UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K

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

For the fiscal year ended March 31, 2011

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

For the transition period from__________to__________

Commission File Number 0-21762

Gateway Tax Credit Fund III Ltd.

(Exact name of Registrant as specified in its charter)

Florida		59-3090386
(State or other jurisdiction of incorporation or organization)		(IRS Employer No.)

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

Registrant’s Telephone Number, Including Area Code:

(727) 567-1000

Securities registered pursuant to Section 12(b) of the Act: None

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

Title of Each Class

Units of Limited Partnership Interest

		Number of Record Holders
Title of Class		as of March 31, 2011
Limited Partnership Interest		2,048
General Partner Interest		2

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

YES [ ]

NO [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

YES [ ]

NO [X]

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

YES [X]

NO [ ]

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

YES [X]

NO [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Sec. 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. [X]

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

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ]	Smaller Reporting Company [X]

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

Yes [ ]

No [X]

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrants most recently completed second fiscal quarter.

There is no market for the Registrant’s Limited Partnership interests.

DOCUMENTS INCORPORATED BY REFERENCE

Parts I, II, III and IV - Form S-11 Registration Statement

and all amendments and supplements thereto.

File No. 33-44238

PART I

Item 1. Business

Gateway Tax Credit Fund III Ltd. (“Gateway”) is a Florida Limited Partnership. The general partners are Raymond James Tax Credit Funds, Inc., the Managing General Partner, and Raymond James Partners, Inc., (collectively the “General Partners”) both sponsors of Gateway Tax Credit Fund III Ltd. and wholly owned subsidiaries of Raymond James Financial, Inc. Gateway was formed October 17, 1991 and commenced operations July 16, 1992 with the first admission of Limited Partners.

Gateway is engaged in only one industry segment, to acquire limited partnership interests in unaffiliated limited partnerships (“Project Partnerships”), each of which owns and operates one or more apartment complexes eligible for Low-Income Housing Tax Credits (“Tax Credits”) under Section 42 of the Internal Revenue Code, received over a ten year period. Subject to certain limitations, Tax Credits may be used by Gateway's investors to reduce their income tax liability generated from other income sources. Gateway will terminate on December 31, 2040 or sooner, in accordance with the terms of its Limited Partnership Agreement. As of March 31, 2011, Gateway received capital contributions of $1,000 from the General Partners and from the Limited Partners: $10,395,000 in Series 7, $9,980,000 from Series 8, $6,254,000 from Series 9, $5,043,000 from Series 10 and $5,127,000 from Series 11.

Gateway offered Limited Partnership units in series. Each Series invests in a separate and distinct pool of Project Partnerships. Net proceeds from each Series were used to acquire Project Partnerships which are specifically allocated to such Series. Income or loss and all tax items from the Project Partnerships acquired by each Series are specifically allocated among the Limited Partners of such Series.

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

Gateway initially held investments in 133 Project Partnerships. As more fully described in Item 7 herein, Gateway is presently in the process of disposing of its interests in Project Partnerships. As of March 31, 2011, 21 Project Partnerships once held by Gateway have been sold. Project Partnership investments held by Series as of March 31, 2011 are as follows: 25 Project Partnerships for Series 7, 40 Project Partnerships for Series 8, 22 Project Partnerships for Series 9, 14 Project Partnerships for Series 10 and 11 Project Partnerships for Series 11. Gateway acquired its interests in the Project Partnerships by becoming a limited partner in the Project Partnerships that own the properties. As of March 31, 2011, the capital received for each Series was fully invested in Project Partnerships and management plans no new Project Partnership acquisitions.

The primary source of funds from the inception of each Series has been the capital contributions from Limited Partner investors. Gateway’s operating costs are funded using the reserves established for this purpose, the interest earned on these reserves and distributions received from Project Partnerships. Gateway has also received proceeds from the sale of Project Partnerships and made corresponding cash distributions to Limited Partners.

All but eight of the Project Partnerships are financed with mortgage loans from the Farmers Home Administration (now called United States Department of Agriculture - Rural Development) (“USDA-RD”) under Section 515 of the Housing Act of 1949. These mortgage loans are made at low interest rates for multi-family housing in rural and suburban areas, with the requirement that the interest savings be passed on to low income tenants in the form of lower rents. A significant portion of the project partnerships also receive rental assistance from USDA-RD to subsidize certain qualifying tenants. One Project Partnership in Series 7 received conventional financing. One Project Partnership in Series 9, two Project Partnerships in Series 10 and one Project Partnership in Series 11 are fully financed through the HOME Investment Partnerships Program. These HOME Program loans provide financing at rates of 0 % to 0.5% for a period of 15 to 42 years. One Project Partnership in Series 11 is partially financed by HOME. Two Project Partnerships in Series 11 received conventional financing.

The investment objectives of Gateway are to:

1) Provide tax benefits to Limited Partners in the form of Tax Credits during the period in which each Project is eligible

to claim Tax Credits;

2) Preserve and protect the capital of each Series.

The investment objectives and policies of Gateway are described in detail on pages 39 through 47 of the Prospectus under the caption “Investment Objectives and Policies” which is incorporated herein by reference.

Item 1. Business (Continued)

Gateway's goal is to invest in a diversified portfolio of Project Partnerships located in rural and suburban locations with a high demand for low income housing. As of March 31, 2011, each Series' investor capital contributions were successfully invested in Project Partnerships which met the investment criteria. The Tax Credits have been provided to Gateway’s investors and the fifteen year Tax Credit compliance period has expired for all of the Project Partnerships (see further information in the Exit Strategy discussion below). Gateway is now in the process of disposing of its remaining interests and distributing proceeds from those sales to the Limited Partners. Gateway’s objective is to sell Gateway’s interests in Project Partnerships which have exited the Tax Credit compliance period for fair market value and ultimately, liquidate the Project Partnerships and in turn liquidate Gateway.

Gateway has no direct employees. Services are performed by the Managing General Partner and its affiliates and by agents retained by it. The Managing General Partner has full and exclusive discretion in management and control of Gateway.

Exit Strategy Upon expiration of the Project Partnership Tax Credit Compliance Period

When Project Partnerships reach the end of their Tax Credit compliance period, Gateway initiates a process of disposing of its investments in the Project Partnerships. The objective is to sell Gateway’s interest in such properties for fair market value and ultimately, liquidate the Project Partnerships and in turn, when Gateway’s last Project Partnership investment is sold, liquidate Gateway.

The IRS compliance period for low-income housing Tax Credit properties is generally 15 years from occupancy following construction or rehabilitation completion.

All of the original 133 Project Partnership investments have reached the end of their Tax Credit compliance period as of December 31, 2010. As of March 31, 2011, 21 of the Project Partnership investments have been sold and, in accordance with the Gateway partnership agreement, the entire net proceeds received from these sales either have been or will be distributed to the Limited Partners of those Series. On a cumulative basis as of March 31, 2011, $338,877 of net sales proceeds representing $32.60 per Limited Partner unit in Series 7 and $67,964 of net sales proceeds representing $6.81 per Limited Partner unit in Series 8 have been distributed to the Limited Partners of the respective Series.

Item 1A. Risk Factors

The General Partners do not believe the Project Partnerships are subject to the risks generally associated with conventionally financed nonsubsidized apartment properties. Risks related to the operations of Gateway are described in detail on pages 29 through 38 of the Prospectus, as supplemented, contained in the Registration Statement, File No. 33-44238 (“Prospectus”), under the Caption “Risk Factors” which is incorporated herein by reference.

Gateway, as a limited partner in the Project Partnerships, is subject to risks inherent in the ownership of property which are beyond its control, such as fluctuations in occupancy rates and operating expenses, variations in rental schedules, proper maintenance and continued eligibility of Tax Credits. If the cost of operating a property exceeds the rental income earned thereon, Gateway may deem it in its best interest to voluntarily provide funds in order to protect its investment. No such contributions have been made during fiscal year 2011, 2010 or 2009.

Investors eventually may be allocated profits for tax purposes which exceed any cash Gateway distributes to them. Under these circumstances, unless an investor has passive losses or credits to reduce such tax liability, the investor will have to pay federal income tax without a corresponding cash distribution from Gateway. Similarly, in the event of a sale or foreclosure of an apartment complex, an investor may be allocated taxable income, resulting in a tax liability in excess of any cash distributed to the investor as a result of such event.

