Go to the Web site www.napico.com and click on “Partnership Financial Information—Click Here.” Then click on “2006 Annual Reports” to access the annual report for National Tax Credit Investors II (NTCIII).

Read the financial statements contained in the 2006 annual report and the accompanying notes, espe¬ cially any that discuss the partnership form of organization.

Assume that an investor is considering investing in this partnership and has downloaded this report for study and analysis.

Required LO6 1. What differences between NTCI II’s financial statements and those of an incorporated entity exist?

2. Assume that this potential investor is not aware of the potential implications of owning a partnership rather than a corporation. What information is available in these statements to advise this individual of the unique characteristics of this legal business form?