, the Partnership’s liabilities exceeded assets by $420,667 and for the three months ended June 30, 2017, the Partnership had a net gain of $15,125,755. However, because 1) the provisions of the secondary loan deferred the payment of accrued interest of the remaining Local Partnership and will only have been made from future refinancing or 17

Table of Contents

At September 30, 2017, the Partnership’s liabilities exceeded assets by $502,811 and for the six months ended September 30, 2017, the Partnership had a net gain of $15,043,611. However, because 1) the provisions of the secondary loan deferred the payment of accrued interest of the remaining Local Partnership and would only have to have been made from future refinancing or sales proceeds of the remaining Local Partnership, (if any) 2) the General Partner continues to defer the payment of fees as discussed below and in Note 2 to the Condensed Consolidated Financial Statements, and 3) the Partnership has sufficient unconsolidated working capital reserves to cover the Partnership’s day to day operating expenses, the Partnership ~~(and the remaining Local Partnership)~~ believes it has sufficient liquidity ~~and ability~~ to ~~generate cash and to~~ meet existing and known or reasonably likely future cash requirements ~~over~~such ~~both~~as payment of the ~~short~~Partnership’s remaining liabilities and ~~long~~the ~~term~~costs of liquidation.

Long-Term

Partnership management fees owed to the General Partner amounting to approximately $1,850,000 and $1,842,000 were accrued and unpaid as of ~~June~~September 30, 2017 and March 31, 2017, respectively and are included in Due to General Partner and affiliates on the Condensed Consolidated Balance Sheets. Unpaid partnership management fees for any year are deferred without interest and will be payable out of sales or refinancing proceeds only to the extent of available funds after payments on all Partnership liabilities have been made other than to those owed to the General Partner and its affiliates, and after the Limited Partners have received a 10% return on their capital contributions.

All other amounts included in Due to General Partner and affiliates are expected to be paid, if at all, from working capital reserves. See Note 2 in Item 1 for further discussion of amounts due to the General Partner and its affiliates.

The Partnership’s liquidity considerations are discussed above and in Note 5a6a in Item 1.

Results of Operations

The following is a summary of the Partnership’s results of operations for the three and six months ended ~~June~~September 30, 2017 and 2016, ~~respectively,~~ excluding the results of its discontinued operations which are not reflected in the following discussion.

General and administrative for non-related parties’ expenses increased approximately $26,000 and decreased approximately $4014,000 for the three and six months ended ~~June~~September 30, 2017 as compared to the corresponding period ended ~~June~~September 30, 2016,. The increase in the second quarter was primarily due to antiming differences on invoices at the Partnership level and the overall decrease was due to a decrease of legal expenses and accrued audit fees at the Partnership level.

NoGeneral ~~depreciation~~ and ~~amortization~~administrative ~~was~~for ~~booked~~related parties’ expenses decreased approximately $21,000 and $20,000 for the three and six months ended ~~June~~September 30, 2017 ~~and~~as ~~2016,~~compared ~~respectively, due~~ to the ~~fact~~corresponding ~~that~~period ~~property~~ended ~~and~~September 30, ~~equipment~~2016, ~~were~~primarily ~~fully~~due ~~depreciated~~to asa decrease of management fees due to the ~~end~~sale of the ~~year~~last ~~ended~~remaining ~~March 31, 2016~~property.

No depreciation and amortization was booked for the three and six months ended September 30, 2017 and 2016, respectively, due to the fact that property and equipment were fully depreciated as of the end of the year ended March 31, 2016.

Off-Balance Sheet Arrangements

The Partnership has no off-balance sheet arrangements.

Fair Value Measurements

See Note 3 in Item 1 for methods and assumptions 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.

Table of Contents

Critical Accounting Policies and Estimates

The preparation of condensed consolidated financial statements requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. The following is a summary of certain accounting estimates considered critical by the Partnership. The summary should be read in conjunction with the more complete discussion of the Partnership’s accounting policies included in Item 8, Note 2 to the consolidated financial statements in the Partnership’s Annual Report on Form 10-K for the year ended March 31, 2017.

Table of Contents

Property and Equipment

Property and equipment to be held and used are carried at cost which includes the purchase price, acquisition fees and expenses, construction period interest and any other costs incurred in acquiring the Properties. 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 ASC 360, Property, Plant and Equipment. 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, Property investments themselves are reduced to estimated fair value (using the fair market value based on comparative sales) when the Property is considered to be impaired and the depreciated cost exceeds estimated fair value.

