UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2017

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

For the transition period from ______ to ______

Commission File Number 033-89968

INDEPENDENCE TAX CREDIT PLUS L.P. IV

(Exact name of registrant as specified in its charter)

Delaware		13-3809869
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

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

(303) 927-5000

Registrant’s telephone number, including area code

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

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

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

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

Large accelerated filer ☐		Accelerated filer ☐

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

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

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

Table of Contents


		Page Numbers

Part I
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statement of Changes in Partners’ (Deficit) Capital	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	17
Item 4.	Controls and Procedures	17

Part II
Item 1.	Legal Proceedings	18
Item 1A.	Risk Factors	18
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3.	Defaults Upon Senior Securities	18
Item 4.	Mine Safety Disclosures	18
Item 5.	Other Information	18
Item 6.	Exhibits	18

Signatures		19

Table of Contents

Item 1. Financial Statements.

INDEPENDENCE TAX CREDIT PLUS L.P. IV

AND SUBSIDIARIES

Condensed Consolidated Balance Sheets


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

Operating assets
Cash and cash equivalents	$	2,123,715	$	1,841,212
Cash held in escrow		—		82,119
Due from local general partners and affiliates (Note 2)		—		56,111
Other assets		—		10,944

Total operating assets		2,123,715		1,990,386

Assets from discontinued operations (Note 6)
Property and equipment - (at cost, net of accumulated depreciation of $0 and $2,284,169, respectively)		—		51,133
Other assets held for sale		—		429,411
Total assets from discontinued operations		—		480,544

Total assets	$	2,123,715	$	2,470,930

LIABILITIES AND PARTNERS’ CAPITAL

Operating liabilities
Accounts payable	$	23,099	$	63,619
Due to general partners and affiliates		55,510		—

Total operating liabilities		78,609		63,619

Liabilities from discontinued operations (Note 6)
Mortgage notes payable (net of deferred financing costs of $0 and $32,299, respectively)		—		1,527,076
Other liabilities held for sale		—		304,035
Total liabilities from discontinued operations		—		1,831,111

Total liabilities		78,609		1,894,730

Commitments and contingencies

Partners’ capital (deficit)
Limited partners (45,844 BACs issued and outstanding)		2,410,854		901,928
General partner		(365,748)		(380,989)

Independence Tax Credit Plus L.P. IV total		2,045,106		520,939

Noncontrolling interests		—		55,261

Total partners’ capital		2,045,106		576,200

Total liabilities and partners’ capital	$	2,123,715	$	2,470,930

See accompanying notes to condensed consolidated financial statements.

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INDEPENDENCE TAX CREDIT PLUS L.P. IV

AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)


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

Total revenues	$	—	$	—	$	—	$	—

Expenses
General and administrative		40,331		124,749		77,775		216,521
General and administrative-related parties		52,736		62,760		111,272		126,405

Total expenses		93,066		187,509		189,047		342,926

Loss from operations		(93,066)		(187,509)		(189,047)		(342,926)
Income from discontinued operations (including gain on sale of property) (Note 4)		307,385		5,314,948		1,657,953		5,363,622

Net income		214,319		5,127,439		1,468,906		5,020,696

Less: net loss attributable to noncontrolling interests from discontinued operations		—		131,924		55,261		131,718

Net income attributable to Independence Tax Credit Plus L.P. IV	$	214,319	$	5,259,363	$	1,524,167	$	5,152,414

Loss from operations – limited partners	$	(92,135)	$	(185,635)	$	(187,156)	$	(339,497)
Income from discontinued operations – limited partners		304,311		5,392,403		1,696,082		5,440,387

Net income – limited partners	$	212,176	$	5,206,768	$	1,508,926	$	5,100,890

Number of BACs outstanding		45,844		45,844		45,844		45,844

Loss from operations per weighted average BAC	$	(2.01)	$	(4.06)	$	(4.08)	$	(7.41)
Income from discontinued operations per weighted average BAC		6.64		117.63		37.00		118.67

Net income per weighted average BAC	$	4.63	$	113.57	$	32.92	$	111.26

* Reclassified for comparative purposes.

See accompanying notes to condensed consolidated financial statements.

