UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549




FORM
10-K





þ
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
      EXCHANGE ACT OF 1934For the fiscal year
      ended December
      31, 2007ORo
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
      EXCHANGE ACT OF 1934





Commission
file number: 333-37504




ICON
Income Fund Eight B L.P.


(Exact
name of registrant as specified in its charter)




Delaware
            
            13-4101114(State
      or other jurisdiction of incorporation or organization)
            
            (I.R.S.
      Employer Identification No.)100
      Fifth Avenue, 4th
      Floor
              New
      York, New York
            
            10011(Address
      of principal executive offices)
            
            (Zip
      Code)




(212)
418-4700


(Registrant’s
telephone number, including area code)




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




Securities
registered pursuant to Section 12(g) of the Act:  Units of Limited
Partnership Interests




Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.Yes     No þ




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Exchange Act.Yes     No
þ




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




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  Yes þ    No





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


Large
accelerated filer       Accelerated filer
      Non-accelerated filer  þ      Smaller
reporting company  





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




State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last day of the registrant’s most recently completed second fiscal
quarter:  Not
applicable.




There is
no established market for limited partnership units of the
registrant.




Number of
outstanding limited partnership units of the Registrant on February 29, 2008 is
740,530.





DOCUMENTS
INCORPORATED BY REFERENCE





None.













Table
of Contents







PART
      I
            1Item
      1. Business
            1Item
      1A. Risk Factors
            3Item
      1B. Unresolved Staff Comments
            8Item
      2. Properties
            9Item
      3. Legal Proceedings
            9Item
      4. Submission of Matters to a Vote of Security Holders
            9PART
      II
            10Item
      5. Market for Registrant’s Securities, Related Security Holder Matters and
      Issuer Purchases of Equity Securities
            10Item
      6. Selected Consolidated Financial Data
            11Item
      7. General Partner’s Discussion and Analysis of Financial Condition and
      Results of Operation
            12Item
      7A. Quantitative and Qualitative Disclosures About Market
    Risk
            29Item
      8. Consolidated Financial Statements and Supplementary
Data
            30Item
      9. Changes in and Disagreements with Accountants on Accounting and
      Financial Disclosure
            60Item
      9A(T). Controls and Procedures
            61Item
      9B. Other Information
            62PART
      III
            63Item
      10. Directors, Executive Officers of the Registrant’s General Partner and
      Corporate Governance
            63Item
      11. Executive Compensation
            65Item
      12. Security Ownership of Certain Beneficial Owners and the General
      Partner and Related Security Holder Matters
            65Item
      13. Certain Relationships and Related Transactions, and Director
      Independence
            65Item
      14. Principal Accounting Fees and Services
            66PART
      IV
            67Item
      15. Exhibits, Financial Statement Schedules
            67SIGNATURES
            68













PART I








Forward-Looking
Statements





Certain
statements within this Annual Report on Form 10-K may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 (“PSLRA”).  These statements are being made pursuant to the
PSLRA, with the intention of obtaining the benefits of the “safe harbor”
provisions of the PSLRA, and, other than as required by law, we assume no
obligation to update or supplement such statements.  Forward-looking
statements are those that do not relate solely to historical
fact.  They include, but are not limited to, any statement that may
predict, forecast, indicate or imply future results, performance, achievements
or events.  You can identify these statements by the use of words such
as “may,” “will,” “could,” “anticipate,” “believe,” “estimate,” “expect,”
“intend,” “plan”, “seek”, “predict” or “project” and variations of these words
or comparable words or phrases of similar meaning.  These
forward-looking statements reflect our current beliefs and expectations with
respect to future events and are based on assumptions and are subject to risks
and uncertainties and other factors outside our control that may cause actual
results to differ materially from those projected. We undertake no obligation to
update publicly or review any forward-looking statement, whether as a result of
new information, future developments or otherwise.





Item 1. Business





Our
History





ICON
Income Fund Eight B L.P. (the “Partnership”) was formed on February 7, 2000 as a
Delaware limited partnership.  The Partnership will continue until
December 31, 2017, unless terminated sooner.  When used in this
report, the terms “we,” “us” and “our” refer to the Partnership (and its
consolidated subsidiaries).





Our
general partner is ICON Capital Corp. (our “General Partner”), which was
originally a Connecticut corporation. Effective June 1, 2007, our General
Partner was re-incorporated as a Delaware corporation. Our General Partner
manages and controls our business affairs, including, but not limited to, our
equipment leases and financing transactions, under the terms of our amended and
restated limited partnership agreement (our “LP Agreement”).





We are
currently in our liquidation period. Our maximum offering was $75,000,000 and we
commenced business operations on our initial closing date, June 14, 2000, with
the admission of 15,816 limited partnership units representing $1,581,551 of
capital contributions.  Between June 15, 2000 and October 17, 2001,
the date of our final closing, 734,184 additional limited partnership units were
sold representing $73,418,449 of capital contributions bringing the total
admission to 750,000 limited partnership units representing $75,000,000 of
capital contributions. Through December 31, 2007 we redeemed 9,470 limited
partnership units.  At December 31, 2007 we had 740,530 limited
partnership units outstanding.





