<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 (FEE REQUIRED) FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005

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

                        Commission File Number: 33-69996

                       COMMONWEALTH INCOME & GROWTH FUND I
             (Exact name of registrant as specified in its charter)

              Pennsylvania                                23-2735641
    (State or other jurisdiction of                    (I.R.S. Employer
     incorporation or organization)                 Identification Number)

                               470 John Young Way
                                 Exton, PA 19341
          (Address, including zip code, of principal executive offices)

                                 (610) 594-9600
               (Registrant's telephone number including area code)

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

         Title of each class to                   Name of exchange on
            be so registered                        which each class
                                                  is to be registered

                  None                                    N/A
                  ----                                    ---

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

                      Units of Limited Partnership Interest
                      -------------------------------------
                                (Title of Class)

         Indicate by check mark whether the registrant (i) 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, and (ii) has been subject to such filing
requirements for the past 90 days: YES [X] NO [ ]

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, to the best of Registrant's
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K:
YES [X] NO [ ]

         Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12c-2 of the Act): YES [ ] NO [X]

         Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Act): YES [ ] NO [X]

         Aggregate Market Value of Voting and Non-Voting Common Equity Held by
non-affiliates of the Registrant: N/A

         Indicate by check mark if the registrant is a well-known seasoned
issuer, (as defined in Rule 405 of the Act): YES [ ] NO [X]

                       DOCUMENTS INCORPORATED BY REFERENCE
 (Specific sections incorporated are identified under applicable items herein)

      Certain exhibits to the Company's Registration Statement on Form S-1
(File No. 33-69996).

<PAGE>

                                    FORM 10-K
                                DECEMBER 31, 2005

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S>        <C>                                                                   <C>
                                         PART I
Item 1.    Business                                                               3
Item 1A.   Risk Factors                                                           6
Item 1B.   Unresolved Staff Comments                                              7
Item 2.    Properties                                                             7
Item 3.    Legal Proceedings                                                      7
Item 4.    Submission of Matters to a Vote of Security Holders                    7

                                        PART II
Item 5.    Market for Registrant's Common Equity, Related Stockholder Matters
           and Issuer Purchases of Equity Securities                              7
Item 6.    Selected Financial Data                                                9
Item 7.    Management's Discussion and Analysis of Financial Condition and
           Results of Operations                                                 11
Item 7A.   Quantitative and Qualitative Disclosures About Market Risk            14
Item 8.    Financial Statements and Supplementary Data                           14
Item 9.    Changes in and Disagreements with Accountants on Accounting and
           Financial Disclosure                                                  14
Item 9A.   Controls and Procedures                                               15
Item 9B.   Other Information                                                     15

                                       PART III
Item 10.   Directors and Executive Officers of the Registrant                    15
Item 11.   Executive Compensation                                                18
Item 12.   Security Ownership of Certain Beneficial Owners and Management and
           Related Stockholder Matters                                           18
Item 13.   Certain Relationships and Related Transactions                        18
Item 14.   Principal Accountant Fees and Services                                23

                                         PART IV
Item 15.   Exhibits and Financial Statement Schedules                            24

           Index to Exhibits

           Signatures

           Certifications
</TABLE>

                                                                               2
<PAGE>

PART I

ITEM 1:    BUSINESS

GENERAL

         Commonwealth Income & Growth Fund I ( the "Partnership") was formed on
August 26, 1993 under the Pennsylvania Revised Uniform Limited Partnership Act.
The Partnership began offering $15,000,000 of Units of Limited Partnership
("Units") to the public on December 17, 1993 (the "Offerings"). The Partnership
terminated its offering of Units on May 11, 1995, with 631,358 Units sold
($12,623,682) and 749 investors admitted as Limited Partners of the Partnership.

         The Partnership began liquidation effective July 1, 2005. Particular
items of equipment may be sold at any time if, in the judgment of the General
Partner, it is in the best interest of the Partnership to do so. The
determination of whether particular items of partnership equipment should be
sold will be made by the General Partner after consideration of all relevant
factors (including prevailing economic conditions, the cash requirements of the
Partnership, potential capital appreciation, cash flow and federal income tax
considerations), with a view toward achieving the principal investment
objectives of the Partnership.

         See "The Glossary" below for the definition of capitalized terms not
otherwise defined in the text of this report.

PRINCIPAL INVESTMENT OBJECTIVES

         The Partnership was formed for the purpose of acquiring various types
of Equipment, including computer peripheral and other similar capital equipment.
The Partnership utilized the net Proceeds of the Offering to purchase IBM and
IBM compatible computer peripheral and other similar capital equipment. The
Partnership utilized Retained Proceeds and debt financing (not exceeding 30% of
the aggregate cost of the Equipment owned or subject to Conditional Sales
Contract by the Partnership at the time the debt was incurred) to purchase
additional Equipment. The Partnership acquired and leased equipment principally
to U.S. corporations and other institutions pursuant to Operating Leases.
Currently, the Partnership's primary objective is the orderly and efficient
liquidation of its equipment portfolio.

         Limited Partners do not have the right to vote on or otherwise approve
or disapprove any particular investment to be made by the Partnership or the
terms of any sale of equipment in liquidation.

         The General Partner has the discretion consistent with its fiduciary
duty to change the investment objectives of the Partnership if it determines
that such a change is in the best interest of the Limited Partners and so long
as such a change is consistent with the Partnership Agreement. The General
Partner will notify the Limited Partners if it makes such a determination to
change the Partnership's investment objectives.

TYPES OF EQUIPMENT

         COMPUTER PERIPHERAL EQUIPMENT. Computer peripheral equipment consists
of devices used to convey information into and out of a central processing unit
(or "mainframe") of a computer system, such as tape drives, disk drives, tape
controllers, disk controllers, printers, terminals and related control units,
all of which are in some way related to the process of storing, retrieving, and
processing information by computer.

         Computer technology has developed rapidly in recent years and is
expected to continue to do so. Technological advances have permitted continued
reductions in the cost of computer processing capacity, thereby permitting
applications not economically feasible a few years ago. Much of the older IBM
and IBM compatible computer peripheral equipment has not been retired from
service, because software is generally interchangeable between older and newer
equipment, and older equipment is capable of performing many of the same
functions as newer equipment. The General Partner believes, historically, that
the values of peripheral equipment have been affected less dramatically by
changes in technology than have the values of central processing units. An
equipment user who upgrades to a more advanced central

                                                                               3
<PAGE>

processor generally can continue to use his existing peripheral equipment.
Peripheral equipment nevertheless is subject to declines in value as new,
improved models are developed and become available. Technological advances and
other factors, discussed below in Management Discussion and Analysis, have at
times caused dramatic reduction in the market prices of older models of IBM and
IBM compatible computer peripheral equipment from the prices at which they were
originally introduced.

DESCRIPTION OF LEASES

         The Partnership to date has purchased only Equipment that is subject to
a lease or for which a lease or similar agreement will be entered into
contemporaneously with the consummation of the Partnership's acquisition of the
Equipment. The General Partner to date has leased most of the Equipment
purchased by the Partnership to third parties pursuant to Operating Leases.
Operating Leases are relatively short-term (12 to 48 month) leases under which
the aggregate noncancellable rental payments during the original term of the
lease are not sufficient to permit the lessor to recover the purchase price of
the subject Equipment. The Equipment may also be leased pursuant to Full Payout
Net Leases. Full Payout Net Leases are leases under which the aggregate
noncancellable rental payments during the original term of the lease are at
least sufficient to recover the purchase price of the subject Equipment. The
General Partner may also enter into Conditional Sales Contracts for Equipment. A
Conditional Sales Contract generally provides that the noncancellable payments
to the seller over the term of the contract are sufficient to recover the
investment in such Equipment and to provide a return on such investment. Under a
Conditional Sales Contract, the seller reserves title to, and retain a security
interest in, the Equipment until the Purchase Price of the Equipment is paid. As
of December 31, 2005, the Partnership has not entered into any Full Payout Net
Leases or Conditional Sales Contracts for Equipment. The Equipment may also be
leased pursuant to Capital Leases. Capital Leases are leases under which the
Equipment either transfers to the lessee at the end of the lease term, contains
a bargain purchase price option, the lease term is equal to 75% or more of the
estimated economic life of the Equipment, or the present value at the beginning
of the lease term of the minimum lease payments is equal to or exceeds 90% of
the excess of the fair value of the Equipment. As of December 31, 2005, we have
entered into one Capital Lease.

         In general, the terms of the Partnership's leases, whether the
Equipment is leased pursuant to an Operating lease, Capital Lease or a Full
Payout Net Lease, depend upon a variety of factors, including: the desirability
of each type of lease from both an investment and a tax point of view; the
relative demand among lessees for Operating, Capital Lease or Full Payout Net
Leases; the type and use of Equipment and its anticipated residual value; the
business of the lessee and its credit rating; the availability and cost of
financing; regulatory considerations; the accounting treatment of the lease
sought by the lessee or the Partnership; and competitive factors.

         An Operating Lease generally represents a greater risk to the
Partnership than a Capital Lease or Full Payout Net Lease, because in order to
recover the purchase price of the subject Equipment and earn a return on such
investment, it is necessary to renew or extend the Operating Lease, lease the
Equipment to a third party at the end of the original lease term, or sell the
Equipment. On the other hand, the term of an Operating Lease is generally much
shorter than the term of a Capital Lease or Full Payout Net Lease, and the
lessor is thus afforded an opportunity under an Operating Lease to re-lease or
sell the subject Equipment at an earlier stage of the Equipment's life cycle
than under a Capital Lease or Full Payout Net Lease. Also, the annual rental
payments received under an Operating Lease are ordinarily higher than those
received under a Capital Lease or Full Payout Net Lease.

         The Partnership's policy is to generally enter into "triple net leases"
(or the equivalent, in the case of a Conditional Sales Contract) which typically
provide that the lessee or some other party bear the risk of physical loss of
the Equipment; pay taxes relating to the lease or use of the Equipment; maintain
the Equipment; indemnify the Partnership-lessor against any liability suffered
by the Partnership as the result of any act or omission of the lessee or its
agents; maintain casualty insurance in an amount equal to the greater of the
full value of the Equipment and a specified amount set forth in the lease; and
maintain liability insurance naming the Partnership as an additional insured
with a minimum coverage which the General Partner deems appropriate. In
addition, the Partnership may purchase "umbrella" insurance policies to

                                                                               4
<PAGE>

cover excess liability and casualty losses, to the extent deemed practicable and
advisable by the General Partner. As of December 31, 2005, all leases that have
been entered into are "triple net leases".

         The General Partner has not established any standards for lessees to
whom it will lease Equipment and, as a result, there is not an investment
restriction prohibiting the Partnership from doing business with any lessees.
However, a credit analysis of all potential lessees is undertaken by the General
Partner to determine the lessee's ability to make payments under the proposed
lease. The General Partner may refuse to enter into an agreement with a
potential lessee based on the outcome of the credit analysis.

         The terms and conditions of the Partnership's leases, or Conditional
Sales Contracts, are each determined by negotiation and may impose substantial
obligations upon the Partnership. Where the Partnership assumes maintenance or
service obligations, the General Partner generally causes the Partnership to
enter into separate maintenance or service agreements with manufacturers or
certified maintenance organizations to provide such services. Such agreements
generally require annual or more frequent adjustment of service fees. As of
December 31, 2005, the Partnership has not entered into any such agreements.

         Remarketing fees are paid to the leasing companies from which the
Partnership purchases leases. These are fees that are earned by the leasing
companies when the initial terms of the lease have been met. The General Partner
believes that this strategy adds value since it entices the leasing company to
"stay with the lease" for potential extensions, remarketing or sale of
equipment. This strategy potentially minimizes any conflicts the leasing company
may have with a potential new lease and will potentially assist in maximizing
overall portfolio performance. The remarketing fee is tied into lease
performance thresholds and is factored in the negotiation of the fee.

LIQUIDATION POLICIES

         The Partnership began disposing of its Equipment in July 2005. The
Partnership's objective is to sell all of its assets and dissolve by December
31, 2006.

         Particular items of Equipment may be sold at any time if, in the
judgment of the General Partner, it is in the best interest of the Partnership
to do so. The determination of whether particular items of Partnership Equipment
should be sold or otherwise disposed of is made by the General Partner after
consideration of all relevant factors (including prevailing general economic
conditions, lessee demand, the General Partner's views of current and future
market conditions, the cash requirements of the Partnership, potential capital
appreciation, cash flow and federal income tax considerations), with a view
toward achieving the principal investment objectives of the Partnership. As
partial payment for Equipment sold, the Partnership may receive purchase money
obligations secured by liens on such Equipment.

MANAGEMENT OF EQUIPMENT

         Equipment management services for the Partnership's Equipment is
provided by the General Partner and its Affiliates and by persons employed by
the General Partner. Such services will consist of collection of income from the
Equipment, negotiation and review of leases, Conditional Sales Contracts and
sales agreements, releasing and leasing-related services, payment of operating
expenses, periodic physical inspections and market surveys, servicing
indebtedness secured by Equipment, general supervision of lessees to assure that
they are properly utilizing and operating Equipment, providing related services
with respect to Equipment, supervising, monitoring and reviewing services
performed by others in respect to Equipment and preparing monthly Equipment
operating statements and related reports.

GENERAL RESTRICTIONS

         Under the Partnership Agreement, the Partnership is not permitted,
among other things, to:

                                                                               5
<PAGE>

         (a)      invest in junior trust deeds unless received in connection
with the sale of an item of Equipment in an aggregate amount that does not
exceed 30% of the assets of the Partnership on the date of the investment;

         (b)      invest in or underwrite the securities of other issuers;

         (c)      acquire any Equipment for Units;

         (d)      issue senior securities (except that the issuance to lenders
of notes or other evidences of indebtedness in connection with the financing or
refinancing of Equipment or the Partnership's business shall not be deemed to be
the issuance of senior securities);

         (e)      make loans to any Person, including the General Partner or any
of its Affiliates, except to the extent a Conditional Sales Contract constitutes
a loan;

         (f)      sell or lease any Equipment to, lease any Equipment from, or
enter into any sale- leaseback transactions with, the General Partner or any of
its Affiliates; or

         (g)      give the General Partner or any of its Affiliates an exclusive
right or employment to sell the Partnership's Equipment.