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INDEPENDENCE TAX CREDIT PLUS L.P. IV

AND SUBSIDIARIES

Condensed Consolidated Statement of Changes in Partners’ Capital

For the Six Months Ended September 30, 2017

(Unaudited)


			Limited		General		Noncontrolling
	Total		Partners		Partner		Interests

Partners’ capital (deficit) – March 31, 2017	$	576,200	$	901,928	$	(380,989)	$	55,261

Net income (loss)		1,468,906		1,508,926		15,241		(55,261)

Partners’ capital (deficit) – September 30, 2017	$	2,045,106	$	2,410,854	$	(365,748)	$	-

See accompanying notes to condensed consolidated financial statements.

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INDEPENDENCE TAX CREDIT PLUS L.P. IV

AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Six Months Ended
	September 30,
	2017		2016

Cash flows from operating activities:
Net income	$	1,468,906	$	5,020,696
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		847		3,405
Amortization of debt issuance costs		288		1,170
Gain on sale of property		(1,803,747)		(5,247,186)
Changes in assets and liabilities:
Decrease in cash held in escrow		7,532		625
Increase in other assets		(103,664)		(156,097)
Decrease in accounts payable		(49,789)		(62,540)
Increase in accrued interest payable		—		5,021
Increase in security deposit payable		1,000		1,076
Increase in due from general partner and affiliates		56,111		—
Increase in due to general partner and affiliates		55,510		135,448

Total adjustments		(1,835,912)		(5,319,078)

Net cash used in operating activities		(367,006)		(298,382)

Cash flows from investing activities:
(Increase) decrease in cash held in escrow		(8,547)		4,267
Net repayments to local general partners and affiliates		22,468		56,363
Proceeds from sale of property		400,000		2,120,988
Costs paid relating to sale of property		(10,495)		—

Net cash provided by investing activities		403,426		2,181,618

Cash flows from financing activities:
Repayments of mortgage notes		(20,461)		(124,299)

Net cash used in financing activities		(20,461)		(124,299)

Net increase in cash and cash equivalents		15,959		1,758,937
Cash and cash equivalents at beginning of period		2,107,756		867,364
Cash and cash equivalents at end of period	$	2,123,715	$	2,626,301


Summarized below are the components of the gain on sale of property:
Proceeds from sale of property	$	(400,000)	$	(2,120,988)
Costs paid relating to sale of property		10,495		—
Property and equipment, net of accumulated depreciation		50,590		127,847
Deferred costs		15,116		65,552
Other assets		119,137		217,938
Cash held in escrow		143,938		390,453
Accounts payable		(2,807)		(15,522)
Mortgage payable		(1,506,903)		(3,193,718)
Accrued interest		(56,839)		(9,223)
Security deposits		(15,391)		(132,247)
Due to local general partners and affiliates		(243,202)		(498,266)
Subscription payment		82,119		(79,012)

See accompanying notes to condensed consolidated financial statements.

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INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements

September 30, 2017

(Unaudited)

NOTE 1 – Summary of Significant Accounting Policies

Basis of Presentation

The condensed consolidated financial statements, as of September 30, 2017, include the accounts of Independence Tax Credit Plus L.P. IV (the “Partnership”) and two other limited partnerships (“subsidiary partnerships”, “subsidiaries” or “Local Partnerships”) owning affordable apartment complexes (“Properties”) that are eligible for the low-income housing tax credits. The Partnership sold its last remaining investment on June 26, 2017. The general partner of the Partnership is Related Independence L.L.C., a Delaware limited liability company (the “General Partner”). Centerline Holding Company (“Centerline”) was the ultimate parent of Centerline Affordable Housing Advisors LLC (“CAHA”), the sole member of the Manager of the General Partner. On April 15, 2015, Alden Torch Financial LLC, a newly formed Delaware limited liability company (“ATF”), became the indirect owner of 100% of the equity interests in Centerline. Since April 15, 2015, ATF has been the ultimate parent and indirect owner of 100% of the equity interests in CAHA.

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

The net loss attributable to noncontrolling interests from discontinued operations amounted to $0 and $131,924 and $55,261 and $131,718 for the three and six months ended September 30, 2017 and 2016, respectively. The Partnership’s investment in each subsidiary is equal to the respective subsidiary’s partners’ equity less noncontrolling interest capital, if any.