At the time management commits to a plan to dispose of a specific asset, said asset is adjusted to the lower of carrying amount or fair value less costs to sell. These assets are classified as property and equipment-held for sale and are not depreciated. Property and equipment that are held for sale are included in discontinued operations.

During the ~~three~~six months ended ~~June~~September 30, 2017, the Partnership has not recorded any loss on impairment of assets. Through 2017, the Partnership has recorded approximately $31,906,000 as an aggregate loss on impairment of property.

Revenue Recognition

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

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

Income Taxes

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

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Not applicable.

Table of Contents

Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures. The President (Principal Executive Officer) and Chief Financial Officer of Related Independence Associates, Inc., the general partner of the General Partner of the Partnership, 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.

18(b) Changes in Internal Controls over Financial Reporting. During the period ended September 30, 2017, 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.

Table of Contents

(b) Changes in Internal Controls over Financial Reporting. During the period ended June 30, 2017, 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.

Table of Contents

PART II. OTHER INFORMATION


Item 1.	Legal Proceedings. – None

Item 1A.	Risk Factors. – No Changes

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

Item 3.	Defaults Upon Senior Securities. – None

Item 4.	Mine Safety Disclosures. - None

Item 5.	Other Information. - None

Item 6.	Exhibits.

	(3A)	Agreement of Limited Partnership of Independence Tax Credit Plus L.P. II as adopted on February 11, 1992*

	(3B)	Form of Amended and Restated Agreement of Limited Partnership of Independence Tax Credit Plus L.P. II, attached to the Prospectus as Exhibit A**

	(3C)	Certificate of Limited Partnership of Independence Tax Credit Plus L.P. II as filed on February 11, 1992*

	(10A)	Form of Subscription Agreement attached to the Prospectus as Exhibit B**

	(10B)	Escrow Agreement between Independence Tax Credit Plus L.P. II and Bankers Trust Company*

	(10C)	Form of Purchase and Sales Agreement pertaining to the Partnership’s acquisition of Local Partnership Interests*

	(10D)	Form of Amended and Restated Agreement of Limited Partnership of Local Partnerships*

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

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

	(32.1)+	Certification Pursuant to Section 1350 of Title 18 of the United States Code (18 U.S.C. 1350).

	(32.2)+	Certification Pursuant to Section 1350 of Title 18 of the United States Code (18 U.S.C. 1350).

	101+	The following items from this Quarterly Report on Form 10-Q formatted in Extensible Business Reporting Language: (i) Consolidated Balance Sheet (unaudited), (ii) Consolidated Statement of Operations (unaudited), (iii) Consolidated Statements of Changes in Partners’ (Deficit) Capital (unaudited), (iv) Consolidated Statement of Cash Flows (unaudited), and (v) Notes to Consolidated Financial Statements (unaudited).

*Incorporated herein as an exhibit by reference to exhibits filed with Post-Effective Amendment No. 4 to the Registration Statement on Form S-11 (Registration No. 33-37704).

**Incorporated herein as an exhibit by reference to exhibits filed with Post-Effective Amendment No. 8 to the Registration Statement on Form S-11 (Registration No. 33-37704).

+Filed herewith.

2021

Table of Contents

SIGNATURES

Pursuant to the requirements 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.

INDEPENDENCE TAX CREDIT PLUS L.P. II

(Registrant)


	By:	RELATED INDEPENDENCE ASSOCIATES L.P.,
		General Partner

	By:	INDEPENDENCE ASSOCIATES GP LLC,
		General Partner

	By:	CENTERLINE MANAGER LLC,
		Manager

	By:	CENTERLINE AFFORDABLE HOUSING ADVISORS LLC,
		Sole Member

	By:	CENTERLINE CAPITAL GROUP LLC,
		Sole Member

Date:	~~August~~November 1014, 2017	By:	/s/ Ivyl T. Boyce
			Ivyl T. Boyce
			Chief Financial Officer
Date:	~~August~~November 1014, 2017	By:	/s/ Alan T. Fair
			Alan T. Fair
			President and Chief Executive Officer

2122

Filing Compare · INDEPENDENCE TAX CREDIT PLUS L P II