Our
Business





We
operate as an equipment leasing program in which the capital our partners
invested was pooled together to make investments, pay fees and establish a small
reserve. We primarily acquired equipment subject to lease, purchased equipment
and leased it to third party end users or financed equipment for third parties
and, to a lesser degree, acquired ownership rights to items of leased equipment
at lease expiration. Some of our equipment leases are acquired for cash and
provide current cash flow, which we refer to as “income” leases. For our other
equipment leases, we finance the majority of the purchase price through
borrowings from third parties. We refer to these leases as “growth” leases.
These growth leases generated little or no current cash flow because
substantially all of the rental payments received from the lessee was used to
service the indebtedness associated with acquiring or financing the lease. For
these leases, we anticipate that the future value of the leased equipment will
exceed the cash portion of the purchase price.





1






We divide
the life of the program into three distinct phases:





(1) Offering Period: We invested
most of the net proceeds from the sale of limited partnership units in items of
equipment subject to a lease.





(2)
      Reinvestment
      Period: After the close of the offering period, we reinvested and
      continued to reinvest the cash generated from our initial investments to
      the extent that cash was not needed for our expenses, reserves and
      distributions to partners.  The reinvestment period was
      anticipated to end on or about October 16, 2006.  However, on
      October 5, 2006, our General Partner determined that it was in the best
      interests of our partners that the reinvestment period be extended until
      approximately April 16, 2007 and subsequently further extended the
      reinvestment period for an additional two months to June
    2007.





(3)
      Liquidation
      Period: Since the end of the reinvestment period, we have sold
      our assets in the ordinary course of business. If our General Partner
      believes it would benefit our partners to reinvest the proceeds
      received from our investments in additional investments during the
      liquidation period, we may do so, but our General Partner will not receive
      any additional acquisition fees in connection with such reinvestments.
      Our goal was to complete the liquidation period in three years after
      the end of the reinvestment period, but it may take longer to do
      so.





On
June 17, 2007, we began our liquidation period.  During our
liquidation period, we have continued to distribute substantially all
distributable cash from operations and equipment sales to our partners and are
continuing the orderly termination of our operations and affairs. At December
31, 2007 and 2006, we had total assets of $65,113,221 and $78,651,672,
respectively.  For the year ended December 31, 2007, two lessees
accounted for 85.8% of our total rental and finance income of
$9,322,816. We had net income for the year ended December 31, 2007
of $1,146,979.  For the year ended December 31, 2006, our revenue
from total rental and finance income was $16,308,179, which included two
lessees that accounted for approximately 83.5% of our total rental income and
finance income. We had net loss for the year ended December 31, 2006 of
$614,426.  For the year ended December 31, 2005, our revenue from
total rental and finance income was $19,990,082, which included two lessees that
accounted for approximately 85% of our total rental and finance
income.  We had net income for the year ended December 31, 2005
of $3,368,585.





At
December 31, 2007, our portfolio, which we hold either directly or through joint
venture investments with affiliates, consisted primarily of the following
equipment subject to lease:





·
            We
      own certain telecommunications equipment on lease to Global Crossing
      Telecommunications, Inc. (“Global Crossing”). The purchase price of the
      equipment totaled approximately $7,755,000 and we also incurred an initial
      direct cost of approximately $124,000. Monthly rent is payable in advance
      on the first business day of each month and the lease is scheduled to
      expire on March 31, 2011. Our General Partner did not take any acquisition
      fees in connection with this
transaction.





·
            We
      own one Airbus A340-313X aircraft and have a 50% interest through a joint
      venture with ICON Income Fund Nine, LLC (“Fund Nine”), an entity also
      managed by our General Partner, in a second Airbus A340-313X
      aircraft.  Both aircraft are on lease to Cathay Pacific Airways
      Limited (“Cathay”). The original expiration dates of the aircraft were
      March 14, 2006 for the aircraft in which we have 100% interest and March
      27, 2006 for the aircraft in which we have 50% interest. We entered into
      lease extensions with respect to each of the Airbus A340-313X aircraft to
      extend the terms of the leases from March 14, 2006 and March 27, 2006 to
      October 1, 2011 and July 1, 2011,
respectively.





For a
discussion of our lease and other significant transactions for the years ended
December 31, 2007, 2006 and 2005, please refer to “Item 7. General Partner’s
Discussion and Analysis of Financial Condition and Results of
Operations.”






2





Segment
Information





We have
only one operating segment: the business of leasing and financing equipment to
companies that we believe to be creditworthy.





Competition





The
equipment leasing and financing industry is highly competitive. When seeking
leasing and financing transactions for acquisition, we compete with leasing
companies, manufacturers that lease their products directly, equipment brokers
and dealers and financial institutions, including commercial banks and insurance
companies.  Many competitors are larger than us and have greater financial
resources than we do. For additional information about our competition and other
risks relating to our operations, please see “Risk Factors” in Item
1A.





Employees





We have
no direct employees. Our General Partner has full and exclusive control over our
management and operations.





Available
Information




Our
Annual Report on Form 10-K and our most recent Quarterly Reports on Form 10-Q
and amendments to those reports, if any, and our Current Reports on Form 8-K and
any amendments to those reports are available free of charge on our General
Partner’s internet website at http://www.iconcapital.com as soon as reasonably
practicable after such reports are electronically filed with or furnished to the
Securities and Exchange Commission (the “SEC”). The information contained on our
General Partner’s website is not deemed part of this Annual Report on Form 10-K.
Our Reports are also available on the SEC’s website at http://www.sec.gov.