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

In the opinion of the General Partner of the Partnership, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the condensed consolidated financial position of the Partnership as of September 30, 2017 and the results of their operations and their cash flows for the six months ended September 30, 2017 and 2016. However, the operating results and cash flows for the six months ended September 30, 2017 may not be indicative of the results for the entire year.

On June 26, 2017, the Partnership sold its last remaining investment. Liquidation of the Partnership in accordance with Section 8.1(ii) of the Limited Partnership Agreement requires the Partnership to dissolve 150 days following the sale of the Partnership’s last remaining investment. Following dissolution, the general Partner will cause the Partnership to liquidate as soon thereafter as possible at which time the remaining assets (i.e.cash) of the Partnership will be used to first pay any remaining liabilities of the Partnership and the cost of liquidation with the remaining balance, if any, distributed to the General Partner and BACs holders in accordance with the Partnership Agreement. Dissolution is expected to take place on or about November 30, 2017, with the liquidation and termination of the Partnership to follow shortly thereafter. At this time, the amount of reserves to be set aside for the payment of accrued operating expenses and liquidation expenses has not yet been determined. There can be no assurance that there will be any remaining funds available for distributions

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INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements

September 30, 2017

(Unaudited)

to BAC holders. However, based on current estimates the General Partner does not believe such amounts will be substantial.

Recently Issued Accounting Pronouncements

In April 2015, the FASB issued Accounting Standard Update 2015-03: Simplifying the Presentation of Debt Issuance Costs. This update requires capitalized debt issuance costs to be presented as a reduction to the carrying value of debt instead of being classified as a deferred charge, as currently required. Management has adopted the guidance in ASU 2015-03 as of April 1, 2016 and it has been applied retroactively for all periods presented. This update did not have a material impact on the presentation of the Partnership’s financial position.

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

In February 2016, the Financial Accounting Standards Board issued ASU No. 2016-02 “Leases – Topic 842” (“ASU 2016-02”). ASU 2016-02 requires recognition of lease assets and lease liabilities by lessees for all leases greater than one year in duration and classified as operating leases under previous GAAP. ASU 2016.02 is effective for fiscal years beginning after December 15, 2018, and for interim periods within that fiscal year. The new guidance will not have an impact on the Partnership’s condensed consolidated financial statements.

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

In May 14, 2014, FASB and IASB issued a new joint revenue recognition standard that supersedes nearly all GAAP guidance on revenue recognition. The core principal of the standard is that revenue recognition should depict the transfer of goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The new standard is effective for the Partnership for the fiscal year beginning April 1, 2018 and the effects of the standard on the Partnership’s condensed consolidated financial statements are not known at this time.

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

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INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements

September 30, 2017

(Unaudited)

Use of Estimates

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

NOTE 2 – Related Party Transactions

A)Related Party Expenses

An affiliate of the General Partner, Independence SLP IV L.P., had a 0.01% interest as a special limited partner in each of the Local Partnerships.

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


	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Partnership management fees (a)	$	—	$	23,615	$	5,800	$	48,115
Expense reimbursement (b)		52,736		39,145		105,472		78,290
Total general and administrative-General Partners	$	52,736	$	62,760	$	111,272	$	126,405

*Reclassified for comparative purposes.

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


		Three Months Ended				Six Months Ended
		September 30,				September 30,
		2017		2016*		2017		2016*
Local administrative fee (c)	$		—	$	3,160	$	150,187	$	6,317
Total general and administrative-General Partner			—		3,160		150,187		6,317
Property management fees incurred to affiliates of the subsidiary partnerships' general partners			—		21,651		6,249		44,624

Total general and administrative-related parties	$		—	$	24,811	$	156,436	$	50,941

*Reclassified for comparative purposes.

