UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2011

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

For the transition period from ______________________to_______________________

Commission File Number: 0-21762

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

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

YES [X]

NO [ ]

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

YES [X]

NO [ ]

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

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

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

Yes [ ]

No [X]

PART I - Financial Information

Item 1. Financial Statements

Balance of this page intentionally left blank.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

BALANCE SHEETS

(Unaudited)

	SERIES 7						SERIES 8						SERIES 9
	September 30,			March 31,			September 30,			March 31,			September 30,			March 31,
	2011			2011			2011			2011			2011			2011
ASSETS
Current Assets:
Cash and Cash Equivalents	$	866,643		$	770,297		$	125,264		$	231,397		$	175,842		$	142,196
Total Current Assets		866,643			770,297			125,264			231,397			175,842			142,196

Total Assets	$	866,643		$	770,297		$	125,264		$	231,397		$	175,842		$	142,196

LIABILITIES AND PARTNERS' DEFICIT
Current Liabilities:
Payable to General Partners	$	3,098		$	6,174		$	78,810		$	183,126		$	42,518		$	55,327
Distribution Payable		666,627			545,751			47,259			27,385			111,748			55,030

Total Current Liabilities		669,725			551,925			126,069			210,511			154,266			110,357

Long-Term Liabilities:
Payable to General Partners		1,089,079			1,065,589			1,190,036			1,150,230			711,538			690,195

Partners' (Deficit) Equity:
Limited Partners - 10,395, 9,980, and 6,254
units for Series 7, 8, and 9, respectively,
at September 30, 2011 and March 31, 2011		(900,105	)		(854,401	)		(1,190,998	)		(1,125,775	)		(690,462	)		(651,966	)
General Partners		7,944			7,184			157			(3,569	)		500			(6,390	)

Total Partners' Deficit		(892,161	)		(847,217	)		(1,190,841	)		(1,129,344	)		(689,962	)		(658,356	)

Total Liabilities and Partners' Deficit	$	866,643		$	770,297		$	125,264		$	231,397		$	175,842		$	142,196

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

BALANCE SHEETS

(Unaudited)

	SERIES 10						SERIES 11				TOTAL SERIES 7 - 11
	September 30,			March 31,			September 30,		March 31,		September 30,			March 31,
	2011			2011			2011		2011		2011			2011
ASSETS
Current Assets:
Cash and Cash Equivalents	$	149,354		$	153,660		$	441,355	$	356,285	$	1,758,458		$	1,653,835
Total Current Assets		149,354			153,660			441,355		356,285		1,758,458			1,653,835

Investments in Project Partnerships, net		41,880			64,697			197,996		245,863		239,876			310,560

Total Assets	$	191,234		$	218,357		$	639,351	$	602,148	$	1,998,334		$	1,964,395

LIABILITIES AND PARTNERS' DEFICIT
Current Liabilities:
Payable to General Partners	$	2,144		$	27,005		$	2,159	$	4,167	$	128,729		$	275,799
Distribution Payable		38,145			12,000			225,544		125,774		1,089,323			765,940

Total Current Liabilities		40,289			39,005			227,703		129,941		1,218,052			1,041,739

Long-Term Liabilities:
Payable to General Partners		251,188			235,562			154,466		140,876		3,396,307			3,282,452

Partners' (Deficit) Equity:
Limited Partners - 5,043 and 5,127 units
for Series 10 and 11, respectively, at
September 30, 2011 and March 31, 2011		(93,205	)		(23,468	)		256,095		330,500		(2,618,675	)		(2,325,110	)
General Partners		(7,038	)		(32,742	)		1,087		831		2,650			(34,686	)

Total Partners' (Deficit) Equity		(100,243	)		(56,210	)		257,182		331,331		(2,616,025	)		(2,359,796	)

Total Liabilities and Partners' Deficit	$	191,234		$	218,357		$	639,351	$	602,148	$	1,998,334		$	1,964,395

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

	SERIES 7						SERIES 8						SERIES 9
	2011			2010			2011			2010			2011			2010
Revenues:
Distribution Income	$	-		$	1,957		$	868		$	5,271		$	6,893		$	2,844
Total Revenues		-			1,957			868			5,271			6,893			2,844

Expenses:
Asset Management Fee - General Partner		10,579			15,067			19,677			20,117			10,030			11,585
General and Administrative:
Other		23,621			23,192			24,477			23,303			16,324			15,010
Amortization		-			73			-			-			-			-

Total Expenses		34,200			38,332			44,154			43,420			26,354			26,595

Loss Before Equity in Loss of Project Partnerships
and Other Income		(34,200	)		(36,374	)		(43,286	)		(38,149	)		(19,461	)		(23,751	)
Equity in Loss of Project Partnerships		-			(288	)		-			-			-			-
Gain on Sale of Project Partnerships		6,977			157,948			-			-			4,169			-
Interest Income		27			8			6			7			6			4

Net (Loss) Income	$	(27,196	)	$	121,294		$	(43,280	)	$	(38,142	)	$	(15,286	)	$	(23,747	)

Allocation of Net (Loss) Income:
Limited Partners	$	(26,924	)	$	120,082		$	(43,276	)	$	(37,760	)	$	(15,326	)	$	(23,510	)
General Partners		(272	)		1,212			(4	)		(382	)		40			(237	)