Financial
Information Regarding Geographic Areas





We have
long-lived assets, which include operating leases and revenues, within the
United States.





Item 1A. Risk Factors





Our
operations are subject to a number of risks. You should carefully read and
consider these risks, together with all other information in this Annual Report
on Form 10-K. The risks and uncertainties described below are not the only ones
we may face.  If any of the following risks actually occur, our
business, operating results and financial condition could be adversely
affected.





Uncertainties
associated with the equipment leasing and financing business may affect our
business, operating results and financial condition.





We are
subject to a number of uncertainties associated with the equipment leasing and
financing business that may affect our business, operating results and financial
condition. These include, but are not limited to:





·
            changes
      in economic conditions, including fluctuations in demand for equipment and
      interest rates;


·
            the
      technological and economic obsolescence of
  equipment;


·
            potential
      defaults by lessees or borrowers;


·
            the
      existence of leverage increases the risk of foreclosure;
    and


·
            increases
      in our expenses, including taxes and insurance
  expenses.








3





Our
General Partner’s decisions are subject to conflicts of interest with
us.




Our
General Partner’s decisions could be subject to various conflicts of interest
arising out of its relationship to us and our affiliates. Our General Partner
could be confronted with decisions in which it will have an economic incentive
to place its interests above ours. Our General Partner sponsors and currently
manages six other equipment leasing businesses. See “Item 13. Certain
Relationships and Related Transactions, and Director Independence.” These
conflicts may include, but are not limited to:





·
            Our
      General Partner will receive more fees for making investments if we incur
      indebtedness to fund these acquisitions than it would if we did not incur
      such indebtedness;


·
            Our
      LP Agreement does not prohibit our General Partner from competing with us
      for equipment acquisitions and engaging in other types of
      business;


·
            Our
      General Partner will have opportunities to earn fees for referring a
      prospective acquisition opportunity to purchasers other than
      us;


·
            Our
      General Partner may receive fees in connection with the turnover of our
      equipment portfolio;


·
            The
      lack of separate legal representation for us and our General Partner and
      lack of arm’s-length transactions could affect negotiations regarding
      compensation payable to our General
Partner;


·
            Our
      General Partner is our tax matters partner and is able to negotiate with
      the IRS to settle tax disputes that would bind us and our partners that
      might not be in the best interest of our partners given a partner’s
      individual tax situation; and


·
            Our
      General Partner can make decisions as to when and whether to sell a
      jointly-owned asset when the co-owner is another business it
      manages.





Because
we borrowed funds to purchase equipment, losses as a result of lessee defaults
may be greater than if debt were not incurred.





Although
we have acquired some of our investments for cash, we borrowed a substantial
portion of the purchase price of our equipment investments. While we believe the
use of leverage results in us being able to make more acquisitions and that each
acquisition will have fewer dollars at risk than if leverage were not utilized,
there can be no assurance that the benefits of greater size and diversification
of the portfolio will offset the heightened risk of loss in an individual lease
transaction using leverage. With respect to our non-recourse borrowings, a
lessee default could force us to make the debt service payments that would
otherwise be paid by the lessee so as to protect our investment in equipment and
prevent the equipment owned by us from being subject to
repossession.





Restrictions
imposed by the terms of our indebtedness may limit our financial
flexibility.





We,
together with certain of our affiliates (entities sponsored and organized by our
General Partner), specifically Fund Nine, ICON Income Fund Ten, LLC (“Fund
Ten”), ICON Leasing Fund Eleven, LLC (“Fund Eleven”) and ICON Leasing Fund
Twelve, LLC (“Fund Twelve”), are party to a revolving line of credit agreement
with California Bank & Trust. The terms of that agreement could
restrict us from paying distributions to our partners if such payments would
cause us not to be in compliance with our financial covenants in that agreement.
For additional information on the terms of our credit agreement, see “Item
7. General Partner’s Discussion and Analysis of Financial Condition and Results
of Operations – Liquidity and Capital Resources.”





4







The
risks and uncertainties associated with the industries of our lessees may
indirectly affect our business, operating results and financial
condition.




We are
indirectly subject to a number of uncertainties associated with the industries
of our lessees. We primarily acquire equipment subject to lease, purchase
equipment and lease it to third party end users or finance equipment for third
party end users, and, to a lesser degree, acquire ownership rights to items of
leased equipment at lease expiration in a variety of industries with a number of
lessees. As such, we are indirectly subject to the various risks and
uncertainties that affect our lessees’ businesses and operations.  If
such risks or uncertainties were to affect our lessees, we may indirectly suffer
a loss on our investment, lose future revenues or experience adverse
consequences to our business, operating results and financial
condition.





If
the value of our equipment declines more rapidly than we anticipate, our
financial performance may be adversely affected.