         The General Partner has also agreed in the Partnership Agreement to use
its best efforts to assure that the Partnership shall not be deemed an
"investment company" as such term is detained in the Investment Company Act of
1940.

         The General Partner and its Affiliates may engage in other activities,
whether or not competitive with the Partnership. The Partnership Agreement
provides, however, that neither the General Partner nor any of its Affiliates
may receive any rebate or "give up" in connection with the Partnership's
activities or participate in reciprocal business arrangements that circumvent
the restrictions in the Partnership Agreement against dealings with Affiliates.

EMPLOYEES

         The Partnership had no employees in 2005 and received administrative
and other services from a related party, Commonwealth Capital Corp. (CCC), which
has 51 employees as of December 31, 2005.

ITEM 1A.   RISK FACTORS

THERE IS NO PUBLIC MARKET FOR THE UNITS, AND YOU MAY BE UNABLE TO SELL OR
TRANSFER YOUR UNITS AT A TIME AND PRICE OF YOUR CHOOSING

There exists no public market for the units, and the General Partner does not
expect a public market for units to develop. The units cannot be pledged or
transferred without the consent of the General Partner. The units should be
purchased as a long-term investment only.

The general partner has sole discretion in deciding whether we will redeem units
in the future. Consequently, you may not be able to liquidate your investment in
the event of an emergency. You must be prepared to hold your units for the life
of the fund.

LIMITED PARTNERS DO NOT HAVE THE RIGHT TO VOTE ON OR OTHERWISE APPROVE OR
DISAPPROVE OF ANY PARTICULAR INVESTMENT TO BE MADE BY THE PARTNERSHIP OR THE
TERMS OF ANY SALE OF EQUIPMENT IN LIQUIDATION.

                                                                               6
<PAGE>

ITEM 1B.   UNRESOLVED STAFF COMMENTS

                NOT APPLICABLE

ITEM 2:    PROPERTIES

                NOT APPLICABLE

ITEM 3:    LEGAL PROCEEDINGS

                NOT APPLICABLE

ITEM 4:    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                NOT APPLICABLE

PART II

ITEM 5:    MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
           MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

         There is no public market for the Units nor is it anticipated that one
will develop. As of December 31, 2005, there were 749 holders of Units. The
Units are not listed on any exchange or permitted to trade on any
over-the-counter market. In addition, there are substantial restrictions on the
transferability of Units.

GENERAL LIMITATIONS

         Units cannot be transferred without the consent of the General Partner,
which may be withheld in its absolute discretion. The General Partner monitors
transfers of Units in an effort to ensure that all transfers are within certain
safe harbors promulgated by the IRS to furnish guidance regarding publicly
traded partnerships. These safe harbors limit the number of transfers that can
occur in any one year. The General Partner intends to cause the Partnership to
comply with the safe harbor that permits nonexempt transfers and redemptions of
Units of up to five percent of the total outstanding interest in the
Partnership's capital or profits in any one year.

REDEMPTION PROVISION

         On a semi-annual basis, the General Partner, at its discretion, will
establish an amount for redemption, generally not to exceed two percent of the
outstanding Units per year, subject to the General Partner's good faith
determination that such redemptions will not (a) cause the Partnership to be
taxed as a corporation under Section 7704 of the Code or (b) impair the capital
or operations of the Partnership. (The Partnership may redeem Units in excess of
the two percent limitation if, in the good faith judgment of the General
Partner, the conditions imposed in the preceding sentence would remain
satisfied.) The redemption price for Units will be 105% of the selling Limited
Partner's Adjusted Capital Contributions attributable to the Units for sale.
Following the determination of the annual redemption amount, redemptions will
occur on a semi-annual basis and all requests for redemption, which must be made
in writing, must be on file as of the Record Date in which the redemption is to
occur. The General Partner will maintain a master list of requests for
redemption with priority being given to Units owned by estates, followed by IRAs
and Qualified Plans. All other requests will be considered in the order
received. Redemption requests made by or on behalf of Limited Partners who are
not affiliated with the General Partner or its Affiliates will be given priority
over those made by Limited Partners who are affiliated with the General Partner
or its Affiliates. All redemption requests will remain in effect until and
unless canceled, in writing, by the requesting Limited Partner(s).

                                                                               7
<PAGE>

         The Partnership began accepting redemption requests 30 months following
the termination of the Offering. There will be no limitations on the period of
time that a redemption request may be pending prior to its being granted.
Limited Partners will not be required to hold their interest in the Partnership
for any specified period prior to their making a redemption request.

         In order to make a redemption request, Limited Partners will be
required to advise the General Partner in writing of such request. Upon receipt
of such notification, the Partnership will provide detailed forms and
instructions to complete the request. For the twelve months ending December 31,
2005, the General Partner has not redeemed any Units. Additionally, no Limited
Partners have requested redemption of their Units.

EXEMPT TRANSFERS

         The following six categories of transfers are exempt transfers for
purposes of calculating the volume limitations imposed by the IRS and will
generally be permitted by the General Partner:

         (1)      transfers in which the basis of the Unit in the hands of the
                  transferee is determined, in whole or in part, by reference to
                  its basis in the hands of the transferor (for example, Units
                  acquired by corporations in certain reorganizations,
                  contributions to capital, gifts of Units, Units contributed to
                  another partnership, and nonliquidating as well as liquidating
                  distributions by a parent partnership to its partners of
                  interests in a sub partnership);

         (2)      transfers at death;

         (3)      transfers between members of a family (which include brothers
                  and sisters, spouse, ancestors, and lineal descendants);

         (4)      transfers resulting from the issuance of Units by the
                  Partnership in exchange for cash, property, or services;

         (5)      transfers resulting from distributions from Qualified Plans;
                  and

         (6)      any transfer by a Limited Partner in one or more transactions
                  during any 30-day period of Units representing in the
                  aggregate more than five percent of the total outstanding
                  interests in capital or profits of the Partnership.

ALLOCATION AND DISTRIBUTION BETWEEN THE GENERAL PARTNER AND THE LIMITED PARTNERS

         Cash distributions, if any, are made quarterly on March 31, June 30,
and September 30, and December 31, of each year. Distributions are made 99% to
the Limited Partners and one percent to the General Partner until the Limited
Partners have received an amount equal to their Capital Contributions plus the
Priority Return; thereafter, cash distributions will be made 90% to Limited
Partners and 10% to the General Partner. Distributions made in connection with
the liquidation of the Partnership or a Partner's Units will be made in
accordance with the Partner's positive Capital Account balance as determined
under the Partnership Agreement and Treasury Regulations.

         The Priority Return is calculated on the Limited Partners' Adjusted
Capital Contributions for their Units. The Adjusted Capital Contributions will
initially be equal to the amount paid by the Limited Partners for their Units.
If distributions at any time exceed the Priority Return, the excess will reduce
the Adjusted Capital Contributions, decreasing the base on which the Priority
Return is calculated.

         If the proceeds resulting from the sale of any Equipment are reinvested
in Equipment, sufficient cash will be distributed to the Partners to pay the
additional federal income tax resulting from such sale for a Partner in a 38.6%
federal income tax bracket or, if lower, the maximum federal income tax rate in
effect for individuals for such taxable year.

                                                                               8
<PAGE>

         Generally, the General Partner is allocated Net Profits equal to its
cash distributions (but not less than one percent of Net Profits) and the
balance is allocated to the Limited Partners. Net Profits arising from
transactions in connection with the termination or liquidation of the
Partnership are allocated in the following order: (1) First, to each Partner in
an amount equal to the negative amount, if any, of his Capital Account; (2)
Second, an amount equal to the excess of the proceeds which would be distributed
to the Partners based on the Operating Distributions to the Partners over the
aggregate Capital Accounts of all the Partners, to the Partners in proportion to
their respective shares of such excess, and (3) Third, with respect to any
remaining Net Profits, to the Partners in the same proportions as if the
distributions were Operating Distributions. Net Losses, if any, are in all cases
allocated 99% to the Limited Partners and one percent to the General Partner.

         Net Profits and Net Losses are computed without taking into account, in
each taxable year of the Partnership, any items of income, gain, loss or
deduction required to be specially allocated pursuant to Section 704(b) of the
Code and the Treasury Regulation promulgated thereunder. No Limited Partner is
required to contribute cash to the capital of the Partnership in order to
restore a closing Capital Account deficit, and the General Partner has only a
limited deficit restoration obligation under the Partnership Agreement.

         Distributions in the amount of $31,200 were made to the Limited
Partners in 2005. There were no quarterly distributions paid to the Limited
Partners during 2004 and 2003.

ALLOCATIONS AND DISTRIBUTIONS AMONG THE LIMITED PARTNERS

         Except during the Offering Period, Cash Available for Distribution that
is allocable to the Limited Partners is apportioned among and distributed to
them solely with reference to the number of Units owned by each as of the Record
Date for each such distribution. During the Offering Period, Cash Available for
Distribution which is allocable to the Limited Partners was apportioned among
and distributed to them with reference to both (i) the number of Units owned by
each as of each Record Date and (ii) the number of days since the previous
Record Date (or, in the case of the first Record Date, the commencement of the
Offering Period) that the Limited Partner owned the Units.

         After the Offering Period, Net Profits, Net Losses and Cash Available
for Distribution allocable to the Limited Partners is apportioned among them in
accordance with the number of Units owned by each. A different convention was
utilized during the Offering Period, whereby Net Profits and Net Losses
allocable to Limited Partners were apportioned among them in the ratio which the
product of the number of Units owned by a Limited Partner multiplied by the
number of days in which the Limited Partner owns such Units during the period
bears to the sum of such products for all Limited Partners.

         In addition, where a Limited Partner transfers Units during a taxable
year, the Limited Partner may be allocated Net Profits for a period for which
such Limited Partner does not receive a corresponding cash distribution.

ITEM 6:    SELECTED FINANCIAL DATA

         The following table sets forth, in summary form, selected financial
data for the Partnership as of June 30, 2005 and for each of the four years
ending December 31, 2004. This table is qualified in its entirety by the more
detailed information and financial statements presented elsewhere in this
report, and should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the financial
statements and related notes thereto included herein. As described in Note 2 of
the accompanying financial statements, the Partnership adopted the liquidation
basis of accounting effective July 1, 2005. Information presented at December
31, 2005 follows this basis of accounting. The information for the period ended
June 30, 2005 and the four prior years follows the going-concern basis of
accounting.

                                                                               9
<PAGE>

<TABLE>
<CAPTION>
                                                   YEARS ENDED DECEMBER 31,
                                 -------------------------------------------------------------
                                 PERIOD ENDED
STATEMENTS OF OPERATIONS DATA:   JUNE 30, 2005     2004        2003        2002        2001
------------------------------   -------------   ---------   ---------   ---------   ---------
<S>                              <C>             <C>         <C>         <C>         <C>
Lease Income                     $      47,452   $ 258,552   $ 331,958   $ 405,772   $ 764,635
Net (Loss) / Income                   (147,218)   (136,479)   (114,587)   (237,111)    170,529
Cash Distributions to Limited
 Partners                                   --          --          --          --     315,490
Net (Loss) / Income Allocated
 to Limited Partnerrs                 (147,218)   (136,479)   (114,587)   (237,111)    167,449
Net (Loss) / Income Per
 Limited Partner Unit                     (.23)       (.22)       (.18)       (.38)        .27
Cash Distribution Per Limited
 Partner Unit                               --          --          --          --         .50
</TABLE>

<TABLE>
<CAPTION>

                                               FOR THE YEARS ENDED DECEMBER 31,
                                 -------------------------------------------------------------
                                 PERIOD ENDED
OTHER DATA:                      JUNE 30, 2005     2004        2003        2002        2001
------------------------------   -------------   ---------   ---------   ---------   ---------
<S>                              <C>             <C>         <C>         <C>         <C>
Net cash provided by (used in)
 operating activities            $      10,183   $  27,849   $ (64,210)  $  (2,263)  $ 256,758
Net cash provided by (used in)
 investing activities                   23,795      16,989      65,181     (10,329)        678
Net cash provided by (used in)
 financing activities                       --          --          --      11,948    (320,931)
</TABLE>

<TABLE>
<CAPTION>
                                                       AS OF DECEMBER 31,
                                 --------------------------------------------------------------
                                    2005         2004         2003         2002         2001
                                 ----------   ----------   ----------   ----------   ----------
<S>                              <C>          <C>          <C>          <C>          <C>
Total Assets                     $   58,223   $  303,612   $  684,151   $  968,125   $1,108,320
Notes Payable                         5,906       17,158      168,343      444,732      500,585
Partners' Capital                        --      (49,906)      86,573      201,160      438,271
Net assets in
 liquidation                             --           --           --           --           --
</TABLE>

         Net income (loss) per unit is computed based upon net income (loss)
allocated to the Limited Partners and the weighted average number of equivalent
units outstanding during the year. Cash

                                                                              10
<PAGE>

distribution per Unit is computed based upon distributions allocated to the
Limited Partners and the weighted average number of equivalent Units outstanding
during the year.

ITEM 7:    MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Partnership's discussion and analysis of its financial condition and results
of operations are based upon its financial statements which have been prepared
in accordance with accounting principles generally accepted in the United
States. The preparation of these financial statements requires the Partnership
to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses. The Partnership bases its estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

The Partnership believes that its critical accounting policies affect its more
significant judgments and estimates used in the preparation of its financial
statements.

NET ASSETS IN LIQUIDATION

As a result of the General Partner's approval of the plan of liquidation as of
July 1, 2005, we changed our basis of accounting to the liquidation basis
effective on such date. This basis of accounting is considered appropriate when,
among other things, liquidation of a company is probable and the net realizable
value of assets is reasonably determinable. Under the liquidation basis of
accounting, assets are stated at their estimated net realizable cash value and
liabilities are stated at their anticipated settlement amounts. There are
substantial risks and uncertainties associated with carrying out the liquidation
of the Partnership. The valuations presented in the accompanying Statement of
Net Assets in Liquidation represent estimates, based on present facts and
circumstances, of the net realizable values of assets and the costs associated
with carrying out the liquidation. The actual costs and values are expected to
differ from the amounts shown herein and could be greater or lesser than the
amounts recorded.