	$	(27,196	)	$	121,294		$	(43,280	)	$	(38,142	)	$	(15,286	)	$	(23,747	)

Net (Loss) Income Per Limited Partnership Unit	$	(2.59	)	$	11.55		$	(4.34	)	$	(3.78	)	$	(2.45	)	$	(3.76	)

Number of Limited Partnership Units Outstanding		10,395			10,395			9,980			9,980			6,254			6,254

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

	SERIES 10						SERIES 11						TOTAL SERIES 7 - 11
	2011			2010			2011			2010			2011			2010
Revenues:
Distribution Income	$	2,569		$	700		$	2,182		$	2,182		$	12,512		$	12,954
Total Revenues		2,569			700			2,182			2,182			12,512			12,954

Expenses:
Asset Management Fee - General Partner		7,813			7,813			6,795			6,972			54,894			61,554
General and Administrative:
General Partner		-			-			-			10,961			-			10,961
Other		12,412			11,783			12,369			11,871			89,203			85,159
Amortization		-			-			-			-			-			73

Total Expenses		20,225			19,596			19,164			29,804			144,097			157,747

Loss Before Equity in Loss of Project Partnerships
and Other Income		(17,656	)		(18,896	)		(16,982	)		(27,622	)		(131,585	)		(144,792	)
Equity in Loss of Project Partnerships		(10,810	)		(18,150	)		(23,470	)		(110,312	)		(34,280	)		(128,750	)
Gain on Sale of Project Partnerships		26,145			-			99,770			-			137,061			157,948
Interest Income		4			5			11			7			54			31

Net (Loss) Income	$	(2,317	)	$	(37,041	)	$	59,329		$	(137,927	)	$	(28,750	)	$	(115,563	)

Allocation of Net (Loss) Income:
Limited Partners	$	(28,176	)	$	(36,669	)	$	58,736		$	(136,548	)	$	(54,966	)	$	(114,405	)
General Partners		25,859			(372	)		593			(1,379	)		26,216			(1,158	)

	$	(2,317	)	$	(37,041	)	$	59,329		$	(137,927	)	$	(28,750	)	$	(115,563	)

Net (Loss) Income Per Limited Partnership Unit	$	(5.59	)	$	(7.27	)	$	11.46		$	(26.63	)

Number of Limited Partnership Units Outstanding		5,043			5,043			5,127			5,127

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

STATEMENTS OF OPERATIONS

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

	SERIES 7						SERIES 8						SERIES 9
	2011			2010			2011			2010			2011			2010
Revenues:
Distribution Income	$	8,047		$	6,489		$	8,762		$	7,446		$	10,275		$	5,652
Total Revenues		8,047			6,489			8,762			7,446			10,275			5,652

Expenses:
Asset Management Fee - General Partner		23,490			30,132			39,806			40,233			21,344			23,169
General and Administrative:
Other		29,549			26,876			30,465			27,594			20,547			17,736
Amortization		-			146			-			-			-			-

Total Expenses		53,039			57,154			70,271			67,827			41,891			40,905

Loss Before Equity in Loss of Project Partnerships
and Other Income		(44,992	)		(50,664	)		(61,509	)		(60,381	)		(31,616	)		(35,253	)
Equity in Loss of Project Partnerships		-			(288	)		-			-			-			-
Gain on Sale of Project Partnerships		120,876			157,948			19,875			-			56,718			-
Interest Income		48			13			12			13			10			6

Net Income (Loss)	$	75,932		$	107,009		$	(41,622	)	$	(60,368	)	$	25,112		$	(35,247	)

Allocation of Net Income (Loss):
Limited Partners	$	75,172		$	105,940		$	(45,348	)	$	(59,764	)	$	18,222		$	(34,895	)
General Partners		760			1,069			3,726			(604	)		6,890			(352	)

	$	75,932		$	107,009		$	(41,622	)	$	(60,368	)	$	25,112		$	(35,247	)

Net Income (Loss) Per Limited Partnership Unit	$	7.23		$	10.19		$	(4.54	)	$	(5.99	)	$	2.91		$	(5.58	)

Number of Limited Partnership Units Outstanding		10,395			10,395			9,980			9,980			6,254			6,254

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

STATEMENTS OF OPERATIONS

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

	SERIES 10						SERIES 11						TOTAL SERIES 7 - 11
	2011			2010			2011			2010			2011			2010
Revenues:
Distribution Income	$	4,649		$	4,439		$	2,982		$	2,982		$	34,715		$	27,008
Total Revenues		4,649			4,439			2,982			2,982			34,715			27,008

Expenses:
Asset Management Fee - General Partner		15,626			15,626			13,590			13,944			113,856			123,104
General and Administrative:
General Partner		-			-			-			20,774			-			20,774
Other		15,696			13,633			15,693			13,669			111,950			99,508
Amortization		-			-			-			-			-			146

Total Expenses		31,322			29,259			29,283			48,387			225,806			243,532

Loss Before Equity in Loss of Project Partnerships
and Other Income		(26,673	)		(24,820	)		(26,301	)		(45,405	)		(191,091	)		(216,523	)
Equity in Loss of Project Partnerships		(17,368	)		(18,150	)		(47,868	)		(110,312	)		(65,236	)		(128,750	)
Gain on Sale of Project Partnerships		26,145			-			99,770			-			323,384			157,948
Interest Income		8			9			20			12			98			53