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INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements

September 30, 2017

(Unaudited)

(a)

The General Partner is entitled to receive a partnership management fee, after payment of all Partnership expenses, which together with the annual local administrative fees will not exceed a maximum of 0.5% per annum of invested assets (as defined in the Partnership Agreement), for administering the affairs of the Partnership. Subject to the foregoing limitation, the partnership management fee will be determined by the General Partner in its sole discretion based upon its review of the Partnership’s investments. Unpaid partnership management fees for any year are deferred without interest and will be payable out of sales or refinancing proceeds only to the extent of available funds after payments on all Partnership liabilities have been made other than those owed to the General Partner and its affiliates. Partnership management fees owed to the General Partner amounting to approximately $0 and $0 were accrued and unpaid as of September 30, 2017 and March 31, 2017, respectively. Current year partnership management fees may be paid out of operating reserves or refinancing and sales proceeds. However, the General Partner cannot demand payment of the deferred fees beyond the Partnership’s ability to pay them.

(b)

The Partnership reimburses the General Partner and its affiliates for actual Partnership operating expenses incurred by the General Partner and its affiliates on the Partnership’s behalf. The amount of reimbursement from the Partnership is limited by the provisions of the Partnership Agreement. Another affiliate of the General Partner performs asset monitoring for the Partnership. These services include site visits and evaluations of the subsidiary partnerships’ performance. Expense reimbursements and asset monitoring fees owed to the General Partner and its affiliates amounting to approximately $55,000 and $0 were accrued and unpaid as of September 30, 2017 and March 31, 2017, respectively. The General Partner does not intend to demand payment of the deferred payables beyond the Partnership’s ability to pay them. The Partnership anticipates that these will be paid, if at all, from working capital reserves.

(c)

Independence SLP IV L.P., (“SLP”) a special limited partner of the subsidiary partnerships, is entitled to receive a local administrative fee of up to $5,000 per year from each subsidiary partnership. Local administrative fees owed to Independence SLP IV L.P. amounting to $0 and $0 were accrued and unpaid as of September 30, 2017 and March 31, 2017, respectively. The Partnership sold its last remaining investment on June 26, 2017, at the closing date it was determined that the Local partnership owed $150,187 of SLP fees which were not accrued, these fees were paid on the closing date out of sale proceeds.

B)Due to/from Local General Partners and Affiliates

The amounts due to Local General Partners and affiliates from discontinued operations consist of the following, which are reported as a component of other liabilities held for sale in the accompanying condensed consolidated balance sheet:


	September 30,		March 31,
	2017		2017
Operating advances	$	—	$	220,734

	$	—	$	220,734

NOTE 3– Fair Value of Financial Instruments

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

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INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements

September 30, 2017

(Unaudited)

Cash and Cash Equivalents and Cash Held in Escrow

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

Accounts Payable and Other Liabilities

The carrying amounts approximate fair value due to their short-term nature.

Mortgage Notes Payable

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

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

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

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

The estimated fair value of mortgage notes payable has been determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange. The following are financial instruments for which the Partnership’s estimate of fair value differs from the carrying amounts:


	At September 30, 2017				At March 31, 2017
	(Unaudited)				(Audited)
	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value

LIABILITIES:
Mortgage notes	$	—	$	—	$	1,544,366	$	1,360,695

For the mortgage notes, fair value is estimated using Level 3 inputs and calculated using present value cash flow models based on a discount rate. The Partnership has not been active in the tender option bond market, through which these bonds have been securitized in the past. To assist in valuing these notes, the Partnership held separate discussions with various third party investment banks who are leaders in the municipal bond business. The discussions produced assumptions that were based on market conditions as well as the credit quality of the underlying property partnerships, which held the mortgage notes, to determine what discount rates to utilize.

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INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements

September 30, 2017

(Unaudited)

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

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

NOTE 4 – Sale of Properties

The Partnership sold its last remaining investment on June 26, 2017. All gains and losses on sales are included in discontinued operations.

On June 26, 2017, the property and the related assets and liabilities for Fawcett Street Limited Partnership (“Fawcett”) were sold to an unaffiliated third party for a sales price of $2,125,000. The Partnership received $0 as a distribution from this sale after the repayment of the mortgages, other liabilities and closing costs of approximately $2,125,000. The sale resulted in a gain of approximately $1,496,000 which was recorded during the quarter ended June 30, 2017. SLP fees owed but not accrued in the amount of approximately $150,000 were paid out of sale proceeds. An adjustment to the gain of approximately $308,000 was recorded during the quarter ended September 30, 2017 due to the Partnership receiving sale proceeds offset by legal fees related to the sale paid by the Partnership, which resulted in the overall gain being increased to $1,803,747.