REVENUE RECOGNITION

Through December 31, 2005, the Partnership's leasing operations consist
substantially of operating leases and one direct financing lease. Operating
lease revenue is recognized on a monthly basis in accordance with the terms of
the lease agreement. Unearned revenue from direct financing agreements is
amortized to revenue over the lease term.

LONG-LIVED ASSETS

The Partnership evaluates its long-lived assets when events or circumstances
indicate that the value of the asset may not be recoverable. The Partnership
determines whether impairment exists by estimating the undiscounted cash flows
to be generated by each asset. If the estimated undiscounted cash flows are less
than the carrying value of the asset then impairment exists. The amount of the
impairment is determined based on the difference between the carrying value and
the fair value. Fair value is determined based on estimated discounted cash
flows to be generated by the asset.

Depreciation on computer equipment for financial statement purposes is based on
the straight-line method over estimated useful lives of four years.

                                                                              11
<PAGE>

REIMBURSABLE EXPENSES

Reimbursable expenses, which are charged to the Partnership by CCC in connection
with the administration and operation of the Partnership, are allocated to the
Partnership based upon several factors including, but not limited to, the number
of investors, compliance issues, and the number of existing leases.

LIQUIDITY AND CAPITAL RESOURCES

         The Partnership's primary sources of capital for the period ended June
30, 2005 and the year ended December 31, 2004 was cash from operations of
$10,000 and 28,000, respectively, and proceeds from the sale of computer
equipment of $24,000 and $17,000, respectively. The primary uses of cash for the
year ended December 31, 2003 was $64,000 used in operations and capital
expenditures for new equipment totaling $5,000. There were no distributions paid
during the six months ended June 30, 2005 or the years ended December 31, 2004
and 2003 mainly due to the litigation with Gentronics, declining lease revenues
and declining cash from operations.

         The Partnership's investment strategy of acquiring computer equipment
and generally leasing it under triple-net leases to operators, who generally
meet specified financial standards, minimizes the Partnership's operating
expenses. As of December 31, 2005, future minimum rentals on noncancellable
operating and capital leases decreased to $16,000, down from $30,000 in 2004,
due to the fact that more lease agreements have expired than new computer
equipment leases acquired in 2005. As of December 31, 2005, the Partnership had
future minimum rentals on noncancellable operating leases of $10,000 for the
year ended 2006. As of December 31, 2005, the Partnership had future minimum
rentals on noncancellable capital leases of $6,000 for the year ended 2006. No
debt was incurred in 2005, 2004 and 2003. At December 31, 2005, the outstanding
debt was $6,000, with an interest rate of 6.5% and will be payable through June
2006.

         CCC, on behalf of the Partnership and other affiliated partnerships,
acquired computer equipment subject to associated debt obligations and lease
agreements and allocated a participation in the cost, debt and lease revenue to
the various partnerships based on certain risk factors. The Partnership's share
of the computer equipment in which they participate at December 31, 2005 and
2004 is approximately $326,000 and $399,000, respectively, which is included in
the Partnership's fixed assets on their balance sheet, and the total cost of the
equipment shared by the Partnership with other partnerships at December 31, 2005
and 2004 was approximately $1,432,000 and $1,743,000, respectively. There was no
outstanding debt associated with this equipment at December 31, 2005 and 2004.

RESULTS OF OPERATIONS

         For the period ended June 30, 2005, the Partnership recognized income
of $65,000 and expenses of $212,000, resulting in a net loss of $147,000. For
the years ended December 31, 2004 and 2003, the Partnership recognized income of
$334,000 and $383,000, and expenses of $471,000 and $498,000, resulting in a net
loss of $136,000 and $115,000, in 2004 and 2003, respectively.

         Lease income decreased by 82% to approximately $47,000 for the six
months ended June 30, 2005, down from $259,000 and $332,000 in 2004 and 2003,
respectively, primarily due to the fact that more lease agreements terminated
than new lease agreements entered into since 2003.

         The Partnership sold computer equipment with a net book value of
approximately $11,000 for the six months ended June 30, 2005, for a net gain of
approximately $12,000. The Partnership sold computer equipment with a net book
value of $30,000, and $19,000, during the years ended December 31, 2004 and
2003, respectively, for a net (loss) gain of $(13,000), and $51,000 for the
years ended December 31, 2004 and 2003, respectively.

         Operating expenses, excluding depreciation, consist of accounting,
legal, outside service fees and reimbursement of expenses to CCC for
administration and operation of the Partnership. The operating expenses for the
period ended June 30, 2005 totaled approximately $57,000. At December 31, 2004,
and 2003 the operating expenses totaled approximately $41,000, and $196,000,
respectively. The increase in operating expenses from 2004 to 2005 was primarily
due to an increase in accounting fees of $10,000.

                                                                              12
<PAGE>

         The equipment management fee is equal to approximately 5% of the gross
lease revenue attributable to equipment, which is subject to operating and
capital leases. No equipment management fees were charged to the Partnership for
2005 due to the liquidation. The equipment management fee was $2,000 in 2004,
down from $17,000 in 2003, which is consistent with the decrease in lease
income.

         Depreciation and amortization expenses consist of depreciation on
computer equipment, equipment acquisition fees and debt placement fees.
Depreciation and amortization during the period ended June 30, 2005 decreased to
$79,000, down from $235,000 and $263,000 in 2004 and 2003, respectively, due to
the older equipment becoming fully depreciated and certain acquisition and
finance fees being fully amortized and only a minimal amount of new additions.

         The Partnership has charged bad debt expense of $75,000 and $174,000 as
additional allowances against accounts receivable for the period ended June 30,
2005 and the year ending December 31, 2004, rspecitively. There was no bad debt
expense recorded for the years ending December 31, 2003.

         The Partnership identified specific computer equipment and associated
equipment acquisition costs, which were reevaluated due to technological
changes. The Partnership determined that no impairment existed in 2005 and 2003.
In 2004, the Partnership determined that the carrying amount of certain assets
was greater than the undiscounted cash flows to be generated by these assets.
The Partnership recorded charges of $11,000 in the fourth quarter of 2004 to
record the assets at their estimated fair value. Such amounts have been included
in depreciation expense in the accompanying financial statements.

NET LOSS

         Net loss for the period January 1, 2005 to June 30, 2005, increased to
$147,000, up from a net loss of $136,000 in 2004 and $115,000 in 2003. The
changes in net income (loss) were attributable to the changes in revenues and
expenses as discussed above.

COMMITMENTS AND CONTINGENCIES

         CONTRACTUAL CASH OBLIGATIONS

The following table presents our contractual cash obligations as of December 31,
2005:

                                  TOTAL       2006
                                ---------   ---------
Installment notes payable
 due 2006:
  Principal                         5,906       5,906
  Interest                            112         112
                                ---------   ---------
TOTAL                               6,018   $   6,018
                                =========   =========

RECENT ACCOUNTING PRONOUNCEMENTS

         In May 2005, the Financial Accounting Standards Board (FASB) issued
SFAS No. 154, "Accounting Changes and Error Corrections" (SFAS No. 154) which
replaces APB No. 20 "Accounting Changes" and SFAS No. 3, "Reporting Accounting
Changes in Interim Financial Statements - An Amendment of APB Opinion No. 28."
SFAS No. 154 provides guidance on the methods issuers should use to account for
and report accounting changes and error corrections. Specifically, this
statement requires that

                                                                              13
<PAGE>

issuers retrospectively apply any voluntary change in accounting principles to
prior period financial statements, if it is practicable to do so. This principle
replaces APB No. 20, which required that most voluntary changes in accounting
principle be recognized by including the cumulative effect of the change to the
new accounting principle on prior periods in the net income reported by the
issuer in the period in which it instituted the change. SFAS No. 154 also
redefines the term "restatement" to mean the correction of an error by revising
previously issued financial statements. Unless adopted early, SFAS No. 154 is
effective for accounting changes and corrections of errors made in fiscal years
beginning after December 15, 2005. The Partnership does not expect the adoption
of SFAS No. 154 to have an impact on its financial position or results of
operations.

ITEM 7.A:  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Partnership believes its exposure to market risk is not material
due to the fixed interest rate of its long-term debt and its associated fixed
revenue streams.

ITEM 8:    FINANCIAL STATEMENTS

         Our financial statements for the fiscal years ended December 31, 2005
and 2004, and the report thereon of Asher and Company, Ltd. and the report
thereon of BDO Seidman, LLP for the fiscal year ended December 31, 2003, are
included in this annual report.

ITEM 9:    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
           FINANCIAL DISCLOSURE

         Effective October 11, 2004, the registrant dismissed its principal
independent accounting firm, BDO Seidman, LLP. BDO Seidman, LLP's report on the
registrant's financial statements for 2003 did not contain any adverse opinion
or a disclaimer of opinion, nor were they qualified or modified as to
uncertainty, audit scope or accounting principles. The decision to change
accountants was approved by the board of directors of the registrant's general
partner. During the registrant's 2003 fiscal year and the interim period prior
to such dismissal, the registrant had no disagreements with BDO Seidman, LLP on
any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements, if not resolved
to the satisfaction of BDO Seidman, LLP, would have caused BDO Seidman, LLP to
make reference to the subject matter of the disagreements in connection with its
report. Further, during the registrant's 2003 recent fiscal year and the interim
period prior to such dismissal, there occurred no reportable events, as set
forth in Item 304(a)(1)(v) of Regulation S-K.

         The registrant provided BDO Seidman, LLP with a copy of this disclosure
on or prior to the date hereof and requested BDO Seidman, LLP to provide the
registrant with a letter addressed to the Securities and Exchange Commission
stating whether it agreed with the statements contained herein. A copy of such
letter will be filed by amendment to this report when and if it is received by
the registrant.

         Also effective October 11, 2004, the registrant retained Asher &
Company, Ltd. of Philadelphia, Pennsylvania as its principal independent
accounting firm. The registrant believes that Asher & Company, Ltd. is an
accounting firm of a size and scope of experience better suited to the
registrant's current needs than the registrant's former accounting firm.

         During 2003, we had not consulted with Asher & Company, Ltd. on any
matter that (i) involved the application of accounting principles to a specific
completed or contemplated transaction, or the type of audit opinion that might
be rendered on our financial statements, in each case where written or oral
advice was provided, that was an important factor considered by us in reaching a
decision as to the accounting, auditing or financial reporting issue; or (ii)
was either the subject of a disagreement or event, as that term is described in
item 304(a)(1)(iv)(A) of Regulation S-X.

                                                                              14
<PAGE>

ITEM 9A:   CONTROLS AND PROCEDURES

         Our management, under the supervision and with the participation of the
principal executive officer and principal financial officer, have evaluated the
effectiveness of our controls and procedures related to our reporting and
disclosure obligations as of December 31, 2005, which is the end of the period
covered by this Annual Report on Form 10-K. Based on that evaluation, the
principal executive officer and principal financial officer have concluded that
our disclosure controls and procedures are sufficient to provide that (a)
material information relating to us, including our consolidated subsidiaries, is
made known to these officers by our and our consolidated subsidiaries other
employees, particularly material information related to the period for which
this periodic report is being prepared; and (b) this information is recorded,
processed, summarized, evaluated and reported, as applicable, within the time
periods specified in the rules and forms promulgated by the Securities and
Exchange Commission.

ITEM 9B:   OTHER INFORMATION

         NOT APPLICABLE

ITEM 10:   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

GENERAL

         The Partnership does not have any Directors or executive officers.

         The General Partner, a wholly owned subsidiary of Commonwealth of
Delaware, Inc., a Delaware corporation, which is in turn a wholly-owned
subsidiary of CCC, a Pennsylvania corporation, was incorporated in Pennsylvania
on August 26, 1993. The General Partner also acts as the General Partner for
Commonwealth Income & Growth Fund II, Commonwealth Income & Growth Fund III,
Commonwealth Income & Growth Fund IV, Commonwealth Income & Growth Fund V, and
Commonwealth Income & Growth Fund VI. The principal business office of the
General Partner is 470 John Young Way, Suite 300, Exton, PA 19341, and its
telephone number is 610-594-9600. The General Partner manages and controls the
affairs of the Partnership and has sole responsibility for all aspects of the
Partnership's operations. The officers of the General Partner devote such time
to the affairs of the Partnership as in the opinion of the General Partner is
necessary to enable it to perform its function as General Partner. The officers
of the General Partner are not required to spend their full time in meeting
their obligations to the Partnership.

         The directors and officers of the General Partner and key employees of
CCC are as follows:

<TABLE>
<CAPTION>
NAME                       TITLE
-----------------------    ------------------------------------------------------------------------------
<S>                        <C>
George S. Springsteen      Chairman of the Board, Treasurer and Chief Executive Officer of CCC, CCSC,
                           and Commonwealth Income & Growth Fund, Inc. ("CIGF, Inc.")

Kimberly A. Springsteen    Director, Secretary, President & Chief Operations Officers of CCC, CCSC and
                           CIGF, Inc. Chief Compliance Officer of CCSC.

Henry J. Abbott            Director, Senior Vice President & Portfolio Manager of CCC,  CCSC and
                           CIGF, Inc.

Lynn A. Franceschina       Controller, Senior Vice President of CCC, CCSC and CIGF, Inc.

Katrina M. Mason           Due Diligence Officer, Senior Vice President of CCC, CCSC and CIGF, Inc.

Jay Dugan                  Chief Technology Officer, Senior Vice President of CCC, CCSC and CIGF, Inc.

Donald Bachmayer           Accounting and Accounting Manager, Vice President of CCC, CCSC, and CIGF, Inc.

Mark Hershenson            Broker Services Manager, Vice President of CCC, CCSC and CIGF,
                           Inc.

James Pruett               Compliance Officer, Assistant Vice President of CCC, CCSC, and CIGF, Inc.