There is no assurance that investors will receive any cash distributions from the sale or disposal of a Project Partnership. The price at which a Project Partnership is sold may not be sufficient to pay the mortgage and other expenses which must be paid at such time.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Gateway holds an interest in properties through its limited partnership investments in Project Partnerships. The largest single net investment as of March 31, 2011 in a Project Partnership for each respective Series is: Series 10, one Project Partnership investment constitutes 21.7% of the Series’ total assets, and in Series 11, one Project Partnership constitutes 22.5% of the Series’ total assets (the net investment for book purposes is zero for each Project Partnership in Series 7, 8 and 9). The following table provides certain summary information regarding the Project Partnerships in which Gateway held an interest as of December 31, 2010 (the Project Partnerships’ financial information contained herein is reported on a 3-month lag):

SERIES 7
PARTNERSHIP	LOCATION OF PROPERTY	# OF UNITS		DATE ACQUIRED		PROPERTY COST		OCCUPANCY RATE
PARTNERSHIP	LOCATION OF PROPERTY	# OF UNITS		DATE ACQUIRED		PROPERTY COST		OCCUPANCY RATE
Nottingham	Pisgah, AL		18		6/92	$	796,494		94	%
Washington	Bloomfield, NE		24		9/92		993,827		71	%
BrookStone	McCaysville, GA		40		9/92		1,464,981		98	%
N. Irvine	Irvine, KY		24		9/92		1,044,872		96	%
Manchester	Manchester, GA		42		9/92		1,474,516		98	%
Waynesboro	Waynesboro, GA		24		9/92		819,270		100	%
Lakeland II	Lakeland, GA		30		9/92		1,009,647		97	%
Mt. Vernon	Mt. Vernon, GA		24		9/92		900,526		96	%
Meadow Run	Dawson, GA		48		9/92		1,744,840		90	%
Warm Springs	Warm Springs, GA		22		9/92		822,692		100	%
Blue Ridge	Blue Ridge, GA		41		9/92		1,339,143		100	%
Dilley	Dilley, TX		28		9/92		892,426		100	%
Elsa	Elsa, TX		40		9/92		1,342,015		100	%
Leander	Leander, TX		36		9/92		1,170,184		100	%
Louisa Sr.	Louisa, KY		36		9/92		1,451,921		100	%
Orchard Commons	Crab Orchard, KY		12		9/92		450,887		100	%
Vardaman	Vardaman, MS		24		9/92		929,282		96	%
Heritage Park	Paze, AZ		32		9/92		1,663,447		97	%
BrooksHollow	Jasper, GA		40		9/92		1,514,019		93	%
Cavalry Crossing	Ft. Scott, KS		40		9/92		1,908,549		93	%
Carson City	Carson City, KS		24		11/92		982,335		75	%
Matteson	Capa, KS		24		11/92		973,185		67	%
Pembroke	Pembroke, KY		16		12/92		588,717		100	%
Robynwood	Cynthiana, KY		24		12/92		962,677		100	%
Hill Creek	West Blocton, AL		24		11/93		1,011,517		92	%

Total Series 7			737			$	28,251,969

The average effective rental income per unit for the year ended December 31, 2010 is $4,543 per year ($379 per month).

Item 2 - Properties (Continued)

SERIES 8
PARTNERSHIP	LOCATION OF PROPERTY	# OF UNITS		DATE ACQUIRED		PROPERTY COST		OCCUPANCY RATE
PARTNERSHIP	LOCATION OF PROPERTY	# OF UNITS		DATE ACQUIRED		PROPERTY COST		OCCUPANCY RATE
Purdy	Purdy, MO		16		12/92	$	668,614		94	%
Galena	Galena, KS		24		12/92		893,643		96	%
Antlers 2	Antlers, OK		24		1/93		787,859		83	%
Holdenville	Holdenville, OK		24		1/93		892,598		88	%
Wetumka	Wetumka, OK		24		1/93		812,853		67	%
Mariners Cove	Marine City, MI		32		1/93		1,344,796		75	%
Mariners Cove Sr.	Marine City, MI		24		1/93		1,042,248		96	%
Antlers	Antlers, OK		36		3/93		1,321,039		72	%
Bentonville	Bentonville, AR		24		3/93		758,489		96	%
Deerpoint	Elgin, AL		24		3/93		948,824		100	%
Aurora	Aurora, MO		28		3/93		990,087		96	%
Baxter	Baxter Springs, KS		16		4/93		631,666		100	%
Arbor Gate	Bridgeport, AL		24		5/93		965,988		88	%
Timber Ridge	Collinsville, AL		24		5/93		964,519		92	%
Concordia Sr.	Concordia, KS		24		5/93		826,389		88	%
Mountainburg	Mountainburg, AR		24		6/93		883,990		88	%
Lincoln	Pierre, SD		25		5/93		1,206,788		100	%
Fox Ridge	Russellville, AL		24		6/93		909,110		67	%
Meadow View	Bridgeport, NE		16		6/93		753,978		100	%
Sheridan	Auburn, NE		16		6/93		834,822		100	%
Grand Isle	Grand Isle, ME		16		6/93		1,212,833		81	%
Meadowview	Van Buren, AR		29		8/93		994,717		90	%
Taylor	Taylor, TX		44		9/93		1,530,463		93	%
Brookwood	Gainesboro, TN		44		9/93		1,823,526		98	%
Pleasant Valley	Lynchburg, TN		33		9/93		1,457,746		100	%
Reelfoot	Ridgely, TN		20		9/93		830,045		95	%
River Rest	Newport, TN		34		9/93		1,465,419		100	%
Kirksville	Kirksville, MO		24		9/93		831,492		96	%
Kenton	Kenton, OH		46		9/93		1,781,759		78	%
Lovingston	Lovingston, VA		64		9/93		2,841,268		100	%
Pontotoc	Pontotoc, MS		36		10/93		1,442,814		94	%
Hustonville	Hustonville, KY		16		10/93		725,282		94	%
Northpoint	Jackson, KY		24		10/93		1,139,654		96	%
Brooks Field	Louisville, GA		32		10/93		1,245,043		100	%
Brooks Lane	Clayton, GA		36		10/93		1,377,993		94	%
Brooks Point	Dahlonega, GA		41		10/93		1,699,639		98	%
Brooks Run	Jasper, GA		24		10/93		957,486		100	%
Logan Heights	Russellville, KY		24		11/93		963,707		96	%
Lakeshore 2	Tuskegee, AL		36		12/93		1,480,011		94	%
Cottondale	Cottondale, FL		25		1/94		948,319		100	%

Total Series 8			1,121			$	45,187,516

The average effective rental income per unit for the year ended December 31, 2010 is $4,707 per year ($392 per month).

Item 2 - Properties (Continued)

SERIES 9
PARTNERSHIP	LOCATION OF PROPERTY	# OF UNITS		DATE ACQUIRED		PROPERTY COST		OCCUPANCY RATE
PARTNERSHIP	LOCATION OF PROPERTY	# OF UNITS		DATE ACQUIRED		PROPERTY COST		OCCUPANCY RATE
Jay	Jay, OK		24		9/93	$	810,597		100	%
Boxwood	Lexington, TX		24		9/93		770,939		100	%
Arbor Trace	Lake Park, GA		24		11/93		918,358		100	%
Arbor Trace 2	Lake Park, GA		42		11/93		1,806,434		98	%
Omega	Omega, GA		36		11/93		1,407,304		94	%
Cornell 2	Watertown, SD		24		11/93		1,275,936		88	%
Elm Creek	Pierre, SD		24		11/93		1,358,399		88	%
Marionville	Marionville, MO		20		11/93		804,558		95	%
Lamar	Lamar, AR		24		12/93		904,325		96	%
Centreville	Centreville, AL		24		12/93		1,009,795		100	%
Skyview	Troy, AL		36		12/93		1,502,296		94	%
Sycamore	Coffeyville, KS		40		12/93		1,864,224		100	%
Bradford	Cumberland, KY		24		12/93		1,026,848		100	%
Cedar Lane	London, KY		24		12/93		963,841		100	%
Stanton	Stanton, KY		24		12/93		959,149		100	%
Abernathy	Abernathy, TX		24		1/94		781,898		92	%
Pembroke	Pembroke, KY		24		1/94		950,827		100	%
Meadowview	Greenville, AL		24		2/94		1,170,447		100	%
Town Branch	Mt. Vernon, KY		24		12/93		937,356		100	%
Fox Run	Ragland, AL		24		3/94		978,195		96	%
Maple Street	Emporium, PA		32		3/94		1,722,593		97	%
Manchester	Manchester, GA		18		5/94		735,449		94	%

Total Series 9			584			$	24,659,768

The average effective rental income per unit for the year ended December 31, 2010 is $4,660 per year ($388 per month).

Item 2 - Properties (Continued)

SERIES 10
PARTNERSHIP	LOCATION OF PROPERTY	# OF UNITS		DATE ACQUIRED		PROPERTY COST		OCCUPANCY RATE
PARTNERSHIP	LOCATION OF PROPERTY	# OF UNITS		DATE ACQUIRED		PROPERTY COST		OCCUPANCY RATE
Albany	Albany, KY		24		1/94	$	1,013,806		100	%
Oak Terrace	Bonifay, FL		18		1/94		663,278		100	%
Wellshill	West Liberty, KY		32		1/94		1,282,246		100	%
Applegate	Florence, AL		36		2/94		1,874,908		97	%
Heatherwood	Alexander, AL		36		2/94		1,661,886		100	%
Peachtree	Gaffney, SC		28		3/94		1,217,381		96	%
Donna	Donna, TX		50		1/94		1,778,336		100	%
Wellsville	Wellsville, NY		24		2/94		1,489,251		100	%
Tecumseh	Tecumseh, NE		24		4/94		1,186,197		79	%
Clay City	Clay City, KY		24		5/94		1,113,165		100	%
Irvine West	Irvine, KY		24		5/94		1,154,266		100	%
New Castle	New Castle, KY		24		5/94		1,057,325		92	%
Stigler	Stigler, OK		20		7/94		754,056		100	%
Courtyard	Huron, SD		21		8/94		824,964		95	%

Total Series 10			385			$	17,071,065

The average effective rental income per unit for the year ended December 31, 2010 is $4,780 per year ($398 per month).