A
significant part of the value of some of the equipment that we purchase is the
potential value of the equipment once the lease term expires (“residual value”).
Generally, leased equipment is expected to decline in value over its useful
life. In acquiring equipment, we calculate a residual value for the equipment at
the end of the lease based on available information including, depending on the
equipment, historical residual value rates. The expected residual value, when
combined with lease payments, is expected to return the cost of our investment
in the equipment and provide a rate of return despite the expected decline in
the value of the equipment over the lease term. However, the residual value of
the equipment at the end of a lease, and whether that value meets our
expectations, depends to a significant extent upon many factors, including the
following, many of which are beyond our control:





·
            our
      ability to acquire or, to a lesser degree, enter into lease agreements
      that preserve or enhance the relative value of the
    equipment;


·
            our
      ability to maximize the value of the equipment upon the sale or re-lease
      when the lease expires;


·
            the
      technological and economic obsolescence of
  equipment;


·
            market
      conditions prevailing at the time the lease
  expires;


·
            the
      cost of new equipment at the time we are remarketing used
      equipment;


·
            the
      extent to which technological or regulatory developments during the lease
      term reduce the market for such used
equipment;


·
            the
      strength of the economy at the time the lease expires;
  and


·
            the
      condition of the equipment when the lease
  expires.





We cannot
assure you that our assumptions with respect to value are accurate or that the
equipment will not lose value more rapidly than we anticipate. If our
residual value estimates are incorrect, the total proceeds of the lease plus the
proceeds received from realizing the residual value of the equipment may be
insufficient to achieve our anticipated rate of return, or even in growth leases
to recover the principal invested.





If
leased equipment is not properly maintained, its residual value may be less than
expected.





If a
lessee fails to maintain equipment in accordance with the terms of its lease, we
may have to make unanticipated expenditures to repair the equipment in order to
protect our investment. In addition, some of the equipment we purchase is used
equipment. While we plan to inspect most used equipment prior to purchase, there
is no assurance that an inspection of used equipment prior to purchasing it will
reveal any or all defects and problems with the equipment that may occur after
it is acquired by us.








5








We seek
to obtain representations from the sellers and lessees of used equipment
that:





·
            the
      equipment has been maintained in compliance with the terms of their
      leases;


·
            that
      neither the seller, as lessor, nor the lessee, is in violation of any
      material terms of such leases; and


·
            the
      equipment is in good operating condition and repair and that the lessee
      has no defenses to the payment of rent for the equipment as a result of
      its condition.





We would
have rights against the seller of the equipment for any losses arising from a
breach of representations made to us, and against the lessee for a default under
the lease. However, we cannot assure you that these rights would make us whole
with respect to our entire investment in the equipment or our expected returns
on the equipment, including legal costs, costs of repair and lost revenue from
the delay in being able to sell or re-lease the equipment due to undetected
problems or issues. These costs and lost revenue could negatively affect
our liquidity and cash flows, and could negatively affect our profitability if
we are unable to recoup such costs from the lessee or other
third-parties.





If
a lessee defaults on its lease, we could incur losses.





We may
lease equipment to lessees that have senior debt rated below investment grade.
We do not require our lessees to have a minimum credit rating. Lessees with such
lower credit ratings may default on lease payments more frequently than lessees
with higher credit ratings. If a lessee does not make lease payments to us
when due, or violates the terms of its lease in another important way, we may be
forced to terminate the lease and attempt to recover the equipment. We may do
this at a time when we may not be able to arrange for a new lease or to sell the
equipment right away, if at all. If that were to happen, we would lose the
expected lease revenues and might not be able to recover the entire amount or
any of our original investment in the equipment. The costs of recovering
equipment upon a lessee’s default, enforcing the lessee’s obligations under the
lease, and transporting, storing, repairing and finding a new lessee for the
equipment may be high and may negatively affect the value of our investment in
the equipment. These costs could also negatively affect our liquidity and cash
flows, and could negatively affect our profitability.





If
a lessee files for bankruptcy, we may have difficulty enforcing the terms of the
lease and may incur losses.





If a
lessee files for protection under the bankruptcy laws, the remaining term of the
lease could be shortened or the lease could be rejected by the bankruptcy court,
which could result in, among other things, any unpaid pre-bankruptcy lease
payments being cancelled as part of the bankruptcy proceeding. We may also
experience difficulties and delays in recovering equipment from a bankrupt
lessee that is involved in a bankruptcy proceeding or has been declared bankrupt
by a bankruptcy court. If a lease is rejected in a bankruptcy, we would bear the
cost of retrieving and storing the equipment, and then have to remarket the
equipment. In addition, the bankruptcy court would treat us as an unsecured
creditor for any amounts due under the lease. These costs and lost revenues
could also negatively affect our liquidity and cash flows, and could negatively
affect our profitability.





We
may be subject to greater income tax obligations than originally
anticipated.





We have
acquired equipment subject to lease that the Internal Revenue Code requires us
to depreciate over a longer period than the depreciation period for most of the
equipment that our General Partner’s prior equipment leasing funds
purchased.  Similarly, some of the equipment that we may purchase may not
be eligible for accelerated depreciation under the Modified Accelerated Costs
Recovery System, which was established by the Tax Reform Act of 1986 to set
forth the guidelines for accelerated depreciation under the Internal Revenue
Code. Depending on the equipment that we acquire and its eligibility for
accelerated depreciation under the Internal Revenue Code, we may have less
depreciation deductions to offset gross lease revenue, thereby increasing our
taxable income.








6






Sellers
of leased equipment could use their knowledge of the lease terms for gain at our
expense.