Donnamarie D. Abbott       Investor Services Manager, Assistant Vice President of CCC, and CIGF, Inc.
</TABLE>

                                                                              15
<PAGE>

         GEORGE S. SPRINGSTEEN, age 71, is a founding stockholder, Chairman of
the Board and Chief Executive Officer of the parent leasing company,
Commonwealth Capital Corp. since 1978. In addition, Mr. Springsteen serves as
Chairman of the Board and Chief Executive Officer and registered principal of
the broker/dealer, Commonwealth Capital Securities Corp and the General Partner,
Commonwealth Income & Growth Fund Inc. He oversees numerous equipment investment
portfolios and is responsible for business development. Mr. Springsteen and his
wife, Kim, are the sole shareholders of the parent company and its affiliates.
Mr. Springsteen oversees the Portfolio Advisory Committee, the Audit Committee,
the Disaster Recovery Committee and the Facilities Committee. Before starting
Commonwealth, Mr. Springsteen managed a portfolio of $120 million at Granite
Computer Corp., bought their portfolio and founded his own firm. Mr. Springsteen
attended the University of Delaware and holds his NASD Series 22, 63 and 39
licenses. Mr. Springsteen is a member of the Equipment Leasing Association and a
founding member of the Computer Dealers Leasing Association prior to, as well as
a member of the Investment Program Association. (Mr. Springsteen is the spouse
of Kimberly A. Springsteen)

         KIMBERLY A. SPRINGSTEEN, age 46, joined Commonwealth in 1997, as a
founding registered principal and Chief Compliance Officer of its broker/dealer,
Commonwealth Capital Securities Corp. and serves as Director and Secretary,
President and Chief Operating Officer of the parent and its affiliates. Ms.
Springsteen is responsible for oversight of daily operations, due diligence and
business development. Ms. Springsteen also oversees the Portfolio Advisory
Committee, the Audit Committee, the Disaster Recovery Committee and the
Facilities Committee. Ms. Springsteen has developed and presented numerous
motivational, informational and sales training workshops over the past 25 years.
Prior to Commonwealth, Ms. Springsteen served as Senior Vice President &
Marketing Manager in the Alternative Investments Department of Wheat
First/Butcher & Singer, a broker/dealer headquartered in Richmond, Virginia,
where she raised over $450,000,000 of capital in the real estate, equipment
leasing, tax credit and energy-related industries. Ms. Springsteen holds her
NASD Series 7, 63 and 39 licenses and is a member of the Equipment Leasing
Association, the Financial Planners Association and serves on the Board of
Trustees for the Investment Program Association. Ms. Springsteen is the wife of
George Springsteen and is co-shareholder of the parent and its affiliates.

         HENRY J. ABBOTT, age 55, joined Commonwealth in 1998, as a Portfolio
Manager. Mr. Abbott serves as a Director, Senior Vice President and Portfolio
Manager of the parent and its affiliates. Mr. Abbott is a registered principal
of the broker/dealer. Mr. Abbott is responsible for lease acquisitions,
equipment dispositions and portfolio review. Additionally, Mr. Abbott is also
responsible for oversight of residual valuation, due diligence, equipment
inspections, negotiating renewal and purchase options and remarketing off lease
equipment. Mr. Abbott serves as senior member on the Portfolio Advisory
Committee, the Audit Committee, the Disaster Recovery Committee and the
Facilities Committee. Prior to Commonwealth, Mr. Abbott has been active in the
commercial lending industry, working primarily on asset-backed transactions for
more than 30 years. Mr. Abbott attended St. John's University and holds his NASD
Series 7, 63 and 24 licenses. Mr. Abbott was a founding partner of Westwood
Capital LLC in New York, a Senior Vice President for IBJ Schroeder Leasing
Corporation and has managed a group specializing in the provision of operating
lease finance programs in the high technology sector. Mr. Abbott brings
extensive knowledge and experience in leasing and has managed over $1.5 billion
of secured transactions. Mr. Abbott is a member of the Equipment Leasing
Association and the Investment Program Association.

         LYNN A. FRANCESCHINA, age 34, joined Commonwealth in 2001 and serves as
Senior Vice President and Controller of the parent and its affiliates. Ms.
Franceschina is responsible for the oversight of all accounting, cash
management, financial reporting and audit and tax preparation functions. During
the period of March 2004 to October 2004, Ms. Franceschina was employed with
Wilmington Trust Corp., where she was a part in the development of policies and
procedures related to Sarbanes Oxley and its

                                                                              16
<PAGE>

documentation. Prior to Commonwealth, in 1994 until 1999, Ms. Franceschina
served as a Senior Accountant with Duquesne University, and from 1999 to 2000, a
Senior Financial Analyst for Environ Products. Ms. Franceschina attended Robert
Morris University and holds a Bachelor of Science in Accounting. Ms.
Franceschina serves on the Portfolio Advisory Committee, the Audit Committee and
the Disaster Recovery Committee, as well as a member of the Equipment Leasing
Association, the Investment Program Association and the Institute of Management
Accountants.

         KATRINAM. MASON, age 33, joined Commonwealth in 2002 and serves as
Senior Vice President, Broker/Dealer Relations Manager and Due Diligence Manager
of the parent and its affiliates. Ms. Mason is a registered principal of the
broker/dealer. Ms. Mason is responsible for managing due diligence and
broker/dealer development, as well as coordination of the national sales and
marketing effort, syndication and product development. Ms. Mason serves on the
Disaster Recovery Committee and the Website Committee. Prior to Commonwealth,
Ms. Mason worked at ICON Securities, an equipment leasing sponsor, from 1997 to
2002 and served as President from 2001 to 2002. Prior to that, Ms. Mason served
as a Regional Marketing Director of Textainer Capital, an equipment-leasing
sponsor. Ms. Mason attended the University of California at Santa Barbara and
holds a Bachelor of Arts and also attended University of San Francisco and holds
an MBA. Ms Mason holds her NASD Series 7, 22, 63 & 24 licenses. Ms. Mason is a
member of the Equipment Leasing Association, the Financial Planners Association
and the Investment Program Association.

         JAY DUGAN, age 57, joined Commonwealth in 2002 and serves as Senior
Vice President and Chief Technology Officer of the parent and its affiliates.
Mr. Dugan is responsible for the information technology vision, security and
operation and ongoing development, including network configurations, protection
of corporate assets and maximizing security and efficiency of information flow.
Prior to Commonwealth, Mr. Dugan founded First Securities USA, an NASD member
firm, in 1988 and operated that firm through 1998. From 1999 until 2002, Mr.
Dugan was an independent due diligence consultant until he came to Commonwealth
to develop that area of the firm. Mr. Dugan attended St. Petersburg College and
holds an AS Degree in Computer Networking Technology. Mr. Dugan is a Microsoft
Certified Systems Engineer, Microsoft Certified Database Administrator and
Comp-Tia Certified Computer Technician. Mr. Dugan is a senior member of the
Disaster Recovery Committee, as well as oversight member of the Website
Committee.

         DONALD A. BACHMAYER, age 41, joined Commonwealth in 2004 and serves as
Vice President and Accounting Manager of the General Partner, CCC and certain of
its subsidiaries where he has been employed since 2004. Mr. Bachmayer is
responsible for financial reporting and analysis, cash management and tax
compliance. He is a member of the Portfolio Advisory Committee. Prior to joining
Commonwealth, from 2002 to 2004, Mr. Bachmayer served as Accounting Supervisor
for LEAF Financial, an equipment-leasing sponsor, where his responsibilities
included cash management, commission and syndication reporting. From 1997 to
2001, Mr. Bachmayer was a senior accountant/auditor with Fishbein & Company,
P.C., certified public accountants, with responsibilities including audit,
financial reporting, cash management, commission and syndication reporting, and
tax preparation. Mr. Bachmayer attended LaSalle University and holds a Bachelor
of Science in Accounting.

         MARK HERSHENSON, age 40, joined Commonwealth in 2002 and serves as Vice
President and Broker Services Manager of the parent and its affiliates. Mr.
Hershenson is responsible for management of all custodial relationships, broker
services in the areas of product education and production goals, wholesaler
scheduling/support and internal sales staff. Prior to Commonwealth, Mr.
Hershenson served as part of a financial planning practice at American United
Life from 1999 through 2002. He has written a book for the Florida Insurance
Commissioner on how to sell insurance products. Additionally, in 1991 through
1998, Mr. Hershenson served as sales trainer fat MetLife for over 100 registered
representatives. Mr. Hershenson attended Stonehill College and holds a
Bachelor's in Psychology, with a concentration in Marketing/Organizational
Behaviorism and Master's level coursework in Financial Planning though American
College. Mr. Hershenson holds his NASD Series 6, 7 and 63 licenses. Mr.
Hershenson is a member of the Equipment Leasing Association and the Investment
Program Association.

         JAMES PRUETT, age 40, joined Commonwealth in 2002 and serves as
Assistant Vice President and Compliance Officer of the parent and its
affiliates. Mr. Pruett is responsible for management of regulatory

                                                                              17
<PAGE>

policies and procedures, assisting in compliance internal audit, associate
regulatory filings, broker/dealer registrations, state and broker/dealer
financial regulatory reporting requirements. Mr. Pruett assists in the
management of shareholder records and updates. Mr. Pruett is a member of the
Website Committee. Mr. Pruett holds his NASD Series 22 and 63 licenses. Prior to
joining Commonwealth, Mr. Pruett served as Managing Editor/Associate Publisher
for Caliber Entertainment, a publishing and entertainment licensing company. Mr.
Pruett's responsibilities included oversight of production of publishing
library, as well as serving as Editor-in-Chief for all publications and
additionally served as Media Relations Liaison. Mr. Pruett is a member of the
Equipment Leasing Association and the Investment Program Association.

         DONNAMARIE D. ABBOTT, age 47, joined Commonwealth in 2001 and serves as
Assistant Vice President and Investor Services Manager of the parent and its
affiliates. Ms. Abbott is responsible for management of daily operations in
Investor Services, from pre-formation stage through issuance of investors' final
distribution, communication, audited financial report, including fund masters,
blue sky coordination, subscription processing, distributions, transfers of
interest, redemptions, reporting and tax reporting. Ms. Abbott is a member of
the Office Development Committee, the Website Committee and the Disaster
Recovery Committee. Ms. Abbott holds her NASD Series 22 and 63 licenses. Prior
to joining Commonwealth, Ms. Abbott served as a Pennsylvania licensed realtor.
Ms. Abbott is a member of the Equipment Leasing Association and a member of the
Investment Program Association.

         The directors and officers of the General Partner are required to spend
only such time on the Partnership's affairs as is necessary in the sole
discretion of the directors of the General Partner for the proper conduct of the
Partnership's business. A substantial amount of time of such directors and
officers is expected to be spent on matters unrelated to the Partnership,
particularly after the Partnership's investments have been selected. Under
certain circumstances, such directors and officers are entitled to
indemnification from the Partnership.

         The Partnership has no audit committee financial expert, as defined
under Section 229.401 of the Exchange Act, serving on its audit committee. An
audit committee is not required because the Partnership is not a listed security
as defined by Section 240.10A-3; therefore, no audit committee financial expert
is required.

CODE OF ETHICS

         In view of the fiduciary obligation that the General Partner has to the
Partnership, the General Partner believes an adoption of a formal code of ethics
is unnecessary and would not benefit the Partnership, particularly, in light of
Partnership's limited business activities.

ITEM 11:   EXECUTIVE COMPENSATION

         The Partnership does not have any Directors or executive officers.

ITEM 12:   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         NONE

ITEM 13:   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The following table summarizes the types, amounts and recipients of
compensation to be paid by the Partnership directly or indirectly to the General
Partner and its Affiliates. Some of these fees are paid regardless of the
success or profitability of the Partnership's operations and investments. While
such compensation and fees were established by the General Partner and are not
based on arm's-length negotiations, the General Partner believes that such
compensation and fees are comparable to those that would be charged by an
unaffiliated entity or entities for similar services. The Partnership Agreement
limits

                                                                              18
<PAGE>

the liability of the General Partner and its Affiliates to the Partnership and
the Limited Partners and provides indemnification to the General Partner and its
Affiliates under certain circumstances.

<TABLE>
<CAPTION>
      ENTITY                                                                AMOUNT        AMOUNT         AMOUNT
     RECEIVING                                                             INCURRED      INCURRED       INCURRED
   COMPENSATION                   TYPE OF COMPENSATION                   DURING 2005    DURING 2004    DURING 2003
-------------------     ----------------------------------------------   -----------    -----------    -----------
<S>                     <C>                                              <C>            <C>            <C>
The General Partner     EQUIPMENT ACQUISITION FEE. An Equipment          $         0    $         0    $     1,000
                        Acquisition Fee of four percent of the
                        Purchase Price of each item of
                        Equipment purchased as compensation for
                        the negotiation of the acquisition of
                        the Equipment and the lease thereof or
                        sale under a Conditional Sales
                        Contract. The fee was paid upon each
                        closing of the Offering with respect to
                        the Equipment purchased by the
                        Partnership with the net proceeds of
                        the Offering available for investment
                        in Equipment. If the Partnership
                        acquires Equipment in an amount
                        exceeding the net proceeds of the
                        Offering available for investment in
                        Equipment, the fee will be paid when
                        such Equipment is acquired.

The General Partner     REIMBURSABLE EXPENSES. The General               $    18,000    $    22,000    $   194,000
and its Affiliates      Partner and its Affiliates are entitled
                        to reimbursement by the Partnership for the
                        cost of goods, supplies or services obtained
                        and used by the General Partner in connection
                        with the administration and operation of the
                        Partnership from third parties unaffiliated
                        with the General Partner. In addition, the
                        General Partner and its affiliates are
                        entitled to reimbursement of certain expenses
                        incurred by the General Partner and its
                        affiliates in connection with the
                        administration and operation of the
                        Partnership. The amounts set forth on this
                        table do not include expenses incurred in the
                        offering of Units.

The General Partner     EQUIPMENT MANAGEMENT FEE. A monthly fee          $         0    $     2,000    $    17,000
                        equal to the lesser of (i) the fees
                        which would be charged by an
                        independent third party for similar
                        services for similar equipment or (ii)
                        the sum of (a) two percent of (1) the
                        Gross Lease Revenues attributable to
                        Equipment which is subject to Full
                        Payout Net Leases which contain Net
                        Lease provisions plus (2) the purchase
                        price paid on Conditional Sales
                        Contracts as received by the
                        Partnership and (b) five percent of the
                        Gross Lease Revenues attributable to
                        Equipment which is subject to Operating
                        Leases.