Net (Loss) Income	$	(17,888	)	$	(42,961	)	$	25,621		$	(155,705	)	$	67,155		$	(187,272	)

Allocation of Net (Loss) Income:
Limited Partners	$	(43,592	)	$	(42,531	)	$	25,365		$	(154,148	)	$	29,819		$	(185,398	)
General Partners		25,704			(430	)		256			(1,557	)		37,336			(1,874	)

	$	(17,888	)	$	(42,961	)	$	25,621		$	(155,705	)	$	67,155		$	(187,272	)

Net (Loss) Income Per Limited Partnership Unit	$	(8.64	)	$	(8.43	)	$	4.95		$	(30.07	)

Number of Limited Partnership Units Outstanding		5,043			5,043			5,127			5,127

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

STATEMENTS OF PARTNERS’ EQUITY (DEFICIT)

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

	SERIES 7								SERIES 8
	Limited			General					Limited			General
	Partners			Partners		Total			Partners			Partners			Total

Balance at March 31, 2010	$	(782,420	)	$	2,449	$	(779,971	)	$	(1,028,499	)	$	(6,627	)	$	(1,035,126	)

Net Income (Loss)		105,940			1,069		107,009			(59,764	)		(604	)		(60,368	)

Distributions		(157,948	)		-		(157,948	)		-			-			-

Balance at September 30, 2010	$	(834,428	)	$	3,518	$	(830,910	)	$	(1,088,263	)	$	(7,231	)	$	(1,095,494	)


Balance at March 31, 2011	$	(854,401	)	$	7,184	$	(847,217	)	$	(1,125,775	)	$	(3,569	)	$	(1,129,344	)

Net Income (Loss)		75,172			760		75,932			(45,348	)		3,726			(41,622	)

Distributions		(120,876	)		-		(120,876	)		(19,875	)		-			(19,875	)

Balance at September 30, 2011	$	(900,105	)	$	7,944	$	(892,161	)	$	(1,190,998	)	$	157		$	(1,190,841	)

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

STATEMENTS OF PARTNERS’ EQUITY (DEFICIT)

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

	SERIES 9									SERIES 10
	Limited			General						Limited			General
	Partners			Partners			Total			Partners			Partners			Total

Balance at March 31, 2010	$	(552,816	)	$	(50,873	)	$	(603,689	)	$	40,732		$	(34,113	)	$	6,619

Net Loss		(34,895	)		(352	)		(35,247	)		(42,531	)		(430	)		(42,961	)

Balance at September 30, 2010	$	(587,711	)	$	(51,225	)	$	(638,936	)	$	(1,799	)	$	(34,543	)	$	(36,342	)


Balance at March 31, 2011	$	(651,966	)	$	(6,390	)	$	(658,356	)	$	(23,468	)	$	(32,742	)	$	(56,210	)

Net Income (Loss)		18,222			6,890			25,112			(43,592	)		25,704			(17,888	)

Distributions		(56,718	)		-			(56,718	)		(26,145	)		-			(26,145	)

Balance at September 30, 2011	$	(690,462	)	$	500		$	(689,962	)	$	(93,205	)	$	(7,038	)	$	(100,243	)

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

STATEMENTS OF PARTNERS’ EQUITY (DEFICIT)

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

	SERIES 11									TOTAL SERIES 7 - 11
	Limited			General						Limited			General
	Partners			Partners			Total			Partners			Partners			Total

Balance at March 31, 2010	$	543,134		$	(40,969	)	$	502,165		$	(1,779,869	)	$	(130,133	)	$	(1,910,002	)

Net Loss		(154,148	)		(1,557	)		(155,705	)		(185,398	)		(1,874	)		(187,272	)

Distributions		-			-			-			(157,948	)		-			(157,948	)

Balance at September 30, 2010	$	388,986		$	(42,526	)	$	346,460		$	(2,123,215	)	$	(132,007	)	$	(2,255,222	)


Balance at March 31, 2011	$	330,500		$	831		$	331,331		$	(2,325,110	)	$	(34,686	)	$	(2,359,796	)

Net Income		25,365			256			25,621			29,819			37,336			67,155

Distributions		(99,770	)		-			(99,770	)		(323,384	)		-			(323,384	)

Balance at September 30, 2011	$	256,095		$	1,087		$	257,182		$	(2,618,675	)	$	2,650		$	(2,616,025	)

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

	SERIES 7						SERIES 8
	2011			2010			2011			2010
Cash Flows from Operating Activities:
Net Income (Loss)	$	75,932		$	107,009		$	(41,622	)	$	(60,368	)
Adjustments to Reconcile Net Income (Loss)
to Net Cash Used in Operating Activities:
Amortization		-			146			-			-
Equity in Loss of Project Partnerships		-			288			-			-
Gain on Sale of Project Partnerships		(120,876	)		(157,948	)		(19,875	)		-
Distribution Income		(8,047	)		(6,489	)		(8,762	)		(7,446	)
Changes in Operating Assets and Liabilities:
Increase (Decrease) in Payable to General Partners		20,414			(23,811	)		(64,511	)		49,750
Net Cash Used in Operating Activities		(32,577	)		(80,805	)		(134,770	)		(18,064	)

Cash Flows from Investing Activities:
Distributions Received from Project Partnerships		8,047			5,650			8,762			7,446
Net Proceeds from Sale of Project Partnerships		120,876			157,948			19,875			-
Net Cash Provided by Investing Activities		128,923			163,598			28,637			7,446