We may
have acquired and may in the future acquire equipment subject to lease from
leasing companies that have an ongoing relationship with the lessees. A
seller could use its knowledge of the terms of the lease, particularly the end
of lease options and the date the lease ends, to compete with us. In
particular, a seller may approach a lessee with an offer to substitute
similar equipment at lease end for lower rental amounts. This may adversely
affect our opportunity to maximize the residual value of the
equipment.




Investment
in joint ventures may subject us to risks relating to our co-investors that
could adversely impact the financial results of such joint
ventures.





We
invested in joint ventures with other businesses that our General Partner
sponsors and manages, as well as with unrelated third parties. Investing in
joint ventures involved additional risks not present when acquiring leased
equipment that is wholly owned by us. These risks include the possibility that
our co-investors might become bankrupt or otherwise fail to meet financial
commitments, thereby obligating us to pay all of the debt associated with the
joint venture, as each party to a joint venture typically must guarantee all of
the joint venture’s obligations. Alternatively, the co-investors may have
economic or business interests or goals that are inconsistent with our
investment objectives and want to manage the joint venture in ways that do not
maximize our return. Among other things, actions by a co-investor might subject
leases that are owned by the joint venture to liabilities greater than those
contemplated by the joint venture agreement. Also, when none of the joint owners
control a joint venture, there might be a stalemate on decisions, including when
to sell the equipment or the prices or terms of a lease. Finally, while we may
have the right to buy out the other joint owner’s interest in the equipment in
the event of the sale, we may not have the resources available to do so. These
risks could negatively affect our profitability and could result in legal and
other costs, which could negatively affect our liquidity and cash
flows.





We
may not be able to obtain insurance for certain risks and would have to bear the
cost of losses from non-insurable risks.





Leased
equipment may be damaged or lost. Fire, weather, accidents, theft or other
events can cause damage or loss of leased equipment. While our leases generally
require lessees to have comprehensive insurance and assume the risk of loss,
some losses, such as from acts of war, terrorism or earthquakes may either be
uninsurable or not economically feasible to insure. Furthermore, not all
possible liability claims or contingencies affecting equipment can be
anticipated or insured against, and, if insured, the insurance proceeds may not
be sufficient to cover a loss. If such a loss occurs to the equipment, we could
suffer a total loss of any investment in the affected equipment. In leasing some
types of equipment, we may be exposed to environmental tort liability. Although
we use our best efforts to minimize the possibility and exposure of such
liability including by means of attempting to obtain insurance, we cannot assure
you that our assets will be protected against any such claims. These risks
could negatively affect our profitability and could result in legal and other
costs, which could negatively affect our liquidity and cash flows.





7






We
could suffer losses from failure to maintain equipment registration and from
unexpected regulatory compliance costs.





Many types of transportation equipment
are subject to registration requirements by U.S. governmental agencies, as well
as foreign governments if the equipment is to be used outside of the United
States. Failing to register the equipment, or losing the registration, could
result in substantial penalties, forced liquidation of the equipment and/or the
inability to operate and lease the equipment. Governmental agencies may also
require changes or improvements to equipment, and we may have to spend our own
funds to comply if the lessee of the equipment is not required to do so under
the lease. These changes could force the equipment to be removed from service
for a period of time. The terms of our leases may provide for rent reductions if
the equipment must remain out of service for an extended period of time or is
removed from service. We may then have reduced rental income from the lease for
this item of equipment. If we do not have the funds to make a required change,
we might be required to sell the affected equipment. If so, we could suffer a
loss on our investment, lose future revenues and experience adverse tax
consequences.





If
a lease is determined to be a loan, it could be subject to usury laws, which
could lower our lease revenue.





Equipment
leases have sometimes been held by the courts to be loan transactions subject to
State usury laws, which limit the interest rate that can be charged. Although we
anticipate entering into or acquiring leases that we believe are structured so
that they avoid being deemed loans, and would therefore not be subject to usury
laws, we cannot assure you that we will be successful in doing so. Loans at
usurious interest rates are subject to a reduction in the amount of interest due
under such loans and, if an equipment lease is held to be a loan with a usurious
rate of interest, the amount of the lease payment could be reduced and adversely
affect our lease revenue.





Our
General Partner’s officers and employees manage other businesses and do not
devote their time exclusively to managing us and our business.





We do not
employ our own full-time officers, managers or employees. Instead, our General
Partner supervises and controls our business affairs. Our General Partner’s
officers and employees also spend time supervising the affairs of other
equipment leasing programs it manages, so they devote the amount of time they
think is necessary to conduct our business, which may not be the same amount of
time that would be devoted to us if we had separate officers and
employees.





We
compete with a variety of financing sources for our lessees, which may affect
our ability to achieve our investment objectives.





The
commercial leasing and financing industry is highly competitive and is
characterized by competitive factors that vary based upon product and geographic
region. Our competitors are varied and include other equipment leasing programs,
captive and independent finance companies, commercial and industrial banks,
manufacturers and vendors. Competition from both traditional competitors and new
market entrants has intensified in recent years due to a strong economy, growing
marketplace liquidity and increasing recognition of the attractiveness of the
commercial leasing and financing industry.





We
compete primarily on the basis of pricing, terms and structure. To the extent
that our competitors compete aggressively on any combination of those factors,
we could fail to meet our investment objectives.