SERIES 11
PARTNERSHIP	LOCATION OF PROPERTY	# OF UNITS		DATE ACQUIRED		PROPERTY COST		OCCUPANCY RATE
PARTNERSHIP	LOCATION OF PROPERTY	# OF UNITS		DATE ACQUIRED		PROPERTY COST		OCCUPANCY RATE
Homestead	Pinetop, AZ		32		9/94	$	1,846,395		97	%
Mountain Oak	Collinsville, AL		24		9/94		894,455		63	%
Eloy	Eloy, AZ		24		11/94		1,145,495		92	%
Gila Bend	Gila Bend, AZ		36		11/94		1,601,998		89	%
Creekstone	Dallas, GA		40		12/94		2,008,604		88	%
Tifton	Tifton, GA		36		12/94		1,706,886		92	%
Cass Towne	Cartersville, GA		10		12/94		360,040		100	%
Warsaw	Warsaw, VA		56		12/94		3,517,768		100	%
Royston	Royston, GA		25		12/94		934,548		100	%
Red Bud	Mokane, MO		8		12/94		305,198		38	%
Parsons	Parsons, KS		38		12/94		1,438,601		100	%

Total Series 11			329			$	15,759,988

The average effective rental income per unit for the year ended December 31, 2010 is $5,577 per year ($465 per month).

Item 2 - Properties (Continued)

A summary of the book value of the fixed assets of the Project Partnerships as of December 31, 2010, 2009 and 2008 is as follows:

	12/31/2010
	SERIES 7		SERIES 8		SERIES 9
Land	$	1,102,244	$	1,841,988	$	1,066,159
Land Improvements		185,259		506,661		267,829
Buildings		26,107,509		40,441,082		22,319,500
Furniture and Fixtures		856,957		2,397,785		1,006,280

Properties, at Cost		28,251,969		45,187,516		24,659,768
Less: Accum Depr.		15,080,769		24,615,247		12,235,111

Properties, Net	$	13,171,200	$	20,572,269	$	12,424,657

	SERIES 10		SERIES 11		TOTAL
Land	$	641,025	$	583,404	$	5,234,820
Land Improvements		169,702		22,242		1,151,693
Buildings		15,608,336		14,402,902		118,879,329
Furniture and Fixtures		652,002		751,440		5,664,464

Properties, at Cost		17,071,065		15,759,988		130,930,306
Less: Accum Depr.		7,062,374		7,441,864		66,435,365

Properties, Net	$	10,008,691	$	8,318,124	$	64,494,941

	12/31/2009
	SERIES 7		SERIES 8		SERIES 9
Land	$	1,331,869	$	1,841,988	$	1,076,159
Land Improvements		185,259		449,688		266,148
Buildings		30,482,220		39,998,985		22,826,427
Furniture and Fixtures		1,107,081		2,288,985		985,450
Construction in Process		7,134		-		-

Properties, at Cost		33,113,563		44,579,646		25,154,184
Less: Accum Depr.		16,929,623		23,197,112		11,869,777

Properties, Net	$	16,183,940	$	21,382,534	$	13,284,407

	SERIES 10		SERIES 11		TOTAL
Land	$	641,025	$	599,197	$	5,490,238
Land Improvements		148,044		22,242		1,071,381
Buildings		15,602,386		14,793,221		123,703,239
Furniture and Fixtures		625,446		735,475		5,742,437
Construction in Process		-		-		7,134

Properties, at Cost		17,016,901		16,150,135		136,014,429
Less: Accum Depr.		6,629,121		7,119,194		65,744,827

Properties, Net	$	10,387,780	$	9,030,941	$	70,269,602

Item 2 - Properties (Continued)

	12/31/2008
	SERIES 7		SERIES 8		SERIES 9
Land	$	1,656,669	$	1,947,646	$	1,099,659
Land Improvements		169,924		425,619		234,276
Buildings		37,305,480		42,332,059		23,763,784
Furniture and Fixtures		1,607,149		2,440,596		1,048,730
Construction in Process		7,134		-		-

Properties, at Cost		40,746,356		47,145,920		26,146,449
Less: Accum Depr.		20,275,065		23,298,320		11,745,765

Properties, Net	$	20,471,291	$	23,847,600	$	14,400,684

	SERIES 10		SERIES 11		TOTAL
Land	$	648,625	$	599,197	$	5,951,796
Land Improvements		145,644		22,242		997,705
Buildings		16,569,411		14,716,563		134,687,297
Furniture and Fixtures		711,717		696,059		6,504,251
Construction in Process		-		-		7,134

Properties, at Cost		18,075,397		16,034,061		148,148,183
Less: Accum Depr.		6,862,997		6,598,452		68,780,599

Properties, Net	$	11,212,400	$	9,435,609	$	79,367,584

Item 3. Legal Proceedings

Gateway is not a party to any material pending legal proceedings.

Item 4. (Removed and Reserved)

PART II

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

(a) Gateway's Limited Partnership interests are not publicly traded. There is no market for Gateway's Limited Partnership interests and it is unlikely that any will develop. No transfers of Limited Partnership Interests are permitted without the prior written consent of the Managing General Partner. There have been numerous transfers from inception to date with most being from individuals to their trusts or heirs. The Managing General Partner is not aware of the price at which Limited Partnership units are transferred. The criteria for and the details regarding transfers are found on pages A-28 and A-29 of the Limited Partnership Agreement under ARTICLE XII under the caption “Transfers of Units” found in the Prospectus, which is incorporated herein by reference.

(b) Approximate Number of Equity Security Holders:

		Number of Record Holders
Title of Class		as of March 31, 2011
Limited Partnership Interest		2,048
General Partner Interest		2

Item 6. Selected Financial Data

FOR THE YEARS ENDED MARCH 31,

SERIES 7	2011			2010			2009			2008			2007
Total Revenues	$	23,473		$	31,189		$	26,416		$	36,085		$	27,050
Net Income (Loss)		473,439			142,985			(349,081	)		(345,647	)		(366,648	)
Equity in Income (Loss) of Project Partnerships		-			-			707			(28,789	)		(78,519	)
Total Assets		770,297			293,719			335,175			650,076			906,324
Investments In Project Partnerships		-			84,017			88,308			284,147			442,787

Per Weighted Average
Limited Partnership Unit: (A)
Tax Credits		.00			.00			.00			.00			.96
Portfolio Income		1.75			3.52			7.40			10.02			8.15
Passive Loss		(73.86	)		(100.74	)		(104.98	)		(94.93	)		(98.00	)
Net Income (Loss)		45.09			8.32			(37.38	)		(32.92	)		(34.92	)
Distributions Paid		-			28.43			4.17			-			-

FOR THE YEARS ENDED MARCH 31,

SERIES 8	2011			2010			2009			2008			2007
Total Revenues	$	24,662		$	23,800		$	18,335		$	29,379		$	15,890
Net Loss		(90,218	)		(91,802	)		(517,416	)		(251,652	)		(240,629	)
Equity in Loss of Project Partnerships		-			(2,631	)		(45,239	)		(54,012	)		(15,683	)
Total Assets		231,397			238,988			200,925			625,123			741,918
Investments In Project Partnerships		-			-			15,007			296,532			377,733

Per Weighted Average
Limited Partnership Unit: (A)
Tax Credits		.00			.00			.00			.00			1.55
Portfolio Income		3.99			4.11			8.70			12.04			10.68
Passive Loss		(96.76	)		(113.31	)		(131.63	)		(110.05	)		(110.42	)
Net Loss		(9.35	)		(11.39	)		(51.36	)		(31.71	)		(23.87	)
Distributions Paid		-			-			6.81			-			-

Item 6. Selected Financial Data (Continued)

FOR THE YEARS ENDED MARCH 31,

SERIES 9	2011			2010			2009			2008			2007
Total Revenues	$	16,002		$	15,862		$	10,038		$	8,514		$	6,166
Net Loss		(9,637	)		(120,481	)		(416,956	)		(242,723	)		(248,128	)
Equity in Loss of Project Partnerships		-			(4,909	)		(87,688	)		(100,405	)		(117,893	)
Total Assets		142,196			96,912			134,007			502,778			694,273
Investments In Project Partnerships		-			-			9,681			292,761			412,287

Per Weighted Average
Limited Partnership Unit: (A)
Tax Credits		.00			.00			.00			.00			.00
Portfolio Income		2.72			1.84			6.02			8.73			7.40
Passive Loss		(103.73	)		(131.15	)		(130.99	)		(112.02	)		(103.96	)
Net Loss		(8.65	)		(20.65	)		(66.00	)		(38.42	)		(39.28	)