Increase (Decrease) in Cash and Cash Equivalents		96,346			82,793			(106,133	)		(10,618	)
Cash and Cash Equivalents at Beginning of Year		770,297			209,702			231,397			238,988

Cash and Cash Equivalents at End of Period	$	866,643		$	292,495		$	125,264		$	228,370

Supplemental disclosure of non-cash activities:
Increase in Distribution Payable	$	120,876		$	157,948		$	19,875		$	-
Distribution to Assignees		(120,876	)		(157,948	)		(19,875	)		-
	$	-		$	-		$	-		$	-

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

	SERIES 9						SERIES 10
	2011			2010			2011			2010
Cash Flows from Operating Activities:
Net Income (Loss)	$	25,112		$	(35,247	)	$	(17,888	)	$	(42,961	)
Adjustments to Reconcile Net Income (Loss)
to Net Cash Used in Operating Activities:
Equity in Loss of Project Partnerships		-			-			17,368			18,150
Gain on Sale of Project Partnerships		(56,718	)		-			(26,145	)		-
Distribution Income		(10,275	)		(5,652	)		(4,649	)		(4,439	)
Changes in Operating Assets and Liabilities:
Increase (Decrease) in Payable to General Partners		8,534			33,640			(9,235	)		9,419
Net Cash Used in Operating Activities		(33,347	)		(7,259	)		(40,549	)		(19,831	)

Cash Flows from Investing Activities:
Distributions Received from Project Partnerships		10,275			5,651			10,098			10,590
Net Proceeds from Sale of Project Partnerships		56,718			-			26,145			-
Net Cash Provided by Investing Activities		66,993			5,651			36,243			10,590

Increase (Decrease) in Cash and Cash Equivalents		33,646			(1,608	)		(4,306	)		(9,241	)
Cash and Cash Equivalents at Beginning of Year		142,196			96,912			153,660			153,638

Cash and Cash Equivalents at End of Period	$	175,842		$	95,304		$	149,354		$	144,397

Supplemental disclosure of non-cash activities:
Increase in Distribution Payable	$	56,718		$	-		$	26,145		$	-
Distribution to Assignees		(56,718	)		-			(26,145	)		-
Increase in Receivable - Other		-			44,256			-			-
Increase in Deferred Gain on Sale of Project Partnerships		-			(43,030	)		-			-
Decrease in Payable to General Partners		-			(1,226	)		-			-
	$	-		$	-		$	-		$	-

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Unaudited)

	SERIES 11						TOTAL SERIES 7 - 11
	2011			2010			2011			2010
Cash Flows from Operating Activities:
Net Income (Loss)	$	25,621		$	(155,705	)	$	67,155		$	(187,272	)
Adjustments to Reconcile Net Income (Loss)
to Net Cash Used in Operating Activities:
Amortization		-			-			-			146
Equity in Loss of Project Partnerships		47,868			110,312			65,236			128,750
Gain on Sale of Project Partnerships		(99,770	)		-			(323,384	)		(157,948	)
Distribution Income		(2,982	)		(2,982	)		(34,715	)		(27,008	)
Changes in Operating Assets and Liabilities:
Increase (Decrease) in Payable to General Partners		11,581			13,374			(33,217	)		82,372
Net Cash Used in Operating Activities		(17,682	)		(35,001	)		(258,925	)		(160,960	)

Cash Flows from Investing Activities:
Distributions Received from Project Partnerships		2,982			7,822			40,164			37,159
Net Proceeds from Sale of Project Partnerships		99,770			-			323,384			157,948
Net Cash Provided by Investing Activities		102,752			7,822			363,548			195,107

Increase (Decrease) in Cash and Cash Equivalents		85,070			(27,179	)		104,623			34,147
Cash and Cash Equivalents at Beginning of Year		356,285			209,968			1,653,835			909,208

Cash and Cash Equivalents at End of Period	$	441,355		$	182,789		$	1,758,458		$	943,355

Supplemental disclosure of non-cash activities:
Increase in Distribution Payable	$	99,770		$	-		$	323,384		$	157,948
Distribution to Assignees		(99,770	)		-			(323,384	)		(157,948	)
Increase in Receivable - Other		-			-			-			44,256
Increase in Deferred Gain on Sale of Project Partnerships		-			-			-			(43,030	)
Decrease in Payable to General Partners		-			-			-			(1,226	)
	$	-		$	-		$	-		$	-

See accompanying notes to financial statements.

GATEWAY TAX CREDIT FUND III LTD.

(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2011

(Unaudited)

NOTE 1 - ORGANIZATION:

Gateway Tax Credit Fund III Ltd. (“Gateway”), a Florida Limited Partnership, was formed October 17, 1991 under the laws of Florida. Gateway offered its limited partnership interests in Series (“Series”). The first Series for Gateway is Series 7. Operations commenced on July 16, 1992 for Series 7, January 4, 1993 for Series 8, September 30, 1993 for Series 9, January 21, 1994 for Series 10 and April 29, 1994 for Series 11. Each Series invests, as a limited partner, in other limited partnerships (“Project Partnerships”), each of which owns and operates apartment complexes eligible for Low-Income Housing Tax Credits (“Tax Credits”), provided for in Section 42 of the Internal Revenue Code of 1986. Gateway will terminate on December 31, 2040 or sooner, in accordance with the terms of the limited partnership agreement (the “Agreement”). As of September 30, 2011, Gateway had received capital contributions of $1,000 from the General Partners and $36,799,000 from the investor Limited Partners.