The General Partner     EQUIPMENT LIQUIDATION FEE. With respect          $      1,00    $       500    $     2,000
                        to each item of Equipment sold by the
                        General Partner (other than in
                        connection with a Conditional Sales
                        Contract), a fee equal to the lesser of
                        (i) 50% of the Competitive Equipment
                        Sale Commission or (ii) three percent
                        of the sales price for such Equipment.
                        The payment of such fee is subordinated to the
                        receipt by the Limited Partners of (i) a
                        return of their Capital Contributions and 10%
                        annum cumulative return, compounded daily, on
                        Adjusted Capital Contributions ("Priority
                        Return") and (ii) the Net Disposition Proceeds
                        from such sale in accordance with the
                        Partnership Agreement. Such fee is reduced to
                        the extent any liquidation or resale fees are
                        paid to unaffiliated parties.
</TABLE>

                                                                              19
<PAGE>

<TABLE>
<S>                     <C>                                              <C>            <C>            <C>
The General Partner     PARTNERSHIP INTEREST. The General                $       300    $         0    $         0
                        Partner has a present and continuing
                        one percent interest of $1,000 in the
                        Partnership's item of income, gain,
                        loss, deduction, credit, and tax preference.
                        In addition, the General Partner receives one
                        percent of Cash Available for Distribution
                        until the Limited Partners have received
                        distributions of Cash Available for
                        Distribution equal to their Capital
                        Contributions plus the 10% Priority Return and
                        thereafter, the General Partner will receive
                        10% of Cash Available for Distribution.
</TABLE>

         The Partnership is subject to various conflicts of interest arising out
of its relationships with the General Partner and its Affiliates. These
conflicts include the following:

COMPETITION WITH GENERAL PARTNER AND AFFILIATES: COMPETITION FOR MANAGEMENT'S
TIME

         The General Partner and its Affiliate sponsor other investor programs,
which are in potential competition with the Partnership in connection with the
purchase of Equipment as well as opportunities to lease and sell such Equipment.
Competition for Equipment has occurred and is likely to occur in the future. The
General Partner and its Affiliates may also form additional investor programs,
which may be competitive with the Partnership.

         If one or more investor programs and the Partnership are in a position
to acquire the same Equipment, the General Partner will determine which program
will purchase the Equipment based upon the objectives of each and the
suitability of the acquisition in light of those objectives. The General Partner
will generally afford priority to the program or entity that has had funds
available to purchase Equipment for the longest period of time. If one or more
investor programs and the Partnership are in a position to enter into lease with
the same lessee or sell Equipment to the same purchaser, the General Partner
will generally afford priority to the Equipment which has been available for
lease or sale for the longest period of time.

         Certain senior executives of the General Partner and its Affiliates
also serve as officers and directors of the other programs and are required to
apportion their time among these entities. The Partnership is, therefore, in
competition with the other programs for the attention and management time of the
General Partner and Affiliates. The officers and directors of the General
Partner are not required to devote all or substantially all of their time to the
affairs of the Partnership.

GLOSSARY

The following terms used in this Report shall (unless otherwise expressly
provided herein or unless the context otherwise requires) have the meanings set
forth below.

"Acquisition Expenses" means expenses relating to the prospective selection and
acquisition of or investment in Equipment by the Partnership, whether or not
actually acquired, including, but not limited to, legal fees and expenses,
travel and communication expenses, costs of appraisal, accounting fees and
expenses and other related expenses.

"Acquisition Fees" means the total of all fees and commissions paid by any party
in connection with the initial purchase of Equipment acquired by the
Partnership. Included in the computation of such fees or commissions shall be
the Equipment Acquisition Fee and any commission, selection fee, construction
supervision fee, financing fee, non-recurring management fee or any fee of a
similar nature, however designated.

                                                                              20
<PAGE>

"Adjusted Capital Contributions" means Capital Contributions of the Limited
Partners reduced by any cash distribution received by the Limited Partners
pursuant to the Partnership Agreement, to the extent such distributions exceed
any unpaid Priority Return as of the date such distributions were made.

"Affiliate" means, when used with reference to a specified Person, (i) any
person, that directly or indirectly through one or more intermediaries controls
or is controlled by or is under common control with the specified Person, (ii)
any Person that is a director or an executive officer of, partner in, or serves
in a similar capacity to, the specified Person, or any Person of which the
specified Person is an executive officer or partner or with respect to which the
specified Person serves in a similar capacity, (iii) any Person owning or
controlling 10% or more of the outstanding voting securities of such specified
Person, or (iv) if such Person is an officer, director or partner, any entity
for which such Person acts in such capacity.

"Capital Account" means the bookkeeping account maintained by the Partnership
for each Partner.

"Capital Contributions" means in the case of the General Partner, the total
amount of money contributed to the Partnership by the General Partner, and in
the case of Limited Partners, $20 for each Unit, or where the context requires,
the total Capital Contributions of all the Partners.

"Capital Leases" are leases under which the Equipment either transfers to the
lessee at the end of the lease term, contains a bargain purchase price option,
the lease term is equal to 75% or more of the estimated economic life of the
Equipment, or the present value at the beginning of the lease term of the
minimum lease payments is equal to or exceeds 90% of the excess of the fair
value of the Equipment.

"Cash Available for Distribution" means Cash Flow plus Net Disposition Proceeds
plus cash funds available for distribution from Partnership reserves, less such
amounts as the General Partner, in accordance with the Partnership Agreement,
causes the Partnership to reinvest in Equipment or interests therein, and less
such amounts as the General Partner, in its sole discretion, determines should
be set aside for the restoration or enhancement of Partnership reserves.

"Cash Flow" for any fiscal period means the sum of (i) cash receipts from
operations, including, but not limited to, rents or revenues arising from the
leasing or operation of the Equipment and interest, if any, earned on funds on
deposit for the Partnership, but not including Net Disposition Proceeds, minus
(ii) all cash expenses and costs incurred and paid in connection with the
ownership, lease, management, use and/or operation of the Equipment, including,
but not limited to, fees for handling and storage; all interest expenses paid
and all repayments of principal regarding borrowed funds; maintenance; repair
costs; insurance premiums; accounting and legal fees and expenses; debt
collection expenses; charges, assessments or levies imposed upon or against the
Equipment; ad valorem, gross receipts and other property taxes levied against
the Equipment; and all costs of repurchasing Units in accordance with the
Partnership Agreement; but not including depreciation or amortization of fees or
capital expenditures, or provisions for future expenditures, including, without
limitation, Organizational and Offering Expenses.

"Closing Date" means May 11, 1995.

"Code" means the Internal Revenue Code of 1986, as amended, and as may be
amended from tine to time by future federal tax statutes.

"Competitive Equipment Sale Commission" means that brokerage fee paid for
services rendered in connection with the purchase or sale of Equipment, which is
reasonable, customary, and competitive in light of the size, type, and location
of the Equipment.

"Conditional Sales Contract" means an agreement to sell Equipment to a buyer in
which the seller reserves title to, and retains a security interest in, the
Equipment until the Purchase Price of the Equipment is paid.

"Effective Date" means December 17, 1993, the date on which the Partnership's
Registration Statement on Form S-1 was declared effective by the United States
Securities and Exchange Commission.

                                                                              21
<PAGE>

"Equipment" means each item of and all of the computer peripheral and other
similar capital equipment purchased, owned, operated, and/or leased by the
Partnership or in which the Partnership has acquired a direct or indirect
interest, together with all appliances, parts, instruments, accessories,
furnishings, or other equipment included therein and all substitutions,
renewals, or replacements of, and all additions, improvements, and accessions
to, any and all thereof.

"Full Payout Net Lease" means an initial Net Lease of the Equipment under which
the non-cancelable rental payments due (and which can be calculated at the
commencement of the Net Lease) during the initial noncancelable fixed term (not
including any renewal or extension period of the lease or other contract for the
use of the Equipment) are at least sufficient to recover the Purchase Price of
the Equipment.

"General Partner" means Commonwealth Income & Growth Fund, Inc. and any
additional, substitute or successor general partner of the Partnership.

"Gross Lease Revenues" means Partnership gross receipts from leasing or other
operation of the Equipment, except that, to the extent the Partnership has
leased the Equipment from an unaffiliated party, it shall mean such receipts
less any lease expense.

 "IRS" means the Internal Revenue Service.

"Limited Partner" means a person who acquires Units and who is admitted to the
Partnership as a limited partner in accordance with the terms of the Partnership
Agreement.

"Majority in Interest" means, with respect to the Partnership, Limited Partners
holding more than 50% of the outstanding Units held by all Limited Partners at
the Record Date for any vote or consent of the Limited Partners.

"Minimum Subscription Amount" means an aggregate of $2,500,000 in Subscriptions.

"Net Dispositions Proceeds" means the net proceeds realized by the Partnership
from the refinancing, sale or other disposition of Equipment, including
insurance proceeds or lessee indemnity payments arising from the loss or
destruction of Equipment, less such amounts as are used to satisfy Partnership
liabilities.

"Net Lease" means a lease or other contract under which the owner provides
equipment to a lessee or other operator in return for a payment, and the lessee
assumes all obligations and pays for the operation, repair, maintenance and
insuring of the equipment.

"Net Profits" or "Net Losses" shall be computed in accordance with Section
703(a) of the Code (including all items of income, gain, loss or deduction
required to be stated separately pursuant to Section 703(a) (1) of the Code) for
each taxable year of the Partnership or shorter period prior to an interim
closing of the Partnership's books with the following adjustments: (I) any
income of the Partnership that is exempt from federal income tax and not
otherwise taken into account in computing Net Profits and Net Loss pursuant to
this definition shall be added to such taxable income or shall reduce such
taxable loss; (ii) any expenditure of the Partnership described in Code Section
705(a) (2) (B) or treated as Code Section 705(a) (2) (B) expenditures pursuant
to Treasury Regulations section 1.704-1(b) (2) (iv) (i) and not otherwise taken
into account in computing Net Profits and Net Losses pursuant to this definition
shall be subtracted from such taxable income or loss; (iii) items of income,
gain, loss and deduction specially allocated pursuant to Section 7.3 of the
Partnership Agreement shall not be included in the computation of Net Profits or
Net Loss; and if property is reflected on the books of the Partnership at a book
value that differs from the adjusted tax basis of the property in accordance
with Treasury Regulation Section 1.704-1(b) (2) (iv) (d) or (f), depreciation,
amortization, and gain or loss with respect to such property shall be determined
by reference to such book value in a manner consistent with Treasury Regulation
Section 1.704-1(b) (2) (iv) (g). The terms "Net Profit" or "Net Losses" shall
include the Partnership's distributive share of the profit or loss of any
partnership or joint venture in which it is a partner or joint venturer.

"Offering" means the initial public offering of Units in the Partnership.

                                                                              22
<PAGE>

"Offering Period" means the period commencing the Effective Date and ending the
last day of the calendar month in which the Closing Date occurs.

"Operating Distributions" means the quarterly distributions made to the Partners
pursuant to Article 8 of the Partnership Agreement.

"Operating Lease" means a lease or other contractual arrangement under which an
unaffiliated party agrees to pay the Partnership, directly or indirectly, for
the use of the Equipment, and which is not a Full Payout Net Lease.

"Organizational and Offering Expenses" means the expenses incurred in connection
with the organization of the Partnership and in preparation of the Offering,
including Underwriting Commissions, listing fees and advertising expenses
specifically incurred in connection with the distribution of the Units.

"Partner(s)" means any one or more of the General Partner and the Limited
Partners.

"Partnership" means Commonwealth Income & Growth Fund I, a Pennsylvania limited
partnership.

"Partnership Agreement" means that Limited Partnership Agreement of Commonwealth
Income & Growth Fund I by and among the General Partner and the Limited
Partners, pursuant to which the Partnership is governed.

"Person" means an individual, partnership, limited liability company, joint
venture, corporation, trust, estate or other entity.

"Priority Return" means an amount equal to a return at a rate of 10% per annum,
compounded daily, on the Adjusted Capital Contribution for all outstanding
Units, which amount shall begin accruing at the end of the calendar quarter in
which such Units are sold by the Partnership.

"Proceeds" means proceeds from the sale of the Units.

"Program" means a limited or general partnership, joint venture, unincorporated
association or similar organization, other than a corporation formed and
operated for the primary purpose of investment in and the operation of or gain
from an interest in Equipment.

"Purchase Price" means, with respect to any Equipment, an amount equal to the
sum of (i) the invoice cost of such Equipment or any other such amount paid to
the seller, (ii) any closing, delivery and installation charges associated
therewith not included in such invoice cost and paid by or on behalf of the
Partnership, (iii) the cost of any capitalized modifications or upgrades paid by
on or behalf of the Partnership in connection with its purchase of the
Equipment, and (iv) solely for purposes of the definition of Full Payout Net
Lease, the amount of the Equipment Acquisition Fee and any other Acquisition
Fees.

"Retained Proceeds" means Cash Available for Distribution, which instead of
being distributed to the Partners is retained by the Partnership for the purpose
of acquiring or investing in Equipment.

"Term Debt" means debt of the Partnership with a term in excess of twelve
months, incurred with respect to acquiring or investing in Equipment, or
refinancing non-Term Debt, but not debt incurred with respect to refinancing
existing Partnership Term Debt.

"Unit" means a Limited Partnership interest in the Partnership.

ITEM 14:   PRINCIPAL ACCOUNTING FEES AND SERVICES

AUDIT FEES

The aggregate fees billed for each of the fiscal years ended December 31, 2005
and 2004 for professional services rendered by the independent registered public
accounting firm for the audit of our annual financial

                                                                              23
<PAGE>

statements and review of the financial statements included in our Form 10-Q or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for those fiscal years were
$16,000 and $3,000, respectively.

AUDIT-RELATED FEES

The aggregate fees billed in the fiscal years ended December 31, 2005 and 2004
for assurance and related services by the independent registered public
accounting firm that are reasonably related to the performance of the audit or
review of the registrant's financial statements and are not reported under the
paragraph captioned "Audit Fees" above are $0 and $0, respectively.

TAX FEES

The aggregate fees billed in the fiscal years ended December 31, 2005 and 2004
for professional services rendered by the independent registered public
accounting firm for tax compliance, tax advice and tax planning were $0 and $0,
respectively.

ALL OTHER FEES

The aggregate fees billed in the fiscal years ended December 31, 2005 and 2004
for products and services provided by the independent registered public
accounting firm, other than the services reported above under other captions of
this Item 14 are $0 and $0, respectively.