FOR THE YEARS ENDED MARCH 31,

SERIES 10	2011			2010			2009			2008			2007
Total Revenues	$	12,943		$	8,658		$	12,302		$	2,129		$	2,563
Net Loss		(60,829	)		(100,294	)		(609,675	)		(561,574	)		(261,712	)
Equity in (Loss) Income of Project Partnerships		(25,669	)		(28,325	)		796			(75,336	)		(113,347	)
Total Assets		218,357			250,905			295,574			872,011			1,398,676
Investments In Project Partnerships		64,697			97,267			136,408			672,563			1,159,544

Per Weighted Average
Limited Partnership Unit: (A)
Tax Credits		.00			.00			.00			.00			.00
Portfolio Income		1.57			2.97			6.24			9.28			8.75
Passive Loss		(58.86	)		(98.97	)		(89.39	)		(79.58	)		(91.68	)
Net Loss		(12.33	)		(21.65	)		(119.69	)		(110.24	)		(51.38	)

FOR THE YEARS ENDED MARCH 31,

SERIES 11	2011			2010			2009			2008			2007
Total Revenues	$	3,607		$	4,207		$	2,182		$	2,782		$	3,382
Net Loss		(45,060	)		(188,280	)		(468,075	)		(628,777	)		(470,714	)
Equity in Loss of Project Partnerships		(107,077	)		(80,592	)		(115,651	)		(74,752	)		(32,981	)
Total Assets		602,148			621,840			782,534			1,220,597			1,821,412
Investments In Project Partnerships		245,863			411,872			536,485			935,152			1,505,978

Per Weighted Average
Limited Partnership Unit: (A)
Tax Credits		.00			.00			.00			.00			8.57
Portfolio Income		1.03			2.49			5.61			7.55			6.61
Passive Loss		(63.44	)		(69.47	)		(71.57	)		(67.19	)		(56.12	)
Net Loss		(16.94	)		(36.36	)		(90.38	)		(121.41	)		(90.89	)

FOR THE YEARS ENDED MARCH 31,

TOTAL SERIES 7 - 11	2011			2010			2009			2008			2007
Total Revenues	$	80,687		$	83,716		$	69,273		$	78,889		$	55,051
Net Income (Loss)		267,695			(357,872	)		(2,361,203	)		(2,030,373	)		(1,587,831	)
Equity in Loss of Project Partnerships		(132,746	)		(116,457	)		(247,075	)		(333,294	)		(358,423	)
Total Assets		1,964,395			1,502,364			1,748,215			3,870,585			5,562,603
Investments In Project Partnerships		310,560			593,156			785,889			2,481,155			3,898,239

(A) The tax information is as of December 31, the year end for tax purposes.

The above selected financial data should be read in conjunction with the financial statements and related notes appearing elsewhere in this report. This statement is not covered by the auditor's opinion included elsewhere in this report.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the results of operations and financial condition of Gateway. The MD&A is provided as a supplement to, and should be read in conjunction with the financial statements and accompanying footnotes to the financial statements contained elsewhere in this report.

The Managing General Partner monitors developments in the area of legal and regulatory compliance. For example, the Sarbanes-Oxley Act of 2002 (the “Act”) mandates or suggests additional compliance measures with regard to governance, disclosure, audit and other areas, and certain provisions of the Act have been implemented by Gateway and other provisions will be implemented by Gateway in subsequent years.

Gateway - All Series - The following discusses the overall results of operations, liquidity and capital resources for Gateway as a whole. A summary of the activity within each specific Series of Gateway then follows.

Results of Operations

As more fully detailed in the Exit Strategy discussion included within this MD&A, all of the Project Partnerships have delivered their Tax Credits to Gateway and the Tax Credit compliance period has expired for all 133 of the Project Partnerships initially held. Gateway is in the process of selling or disposing of its interests in Project Partnerships that have reached the end of their Tax Credit compliance period. Net proceeds received from the sales are in turn distributed to the Limited Partners. Once all Project Partnership interests have been sold or otherwise disposed of, Gateway will be liquidated. The target date for liquidation of Gateway is on or before December 31, 2012, although there is no certainty, and it may not even be considered likely at this time, that all the activities necessary to occur as of such date will have transpired.

Distribution income arises from any cash distributions received from Project Partnerships which have a zero investment balance for financial reporting purposes. Distribution income decreased 4% in fiscal year 2011 to $80,687, a decrease of $3,029 from the fiscal year 2010 distribution income of $83,716, which represented a $14,443 or 21% increase as compared to distribution income of $69,273 in fiscal year 2009. The decrease in distribution income for the year ended March 31, 2011 is a result of a reduction in distribution payments to Gateway by the Project Partnerships. The number of Project Partnerships with an investment balance decreased from 9 as of March 31, 2010 to 4 as of March 31, 2011. The gross distributions received from Project Partnerships decreased from $114,268 for the year ended March 31, 2010 to $95,789 for the year ended March 31, 2011. The increase in distribution income for the year ended March 31, 2010 is a result of fewer Project Partnerships with investment balances coupled with an increase of gross distributions received from Project Partnerships.

Gateway has no direct employees. The General Partners have full and exclusive discretion in management and control of Gateway. Total expenses of Gateway were $397,859 for the fiscal year ended March 31, 2011, a decrease of $275,542 as compared to the fiscal year 2010 total expenses of $673,401, which represented a $1,583,833 decrease in total expenses as compared to the fiscal year 2009 amount of $2,257,234. Impairment expense represents a significant component of total expenses in fiscal year 2009. Impairment expense is a non-cash charge that reflects a potential decline in the carrying value of Gateway’s interest in Project Partnerships. Historically, Gateway has considered the residual value of the Project Partnerships as one key component of its estimate of the present value of Gateway’s interest in any of its Project Partnerships. During fiscal year 2011, no impairment expense was recognized. During fiscal years 2010 and 2009, impairment expense was recorded in the aggregate amount of $28,099 and $1,340,110, respectively. Net of this impairment expense, expenses of Gateway decreased $247,443, or 38% in fiscal year 2011 versus fiscal year 2010. The decrease in fiscal year 2011 results primarily from decreases in 1) asset management fees and general and administrative expenses - General Partner due to sales of Project Partnerships (Gateway ceases accruing Asset Management Fees and General and Administrative Expenses - General Partner for sold Project Partnerships) along with the cessation of accruals for general and administrative expenses - General Partner in Series 8 (beginning in fiscal year 2010), Series 7, 9 and 10 (beginning in March 2010) and Series 11 (beginning in October 2010); 2) amortization expense (resulting from the suspension of amortization due to Project Partnership investment balances reaching zero or the acquisition fees and expense being fully amortized). The fiscal year 2010 expense represented a $271,822, or 30%, decrease from the fiscal year 2009 amount of $917,124 (net of impairment expense).

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)

For the year ended March 31, 2011, Equity in Loss of Project Partnerships totaled $132,746 which represents a $16,289 increase as compared to the Equity in Loss of Project Partnerships for the year ended March 31, 2010 of $116,457. For the year ended March 31, 2009, Equity in Loss of Project Partnerships totaled $247,075. Equity in Loss of Project Partnerships increased for the year ended March 31, 2011 as compared to the year ended March 31, 2010 because of an increase in the losses from Project Partnerships with a positive investment balance. Because Gateway utilizes the equity method of accounting for its Project Partnerships, income or losses from Project Partnerships with a zero investment balance are not recognized in the Statement of Operations. For the year ended December 31, 2010 (Project Partnership financial information is reported on a three-month lag), Gateway’s share of the net loss was $2,197,029, of which $2,064,283 was suspended. For the year ended December 31, 2009, Gateway’s share of the net loss was $2,478,314, of which $2,361,857 was suspended. For the year ended December 31, 2008, Gateway’s share of the net loss was $2,548,187, of which $2,301,112 was suspended. Typically, it is customary in the low-income housing Tax Credit industry to experience losses for financial and tax reporting purposes because of the non-cash expenses of depreciation and amortization. As the Project Partnership investments mature and the Investments in Project Partnership balances decrease over time, the losses from Project Partnerships recorded by Gateway decrease.

In fiscal year 2011, the Gain on Sale of Project Partnerships amounted to $717,489, an increase of $373,971 over the fiscal year 2010 amount of $343,518, which in turn was an increase of $299,744 from the fiscal year 2009 Gain on Sale of Project Partnerships amount of $43,774. As more fully discussed herein, seven Project Partnership investments were sold during fiscal year 2010 as compared to nine in fiscal year 2010 and four in fiscal year 2009. The amount of the gain or loss from the sale of a Project Partnership and the year in which it is recognized on the Statement of Operations is dependent upon the specifics related to each sale or disposition transaction. Refer to the discussion of each Project Partnerships sold in the Exit Strategy section within this MD&A.