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

Gateway received capital contributions of $10,395,000, $9,980,000, $6,254,000, $5,043,000 and $5,127,000 from the investor Limited Partners in Series 7, 8, 9, 10 and 11, respectively. Each Series is treated as though it were a separate partnership, investing in a separate and distinct pool of Project Partnerships. 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 from each Series are generally allocated 99% to the Limited Partners in that Series and 1% to the General Partners. Profit or loss and cash distributions from sales of properties by each Series are allocated as specified in the Agreement.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:

Basis of Accounting

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

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

1)	Gateway's capital contribution,

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

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

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

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

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

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

4)	Increased for loans or advances made to the Project Partnerships by Gateway,

5)	Decreased, where appropriate, for impairment.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued):

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

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

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

Gateway, as a limited partner in the Project Partnerships, is subject to risks inherent in the ownership of property which are beyond its control, such as fluctuations in occupancy rates and operating expenses, variations in rental schedules, proper maintenance and continued eligibility 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. However, Gateway does not guarantee any of the mortgages or other debt of the Project Partnerships. No such funding to Project Partnerships occurred during each of the six month periods ended September 30, 2011 or 2010.

Cash and Cash Equivalents

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

Concentrations of Credit Risk

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

Use of Estimates in the Preparation of Financial Statements

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

Income Taxes

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

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued):

Distribution Payable

Distribution payable consists of amounts received as net sales proceeds. These amounts, net of the applicable state tax withholding, are due and payable to the Assignees and will be distributed at such time that state tax withholding liabilities have been settled.

State Tax Withholding

Certain state tax jurisdictions impose a capital gains tax on the taxable gains associated with the sale of investments in partnerships. As General Partner of Gateway, it is Gateway’s obligation to calculate and withhold the applicable state taxes that are payable by the Partners of Gateway when Project Partnerships are sold or otherwise disposed by Gateway. In most cases, the state taxes are due regardless if proceeds are received from the sale of Project Partnerships. Therefore, Gateway has estimated the withholding taxes payable and the amount is included in Distribution Payable on the Balance Sheet.

Variable Interest Entities

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

Generally, a variable interest entity, or VIE, is an entity with one or more of the following characteristics, (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (b) as a group the holders of the equity investment at risk lack (i) the power to direct the activities of the entity that most significantly affect its economic performance, (ii) the obligation to absorb the expected losses or the right to receive the expected benefits of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. GAAP requires a VIE to be consolidated in the financial statements of the entity that is determined to be the primary beneficiary of the VIE. Determination of the primary beneficiary of each VIE requires judgment and is based on an analysis of control of the entity and economic factors. A VIE would be required to be consolidated if it has (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (2) the obligation to absorb losses or receive benefits that could possibly be significant to the VIE. In the design of Project Partnership VIEs, the overriding concept centers around the premise that the limited partner invests solely for tax attributes associated with the property held by the VIE, while the general partner of the Project Partnership is responsible for overseeing its operations. Based upon its analysis of all the relevant facts and considerations, Gateway has concluded that the general partner of the Project Partnership has the power to direct the activities of the Project Partnership that most significantly impact its economic performance, and the obligation to absorb losses or receive benefits that could be significant to the Project Partnership and therefore, Gateway is not the primary beneficiary.

Gateway holds variable interests in 99 VIEs, which consist of Project Partnerships (Refer to Note 1 - Organization for information about Gateway’s involvement in the Project Partnerships). Gateway is not the primary beneficiary of the VIEs. Since its inception, Gateway’s maximum exposure to loss as a result of its involvement with unconsolidated VIEs is limited to Gateway’s capital contributions to those VIEs, which is approximately $20,658,852 at September 30, 2011. Over the course of the investment and Tax Credit Cycle, this maximum exposure to loss was offset by actual losses experienced by the Project Partnerships recorded by Gateway in its equity accounting. Accordingly, at the current stage of the investment and Tax Credit Cycle, the carrying value of Gateway’s interest in the VIEs has been reduced to $239,876. Tabular disclosures within Note 4 - Investments in Project Partnerships detail total capital contributions to VIEs, the carrying amount of assets and liabilities related to Gateway’s VIEs and the aggregate assets, liabilities and Gateway’s exposure to loss from those VIEs. Gateway may be subject to additional losses to the extent of any financial support that Gateway voluntarily provides to those Project Partnerships in the future. Gateway does not currently intend to provide future financial support to the Project Partnerships.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued):

Basis of Preparation

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

NOTE 3 - RELATED PARTY TRANSACTIONS:

The Payable to General Partners primarily represents the asset management fees and general and administrative expenses owed to the General Partners at the end of the period. It is unsecured, due on demand and, in accordance with the Agreement, non-interest bearing. Within the next 12 months, the Managing General Partner does not intend to demand payment on the portion of Asset Management Fees payable classified as long-term on the Balance Sheet.

Value Partners, Inc., an affiliate of Gateway, acquired the general partner interest in Logan Heights, one of the Project Partnerships in Series 8, in 2003 (see further discussion in Note 4).