PRE-APPROVAL POLICIES AND PROCEDURES

All audit related services, tax planning and other services were pre-approved by
the General Partner, which concluded that the provision of such services by the
Partnership's auditors was compatible with the maintenance of that firm's
independence in the conduct of its auditing functions. The policy of the General
Partner provides for pre-approval of these services and all audit related, tax
or other services not prohibited under Section 10A(g) of the Securities Exchange
Act of 1934, as amended to be performed for us by our independent auditors,
subject to the de minimus exception described in Section 10A(i)(1)(B) of the
Exchange Act. on an annual basis and on individual engagements if minimum
thresholds are exceeded.

The percentage of audit-related, tax and other services that were approved by
the board of directors is zero (-0-).

PART IV

ITEM 15:   EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) (1)  Financial Statements

         Report of Independent Registered Public Accounting Firm         F-1

         Report of Independent Registered Public Accounting Firm         F-2

         Statement of Net Assets in Liquidation as of
          December 31, 2005                                              F-3

         Balance Sheet as of December 31, 2004                           F-4

         Statement of Changes in Net Assets in Liquidation at
          December 31, 2005                                              F-5

         Statements of Operations for December 31, 2003 through
          the six months ended June 30, 2005                             F-6

         Statements of Partners  Capital  (Deficit) for
          December 31, 2003 through the six months ended
          June 30, 2005                                                  F-7

         Statements of Cash Flows for December 31, 2003 through
          the six months ended June 30, 2005                             F-8-9

         Notes to Financial Statements                                   F-10-22

         Supplemental Schedules                                          F-23

                                                                              24
<PAGE>

(a) (2)  Schedules.

         Schedules are omitted because they are not applicable, not required, or
because the required information is included in the financial statements and
notes thereto.

(a) (3)  Exhibits.

         * 3.1    Certificate of Limited Partnership

         * 3.2    Agreement of Limited Partnership

           *      Incorporated by reference from the Partnership's Registration
                  Statement on Form S-1 (Registration No. 333-26933)

(b)      Reports on Form 8-K

(c)      Exhibits:

         31.1     Rule 13a-14(a)/15d-14(a) Certifications by the Principal
                  Executive Officer

         31.2     Rule 13a-14(a)/15d-14(a) Certifications by the Principal
                  Financial Officer

         32       Section 1350 Certifications by the Principal Executive Officer
                  and Principal Financial Officer

                                                                              25
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of Section 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf March 30, 2006 by the undersigned thereunto duly authorized.


                                            COMMONWEALTH INCOME & GROWTH FUND I

                                            By:   COMMONWEALTH INCOME &
                                                  GROWTH FUND, INC.,
                                                  General Partner

                                            By:   /s/ George S. Springsteen
                                                  ------------------------------
                                                  George S. Springsteen,
                                                  Chief Executive Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on March 30, 2006.

SIGNATURE                                 CAPACITY
----------------------------------        --------------------------------------

/s/ GEORGE S. SPRINGSTEEN                 Chairman, Chief Executive Officer, and
----------------------------------        Sole Director of Commonwealth Income &
George S. Springsteen                     Growth Fund, Inc.


/s/ KIMBERLY A. SPRINGSTEEN               President, Chief Operating Officer and
----------------------------------        Secretary
Kimberly A. Springsteen

                                                                              26
<PAGE>

                                                             COMMONWEALTH INCOME
                                                                 & GROWTH FUND I


                                   YEARS ENDED DECEMBER 31, 2005, 2004, AND 2003

<PAGE>

                                                             COMMONWEALTH INCOME
                                                                 & GROWTH FUND I


                                                            FINANCIAL STATEMENTS

                                   YEARS ENDED DECEMBER 31, 2005, 2004, AND 2003

<PAGE>

         REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM              1

         REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM              3

         FINANCIAL STATEMENTS
             Statement of net assets in liquidation                           4
             Balance sheet                                                    5
             Statement of changes in net assets in liquidation                6
             Statements of operations                                         7
             Statements of partners' capital (deficit)                        8
             Statements of cash flows                                      9-10

         NOTES TO FINANCIAL STATEMENTS                                    11-24

         SUPPLEMENTAL SCHEDULES
             Changes in Allowance for doubtful accounts                      25

<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Partners
Commonwealth Income & Growth Fund I
Exton, Pennsylvania

         We have audited the statement of net assets in liquidation of
Commonwealth Income & Growth Fund I ("Partnership") as of December 31, 2005, and
the related statement of changes in net assets in liquidation for the period
from July 1, 2005 to December 31, 2005. In addition, we have audited the balance
sheet as of December 31, 2004 and the related statements of operations,
Partners' capital and cash flows for the year ended December 31, 2004, and the
statements of operations, Partners' capital and cash flows for the period from
January 1, 2005 to June 30, 2005. Our audits also included the financial
statement schedule of valuation and qualifying accounts as of and for the
periods ended December 31, 2005 and June 30, 2005, and as of and for the year
ended December 30, 2004. These financial statements and the financial statement
schedule are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements and the
financial statement schedule based on our audits.

         We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Partnership is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

         As more fully described in Note 2, the Partnership is currently being
liquidated. As a result, the Partnership has changed its basis of accounting for
periods subsequent to June 30, 2005 from the going-concern basis to the
liquidation basis.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets in liquidation of Commonwealth
Income & Growth Fund I as of December 31, 2005 and the changes in its net assets
in liquidation for the period from July 1, 2005 to December 31, 2005, its
financial position as of December 31, 2004, and the results of its operations
and cash flows for the year ended December 31, 2004 and for the period from
January 1, 2005 to June 30, 2005 in conformity with accounting principles
generally accepted in the United States of America applied on the bases
described in the preceding paragraph. Also, in our opinion, the related
financial statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly, in all material respects, the
information set forth therein.

                                        1
<PAGE>

         As described in Note 2, these financial statements as of December 31,
2005 and for the period from July 1, 2005 to December 31, 2005 have been
prepared on the liquidation basis of accounting, which requires management to
make significant assumptions and estimates regarding the fair value of assets
and the estimate of liquidating costs to be incurred. Because of the inherent
uncertainty related to these estimates and assumptions, there will likely be
differences between these estimates and the actual results, and those
differences may be material.


/s/ ASHER & COMPANY, Ltd.

Philadelphia, Pennsylvania
March 29, 2006

                                        2
<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Partners
Commonwealth Income & Growth Fund I
Exton, Pennsylvania

We have audited the accompanying statements of operations, partners' capital,
and cash flows of Commonwealth Income & Growth Fund I for the year ended
December 31, 2003. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

Commonwealth Capital Corp, on behalf of the Partnership, has initiated a lawsuit
against a lessee. Due to the ongoing delays in this proceeding, the General
Partner feels that it may be in the best interest of the Partnership to begin
the liquidation process and, if necessary, transfer the lawsuit and the related
lease receivable to a trust on behalf of the Partnership.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of operations and cash flows of Commonwealth
Income & Growth Fund I for the year ended December 31, 2003, in conformity with
accounting principles generally accepted in the United States.


                                                  /s/ BDO Seidman, LLP

Philadelphia, Pennsylvania
March 12, 2004

                                        3
<PAGE>

                                             COMMONWEALTH INCOME & GROWTH FUND I

                                          STATEMENT OF NET ASSETS IN LIQUIDATION

--------------------------------------------------------------------------------

December 31,                                                           2005
----------------------------------------------------------------   ------------
ASSETS

Cash and cash equivalents                                          $     33,503
Lease income receivable, net of reserves of $7,590
     as of December 31, 2005                                             16,490
Net investment in direct financing lease                                  4,517
                                                                   ------------
                                                                         54,510
                                                                   ------------

Computer equipment, at cost                                           1,143,445
Accumulated depreciation                                             (1,139,743)
                                                                   ------------
                                                                          3,702
                                                                   ------------

Equipment acquisition costs and deferred expenses, net                       11
                                                                   ------------

TOTAL ASSETS                                                       $     58,223
                                                                   ============

LIABILITIES AND NET ASSETS

LIABILITIES
Accounts payable                                                   $     13,430
Accounts payable - Affiliated limited partnerships                       16,726
Accounts payable - General Partner                                        3,769
Accounts payable - Commonwealth Capital Corp.                             9,613
Unearned lease income                                                     8,779
Notes payable                                                             5,906
                                                                   ------------
TOTAL LIABILITIES                                                        58,223
                                                                   ------------

NET ASSETS IN LIQUIDATION                                          $         --
                                                                   ------------

NET ASSETS IN LIQUIDATION PER EQUIVALENT LIMITED
 PARTNERSHIP UNIT                                                  $         --
                                                                   ------------

WEIGHTED AVERAGE NUMBER OF EQUIVALENT
 LIMITED PARTNERSHIP UNITS OUTSTANDING DURING THE YEAR                  631,124
                                                                   ============

See accompanying notes to financial statements.

                                        4
<PAGE>

                                             COMMONWEALTH INCOME & GROWTH FUND I

                                                                   BALANCE SHEET

--------------------------------------------------------------------------------

December 31,                                                           2004
----------------------------------------------------------------   ------------
ASSETS

Cash and cash equivalents                                          $     46,246
Lease income receivable, net of reserves of $473,578 at
 December 31, 2004                                                       95,496
Net investment in direct financing lease                                 13,551
Other receivables and deposits                                               --
                                                                   ------------
                                                                        155,293
                                                                   ------------

Computer equipment, at cost                                           1,345,200
Accumulated depreciation                                             (1,201,517)
                                                                   ------------
                                                                        143,683
                                                                   ------------
EQUIPMENT ACQUISITION COSTS AND DEFERRED EXPENSES, net of
 accumulated amortization of $928 at December 31, 2004                      133
                                                                   ------------

TOTAL ASSETS                                                       $    299,109
                                                                   ============

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)

LIABILITIES
     Accounts payable                                              $      8,620
     Accounts payable, General Partner                                  229,840
     Accounts payable, Commonwealth Capital Corp.                         2,886
     Accounts payable, affiliated limited partnerships                   71,528
     Unearned lease income                                               18,983
     Notes payable                                                       17,158
                                                                   ------------
TOTAL LIABILITIES                                                       349,015
                                                                   ------------

PARTNERS' CAPITAL (DEFICIT)
     General Partner                                                      1,000
     Limited partners                                                   (50,906)
                                                                   ------------
TOTAL PARTNERS' CAPITAL (DEFICIT)                                       (49,906)
                                                                   ------------

TOTAL LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)                  $    299,109
                                                                   ============

See accompanying notes to financial statements.

                                        5
<PAGE>

                                             COMMONWEALTH INCOME & GROWTH FUND I

                               STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION

--------------------------------------------------------------------------------

For the period July 1 to December 31,                                  2005
----------------------------------------------------------------   ------------
Net Assets in liquidation - beginning                              $     (7,000)

Lease income                                                             27,334
Interest and other                                                        1,333
Gain on sale of computer equipment                                           68

Operating, excluding depreciation                                       (24,047)
Interest                                                                   (301)
Depreciation and amortization                                           (40,532)
Bad debt                                                                 (7,590)
Loss on sale of computer equipment                                       (4,339)

Distributions to Investors                                              (31,557)
Contributions from CCC                                                   82,847
                                                                   ------------

Changes in estimated liquidation values  of assets and
 liabilities                                                              3,784
                                                                   ------------

NET ASSETS IN LIQUIDATION - ENDING                                 $         --
                                                                   ============

See accompanying notes to financial statements.

                                        6
<PAGE>

                                             COMMONWEALTH INCOME & GROWTH FUND I

                                                        STATEMENTS OF OPERATIONS

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                      Years Ended December 31,
                                                                   PERIOD ENDED    -----------------------------
                                                                   JUNE 30, 2005        2004            2003
----------------------------------------------------------------   -------------   -------------   -------------
<S>                                                                <C>             <C>             <C>
INCOME
     Lease                                                         $      47,452   $     258,552   $     331,958
     Interest and other                                                    4,612          75,977              21
     Gain on sale of computer equipment                                   12,636              --          51,374
                                                                   -------------   -------------   -------------

TOTAL INCOME                                                              64,700         334,529         383,353
                                                                   -------------   -------------   -------------

EXPENSES
     Operating, excluding depreciation                                    56,714          40,501         195,617
     Equipment management fee, General Partner                                --           2,302          16,598
     Interest                                                                483           5,817          22,999
     Depreciation                                                         79,139         227,137         246,000
     Amortization of equipment acquisition costs, and deferred
         expenses                                                             89           8,600          16,726
     Provision for uncollectible lease income receivable                  75,493         174,000              --
     Loss on sale of equipment                                                --          12,651              --
                                                                   -------------   -------------   -------------

TOTAL EXPENSES                                                           211,918         471,008         497,940
                                                                   -------------   -------------   -------------

NET LOSS                                                           $    (147,218)  $    (136,479)  $    (114,587)
                                                                   =============   =============   =============

NET LOSS ALLOCATED TO LIMITED PARTNERS                                  (147,218)       (136,479)       (114,587)

NET LOSS PER EQUIVALENT LIMITED PARTNERSHIP UNIT                   $        (.23)  $        (.22)  $        (.18)

WEIGHTED AVERAGE NUMBER OF EQUIVALENT
     LIMITED PARTNERSHIP UNITS OUTSTANDING DURING THE YEAR
                                                                         631,124         631,124         631,124
                                                                   =============   =============   =============
</TABLE>

See accompanying notes to financial statements.

                                        7
<PAGE>

                                             COMMONWEALTH INCOME & GROWTH FUND I

                                       STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                           General        Limited
                                           Partner        Partner       General          Limited
                                            Units          Units        Partner          Partners          Total
                                         ------------   ------------   ------------    ------------    ------------
<S>                                                <C>       <C>       <C>             <C>             <C>
BALANCE, December 31, 2002                         50        631,124   $      1,000    $    200,160    $    201,160

Net (loss)                                         --             --             --        (114,587)       (114,587)
                                         ------------   ------------   ------------    ------------    ------------

BALANCE, December 31, 2003                         50        631,124          1,000          85,573          86,573

Net (loss)                                         --             --             --        (136,479)       (136,479)
                                         ------------   ------------   ------------    ------------    ------------

BALANCE, December 31, 2004                         50        631,124          1,000         (50,906)        (49,906)

Contributions - Forgiveness of fees                --             --        190,124              --         190,124
Transfer of Partner's Capital                      --             --       (190,124)        190,124              --
Net (loss)                                         --             --             --        (147,218)       (147,218)
                                         ------------   ------------   ------------    ------------    ------------

BALANCE, June 30, 2005                             50        631,124   $      1,000    $     (8,000)   $     (7,000)
                                         ============   ============   ============    ============    ============
</TABLE>

                                 See accompanying notes to financial statements.