On September 21, 2016, the Partnership sold its limited partnership interest in Bakery Village Urban Renewal Associates, L.P. (“Bakery Village”) to an affiliate of the Local General Partner for a sales price of approximately $2,200,000. The sale resulted in a gain of approximately $5,247,000 resulting from the write-off of the deficit basis in the Local Partnership plus the cash recived by the Partnership, which was recorded during the quarter ended September 30, 2016.

NOTE 5 – Discontinued Operations

As of September 30, 2017, there were no assets classified as discontinued operations. The following table summarizes the financial position of Fawcett because it has been classified as assets held for sale as of March 31, 2017. (See Note 4).


	September 30,		March 31,
	2017		2017*
Assets
Property and equipment - (at cost, net of accumulated depreciation of $0 and $2,284,169, respectively)	$	—	$	51,133
Cash and cash equivalents		—		266,544
Cash held in escrow		—		142,923
Other assets		—		19,944
Total assets	$	—	$	480,544

Liabilities
Mortgage notes payable (net of deferred costs of $0 and $32,299, respectively)	$	—	$	1,527,076
Accounts payable		—		12,071
Accrued interest payable		—		56,839
Security deposits payable		—		14,391
Due to local general partners and affiliates		—		220,734
Total liabilities	$	—	$	1,831,111

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INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements

September 30, 2017

(Unaudited)

The following table summarizes the results of operations of the Local Partnerships that are classified as discontinued operations. For the three and six months ended September 30, 2017, Fawcett which was sold in June 2017 was classified as discontinued operations. In order to present comparable results to the three and six months ended September 30, 2016, Bakery Village which was sold in September 2016 and Fawcett Street were classified as discontinued operations in the condensed consolidated financial statements.

Condensed Consolidated Statements of Discontinued Operations:


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

Revenues

Rental income	$	—	$	411,572	$	98,249	$	819,710
Other		—		17,294		1,512		39,561
Gain on sale of property		307,385		5,247,186		1,803,747		5,247,186

Total revenue		307,385		5,676,052		1,903,508		6,106,457

Expenses
General and administrative		—		98,748		22,749		228,351
General and administrative-related parties		—		24,811		156,436		50,941
Repairs and maintenance		—		91,458		32,980		165,852
Operating and other		—		57,158		16,523		116,113
Real estate taxes		—		26,365		—		52,408
Insurance		—		19,008		4,636		39,141
Interest		—		41,386		11,386		85,454
Depreciation and amortization		—		2,170		845		4,576

Total expenses		—		361,104		245,555		742,836

Income from discontinued operations		307,385		5,314,948		1,657,953		5,363,621

Noncontrolling interest in loss (income) of subsidiaries from discontinued operations		—		131,924		55,261		131,718

Income from discontinued operations – Independence Tax Credit Plus L.P. IV	$	307,385	$	5,446,872	$	1,713,214	$	5,495,339

Income from discontinued operations – limited partners	$	304,311	$	5,392,403	$	1,696,083	$	5,440,384

Number of BACs outstanding		45,844		45,844		45,844		45,844

Income from discontinued operations per weighted average BAC	$	6.64	$	117.63	$	37.00	$	118.67

*Reclassified for comparative purpose.

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INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements

September 30, 2017

(Unaudited)

Cash Flows from Discontinued Operations:


	Six Months Ended
	September 30,
	2017		2016*

Net cash (used in) provided by operating activities	$	(480,736)	$	5,449,368

Net cash provided by (used in) investing activities	$	234,653	$	(2,337,867)

Net cash used in financing activities	$	(20,461)	$	(3,232,257)

*Reclassified for comparative purposes.