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

Asset Management Fee - The Managing General Partner is entitled to receive an annual asset management fee equal to the greater of (i) $2,000 for each limited partnership in which Gateway invests, or (ii) 0.275% of Gateway's gross proceeds from the sale of limited partnership interests. In either event (i) or (ii), the maximum amount may not exceed 0.2% of the aggregate cost (Gateway's capital contribution plus Gateway's share of the Properties' mortgage) of Gateway's interest in properties owned by the Project Partnerships. The asset management fee will be paid only after all other expenses of Gateway have been paid. These fees are included in the Statements of Operations.

	2011		2010
Series 7	$	23,490	$	30,131
Series 8		39,806		40,233
Series 9		21,344		23,169
Series 10		15,626		15,626
Series 11		13,590		13,944
Total	$	113,856	$	123,103

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

	2011		2010
Series 7	$	-	$	-
Series 8		-		-
Series 9		-		-
Series 10		-		-
Series 11		-		20,774
Total	$	-	$	20,774

NOTE 4 - INVESTMENTS IN PROJECT PARTNERSHIPS:


As of September 30, 2011, Gateway had acquired a 99% interest in the profits, losses, and Tax Credits as a limited partner in Project Partnerships (Series 7 - 20, Series 8 - 39, and Series 9 - 19) which own and operate government assisted multi-family housing complexes. Cash flows from operations are allocated according to each Project Partnership agreement. Upon dissolution, proceeds will be distributed according to each Project Partnership agreement.

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

	SERIES 7						SERIES 8						SERIES 9
	September 30,			March 31,			September 30,			March 31,			September 30,			March 31,
	2011			2011			2011			2011			2011			2011
Capital Contributions to Project Partnerships
and purchase price paid for limited partner
interests in Project Partnerships	$	3,581,298		$	4,648,444		$	6,793,467		$	6,965,669		$	3,824,212		$	4,599,313

Cumulative equity in losses of Project
Partnerships (1) (2)		(3,416,047	)		(4,533,144	)		(6,704,158	)		(6,877,633	)		(3,489,505	)		(4,242,472	)

Cumulative distributions received from
Project Partnerships		(146,261	)		(177,214	)		(179,115	)		(179,115	)		(124,615	)		(164,111	)

Investment in Project Partnerships before
Adjustment		18,990			(61,914	)		(89,806	)		(91,079	)		210,092			192,730

Excess of investment cost over the underlying
assets acquired:
Acquisition fees and expenses		378,175			496,983			512,354			513,903			174,172			218,681
Accumulated amortization of acquisition
fees and expenses		(191,696	)		(229,600	)		(161,278	)		(161,554	)		(76,332	)		(103,479	)

Reserve for Impairment of Investment in
Project Partnerships		(205,469	)		(205,469	)		(261,270	)		(261,270	)		(307,932	)		(307,932	)

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

(1) In accordance with Gateway's accounting policy to not carry Investments in Project Partnerships below zero, cumulative suspended losses of $3,857,162 in Series 7, $8,933,515 in Series 8, and $3,160,747 in Series 9 for the period ended September 30, 2011; and cumulative suspended losses of $5,196,366 in Series 7, $8,784,792 in Series 8, and $3,506,137 in Series 9 for the year ended March 31, 2011 are not included.
(2) In accordance with Gateway's accounting policy to apply equity in losses of Project Partnerships to receivables from Project Partnerships, $24,220 in losses are included in Series 8 as of September 30, 2011 and March 31, 2011. (See discussion in Note 2 - Significant Accounting Policies).

NOTE 4 - INVESTMENTS IN PROJECT PARTNERSHIPS (Continued):


As of September 30, 2011, Gateway had acquired a 99% interest in the profits, losses, and Tax Credits as a limited partner in Project Partnerships (Series 10 - 13 and Series 11 - 8) which own and operate government assisted multi-family housing complexes. Cash flows from operations are allocated according to each Project Partnership agreement. Upon dissolution, proceeds will be distributed according to each Project Partnership agreement.

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

	SERIES 10						SERIES 11						TOTAL SERIES 7 - 11
	September 30,			March 31,			September 30,			March 31,			September 30,			March 31,
	2011			2011			2011			2011			2011			2011
Capital Contributions to Project Partnerships
and purchase price paid for limited partner
interests in Project Partnerships	$	3,565,393		$	3,716,106		$	2,894,482		$	3,832,294		$	20,658,852		$	23,761,826

Cumulative equity in losses of Project
Partnerships (1)		(2,217,311	)		(2,350,831	)		(1,130,636	)		(2,013,680	)		(16,957,657	)		(20,017,761	)

Cumulative distributions received from
Project Partnerships		(242,191	)		(241,641	)		(173,763	)		(203,283	)		(865,945	)		(965,363	)

Investment in Project Partnerships before
Adjustment		1,105,891			1,123,634			1,590,083			1,615,331			2,835,250			2,778,702

Excess of investment cost over the underlying
assets acquired:
Acquisition fees and expenses		167,749			174,878			201,455			267,568			1,433,905			1,672,013
Accumulated amortization of acquisition
fees and expenses		(145,834	)		(147,889	)		(170,316	)		(200,224	)		(745,456	)		(842,746	)

Reserve for Impairment of Investment in
Project Partnerships		(1,085,926	)		(1,085,926	)		(1,423,226	)		(1,436,812	)		(3,283,823	)		(3,297,409	)

Investments in Project Partnerships	$	41,880		$	64,697		$	197,996		$	245,863		$	239,876		$	310,560

(1) In accordance with Gateway's accounting policy to not carry Investments in Project Partnerships below zero, cumulative suspended losses of $847,360 in Series 10 and $906,963 in Series 11 for the period ended September 30, 2011; and cumulative suspended losses of $856,925 in Series 10 and $1,579,776 in Series 11 for the year ended March 31, 2011 are not included.