                                        8
<PAGE>

                                             COMMONWEALTH INCOME & GROWTH FUND I

                                                        STATEMENTS OF CASH FLOWS

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                   PERIOD ENDED     Year ended      Year ended
                                                                      JUNE 30,      December 31,    December 31,
                                                                       2005            2004            2003
                                                                   -------------   -------------   -------------
<S>                                                                <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net loss                                                      $    (147,218)  $    (136,479)  $    (114,587)
     Adjustments to reconcile net loss to net
         cash (used in) provided by operating activities
              Depreciation and amortization                               79,228         235,738         262,726
              (Gain) Loss on sale of computer
                  equipment                                              (12,636)         12,651         (51,374)
              Provision for uncollectible lease income
              receivable                                                  75,493         174,000              --
              Other noncash activities included in
                  determination of net (loss)                             (1,018)       (142,151)       (267,354)
              Changes in assets and liabilities
                      Lease income receivable                              2,455         (18,732)           (623)
                      Other receivables                                      298             200              --
                      Accounts payable                                    11,659           6,523          (3,087)
                      Accounts payable, General
                           Partner                                            --         (31,916)        108,643
                      Accounts payable,
                           Commonwealth Capital Corp.                     17,659         (18,334)          3,579
                      Accounts payable,
                           affiliated limited partnerships                (5,005)        (52,865)         (2,133)
                      Unearned lease income                              (10,732)           (786)             --
                                                                   -------------   -------------   -------------

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                       10,183          27,849         (64,210)
                                                                   -------------   -------------   -------------
</TABLE>

                                        9
<PAGE>

                                             COMMONWEALTH INCOME & GROWTH FUND I

                                                        STATEMENTS OF CASH FLOWS

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                   PERIOD ENDED     Year ended      Year ended
                                                                      JUNE 30,      December 31,    December 31,
                                                                       2005            2004            2003
                                                                   -------------   -------------   -------------
<S>                                                                <C>             <C>             <C>
CASH FLOWS FROM INVESTING ACTIVITIES
     Capital expenditures                                          $          --   $          --   $      (5,000)
     Net proceeds from sale of computer
         equipment                                                        23,795          16,989          70,381
     Equipment acquisition fees to the General
         Partner                                                              --              --            (200)
                                                                   -------------   -------------   -------------

NET CASH PROVIDED BY INVESTING ACTIVITIES                                 23,795          16,989          65,181
                                                                   -------------   -------------   -------------

CASH FLOWS FROM FINANCING ACTIVITIES
     Proceeds from notes payable                                              --              --              --
     Debt placement fee to the General
         Partner                                                              --              --              --
                                                                   -------------   -------------   -------------

NET CASH PROVIDED BY FINANCING ACTIVITIES                                     --              --              --
                                                                   -------------   -------------   -------------

NET INCREASE IN CASH AND CASH EQUIVALENTS                                 33,978          44,837             971

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                          46,246           1,409             438
                                                                   -------------   -------------   -------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                         $      80,224   $      46,246   $       1,409
                                                                   =============   =============   =============
</TABLE>

                                 See accompanying notes to financial statements.

                                       10
<PAGE>

                                             COMMONWEALTH INCOME & GROWTH FUND I

                                                   NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

1.      BUSINESS              Commonwealth Income & Growth Fund I (the
                              "Partnership") is a limited partnership organized
                              in the Commonwealth of Pennsylvania to acquire,
                              own and lease various types of computer peripheral
                              equipment and other similar capital equipment,
                              which will be leased primarily to U.S.
                              corporations and institutions. Commonwealth
                              Capital Corp ("CCC"), on behalf of the Partnership
                              and other affiliated partnerships, acquires
                              computer equipment subject to associated debt
                              obligations and lease agreements and allocates a
                              participation in the cost, debt and lease revenue
                              to the various partnerships based on certain risk
                              factors. The Partnership's General Partner is
                              Commonwealth Income & Growth Fund, Inc. (the
                              "General Partner"), a Pennsylvania corporation
                              which is an indirect wholly owned subsidiary of
                              Commonwealth Capital Corp. The Partnership began
                              liquidation effective July 1, 2005. Particular
                              items of equipment may be sold at any time if, in
                              the judgment of the General Partner, it is in the
                              best interest of the Partnership to do so. The
                              determination of whether particular items of
                              partnership equipment should be sold will be made
                              by the General Partner after consideration of all
                              relevant factors (including prevailing economic
                              conditions, the cash requirements of the
                              Partnership, potential capital appreciation, cash
                              flow and federal income tax considerations), with
                              a view toward achieving the principal investment
                              objectives of the Partnership.

                              Allocations of income and distributions of cash
                              are based on the Partnership's Limited Partnership
                              Agreement (the "Agreement"). The various
                              allocations under the Agreement prevent any
                              limited partner's capital account from being
                              reduced below zero and ensure the capital accounts
                              reflect the anticipated sharing ratios of cash
                              distributions, as defined in the Agreement. During
                              2005, the Partnership made distributions to the
                              limited partners in the amount of $32,000. During
                              2004 and 2003 the Partnership did not make any
                              distributions to the limited partners.

2.   LIQUIDATION BASIS        As a result of the General Partner's approval of
                              the plan of liquidation as of July 1, 2005, we
                              changed our basis of accounting to the liquidation
                              basis effective on such date. This basis of
                              accounting is considered appropriate when, among
                              other things, liquidation of a company is probable
                              and the net realizable value

                                       11
<PAGE>

                                             COMMONWEALTH INCOME & GROWTH FUND I

                                                   NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

                              of assets is reasonably determinable. Under the
                              liquidation basis of accounting, assets are stated
                              at their estimated net realizable cash value and
                              liabilities are stated at their anticipated
                              settlement amounts. There are substantial risks
                              and uncertainties associated with carrying out the
                              liquidation of the Partnership. The valuations
                              presented in the accompanying Statement of Net
                              Assets in Liquidation represent estimates, based
                              on present facts and circumstances, of the net
                              realizable values of assets and the costs
                              associated with carrying out the liquidation. The
                              actual costs and values are expected to differ
                              from the amounts shown herein and could be greater
                              or lesser than the amounts recorded.

                              In presenting our Statement of Net Assets in
                              Liquidation at December 31, 2005, we recorded a
                              $10,300 increase to assets. This increase
                              represents the present value of future lease
                              payments of leases. Included in the adjustment to
                              net assets recorded in connection with the change
                              from the going-concern to the liquidation basis of
                              accounting, we recorded $6,500 of accrued costs of
                              liquidation representing the estimate of the costs
                              to be incurred during liquidation. Payables to
                              affiliates were decreased by $273,000 to represent
                              the expected settlement value of these
                              liabilities.

3.   SUMMARY OF               REVENUE RECOGNITION
     SIGNIFICANT
     ACCOUNTING               Through December 31, 2005, the Partnership's
     POLICIES                 leasing operations consist substantially of
                              operating leases and one direct financing lease.
                              Operating lease revenue is recognized on a monthly
                              basis in accordance with the terms of the lease
                              agreement. Unearned revenue from direct financing
                              agreements is amortized to revenue over the lease
                              term.

                              The Partnership reviews a customer's credit
                              history before extending credit and establishes a
                              provision for uncollectible accounts receivable
                              based upon the credit risk of specific customers,
                              historical trends and other information.

                                       12
<PAGE>

                                             COMMONWEALTH INCOME & GROWTH FUND I

                                                   NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

                              USE OF ESTIMATES

                              The preparation of financial statements in
                              conformity with generally accepted accounting
                              principles requires management to make estimates
                              and assumptions that affect the reported amounts
                              of assets and liabilities and disclosure of
                              contingent assets and liabilities at the date of
                              the financial statements and the reported amounts
                              of revenues and expenses during the reporting
                              period. Actual results could differ from those
                              estimates.

                              FAIR VALUE OF FINANCIAL INSTRUMENTS

                              Statement of Financial Accounting Standards
                              ("SFAS") No.107, Disclosures about Fair Value of
                              Financial Instruments, requires disclosure of the
                              fair value of certain instruments. The carrying
                              values of cash, receivables and payables
                              approximate fair value due to the short term
                              maturity of these instruments. For debt, the
                              carrying amounts approximate fair value because
                              the interest rates approximate current market
                              rates.

                              LONG-LIVED ASSETS

                              The Partnership evaluates its long-lived assets
                              when events or circumstances indicate that the
                              value of the asset may not be recoverable. The
                              Partnership determines whether impairment exists
                              by estimating the undiscounted cash flows to be
                              generated by each asset. If the estimated
                              undiscounted cash flows are less than the carrying
                              value of the asset then impairment exists. The
                              amount of the impairment is determined based on
                              the difference between the carrying value and the
                              fair value. Fair value is determined based on
                              estimated discounted cash flows to be generated by
                              the asset. The Partnership determined that no
                              impairment existed in 2005. In 2004 and 2003, the
                              Partnership determined that the carrying amount of
                              certain assets was greater than the undiscounted
                              cash flows to be generated by these assets. The
                              Partnership recorded charges of $12,000 and
                              $8,000, respectively in the fourth quarter of 2004
                              and 2003, to record the assets at their estimated
                              fair value. Such amounts were included in
                              depreciation expense in the accompanying financial
                              statements.

                                       13
<PAGE>

                                             COMMONWEALTH INCOME & GROWTH FUND I

                                                   NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

                              Depreciation on computer equipment for financial
                              statement purposes is based on the straight-line
                              method over estimated useful lives of four years.

                              INTANGIBLE ASSETS

                              Equipment acquisition costs and deferred expenses
                              are amortized on a straight-line basis over two-
                              to-four year lives. Unamortized acquisition fees
                              and deferred expenses are charged to amortization
                              expense when the associated leased equipment is
                              sold.

                              CASH AND CASH EQUIVALENTS

                              The Partnership considers all highly liquid
                              investments with a maturity of three months or
                              less to be cash equivalents. Cash equivalents have
                              been invested in a money market fund investing
                              directly in Treasury obligations. Cash at December
                              31, 2005 and 2004 was held in the custody of one
                              financial institution. The balance, at times, may
                              exceed federally insured limits. The Partnership
                              mitigates this risk by depositing funds with a
                              major financial institution. The Partnership has
                              not experienced any losses in such accounts, and
                              believes it is not exposed to any significant
                              credit risk.

                              ACCOUNTS RECEIVABLE

                              Accounts receivable includes current accounts
                              receivable, net of allowances and other accruals.
                              The Partnership regularly reviews the
                              collectability of its receivables and the credit
                              worthiness of its customers and adjusts its
                              allowance for doubtful accounts accordingly.

                              INCOME TAXES

                              The Partnership is not subject to federal income
                              taxes; instead, any taxable income (loss) is
                              passed through to the partners and included on
                              their respective income tax returns.

                              Taxable income differs from financial statement
                              net income as a result of reporting certain income
                              and expense items for tax

                                       14
<PAGE>

                                             COMMONWEALTH INCOME & GROWTH FUND I

                                                   NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

                              purposes in periods other than those used for
                              financial statement purposes, principally relating
                              to depreciation, amortization, and lease income.

                              NET ASSETS IN LIQUIDATION PER EQUIVALENT LIMITED
                              PARTNERSHIP UNIT

                              In connection with the conversion from the
                              going-concern basis of accounting to the
                              liquidation basis, the net assets in liquidation
                              per equivalent limited partnership unit is
                              computed based upon net assets in liquidation
                              allocated to the limited partners and the weighted
                              average number of equivalent limited partner units
                              outstanding during the period.

                              NET INCOME (LOSS) PER EQUIVALENT LIMITED
                              PARTNERSHIP UNIT

                              The net income (loss) per equivalent limited
                              partnership unit is computed based upon net income
                              (loss) allocated to the limited partners and the
                              weighted average number of equivalent limited
                              partner units outstanding during the year.

                              REIMBURSABLE EXPENSES

                              Reimbursable expenses, which are charged to the
                              Partnership by CCC in connection with the
                              administration and operation of the Partnership,
                              are allocated to the Partnership based upon
                              several factors including, but not limited to, the
                              number of investors, compliance issues, and the
                              number of existing leases.

                              FORGIVENESS OF RELATED PARTY PAYABLES

                              In accordance with Accounting Principles Board
                              Opinion No. 26, Early Extinguishment of Debt, the
                              Partnership accounts for forgiveness of related
                              party payables as partner's capital transactions.

                              RECENT ACCOUNTING PRONOUNCEMENTS

                              In May 2005, the Financial Accounting Standards
                              Board (FASB) issued SFAS No. 154, "Accounting
                              Changes and Error

                                       15
<PAGE>

                                             COMMONWEALTH INCOME & GROWTH FUND I

                                                   NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

                              Corrections" (SFAS No. 154) which replaces APB No.
                              20 "Accounting Changes" and SFAS No. 3, "Reporting
                              Accounting Changes in Interim Financial Statements
                              - An Amendment of APB Opinion No. 28." SFAS No.
                              154 provides guidance on the methods issuers
                              should use to account for and report accounting
                              changes and error corrections. Specifically, this
                              statement requires that issuers retrospectively
                              apply any voluntary change in accounting
                              principles to prior period financial statements,
                              if it is practicable to do so. This principle
                              replaces APB No. 20, which required that most
                              voluntary changes in accounting principle be
                              recognized by including the cumulative effect of
                              the change to the new accounting principle on
                              prior periods in the net income reported by the
                              issuer in the period in which it instituted the
                              change. SFAS No. 154 also redefines the term
                              "restatement" to mean the correction of an error
                              by revising previously issued financial
                              statements. Unless adopted early, SFAS No. 154 is
                              effective for accounting changes and corrections
                              of errors made in fiscal years beginning after
                              December 15, 2005. The Partnership does not expect
                              the adoption of SFAS No. 154 to have an impact on
                              its financial position or results of operations.