NOTE 6 – Commitments and Contingencies

a) Uninsured Cash and Cash Equivalents

The Partnership maintains its cash and cash equivalents in various banks. The accounts at each bank are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per entity, per institution. At September 30, 2017, uninsured cash and cash equivalents amounted to approximately $1,874,000.

b) Property Management Fees

Property management fees incurred by the Local Partnerships amounted to approximately $— and $22,000 and $6,000 and $45,000 for the three and six months ended September 30, 2017 and 2016, respectively. Of these fees, approximately $— and $22,000 and $6,000 and $45,000 were incurred to the Local General Partners and are related to discontinued opreations for three and six months ended September 30, 2017 and 2016, respectively.

c) Subsequent Events

The Partnership evaluated all subsequent events from the date of the condensed consolidated balance sheet through the issuance date of these financial statements and determined that there were no events or transactions occurring during the subsequent event reporting period which require recognition or disclosure in the condensed consolidated financial statements.

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

Liquidity and Capital Resources

The Partnership originally invested all of its net proceeds in fourteen Local Partnerships. The Partnership sold its last remaining investments on June 26, 2017. Through September 30, 2017, the Partnership has sold its limited partnership interests in nine Local Partnerships and the property and the related assets and liabilities of five Local Partnerships have been sold. All gains and losses on sales are included in discontinued operations. All gains and losses are included in discontinued operations.

Liquidation of the Partnership in accordance with Section 8.1(ii) of the Limited Partnership Agreement requires the Partnership to dissolve 150 days following the sale of the Partnership’s last remaining investment. Following dissolution, the General Partner will cause the Partnership to liquidate as soon thereafter as possible at which time the remaining assets (i.e. cash) of the Partnership will be used to first pay any remaining liabilities of the Partnership and the costs of liquidation with the remaining balance, if any, distributed to the General Partner and the BACs holders in accordance with the Partnership Agreement. Dissolution is expected to take place on or about November 30, 2017, with the liquidation and termination of the Partnership to follow shortly thereafter. At this time, the amount of reserves to be set aside for the payment of accrued operating expenses and liquidation expenses has not yet been determined. There can be no assurance that there will be any remaining funds available for distributions to BACs holders.

Short-Term

The Partnership’s primary sources of funds include: (i) working capital reserves; (ii) interest earned on the working capital reserves; (iii) cash distributions from operations of the Local Partnerships; and (iv) sales and/or refinance proceeds and distributions. Such funds, although minimal, are available to meet the obligations of the Partnership. During the six months ended September 30, 2017 and 2016, there were no distributions from operations of the Local Partnerships, In addition, during the six months ended September 30, 2017 and 2016, distributions to the Partnership from sales proceeds amounted to approximately $400,000 and $2,121,000, respectively.

During the six months ended September 30, 2017, cash and cash equivalents of the Partnership increased approximately $16,000. This increase was due to proceeds for the sale of property of approximately $400,000, and net repayments from local general partners and affiliates of approximately $22,000, which exceeded cash used in operating activities of approximately ($367,000), repayment of mortgage notes of approximately ($20,000), increase in cash held in escrow relating to investing activities of approximately ($9,000), and costs paid relating to sale of property of approximately ($10,000). Included in the adjustments to reconcile the net loss to net cash used in operating activities is depreciation and amortization in the amount of approximately ($800).

Total expenses from operations for the three and six months ended September 30, 2017 and 2016, excluding depreciation and amortization, interest and general and administrative-related parties, totaled $40,330 and $124,749 and $77,775 and $216,521, respectively.

Accounts payable from operations as of September 30, 2017 and March 31, 2017 were $23,099 and $63,619, respectively. Accounts payable are short term liabilities which are expected to be paid from operating cash flows, working capital balances at the Local Partnership level, Local General Partner advances and in certain circumstances advances from the Partnership. Accounts payable from discontinued operations as of September 30, 2017 and March 31, 2017 was $— and $12,071, respectively. Accrued interest payable from discontinued operations as of September 30, 2017 and March 31, 2017 was $— and $56,829, respectively. Such amount represents the accrued interest on all mortgage loans, which included primary and secondary loans. Certain secondary loans had provisions such that interest was accrued but not payable until a future date. In addition, the last remaining Local Partnership’s mortgage note was collateralized by the land and buildings of the Local Partnership, and was without further recourse to the Partnership.

The Partnership has unconsolidated cash reserves of approximately $2,124,000 at September 30, 2017. Such amount is considered sufficient to cover the Partnership’s remaining liabilities and the costs of liquidation.