NOTE 4 - INVESTMENTS IN PROJECT PARTNERSHIPS (Continued):


In accordance with Gateway's policy of presenting the financial information of the Project Partnerships on a three month lag, below is the summarized balance sheets for the Project Partnerships of Series 7 and Series 8 as of June 30 and the respective summarized statements of operations for the six months ended June 30 of each year:

	SERIES 7						SERIES 8 (1)
	2011			2010			2011			2010
SUMMARIZED BALANCE SHEETS
Assets:
Current assets	$	2,415,356		$	3,450,800		$	4,343,699		$	4,423,474
Investment properties, net		9,823,472			14,838,861			19,465,307			20,683,891
Other assets		16,048			31,784			76,700			349,988
Total assets	$	12,254,876		$	18,321,445		$	23,885,706		$	25,457,353

Liabilities and Partners' Deficit:
Current liabilities	$	551,955		$	723,527		$	1,379,362		$	1,359,919
Long-term debt		15,836,566			23,307,541			32,313,356			33,354,386
Total liabilities		16,388,521			24,031,068			33,692,718			34,714,305

Partners' deficit
Limited Partner		(3,903,852	)		(5,394,428	)		(8,971,585	)		(8,566,537	)
General Partners		(229,793	)		(315,195	)		(835,427	)		(690,415	)
Total partners' deficit		(4,133,645	)		(5,709,623	)		(9,807,012	)		(9,256,952	)

Total liabilities and partners' deficit	$	12,254,876		$	18,321,445		$	23,885,706		$	25,457,353

SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income	$	1,338,771		$	1,905,739		$	2,675,570		$	2,683,210
Expenses:
Operating expenses		1,096,962			1,517,956			2,067,294			2,009,087
Interest expense		149,049			238,408			333,533			346,293
Depreciation and amortization		311,964			482,563			693,364			698,643

Total expenses		1,557,975			2,238,927			3,094,191			3,054,023

Net loss	$	(219,204	)	$	(333,188	)	$	(418,621	)	$	(370,813	)

Other partners' share of net income (loss)	$	11,902		$	16,959		$	3,447		$	(983	)

Gateway's share of net loss	$	(231,106	)	$	(350,147	)	$	(422,068	)	$	(369,830	)
Suspended losses		231,106			349,859			422,068			369,830

Equity in Loss of Project Partnerships	$	-		$	(288	)	$	-		$	-

NOTE 4 - INVESTMENTS IN PROJECT PARTNERSHIPS (Continued):


(1) As discussed in Note 3, an affiliate of the General Partner (Value Partners, Inc.) is the operating general partner in one of the Project Partnerships included in Series 8 above (Logan Heights). The Logan Heights Project Partnership is not consolidated in Gateway's financial statements as Gateway's investment in Logan Heights is accounted for under the equity method. The information below is included for related party disclosure purposes. The Project Partnership's financial information for the periods ending June 2011 and June 2010 is as follows:

	June 2011			June 2010
Total Assets	$	443,552		$	426,600
Total Liabilities		795,376			800,540
Gateway Deficit		(234,477	)		(341,551	)
Other Partner's Deficit		(117,348	)		(32,388	)
Total Revenue		66,877			52,905
Net Income (Loss)	$	3,149		$	(5,742	)

NOTE 4 - INVESTMENTS IN PROJECT PARTNERSHIPS (Continued):


In accordance with Gateway's policy of presenting the financial information of the Project Partnerships on a three month lag, below is the summarized balance sheets for the Project Partnerships of Series 9 and Series 10 as of June 30 and the respective summarized statements of operations for the six months ended June 30 of each year:

	SERIES 9						SERIES 10
	2011			2010			2011			2010
SUMMARIZED BALANCE SHEETS
Assets:
Current assets	$	1,739,878		$	2,107,730		$	2,125,935		$	2,049,308
Investment properties, net		9,682,944			12,701,605			9,788,879			10,167,968
Other assets		47,302			54,435			69,090			42,881
Total assets	$	11,470,124		$	14,863,770		$	11,983,904		$	12,260,157

Liabilities and Partners' Deficit:
Current liabilities	$	371,036		$	434,354		$	473,583		$	440,067
Long-term debt		14,513,118			18,083,323			11,850,415			11,952,788
Total liabilities		14,884,154			18,517,677			12,323,998			12,392,855

Partners' (deficit) equity
Limited Partner		(3,040,658	)		(3,221,020	)		188,942			(494,217	)
General Partners		(373,372	)		(432,887	)		(529,036	)		361,519
Total partners' (deficit) equity		(3,414,030	)		(3,653,907	)		(340,094	)		(132,698	)

Total liabilities and partners' deficit	$	11,470,124		$	14,863,770		$	11,983,904		$	12,260,157

SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income	$	1,165,716		$	1,382,726		$	959,747		$	941,457
Expenses:
Operating expenses		870,767			1,113,437			726,167			690,425
Interest expense		137,228			183,646			94,577			97,057
Depreciation and amortization		302,650			362,545			219,811			219,823

Total expenses		1,310,645			1,659,628			1,040,555			1,007,305

Net loss	$	(144,929	)	$	(276,902	)	$	(80,808	)	$	(65,848	)

Other partners' share of net (loss) income	$	(1,450	)	$	(2,768	)	$	16,439		$	17,571

Gateway's share of net loss	$	(143,479	)	$	(274,134	)	$	(97,247	)	$	(83,419	)
Suspended losses		143,479			274,134			79,879			65,269

Equity in Loss of Project Partnerships	$	-		$	-		$	(17,368	)	$	(18,150	)

NOTE 4 - INVESTMENTS IN PROJECT PARTNERSHIPS (Continued):


In accordance with Gateway's policy of presenting the financial information of the Project Partnerships on a three month lag, below is the summarized balance sheets for the Project Partnerships of Series 11 and Total Series 7 - 11 as of June 30 and the respective summarized statements of operations for the six months ended June 30 of each year:

	SERIES 11						TOTAL SERIES 7 - 11
	2011			2010			2011			2010
SUMMARIZED BALANCE SHEETS
Assets:
Current assets	$	1,014,176		$	1,166,163		$	11,639,044		$	13,197,475
Investment properties, net		7,194,418			8,768,962			55,955,020			67,161,287
Other assets		222,423			273,316			431,563			752,404
Total assets	$	8,431,017		$	10,208,441		$	68,025,627		$	81,111,166

Liabilities and Partners' Deficit:
Current liabilities	$	394,609		$	364,783		$	3,170,545		$	3,322,650
Long-term debt		8,559,153			9,799,866			83,072,608			96,497,904
Total liabilities		8,953,762			10,164,649			86,243,153			99,820,554

Partners' (deficit) equity
Limited Partner		(64,825	)		466,474			(15,791,978	)		(17,209,728	)
General Partners		(457,920	)		(422,682	)		(2,425,548	)		(1,499,660	)
Total partners'(deficit) equity		(522,745	)		43,792			(18,217,526	)		(18,709,388	)

Total liabilities and partners' deficit	$	8,431,017		$	10,208,441		$	68,025,627		$	81,111,166

SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income	$	829,816		$	950,673		$	6,969,620		$	7,863,805
Expenses:
Operating expenses		633,750			770,223			5,394,941			6,101,128
Interest expense		86,814			104,247			801,201			969,651
Depreciation and amortization		246,310			261,979			1,774,100			2,025,553

Total expenses		966,874			1,136,449			7,970,242			9,096,332

Net loss	$	(137,058	)	$	(185,776	)	$	(1,000,622	)	$	(1,232,527	)

Other partners' share of net (loss) income	$	(38,865	)	$	(6,220	)	$	(8,529	)	$	24,559

Gateway's share of net loss	$	(98,193	)	$	(179,556	)	$	(992,093	)	$	(1,257,086	)
Suspended losses		50,325			69,244			926,857			1,128,336

Equity in Loss of Project Partnerships	$	(47,868	)	$	(110,312	)	$	(65,236	)	$	(128,750	)

NOTE 4 - INVESTMENTS IN PROJECT PARTNERSHIPS (Continued):

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

	June 30, 2011						June 30, 2010
	Aggregate Assets		Aggregate Liabilities		Our Risk Of Loss		Aggregate Assets		Aggregate Liabilities		Our Risk Of Loss
Series 7	$	12,254,876	$	16,388,521	$	-	$	18,321,445	$	24,031,068	$	84,423
Series 8		23,885,706		33,692,718		-		25,457,353		34,714,305		-
Series 9		11,470,124		14,884,154		-		14,863,770		18,517,677		-
Series 10		11,983,904		12,323,998		41,880		12,260,157		12,392,855		72,966
Series 11		8,431,017		8,953,762		197,996		10,208,441		10,164,649		296,720
Total	$	68,025,627	$	86,243,153	$	239,876	$	81,111,166	$	99,820,554	$	454,109

NOTE 5 - SUMMARY OF DISPOSITION ACTIVITIES:

Gateway at one time held investments in 133 Project Partnerships (39 in Series 7, 43 in Series 8, 24 in Series 9, 15 in Series 10, and 12 in Series 11). As of September 30, 2011, Gateway has sold its interest in 34 Project Partnerships (19 in Series 7, 4 in Series 8, 5 in Series 9, 2 in Series 10 and 4 in Series 11). A summary of the sale transactions for the Project Partnerships disposed during the current fiscal year-to-date and the previous fiscal year are summarized below.

Fiscal Year 2012 Disposition Activity:

Series 7

Transaction				Net Proceeds		Gain on
Month / Year	Project Partnership	Net Proceeds		Per LP Unit		Disposal
April 2011	Blue Ridge Elderly Housing	$	32,675	$	3.14	$	32,675
April 2011	Lakeland II		23,875		2.30		23,875
April 2011	Meadow Run Apartments		38,275		3.68		38,275
April 2011	Mount Vernon Rental Housing		19,074		1.83		19,074
August 2011	Cavalry Crossing Apartments		4,977		0.48

GATEWAY TAX CREDIT FUND III LTD 10-Q