Interest income for the year ended March 31, 2011 of $124 represents a decrease of $4,628 or 97%, as compared to fiscal year 2010. Interest income in fiscal year 2010 of $4,752 was a decrease of $25,307 or 84% as compared to the fiscal year 2009 interest income of $30,059. The changes in interest income over the prior two fiscal years result primarily from the fluctuation of interest rates on short-term investments over that period, along with the maturation of several investments in securities over the same period. Investments in Securities were $0 as of March 31, 2011 and decreased to $0 as of March 31, 2010 from $79,337 as of March 31, 2009. This decrease was a result of the redemption of U.S. Treasury Security Strips in February 2010 and the reinvestment of these funds into cash and cash equivalents. Interest income is generally one source of funds available to pay administrative costs of Gateway.

Liquidity and Capital Resources

The capital resources of each Series are used to pay General and Administrative operating costs including personnel, supplies, data processing, travel, legal and accounting associated with the administration and monitoring of Gateway and the Project Partnerships. The capital resources are also used to pay the Asset Management Fee due the Managing General Partner, but only to the extent that Gateway's remaining resources are sufficient to fund Gateway's ongoing needs. (Payment of any Asset Management Fee unpaid at the time Gateway sells its interests in the Project Partnerships is subordinated to the Limited Partners’ return of their original capital contribution).

The sources of funds to pay the expenses of Gateway are cash and cash equivalents and the interest earnings thereon, and cash distributed to the Series from the operations of the Project Partnerships. Due to the rent limitations applicable to the Project Partnerships as a result of their qualifying for Low-Income Housing Tax Credits, Gateway does not expect there to be a significant increase in future rental income of the Project Partnerships. Therefore, cash distributions from the operations of the Project Partnerships are not expected to increase on a per project basis. However, operational factors of the Project Partnerships and the timing of distributions contribute to fluctuations of distributions from year to year. Management believes these sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.

In total, Gateway reported a net loss of $267,695 from operations for the year ended March 31, 2011. Cash and Cash Equivalents increased by $744,627. Of the Cash and Cash Equivalents on hand as of March 31, 2011, $765,940 is payable to certain Series’ Limited Partners arising from the sale of Project Partnerships. After consideration of these sales proceeds, Cash and Cash Equivalents increased $27,138 as compared to the prior year-end balances.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)

The financial performance of each respective Series is summarized as follows:

Series 7 - Gateway closed this series on October 16, 1992 after receiving $10,395,000 from 635 Limited Partner investors. As of March 31, 2011, the Series had invested $4,648,444 in 25 Project Partnerships located in 8 states containing 737 apartment units. Average occupancy of the Project Partnerships was 94% at December 31, 2010.

Equity in Loss of Project Partnerships was $0 in fiscal year 2011. Equity in Income (Loss) of Project Partnerships decreased to $0 in fiscal year 2010 from income of $707 for fiscal year 2009. As presented in Note 4, the Project Partnerships generated a loss for the years ended December 31, 2010, 2009 and 2008 of $548,804, $695,025 and $597,535 on Rental and other income of $4,434,943, $5,284,523 and $6,397,144, respectively. Gateway’s share of the Project Partnerships’ net loss for the years ended December 31, 2010, 2009 and 2008 was $573,276, $701,101 and $617,777, of which $573,276, $701,101 and $618,484 were suspended, respectively. If not suspended, these losses would have reduced the Investments in Project Partnerships below zero. The suspended losses for the year ended December 31, 2008 of $618,484 exceed Gateway’s share of the total net loss of $617,777 because certain Project Partnerships with investment balances generated net income of $707. In general, it is common in the real estate industry to experience losses for financial and tax reporting purposes because of the non-cash expenses of depreciation and amortization. (These Project Partnerships reported depreciation and amortization of $847,923, $1,008,239 and $1,277,049 for the years ended December 31, 2010, 2009 and 2008, respectively). As a result, management expects that this Series, as well as the Series described below, will report its equity in Project Partnerships as a loss for tax and financial reporting purposes. Gateway reviews its investments in Project Partnerships to determine if there has been any permanent impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. There was no impairment expense for the fiscal years ended March 31, 2011 or 2010. For the fiscal year ended March 31, 2009, impairment expense of $183,299 was recognized. Overall management believes the Project Partnerships are operating as expected and have generated Tax Credits which met projections.

At March 31, 2011, the Series had $770,297 of short-term investments (Cash and Cash Equivalents). Management believes the sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.

As disclosed on the statement of cash flows, the Series had net income of $473,439 for the year ended March 31, 2011. However, after considering the changes in operating assets and liabilities, net cash used in operating activities was $87,434. Cash provided by investing activities totaled $648,029 consisting of $22,635 in cash distributions from the Project Partnerships and $625,394 in net proceeds from the Sale of Project Partnerships (refer to the Exit Strategy section within this MD&A for more detailed discussion of these sales of Project Partnerships).

Series 8 - Gateway closed this Series on July 1, 1993 after receiving $9,980,000 from 664 Limited Partner investors. As of March 31, 2011, the Series had invested $6,965,669 in 40 Project Partnerships located in 17 states containing 1,121 apartment units. Average occupancy of the Project Partnerships was 92% at December 31, 2010.

Equity in Loss of Project Partnerships decreased to $0 in fiscal year 2011 from a loss of $2,631 for fiscal year 2010. Equity in Loss of Project Partnerships decreased $42,608 to $2,631 in fiscal year 2010 as compared to $45,239 in fiscal year 2009. As presented in Note 4, the Project Partnerships generated a loss for the years ended December 31, 2010, 2009 and 2008 of $723,487, $782,205 and $925,731 on Rental and other income of $6,793,755, $6,930,389 and $7,026,802, respectively. Gateway’s share of the Project Partnerships’ net loss for the years ended December 31, 2010, 2009 and 2008 was $717,967, $777,837 and $921,647, of which $717,967, $775,206 and $876,408 were suspended, respectively. If not suspended, these losses would have reduced the Investments in Project Partnerships below zero. In general, it is common in the real estate industry to experience losses for financial and tax reporting purposes because of the non-cash expenses of depreciation and amortization. (These Project Partnerships reported depreciation and amortization of $1,420,237, $1,397,733 and $1,498,607 for the years ended December 31, 2010, 2009 and 2008, respectively). Gateway reviews its investments in Project Partnerships to determine if there has been any permanent impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. There was no impairment expense for the fiscal year ended March 31, 2011. For the fiscal years ended March 31, 2010 and 2009, impairment expense of $8,681 and $221,243 was recognized, respectively. Overall management believes the Project Partnerships are operating as expected and have generated Tax Credits which met projections.

At March 31, 2011, the Series had $231,397 of short-term investments (Cash and Cash Equivalents). Management believes the sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)

As disclosed on the statement of cash flows, the Series had a net loss of $90,218 for the year ended March 31, 2011. However, after considering the changes in operating assets and liabilities, net cash used in operating activities was $36,253. Cash provided by investing activities totaled $28,662 consisting of $24,662 in cash distributions from the Project Partnerships and $4,000 in net proceeds from the Sale of Project Partnerships (refer to the Exit Strategy section within this MD&A for more detailed discussion of these sales of Project Partnerships).

Series 9 - Gateway closed this Series on September 30, 1993 after receiving $6,254,000 from 406 Limited Partner investors. As of March 31, 2011, the Series had invested $4,599,313 in 22 Project Partnerships located in 10 states containing 584 apartment units. Average occupancy of the Project Partnerships was 97% at December 31, 2010.

Equity in Loss of Project Partnerships decreased to $0 in fiscal year 2011 from a loss of $4,909 for fiscal year 2010. Equity in Loss of Project Partnerships decreased $82,779 to $4,909 in fiscal year 2010 as compared to $87,688 in fiscal year 2009. As presented in Note 4, the Project Partnerships generated a loss for the years ended December 31, 2010, 2009 and 2008 of $452,089, $552,678 and $540,476 on Rental and other income of $3,690,119, $3,633,336 and $3,756,581, respectively. Gateway’s share of the Project Partnerships’ net loss for the years ended December 31, 2010, 2009 and 2008 was $447,568, $547,151 and $542,656, of which $447,568, $542,242 and $454,968 were suspended, respectively. If not suspended, these losses would have reduced the Investments in Project Partnerships below zero. In general, it is common in the real estate industry to experience losses for financial and tax reporting purposes because of the non-cash expenses of depreciation and amortization. (These Project Partnerships reported depreciation and amortization of $733,144, $747,222 and $790,640 for the years ended December 31, 2010, 2009 and 2008, respectively). Gateway reviews its investments in Project Partnerships to determine if there has been any permanent impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. There was no impairment expense for the fiscal years ended March 31, 2011 or 2010. For the fiscal year ended March 31, 2009, impairment expense of $180,400 was recognized. Overall management believes the Project Partnerships are operating as expected and have generated Tax Credits which met projections.

At March 31, 2011, the Series had $142,196 of short-term investments (Cash and Cash Equivalents). Management believes the sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.