Item 1B. Unresolved Staff Comments





None.








8






Item 2. Properties





We
neither own nor lease office space or any other real property in our business at
the present time.





Item 3. Legal Proceedings





In the
ordinary course of conducting our business, we may be subject to certain claims,
suits, and complaints filed against us.  In our General Partner’s
opinion, the outcome of such matters, if any, will not have a material impact on
our consolidated financial position or results of operations. We are not aware
of any material legal proceedings that are currently pending against us or
against any of our assets.





Item 4. Submission of Matters to a Vote of Security
Holders





No
matters were submitted to a vote of security holders during the fourth quarter
of 2007.






9






PART II




Item 5. Market for Registrant's Securities, Related Security Holder
Matters and Issuer Purchases of Equity Securities





Our
limited partnership units are not publicly traded and there is no public market
for our limited partnership units. It is unlikely that any such market will
develop.








Title of
      Class
            Number
      of Partners
              as of February 29,
      2008General
      Partner
            1Limited
      Partners
            2,838








We paid
monthly distributions to each of our partners beginning the first month after
each partner was admitted to the Partnership through the termination of the
reinvestment period, which we anticipated would be on October 16, 2006. However,
on October 5, 2006, our General Partner determined that it was in the best
interests of our partners that the reinvestment period be extended until
approximately April 16, 2007 and subsequently further extended the reinvestment
period for an additional two months to June 2007. We paid distributions to our
limited partners totaling $4,308,340, $5,934,486 and $5,945,540 for the years
ended December 31, 2007, 2006 and 2005, respectively. Additionally, our General
Partner was paid distributions totaling $43,519, $59,944 and $60,056 for the
years ended December 31, 2007, 2006 and 2005, respectively. The terms of our
loan agreement with California Bank & Trust could restrict us from paying
cash distributions to our partners if such payment would cause us to not be in
compliance with our financial covenants. See “Item 7. General Partner’s
Discussion and Analysis of Financial Condition and Results of Operations –
Liquidity and Capital Resources.”





In order
for Financial Industry Regulatory Authority, Inc. (“FINRA”) members and their
associated persons to have participated in the offering and sale of interests in
limited partnership units (the “Units”) pursuant to the offering or to
participate in any future offering of our Units, we are required pursuant to
FINRA Rule 2810(b)(5) to disclose in each annual report distributed to our
limited partners a per unit estimated value of our Units, the method by which we
developed the estimated value and the date used to develop the estimated value.
In addition, our General Partner must prepare annual statements of our estimated
unit values to assist fiduciaries of retirement plans subject to the annual
reporting requirements of Employee Retirement Income Security Act (“ERISA”) in
the preparation of their reports relating to an investment in our Units. For
these purposes, the estimated value of our Units is deemed to be $155.85 per
unit at December 31, 2007.





This
estimate was based on the amount of remaining undiscounted lease payments on our
existing leases, the booked estimated residual values of the equipment held by
us upon the termination of those leases and our cash on hand.  From
this amount we then subtracted our total debt outstanding and then divided that
sum by the total number of units outstanding. To the extent that this abstract
yields a value in excess of the offering price per unit, the offering price per
unit is used for these purposes. This valuation was based solely on our General
Partner’s perception of market conditions and the types and amounts of our
assets. No independent valuation was sought.  However, as set forth
below, there is no significant public trading market for our Units at this time,
and there can be no assurance that limited partners could receive $155.85 per
unit if such a market did exist and they sold their Units or that they will be
able to receive such amount for their Units in the future. The foregoing
valuation was performed solely for the ERISA and FINRA purposes described above.
Furthermore, there can be no assurance as to the amount we may actually receive
if and when we seek to liquidate our assets or the amount of lease payments and
equipment disposition proceeds we will actually receive over our remaining term.
Our Units are not publicly traded and there is no public market for our Units.
It is unlikely that any such market will develop.






10





Item
      6. Selected Consolidated Financial
Data





The
selected consolidated financial data should be read in conjunction with the
consolidated financial statements and related notes included in “Item 8.
Consolidated Financial Statements and Supplementary Data” contained elsewhere in
this Annual Report on Form 10-K.








Years Ended December 31,2007
                
                
                2006
                
                
                2005
                
                
                2004
                
                
                2003Total
      revenue
                
                $
                9,606,325
                
                
                $
                16,252,505
                
                
                $
                25,926,526
                
                
                $
                21,591,797
                
                
                $
                25,150,087Net
      income (loss) (a)
                
                $
                1,146,979
                
                
                $
                (614,426
                )
                
                $
                3,368,585
                
                
                $
                (4,609,006
                )
                
                $
                (5,181,209
                )Net
      income (loss) allocable to limited partners
                
                $
                1,135,509
                
                
                $
                (608,282
                )
                
                $
                3,334,899
                
                
                $
                (4,562,916
                )
                
                $
                (5,129,397
                )Net
      income (loss) allocable to General Partner
                
                $
                11,470
                
                
                $
                (6,144
                )
                
                $
                33,686
                
                
                $
                (46,090
                )
                
                $
                (51,812
                )Weighted
      average number of limitedpartner
      units outstanding
                
                
                740,985
                
                
                