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Long Term

Partnership management fees owed to the General Partner amounting to approximately $0 and $0 were accrued and unpaid as of September 30, 2017 and March 31, 2017, respectively, and are included in the line item Due to general partners and affiliates in the consolidated balance sheets. Unpaid partnership management fees for any year are to be deferred without interest and will be payable out of sales or refinancing proceeds only to the extent of available funds after payments on all Partnership liabilities have been made other than to those owed to the General Partner and its affiliates.

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

Results of Operations

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

General and administrative-related parties’ expenses decreased approximately $10,000 and $15,000 for the three and six months ended September 30, 2017, as compared to the corresponding periods ended September 30, 2016, primarily due to an overall decrease in partnership management fees resulting from the sale of properties at the Partnership level.

General and administrative for non-related parties’ expenses decreased approximately $84,000 and $139,000 a for the three and six months ended September 30, 2017, as compared to the corresponding periods ended September 30, 2016, primarily due to a decrease in legal expenses and accrued audit fees at the Partnership level.

Off-Balance Sheet Arrangements

The Partnership has no off-balance sheet arrangements.

Fair Value Measurements

See Note 3 in Item 1 for methods and assumptions used to estimate the fair value of each class of financial instruments (all of which are held for nontrading purposes) for which it is practicable to estimate that value.

Critical Accounting Policies and Estimates

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

Property and Equipment

Property and equipment to be held and used are carried at cost which includes the purchase price, acquisition fees and expenses, construction period interest and any other costs incurred in acquiring the Properties. The cost of property and equipment is depreciated over their estimated useful lives using accelerated and straight-line methods. Expenditures for repairs and maintenance are charged to expense as incurred; major renewals and betterments are capitalized. At the time property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are eliminated from the assets and accumulated depreciation accounts and the profit or loss on such disposition is reflected in earnings. The Partnership complies with ASC 360, Property, Plant and Equipment. A loss on impairment of assets is recorded when management estimates amounts recoverable through future operations and sale of the Property on an undiscounted basis

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are below depreciated cost. At that time, Property investments themselves are reduced to estimated fair value (using the fair market value based on comparative sales) when the Property is considered to be impaired and the depreciated cost exceeds estimated fair value.

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

During the six months ended September 30, 2017, the Partnership has not recorded any loss on impairment of assets. Through September 30, 2017, the Partnership has recorded approximately $35,686,000 as an aggregate loss on impairment of property.

Revenue Recognition

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

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

Income Taxes

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

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Not applicable.

Item 4. Controls and Procedures.

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

(b) Changes in Internal Controls over Financial Reporting. During the period ended September 30, 2017, there were no changes in the Partnership’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1.	Legal Proceedings. – None

Item 1A.	Risk Factors. – No changes

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

Item 3.	Defaults upon Senior Securities. – None

Item 4.	Mine Safety Disclosures. – None

Item 5.	Other Information. – None

Item 6.	Exhibits.

	(4)	Form of Amended and Restated Agreement of Limited Partnership of the Partnership (attached to the Prospectus as Exhibit A)*

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

	(10B)	Form of Escrow Agreement between the Partnership and the Escrow Agent**

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

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

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

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

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

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

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

*Incorporated herein by reference to the final Prospectus as filed pursuant to Rule 424 under the Securities Act of 1933.

**Filed as an exhibit to the Registration Statement on Form S-11 of the Partnership (File No. 33-89968) and incorporated herein by reference thereto.

+Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

INDEPENDENCE TAX CREDIT PLUS L.P. IV

(Registrant)

	By:	RELATED INDEPENDENCE L.L.C.,
		General Partner

	By:	CENTERLINE MANAGER LLC,
		Manager

	By:	CENTERLINE AFFORDABLE HOUSING ADVISORS LLC,
		Sole Member

	By:	CENTERLINE CAPITAL GROUP LLC,
		Sole Member


Date:	November 14, 2017	By:	/s/ Ivyl T. Boyce
			Ivyl Boyce
			Chief Financial Officer



Date:	November 14, 2017	By:	/s/ Alan T. Fair
			Alan T. Fair
			President and Chief Executive Officer

INDEPENDENCE TAX CREDIT PLUS LP IV 10-Q