As disclosed on the statement of cash flows, the Series had a net loss of $9,637 for the year ended March 31, 2011. However, after considering the changes in operating assets and liabilities, net cash used in operating activities was $15,748. Cash provided by investing activities totaled $61,032 consisting of $16,002 in cash distributions from the Project Partnerships and $45,030 in net proceeds from the Sale of Project Partnerships (refer to the Exit Strategy section within this MD&A for more detailed discussion of this sale of Project Partnership).

Series 10 - Gateway closed this Series on January 21, 1994 after receiving $5,043,000 from 325 Limited Partner investors. As of March 31, 2011, the Series had invested $3,716,106 in 14 Project Partnerships located in 9 states containing 385 apartment units. Average occupancy of the Project Partnerships was 97% at December 31, 2010.

Equity in Loss of Project Partnerships decreased $2,656 to $25,669 in fiscal year 2011 as compared to $28,325 in fiscal year 2010. Equity in (Loss) Income of Project Partnerships decreased $29,121 to a loss of $28,325 in fiscal year 2010 as compared to income of $796 for fiscal year 2009. As presented in Note 4, the Project Partnerships generated a loss for the years ended December 31, 2010, 2009 and 2008 of $144,571, $201,549 and $169,201 on Rental and other income of $2,307,400, $2,239,370 and $2,397,697, respectively. Gateway’s share of the Project Partnerships’ net loss for the years ended December 31, 2010, 2009 and 2008 was $163,491, $211,172 and $170,536, of which $137,822, $182,847 and $171,332 were suspended, respectively. If not suspended, these losses would have reduced the Investments in Project Partnerships below zero. The suspended losses for the year ended December 31, 2008 of $171,332 exceed Gateway’s share of the total net loss of $170,536 because certain Project Partnerships with investment balances generated net income of $796. In general, it is common in the real estate industry to experience losses for financial and tax reporting purposes because of the non-cash expenses of depreciation and amortization. (These Project Partnerships reported depreciation and amortization of $439,674, $439,815 and $486,635 for the years ended December 31, 2010, 2009 and 2008, respectively). Gateway reviews its investments in Project Partnerships to determine if there has been any permanent impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. There was no impairment expense for the fiscal year ended March 31, 2011 or 2010. For the fiscal year ended March 31, 2009, impairment expense of $506,918 was recognized. Overall, management believes the Project Partnerships are operating as expected and have generated Tax Credits which met projections.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)

At March 31, 2011, the Series had $153,660 of short-term investments (Cash and Cash Equivalents). Management believes the sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.

As disclosed on the statement of cash flows, the Series had a net loss of $60,829 for the year ended March 31, 2011. However, after considering the Equity in Loss of Project Partnerships of $25,669 and the changes in operating assets and liabilities, net cash used in operating activities was $21,822. Cash provided by investing activities totaled $21,844 consisting of $19,844 in cash distributions from the Project Partnerships and $2,000 in net proceeds from the Sale of Project Partnerships (refer to the Exit Strategy section within this MD&A for more detailed discussion of this sale of Project Partnership).

Series 11 - Gateway closed this Series on April 29, 1994 after receiving $5,127,000 from 330 Limited Partner investors. As of March 31, 2011 the Series had invested $3,832,294 in 11 Project Partnerships located in 6 states containing 329 apartment units. Average occupancy of the Project Partnerships was 91% at December 31, 2010.

Equity in Loss of Project Partnerships increased $26,485 to $107,077 in fiscal year 2011 as compared to $80,592 in fiscal year 2010. Equity in Loss of Project Partnerships decreased $35,059 to $80,592 in fiscal year 2010 as compared to $115,651 in fiscal year 2009. As presented in Note 4, the Project Partnerships generated a loss for the years ended December 31, 2010, 2009 and 2008 of $307,670, $246,604 and $279,740 on Rental and other income of $2,263,577, $2,231,664 and $2,161,398, respectively. Gateway’s share of the Project Partnerships’ net loss for the years ended December 31, 2010, 2009 and 2008 was $294,727, $241,053 and $295,571, of which $187,650, $160,461 and $179,920 were suspended, respectively. If not suspended, these losses would have reduced the Investments in Project Partnerships below zero. In general, it is common in the real estate industry to experience losses for financial and tax reporting purposes because of the non-cash expenses of depreciation and amortization. (These Project Partnerships reported depreciation and amortization of $525,157, $525,030 and $523,527 for the years ended December 31, 2010, 2009 and 2008, respectively). Gateway reviews its investments in Project Partnerships to determine if there has been any permanent impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. There was no impairment expense for the fiscal year ended March 31, 2011 For the fiscal years ended March 31, 2010 and 2009, impairment expense of $19,418 and $248,250 was recognized, respectively. Overall, management believes the Project Partnerships are operating as expected and have generated Tax Credits which met projections.

At March 31, 2011, the Series had $356,285 of short-term investments (Cash and Cash Equivalents). Management believes the sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.

As disclosed on the statement of cash flows, the Series had a net loss of $45,060 for the year ended March 31, 2011. However, after considering the Equity in Loss of Project Partnerships of $107,077 and the changes in operating assets and liabilities, net cash used in operating activities was $41,996. Cash provided by investing activities totaled $188,313 consisting of $12,646 in cash distributions from the Project Partnerships and $175,667 in net proceeds from the Sale of Project Partnerships (refer to the Exit Strategy section within this MD&A for more detailed discussion of this sale of Project Partnership).

Critical Accounting Estimates

Gateway reviews its investments in Project Partnerships to determine if there has been any permanent impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. If the sum of the expected future cash flows is less than the carrying amount of the investment, Gateway recognizes an impairment loss. Gateway did not recognize any impairment expense for the year ended March 31, 2011. Impairment expense for the year ended March 31, 2010 totaled $28,099, comprised of $8,681 in Series 8 and $19,418 in Series 11. Impairment expense for the year ended March 31, 2009 totaled $1,340,110, comprised of $183,299 in Series 7, $221,243 in Series 8, $180,400 in Series 9, $506,918 in Series 10, and $248,250 in Series 11.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Recent Accounting Changes

In June 2009, the FASB issued amendments to the consolidation guidance applicable to variable interest entities which Gateway adopted effective April 1, 2010. The amendments had no impact on its financial statements for the year-ended March 31, 2011.

In May 2009, the FASB issued guidance regarding subsequent events, which was subsequently updated in February 2010. This guidance established general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. In particular, this guidance sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. This guidance was effective for financial statements issued for fiscal years and interim periods ending after June 15, 2009, and was therefore adopted by Gateway for the quarter ended December 31, 2009. The adoption did not have a significant impact on the subsequent events that Gateway reports, either through recognition or disclosure, in the financial statements. In February 2010, the FASB amended its guidance on subsequent events to remove the requirement to disclose the date through which an entity has evaluated subsequent events, alleviating conflicts with current SEC guidance. This amendment was effective immediately and therefore Gateway did not include the disclosure in this Form 10-K.

Exit Strategy Upon Expiration of the Project Partnership Tax Credit Compliance Period

The IRS compliance period for low-income housing Tax Credit properties is generally 15 years from occupancy following construction or rehabilitation completion.When Project Partnerships reach the end of their Tax Credit compliance period, Gateway initiates the process of disposing of its investment in the Project Partnership; the objective of the process is to sell Gateway’s interest in the properties for fair market value and ultimately, when Gateway’s last Project Partnership investment is sold, liquidate Gateway. Generally, the market for Project Partnerships is limited. Some of the factors which negatively impact the marketability of these projects include (1) requirements by government agencies that the project’s mortgagor continue to maintain the property in the low-income housing program, and (2) the mortgage balance of the property is very near the initial balance as a result of the heavily subsidized debt of the Project Partnerships and lengthy (usually 50 year) amortization periods.

As of March 31, 2011, Gateway holds a limited partner interest in 112 Project Partnerships which own and operate government assisted multi-family housing complexes. Gateway at one time held investments in 133 Project Partnerships. As of December 31, 2010, all of the Project Partnerships had reached the end of their Tax Credit compliance period. As of March 31, 2011, 21 of the Project Partnerships have been sold (14 in Series 7, 3 in Series 8, 2 in Series 9, 1 in Series 10 and 1 in Series 11) and, in accordance with the Gateway partnership agreement, the entire net proceeds received from these sales either have been or will be distributed to the Limited Partners of the respective Series. A summary of the sale transactions for the Project Partnerships disposed during the past three fiscal years are summarized below:

Fiscal Year 2011 Disposition Activity:

Series 7

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
August 2010	Pioneer Apartments, L.P.	$	157,949	$	15.19	$	157,949
December 2010	Lake Village Apartments		65,124		6.27		65,124
December 2010	Savannah Park of Atoka		65,125		6.27		65,125
December 2010	Savannah Park of Coalgate		65,125		6.27		65,125
December 2010	Cardinal Apartments		272,071		26.17		187,362
						$	540,685

The net proceeds per LP unit from the sale of Pioneer Apartments, Lake Village Apartments, Savannah Park of Atoka, Savannah Park of Coalgate and Cardinal Apartments are a component of the Distribution Payable on the Balance Sheet as of March 31, 2011. These net proceeds, less the applicable state tax withholding, will be distributed to the Series 7 Limited Partners in a subsequent period at such time that state withholding tax liabilities have been settled.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Series 8

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
	Other, net (see below)	$	-	$	-	$	4,000
						$	4,000

Gateway recognized an additional gain on sale of Project Partnerships in the amount of $4,000 resulting from the true-up of certain legal and other sale transaction closing expenses arising from Project Partnership sale transactions which closed in the prior fiscal year. This amount, less the applicable state tax withholding, will be distributed to the Series 8 Limited Partners in a subsequent period at such time that state withholding tax liabilities have been settled.