                741,752
                
                
                
                743,161
                
                
                
                744,463
                
                
                
                747,189Net
      income (loss) per weighted averagelimited
      partner unit outstanding
                
                $
                1.53
                
                
                $
                (0.82
                )
                
                $
                4.49
                
                
                $
                (6.13
                )
                
                $
                (6.86
                )Distributions
      to limited partners
                
                $
                4,308,340
                
                
                $
                5,934,486
                
                
                $
                5,945,540
                
                
                $
                5,955,151
                
                
                $
                7,008,299Distributions
      per weighted averagelimited
      partner unit outstanding
                
                $
                5.81
                
                
                $
                8.00
                
                
                $
                8.00
                
                
                $
                8.00
                
                
                $
                9.38Distributions
      to the General Partner
                
                $
                43,519
                
                
                $
                59,944
                
                
                $
                60,056
                
                
                $
                60,155
                
                
                $
                70,347December 31,2007
                
                
                2006
                
                
                2005
                
                
                2004
                
                
                2003Total
      assets
                
                $
                65,113,221
                
                
                $
                78,651,672
                
                
                $
                91,960,247
                
                
                $
                119,147,022
                
                
                $
                180,747,120Notes
      payable
                
                $
                47,397,220
                
                
                $
                55,697,875
                
                
                $
                63,746,059
                
                
                $
                86,305,022
                
                
                $
                134,938,722Partners'
      equity
                
                $
                17,046,972
                
                
                $
                20,277,150
                
                
                $
                26,937,141
                
                
                $
                29,597,291
                
                
                $
                40,363,969(a)   
      In 2007, we sold several of our assets that resulted in an approximately
      $3,000,000 decrease in depreciation and amortizationexpense
      as compared to 2006. In 2006, we took an impairment loss of
      $2,100,000 on an option that management decided towrite-off. In
      2005, we sold one of our leases that resulted in a gain of approximately
      $4,527,000.






11






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





Our General Partner’s Discussion and
Analysis of Financial Condition and Results of Operations relates to our
consolidated financial statements and should be read in conjunction with the
financial statements and notes thereto appearing elsewhere in this Annual Report
on Form 10-K. Statements made in this section may be considered
forward-looking.  These statements are not guarantees of future
performance and are based on current expectations and assumptions that are
subject to risks and uncertainties. Actual results could differ materially
because these risks and assumptions, including, among other things, factors
discussed in “Part I. Forward-Looking Statements” and “Item 1A. Risk Factors”
located elsewhere in this Annual Report on Form
10-K.





Overview





We
operate as an equipment leasing program in which the capital our partners
invested was pooled together to make investments, pay fees and establish a small
reserve. We primarily acquired equipment subject to lease, purchased equipment
and leased it to third party end users or financed equipment for third parties,
provided equipment and other financing and, to a lesser degree, acquired
ownership rights to items of leased equipment at lease expiration. Some of our
equipment leases were acquired for cash and provided current cash flow, which we
refer to as “income” leases. For the other equipment leases, we financed the
majority of the purchase price. We refer to these leases as “growth” leases.
These growth leases generated little or no current cash flow because
substantially all of the rental payments received from the lessee was used
to service the indebtedness associated with acquiring or financing the lease. We
anticipate that the future value of the leased equipment will exceed our cash
portion of the purchase price.





Our
general partner is ICON Capital Corp. (our “General Partner”), which was
originally a Connecticut corporation. Effective June 1, 2007, our General
Partner was re-incorporated as a Delaware corporation. Our General Partner
manages and controls our business affairs, including, but not limited to, our
equipment leases and financing transactions, under the terms of our amended and
restated limited partnership agreement (our “LP Agreement”).







On June
17, 2007, we began our liquidation period.  During our liquidation
period, we have continued to distribute substantially all distributable cash
from operations and equipment sales to our partners and are continuing the
orderly termination of our operations and affairs.







Current
Business Environment and Outlook





We
believe that domestic equipment leasing and financing volume is correlated to
overall business investments in equipment. According to information published by
the Equipment Leasing and Finance Association, domestic business investment in
equipment in 2008 is forecasted to be an estimated $1,159 billion as compared to
a low of $868 billion in 2002 and estimated investment of $1,106 billion in
2007, while the corresponding forecast for equipment finance volume in 2008 is
estimated to be $657 billion as compared to a low of $476 billion in 2003 and
estimated value of $625 billion in 2007. In addition, we believe that a similar
correlation exists in the international markets in which we operate. Increased
capital spending may increase the number of available leases thereby creating
more opportunities in the leasing market. While lower interest rates will remain
a key obstacle for the equipment leasing and financing industry because of the
increased likelihood of customers choosing to purchase rather than lease
business investments in equipment, we believe the leasing and financing
industry’s outlook for the foreseeable future is encouraging.








12








Other
factors that may negatively affect the leasing and financing industry are: (i)
the proposed legal and regulatory changes that may affect tax benefits of
leasing, and (ii) the continued misperception by potential lessees, stemming
from published issues at Enron, WorldCom and others, that leasing should not
play a central role as a financing alternative. However, as overall business
investment in equipment increases, and as companies tend to preserve cash and
lease (rather than purchase) equipment in pre-recessionary and recessionary
economies, we are optimistic that equipment leasing volume will increase as more
lessees return to the marketplace.