4.   NET INVESTMENT           The following lists the components of the net
     IN DIRECT                investment in a direct financing lease as of
     FINANCING LEASE          December 31, 2005 and 2004:

                              December 31,                    2005       2004
                              ---------------------------   ---------  ---------
                              Minimum lease payments
                               receivable                   $   6,018  $  18,054
                              Less: Unearned Revenue            1,501      4,503

                              Net investment in direct
                               financing lease                  4,517  $  13,551
                                                            =========  =========

                                       16
<PAGE>

                                             COMMONWEALTH INCOME & GROWTH FUND I

                                                   NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

                              The following is a schedule of future minimum
                              rentals on the noncancellable direct financing
                              lease at December 31, 2005:

                              Year ending December 31,                  Amount
                              ---------------------------------------  ---------
                                 2006                                  $   6,018
                                                                       ---------

5.   COMPUTER                 The Partnership is the lessor of equipment under
     EQUIPMENT                operating leases with periods ranging from 12 to
                              36 months. In general, associated costs such as
                              repairs and maintenance, insurance and property
                              taxes are paid by the lessee.

                              The Partnership participates in leases that are
                              shared with other affiliated Partnerships. The
                              Partnership's share of the computer equipment in
                              which they participate at December 31, 2005 and
                              2004 was approximately $326,000 and $398,000,
                              respectively, which is included in the
                              Partnership's fixed assets on their balance sheet.
                              The total cost of the equipment shared by the
                              Partnership with other affiliated partnerships at
                              December 31, 2005 and 2004 was approximately
                              $1,432,000 and $1,743,000, respectively. There is
                              no outstanding debt at December 31, 2005 and 2004
                              related to the equipment shared by the
                              Partnership.

                              The following is a schedule of future minimum
                              rentals on noncancelable operating leases at
                              December 31, 2005:

                              Year ending December 31,                  Amount
                              ---------------------------------------  ---------
                                 2006                                  $  10,340
                                                                       ---------

                                       17
<PAGE>

                                             COMMONWEALTH INCOME & GROWTH FUND I

                                                   NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

     SIGNIFICANT              Lessees exceeding 10% of lease income for the
     CUSTOMERS                years ended:

                              Lessee               2005       2004       2003
                              ----------------   --------   --------   --------
                              Lessee A                 --         33%        28%
                              Lessee B                 41%        23%        24%
                              Lessee C                 25%        12%        --
                              Lessee E                 15%        --         --
                              Lessee F                 10%        --         --
                                                 --------   --------   --------
                              TOTAL % OF LEASE
                                INCOME                 91%        68%        52%
                                                 ========   ========   ========

                              Lessees exceeding 10% of accounts receivable at
                              December 31, (See Note 9):

                              Lessee               2005       2004
                              ----------------   --------   --------
                              Lessee B                 36%        --
                              Lessee D                 --         79%
                              Lessee F                 55%        --
                                                 --------   --------
                              TOTAL % OF
                               ACCOUNTS
                               RECEIVABLE              91%        79%
                                                 ========   ========

6.   RELATED PARTY            REIMBURSABLE EXPENSES
     TRANSACTIONS
                              The General Partner and its affiliates are
                              entitled to reimbursement by the Partnership for
                              the cost of supplies and services obtained and
                              used by the General Partner in connection with the
                              administration and operation of the Partnership
                              from third parties unaffiliated with the General
                              Partner. In addition, the General Partner and its
                              affiliates are entitled to reimbursement for
                              certain expenses incurred by the General Partner
                              and its affiliates in connection with the
                              administration and operation of the Partnership.
                              During 2005, 2004, and 2003, the Partnership
                              recorded $18,000, $22,000, and $194,000,
                              respectively, for reimbursement of expenses to the
                              General Partner. The amount due to CCC at December
                              31, 2005 and 2004, for reimburseable expenses was
                              approximately $10,000 and $70,000, respectively.

                                       18
<PAGE>

                                             COMMONWEALTH INCOME & GROWTH FUND I

                                                   NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

                              EQUIPMENT ACQUISITION FEE

                              The General Partner is entitled to be paid an
                              equipment acquisition fee of 4% of the purchase
                              price of each item of equipment purchased as
                              compensation for the negotiation of the
                              acquisition of the equipment and lease thereof or
                              sale under a conditional sales contract. No
                              equipment acquisition fees were earned by the
                              General Partner in 2005 and 2004. During 2003
                              equipment acquisition fees of approximately $1,000
                              were earned by the General Partner.

                              DEBT PLACEMENT FEE

                              As compensation for arranging term debt to finance
                              the acquisition of equipment by the Partnership,
                              the General Partner is paid a fee equal to 1% of
                              such indebtedness; provided, however, that such
                              fee shall be reduced to the extent the Partnership
                              incurs such fees to third parties, unaffiliated
                              with the General Partner or the lender, with
                              respect to such indebtedness and no such fee will
                              be paid with respect to borrowings from the
                              General Partner or its affiliates. No debt
                              placement fees were earned by the General Partner
                              in 2005, 2004 and 2003.

                              EQUIPMENT MANAGEMENT FEE

                              The General Partner is entitled to be paid a
                              monthly fee equal to the lesser of (i) the fees
                              which would be charged by an independent third
                              party for similar services for similar equipment
                              or (ii) the sum of (a) two percent of (1) the
                              gross lease revenues attributable to equipment
                              which is subject to full payout net leases which
                              contain net lease provisions plus (2) the purchase
                              price paid on conditional sales contracts as
                              received by the Partnership and (b) 5% of the
                              gross lease revenues attributable to equipment
                              which is subject to operating and capital leases.
                              No equipment management fees were earned by the
                              General Partner in 2005. During 2004 and 2003,
                              equipment management fees of approximately $2,000
                              and $17,000, respectively, were earned by the
                              General Partner as determined pursuant to section
                              (ii) above.

                                       19
<PAGE>

                                             COMMONWEALTH INCOME & GROWTH FUND I

                                                   NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

                              RELEASE FEE

                              As compensation for providing releasing services
                              for any equipment for which the General Partner
                              has, following the expiration of, or default
                              under, the most recent lease or conditional sales
                              contract, arranged a subsequent lease or
                              conditional sales contract for the use of such
                              equipment to a lessee or other party, other than
                              the current or most recent lessee or other
                              operator of such equipment or its affiliates
                              ("Release"), the General Partner shall receive, on
                              a monthly basis, a Release Fee equal to the lesser
                              of (a) the fees which would be charged by an
                              independent third party for comparable services
                              for comparable equipment or (b) two percent of
                              gross lease revenues derived from such Release.
                              There were no such fees earned by the General
                              Partner in 2005, 2004, and 2003.

                              EQUIPMENT LIQUIDATION FEE

                              With respect to each item of equipment sold by the
                              General Partner (other than in connection with a
                              conditional sales contract), a fee equal to the
                              lesser of (i) 50% of the competitive equipment
                              sale commission or (ii) three percent of the sales
                              price for such equipment is payable to the General
                              Partner. The payment of such fee is subordinated
                              to the receipt by the limited partners of the net
                              disposition proceeds from such sale in accordance
                              with the Partnership Agreement. Such fee will be
                              reduced to the extent any liquidation or resale
                              fees are paid to unaffiliated parties. During
                              2005, 2004 and 2003, equipment liquidation fees of
                              approximately $1,000, $500, and $2,000,
                              respectively, were earned by the General Partner.

7.   NOTES PAYABLE            Notes payable consisted of the following:


                              December 31,                     2005       2004
                              ---------------------------   ---------  ---------
                              Installment note payable to
                              a bank; interest at 6.5%;
                              due in monthly installments
                              of $1,003 including interest
                              through June 2006.                5,906     17,158
                                                            ---------  ---------
                                                            $   5,906  $  17,158
                                                            =========  =========

                                       20
<PAGE>

                                             COMMONWEALTH INCOME & GROWTH FUND I

                                                   NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

                              These notes are secured by specific computer
                              equipment and are nonrecourse liabilities of the
                              Partnership. Aggregate maturities of notes payable
                              for each of the years subsequent to December 31,
                              2005 are as follows:

                              Year ending December 31,                  Amount
                              ---------------------------------------  ---------
                                2006                                   $   5,906
                                                                       ---------
                                                                       $   5,906
                                                                       =========

8.   SUPPLEMENTAL             Other noncash activities included in the
     CASH FLOW                determination of net loss are as follows:
     INFORMATION

<TABLE>
<CAPTION>
                                                                      Year ended      Year ended
                                                     PERIOD ENDED     December 31,    December 31,
                                                     JUNE 30, 2005        2004            2003
                                                     -------------   -------------   -------------
<S>                                                  <C>             <C>             <C>
Lease income, net of interest expense on
     notes payable realized as a result of direct
     payment of principal by lessee to bank          $       1,018   $     145,654   $     267,354
                                                     =============   =============   =============
</TABLE>

                              No interest or principal on notes payable was paid
                              by the Partnership because direct payment was made
                              by lessee to the bank in lieu of collection of
                              lease income and payment of interest and principal
                              by the Partnership.

                                       21
<PAGE>

                                             COMMONWEALTH INCOME & GROWTH FUND I

                                                   NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

9.   RECONCILIATION OF NET (LOSS) REPORTED FOR FINANCIAL
     REPORTING PURPOSES TO TAXABLE (LOSS) ON THE FEDERAL
     PARTNERSHIP RETURN

<TABLE>
<CAPTION>
Year ended December 31,                                  2005            2004            2003
--------------------------------------------------   -------------   -------------   -------------
<S>                                                  <C>             <C>             <C>
     Net loss for financial reporting purposes       $    (195,293)  $    (136,479)  $    (114,587)
     Adjustments
         Gain (loss) on sale of computer equipment         (33,953)         (5,317)         27,245
         Depreciation                                       41,365          89,947          64,017
         Amortization                                          122           7,200          13,937
         Bad debt expense                                 (253,649)             --         (14,587)
         Unearned lease income                              (2,748)         (3,788)        (27,665)
         Other                                              16,244         (14,574)         17,473
                                                     -------------   -------------   -------------
Taxable (loss) on the Federal
     Partnership return                              $    (427,912)  $     (63,011)  $     (34,167)
                                                     =============   =============   =============
</TABLE>

                              The "Adjustments - Other" includes financial
                              statement adjustments reflected in the tax return
                              in the subsequent year.

                              Adjustment for gain (loss) on sale of equipment is
                              due to longer useful lives for tax reporting
                              purposes.

                                       22
<PAGE>

                                             COMMONWEALTH INCOME & GROWTH FUND I

                                                   NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

10.  QUARTERLY RESULTS        Summarized quarterly financial data for the years
     OF OPERATION             ended December 31, 2005 and 2004 is as follows:
     (UNAUDITED)

<TABLE>
<CAPTION>
                                                                 Quarter ended
                                           ---------------------------------------------------------
                                             March 31       June 30      September 30   December 31
                                           ------------   ------------   ------------   ------------
<S>                                        <C>            <C>            <C>            <C>
2005

REVENUES
     Lease and other                       $     23,056   $     29,007   $     16,973   $     11,694
     Gain (loss) on sale of computer
        equipment                                    --         13,116         (4,339)            68
                                           ------------   ------------   ------------   ------------

TOTAL REVENUES                                   23,056         42,173         12,634         11,762

COSTS AND EXPENSES                               76,716        135,731         42,834         29,636
                                           ------------   ------------   ------------   ------------

NET (LOSS) INCOME                          $    (53,660)  $    (93,558)  $    (30,200)  $    (17,874)
                                           ============   ============   ============   ============

(LOSS) INCOME PER LIMITED
     PARTNER UNIT                          $       (.09)  $       (.15)  $         --   $         --
                                           ============   ============   ============   ============

NET ASSETS IN LIQUIDATION PER
LIMITED PARTNER UNIT                       $         --   $         --   $         --   $         --
                                           ============   ============   ============   ============
</TABLE>

                                        Liquidation basis effective July 1, 2005

                                       23
<PAGE>

                                             COMMONWEALTH INCOME & GROWTH FUND I

                                                   NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                 Quarter ended
                                           ---------------------------------------------------------
                                             March 31       June 30      September 30   December 31
                                           ------------   ------------   ------------   ------------
<S>                                        <C>            <C>            <C>            <C>
2004

REVENUES
     Lease and other                       $     64,953   $     83,518   $     62,268   $    123,790
     Gain (loss) on sale of computer
        equipment                                    --            949        (10,764)        (2,836)
                                           ------------   ------------   ------------   ------------

TOTAL REVENUES                                   64,953         84,467         51,504        120,954

COSTS AND EXPENSES                               73,771         65,254        146,710        172,622
                                           ------------   ------------   ------------   ------------

NET (LOSS) INCOME                          $     (8,818)  $     19,213   $    (95,206)  $    (51,668)
                                           ============   ============   ============   ============

(LOSS) INCOME PER LIMITED
     PARTNER UNIT                          $       (.01)  $        .03   $       (.15)  $       (.08)
                                           ============   ============   ============   ============
</TABLE>

                              The cumulative gain or loss on sale of computer
                              equipment is included in revenues or costs as
                              appropriate.

                                       24
<PAGE>

                                             COMMONWEALTH INCOME & GROWTH FUND I

                                                          SUPPLEMENTAL SCHEDULES

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                             BALANCE,      ADDITIONS
                                            BEGINNING      CHARGED TO                      BALANCE,
                                            OF PERIOD      OPERATIONS     DEDUCTIONS    END OF PERIOD
                                           ------------   ------------   ------------   -------------
<S>                                        <C>                 <C>       <C>            <C>
ALLOWANCE FOR DOUBTFUL ACCOUNTS:

   YEAR ENDED DECEMBER 31, 2003            $    314,164             --   $     14,586   $     299,578
                                           ------------   ------------   ------------   -------------

   YEAR ENDED DECEMBER 31, 2004                 299,578        174,000             --         473,578
                                           ------------   ------------   ------------   -------------

   SIX MONTHS ENDED JUNE 30, 2005               473,578         75,493                        549,071
                                           ------------   ------------   ------------   -------------

   SIX MONTH PERIOD JULY 1, 2005 TO
           DECEMBER 31, 2005                    549,071          7,590        549,071           7,590
                                           ============   ============   ============   =============
</TABLE>

                                       25