Series 9

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
September 2010	Stilwell Properties III	$	43,030	$	6.88	$	43,030
	Other, net (see below)		-		-		2,000
						$	45,030

The net proceeds per LP unit from the sale of Stilwell Properties III is a component of the Distribution Payable on the Balance Sheet as of March 31, 2011. These net proceeds, less the applicable state tax withholding, will be distributed to the Series 9 Limited Partners in a subsequent period at such time that state withholding tax liabilities have been settled.

Gateway recognized an additional gain on sale of Project Partnerships in the amount of $2,000 resulting from the true-up of certain legal and other sale transaction closing expenses arising from a Project Partnership sale transaction which closed in the prior fiscal year. This amount, less the applicable state tax withholding, will be distributed to the Series 9 Limited Partners in a subsequent period at such time that state withholding tax liabilities have been settled.

Series 10

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
	Other, net (see below)	$	-	$	-	$	2,000
						$	2,000

Gateway recognized an additional gain on sale of Project Partnerships in the amount of $2,000 resulting from the true-up of certain legal and other sale transaction closing expenses arising from a Project Partnership sale transaction which closed in the prior fiscal year. This amount, less the applicable state tax withholding, will be distributed to the Series 10 Limited Partners in a subsequent period at such time that state withholding tax liabilities have been settled.

Series 11

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
December 2010	Cardinal Apartments	$	175,667	$	34.26	$	125,774
						$	125,774

The net proceeds per LP unit from the sale of Cardinal Apartments is a component of the Distribution Payable on the Balance Sheet as of March 31, 2011. These net proceeds, less the applicable state tax withholding, will be distributed to the Series 11 Limited Partners in a subsequent period at such time that state withholding tax liabilities have been settled.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Fiscal Year 2010 Disposition Activity:

Series 7

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
August 2009	Mountain City Manor	$	36,860	$	3.54	$	38,190
August 2009	Tazewell Village		41,290		3.97		42,620
August 2009	Jamestown Village		36,450		3.51		37,864
August 2009	Clinch View Manor		134,400		12.93		135,814
May 2009	Spring Creek Apartments II LP		46,520		4.48		46,030
						$	300,518

The net proceeds per LP unit from the sale of Mountain City Manor, Tazewell Village, Jamestown Village, Clinch View Manor, and Spring Creek Apartments II LP were distributed to the Series 7 Limited Partners in September 2009.

Series 8

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
January 2010	South Brenchley	$	13,000	$	1.30	$	13,000
January 2010	Cimmaron Station		10,000		1.00		10,000
						$	23,000

The net proceeds per LP unit from the sale of South Brenchely and Cimmaron Station are a component of the Distribution Payable on the Balance Sheet as of March 31, 2010. These net proceeds, less the applicable state tax withholding, will be distributed to the Series 8 Limited Partners in a subsequent period at such time that state withholding tax liabilities have been settled.

Series 9

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
January 2010	Mountain Glen	$	10,000	$	1.59	$	10,000
						$	10,000

The net proceeds per LP unit from the sale of Mountain Glen are a component of the Distribution Payable on the Balance Sheet as of March 31, 2010. These net proceeds, less the applicable state tax withholding, will be distributed to the Series 9 Limited Partners in a subsequent period at such time that state withholding tax liabilities have been settled.

Series 10

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
January 2010	Redstone	$	10,000	$	1.98	$	10,000
						$	10,000

The net proceeds per LP unit from the sale of Redstone are a component of the Distribution Payable on the Balance Sheet as of March 31, 2010. These net proceeds, less the applicable state tax withholding, will be distributed to the Series 10 Limited Partners in a subsequent period at such time that state withholding tax liabilities have been settled.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Fiscal Year 2009 Disposition Activity:

Series 7

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
September 2008	Cedar Hollow Apartments	$	9,741	$	0.94	$	9,741
September 2008	Sunrise I Apartments		14,741		1.42		14,741
September 2008	Burbank Apartments		9,502		0.91		9,502
September 2008	Walnut Apartments		9,441		0.91		9,441
						$	43,425

The net proceeds per LP unit from the sale of Cedar Hollow Apartments, Sunrise I Apartments, Burbank Apartments, and Walnut Apartments were distributed to the Series 7 Limited Partners in December 2008.

Series 8

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
	Other, net (see below)	$	-	$	-	$	349
						$	349

Gateway recognized an additional gain on sale of Project Partnerships in the amount of $349 resulting from the true-up of certain legal and other sale transaction closing expenses arising from a Project Partnership sale transaction which closed in the prior fiscal year. This amount, less the applicable state tax withholding, will be distributed to the Series 8 Limited Partners in a subsequent period at such time that state withholding tax liabilities have been settled.

Status Update on Unsold Project Partnerships:

The following summarizes the most recent status of the sale/disposal process for the Project Partnership investments held as of March 31, 2011:

Project Partnerships sold subsequent to March 31, 2011:

Series 7

Blue Ridge Elderly Housing, Ltd., L.P.	Lakeland II, L.P.
Meadow Run Apartments, L.P.	Mt. Vernon Rental Housing, L.P.

Subsequent to the March 31, 2011 year-end, Gateway sold its partnership interests in Blue Ridge Elderly Housing, Ltd., L.P., Lakeland II, L.P. Meadow Run Apartments, L.P., and Mt. Vernon Rental Housing, L.P. Gateway received approximately $114,400 in net proceeds (approximately $11.01 per beneficial assignee certificate) which also approximates the gain on sale of Project Partnerships. The gain will be recognized in the first quarter of fiscal year 2012 and available proceeds from these sale transactions, less the applicable state tax withholding, will be distributed to the Series 7 Assignees in a subsequent period at such time that state withholding tax liabilities have been settled.

Series 8

Cottondale Rental Housing, L.P.

Subsequent to the March 31, 2011 year-end, Gateway sold its partnership interests in Cottondale Rental Housing, L.P. Gateway received approximately $20,000 in net proceeds (approximately $2.00 per beneficial assignee certificate) which also approximates the gain on sale of Project Partnerships. The gain will be recognized in the first quarter of fiscal year 2012 and available proceeds from this sale transaction, less the applicable state tax withholding, will be distributed to the Series 8 Assignees in a subsequent period at such time that state withholding tax liabilities have been settled.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Series 9

Arbor Trace Apartments Phase I L.P.

Arbor Trace Apartments Phase II L.P.

Subsequent to the March 31, 2011 year-end, Gateway sold its partnership interests in Arbor Trace Apartments Phase I L.P. and Arbor Trace Apartments Phase II L.P. Gateway received approximately $52,800 in net proceeds (approximately $8.44 per beneficial assignee certificate) which also approximates the gain on sale of Project Partnerships. The gain will be recognized in the first quarter of fiscal year 2012 and available proceeds from these sale transactions, less the applicable state tax withholding, will be distributed to the Series 9 Assignees in a subsequent period at such time that state withholding tax liabilities have been settled.

Gateway has approved the sale to the general partner of the Project Partnership or a third party:

Series 8

Antlers Properties	Logan Heights, Ltd.
AAA Properties of Bentonville	Meadowview Properties Limited Partnership
Concordia Senior Housing, L.P.	Mountainburg Properties
Kirksville Senior Apartments, Limited Partnership	Wetumka Properties

These approvals are subject to a number of contingencies, the outcome of which cannot be predicted with certainty. However, utilizing the sales amounts as approved by Gateway, should all the transactions close without modification, the estimated net proceeds to Gateway from the sales of these Project Partnerships are estimated to be $572,000, or $57.31 per limited partnership unit. Sales proceeds would be available for distribution, less the applicable state tax withholding, to the Series 8 Limited Partners in a period subsequent to the closing of these sales transactions which would most likely occur within the next two years.

Series 9

Abernathy Properties	Jay Properties II
Boxwood Place Properties	Lamar Properties, L.P.

These approvals are subject to a number of contingencies, the outcome of which cannot be predicted with certainty. However, utilizing the sales amounts as approved by Gateway, should all the transactions close without modification, the estimated net proceeds to Gateway from the sales of these Project Partnerships are estimated to be $260,000, or $41.57 per limited partnership unit. Sales proceeds would be available for distribution, less the applicable state tax withholding, to the Series 9 Limited Partners in a period subsequent to the closing of these sales transactions which would most likely occur within the next two years.

Series 10

Stigler Properties

This approval is subject to a number of contingencies, the outcome of which cannot be predicted with certainty. However, utilizing the sale amount as approved by Gateway, should the transaction close without modification, the estimated net proceeds to Gateway from the sale of this Project Partnership is estimated to be $54,000, or $10.71 per limited partnership unit. Sales proceeds would be available for distribution, less the applicable state tax withholding, to the Series 10 Limited Partners in a period subsequent to the closing of this sales transaction which would most likely occur within the next two years.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Disclosure of Contractual Obligations

		Payment due by period
		Less than			More than
Contractual Obligations	Total	1 year	1-3 years	3-5 years	5 years

Long-Term Debt Obligations
Capital Lease Obligations
Operating Lease Obligations
Purchase Obligations
Other Liabilities Reflected on the
Registrant’s Balance Sheet under GAAP	$3,558,251 (1)	275,799	3,282,452	-	-

(1) The Other Liabilities represent the asset management fees and other general and administrative expense reimbursements owed to the General Partners as of March 31, 2011. This payable is unsecured, due on demand and, in accordance with the limited partnership agreement, non-interest bearing. As referred to in Note 3, the Managing General Partner does not intend to demand payment of the portion of this balance reflected as due later than one year within the next twelve months.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

As a smaller reporting company, no information is required.

Item 8. Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners of Gateway Tax Credit Fund III Ltd.

We have audited the accompanying balance sheets of Gateway Tax Credit Fund III Ltd. (a Florida Limited Partnership) - Series 7 through 11, in total and for each series, as of March 31, 2011 and 2010, and the related statements of operations, partners’ equity (deficit), and cash flows for the total partnership and for each of the series for each of the years in the three-year period ended March 31, 2011. Gateway’s management is responsible for these financial statements. 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. Gateway is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Gateway’s internal control over financial reporting. Accordingly we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits 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 Gateway Tax Credit Fund III Ltd. - Series 7 through 11, in total and for each series, as of March 31, 2011 and 2010, and the results of its operations and its cash flows for the total partnership and for each of the series for each of the years in the three-year period ended March 31, 2011, 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 taken as a whole. The schedules listed under Item 15(a)(2) in the index are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, based on our audits and the reports of other auditors, fairly state in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.

/s/ Reznick Group, P.C.

REZNICK GROUP, P.C.

Atlanta, Georgia

July 1, 2011

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

BALANCE SHEETS

	SERIES 7						SERIES 8						SERIES 9
	March 31,			March 31,			March 31,			March 31,			March 31,			March 31,
	2011			2010			2011			2010			2011			2010
ASSETS
Current Assets:
Cash and Cash Equivalents	$	770,297		$	209,702		$	231,397		$	238,988		$	142,196		$	96,912
Total Current Assets		770,297			209,702			231,397			238,988			142,196			96,912

Investments in Project Partnerships, net		-			84,017			-			-			-			-

Total Assets	$	770,297		$	293,719		$	231,397		$	238,988		$	142,196		$	96,912

LIABILITIES AND PARTNERS' DEFICIT
Current Liabilities:
Payable to General Partners	$	6,174		$	105,464		$	183,126		$	215,965		$	55,327		$	66,214
Distribution Payable		545,751			5,066			27,385			23,385			55,030			10,000

Total Current Liabilities		551,925			110,530			210,511			239,350			110,357			76,214

Long-Term Liabilities:
Payable to General Partners		1,065,589			963,160			1,150,230			1,034,764			690,195			624,387

Partners' (Deficit) Equity:
Limited Partners - 10,395, 9,980, and 6,254
units for Series 7, 8, and 9, respectively,
at March 31, 2011 and 2010		(854,401	)		(782,420	)		(1,125,775	)		(1,028,499	)		(651,966	)		(552,816	)
General Partners		7,184			2,449			(3,569	)		(6,627	)		(6,390	)		(50,873	)

Total Partners' Deficit		(847,217	)		(779,971	)		(1,129,344	)		(1,035,126	)		(658,356	)		(603,689	)

Total Liabilities and Partners' Deficit	$	770,297		$	293,719		$	231,397		$	238,988		$	142,196		$	96,912

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

BALANCE SHEETS

	SERIES 10						SERIES 11					TOTAL SERIES 7 - 11
	March 31,			March 31,			March 31,		March 31,			March 31,			March 31,
	2011			2010			2011		2010			2011			2010
ASSETS
Current Assets:
Cash and Cash Equivalents	$	153,660		$	153,638		$	356,285	$	209,968		$	1,653,835		$	909,208
Total Current Assets		153,660			153,638			356,285		209,968			1,653,835			909,208

Investments in Project Partnerships, net		64,697			97,267			245,863		411,872			310,560			593,156

Total Assets	$	218,357		$	250,905		$	602,148	$	621,840		$	1,964,395		$	1,502,364

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Current Liabilities:
Payable to General Partners	$	27,005		$	54,975		$	4,167	$	14,511		$	275,799		$	457,129
Distribution Payable		12,000			10,000			125,774		-			765,940			48,451

Total Current Liabilities		39,005			64,975			129,941		14,511			1,041,739			505,580

Long-Term Liabilities:
Payable to General Partners		235,562			179,311			140,876		105,164			3,282,452			2,906,786

Partners' (Deficit) Equity:
Limited Partners - 5,043 and 5,127 units
for Series 10 and 11, respectively, at
March 31, 2011 and 2010		(23,468	)		40,732			330,500		543,134			(2,325,110	)		(1,779,869	)
General Partners		(32,742	)		(34,113	)		831		(40,969	)		(34,686	)		(130,133	)

Total Partners' (Deficit) Equity		(56,210	)		6,619			331,331		502,165			(2,359,796	)		(1,910,002	)

Total Liabilities and Partners' Equity (Deficit)	$	218,357		$	250,905		$	602,148	$	621,840		$	1,964,395		$	1,502,364

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED MARCH 31, 2011, 2010 AND 2009

	SERIES 7									SERIES 8
	2011			2010			2009			2011			2010			2009
Revenues:
Distribution Income	$	23,473		$	31,189		$	26,416		$	24,662		$	23,800		$	18,335
Total Revenues		23,473			31,189			26,416			24,662			23,800			18,335

Expenses:
Asset Management Fee - General Partner		57,429			67,188			80,024			80,466			85,780			86,288
General and Administrative:
General Partner		-			82,933			114,225			-			-			130,191
Other		33,183			38,336			42,989			38,442			40,376			45,703
Amortization		146			291			5,014			-			1,156			11,073
Impairment Loss on Investment in Project Partnerships		-			-			183,299			-			8,681			221,243

Total Expenses		90,758			188,748			425,551			118,908			135,993			494,498

Loss Before Equity in Income (Loss) of Project Partnerships
and Other Income		(67,285	)		(157,559	)		(399,135	)		(94,246	)		(112,193	)		(476,163	)
Equity in Income (Loss) of Project Partnerships		-			-			707			-			(2,631	)		(45,239	)
Gain on Sale of Project Partnerships		540,685			300,518			43,425			4,000			23,000			349
Interest Income		39			26			5,922			28			22			3,637

Net Income (Loss)	$	473,439		$	142,985		$	(349,081	)	$	(90,218	)	$	(91,802	)	$	(517,416	)

Allocation of Net Income (Loss):
Limited Partners	$	468,704		$	86,459		$	(388,581	)	$	(93,276	)	$	(113,654	)	$	(512,587	)
General Partners		4,735			56,526			39,500			3,058			21,852			(4,829	)

	$	473,439		$	142,985		$	(349,081	)	$	(90,218	)	$	(91,802	)	$	(517,416	)

Net Income (Loss) Per Limited Partnership Unit	$	45.09		$	8.32		$	(37.38	)	$	(9.35	)	$	(11.39	)	$	(51.36	)

Number of Limited Partnership Units Outstanding		10,395			10,395			10,395			9,980			9,980			9,980

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED MARCH 31, 2011, 2010 AND 2009

	SERIES 9									SERIES 10
	2011			2010			2009			2011			2010			2009
Revenues:
Distribution Income	$	16,002		$	15,862		$	10,038		$	12,943		$	8,658		$	12,302
Total Revenues		16,002			15,862			10,038			12,943			8,658			12,302

Expenses:
Asset Management Fee - General Partner		45,797			48,589			48,840			31,251			33,424			33,584
General and Administrative:
General Partner		-			62,259			74,395			-			38,620			46,497
Other		24,886			27,603			30,605			18,870			19,824			21,098
Amortization		-			2,993			10,045			-			667			20,914
Impairment Loss on Investment in Project Partnerships		-			-			180,400			-			-			506,918

Total Expenses		70,683			141,444			344,285			50,121			92,535			629,011

Loss Before Equity in (Loss) Income of Project Partnerships
and Other Income		(54,681	)		(125,582	)		(334,247	)		(37,178	)		(83,877	)		(616,709	)
Equity in (Loss) Income of Project Partnerships		-			(4,909	)		(87,688	)		(25,669	)		(28,325	)		796
Gain on Sale of Project Partnerships		45,030			10,000			-			2,000			10,000			-
Interest Income

GATEWAY TAX CREDIT FUND III LTD 10-K