Lease
and Other Significant Transactions





We
entered into the following leases and other significant transactions during the
years ended December 31, 2007, 2006 and 2005:





Acquisition
of Telecommunications Equipment





We have a
100% interest in ICON Global Crossing III, LLC (“ICON Global Crossing III”)
which owns certain telecommunications equipment on lease to Global Crossing
Telecommunications, Inc. (“Global Crossing”). The purchase price of the
equipment totaled approximately $7,755,000 and we also incurred an initial
direct cost of approximately $124,000. Monthly rent is payable in advance on the
first business day of each month and the lease is scheduled to expire on March
31, 2011. Our General Partner did not take any acquisition fees in connection
with this transaction.





Sale
of two McDonnell Douglas DC10-30F Aircraft





During
March 2003, we and ICON Income Fund Nine, LLC (“Fund Nine”) formed a joint
venture, ICON Aircraft 47820 LLC (“Aircraft 47820”), for the purpose of
acquiring an investment in a McDonnell Douglas DC10-30F aircraft and two spare
engines (the “Aircraft and engines”) on lease to Federal Express Corporation
(“FedEx”). The lease expired on March 31, 2007. We had a 90% interest in this
joint venture. On March 11, 2003, Aircraft 47820 acquired the Aircraft and
engines for approximately $27,288,000, which consisted of approximately
$3,077,000 in cash and approximately $24,211,000 of non-recourse debt. Our
portion of the purchase price was approximately $2,769,000. The non-recourse
debt accrued interest at 4.035% per year and matured in March 2007. The lender
had a security interest in the Aircraft and engines and an assignment of the
rental payments under the lease with FedEx. Our General Partner was paid an
acquisition fee of approximately $819,000 relating to this transaction, of which
we paid approximately $737,000.






13






At
December 31, 2005, our General Partner determined that the Aircraft and engines
were impaired based upon an appraisal that indicated a slower than expected
recovery in the air transportation industry, and we recorded an impairment loss
of approximately $3,626,000.





On March
30, 2007, Aircraft 47820 sold the Aircraft and engines to FedEx for $5,475,000
and recognized a loss on the sale of approximately $1,025,000. The final lease
payment was paid to the lender, satisfying all remaining debt
obligations.





During
December 2002, we and Fund Nine formed a joint venture, ICON Aircraft 46835 LLC
(“Aircraft 46835”), for the purpose of acquiring a McDonnell Douglas DC10-30F
aircraft on lease with FedEx. The lease expired on March 31, 2007. We had a 15%
interest in this joint venture. On December 27, 2002, the joint venture acquired
the aircraft for approximately $25,292,000, which consisted of approximately
$3,000,000 in cash and approximately $22,292,000 of non-recourse debt. Our
portion of the purchase price was approximately $450,000. The non-recourse debt
accrued interest at 4.04% per year and matured in March 2007. The lender had a
security interest in the aircraft and an assignment of the rental payments under
the lease. Our General Partner was paid an acquisition fee of approximately
$759,000 relating to this transaction, of which we paid approximately
$114,000.





At
December 31, 2005, our General Partner determined that the aircraft was
impaired, based upon an appraisal that indicated a slower than expected recovery
in the air transportation industry, and we recorded an impairment loss of
approximately $3,182,000.





On March
30, 2007, Aircraft 46835 sold the aircraft to FedEx for $4,260,000 and
recognized a loss on the sale of approximately $640,000. The final lease payment
was paid to the lender, satisfying all remaining debt obligations.





Investment
in Option





At
December 31, 2006, our General Partner determined that our investment in an
option to purchase a 1994 Boeing 737-524 together with two engines was impaired
and accordingly, we recognized an impairment loss of $2,100,000. Our General
Partner’s decision was based upon the fact that the option was currently out of
the money and the probability that we would not exercise the option which
expires May 5, 2012.





K-Mart
Equipment





We had
four lease schedules consisting of 128 Noritsu Optical/Digital photo processing
mini-labs that were subject to lease with K-Mart Corporation (“K-Mart”). On
April 30, 2006 and May 31, 2006, two of our four lease schedules with K-Mart
expired and, pursuant to the terms of the leases, they were extended for an
additional 90 days. We treated these leases as month-to-month leases beginning
on May 1, 2006 and on June 1, 2006, respectively. Accordingly, we reclassified
approximately $285,000 and $119,000, respectively, of the unguaranteed residual
values related to these assets to leased equipment at cost. These lease
extensions ended on or before September 30, 2006, and we reclassified the net
book value of approximately $269,000 to equipment held for sale.





The
remaining two leases with K-Mart expired during 2006 and we reclassified the net
book value of this equipment of $37,120 and $67,295, respectively, to equipment
held for sale.  We also sold equipment for proceeds of $9,360 during
the fourth quarter of 2006.





Our
General Partner determined, based upon negotiations with potential buyers, that
the Noritsu Optical/Digital equipment held by K-Mart was
impaired.  Accordingly, for the year ended December 31, 2006, we
recorded an impairment loss of approximately $393,000, net of estimated selling
costs. At December 31, 2006, the four K-Mart leases represented equipment held
for sale totaling $140,400.





On
February 9, 2007, we sold all of the remaining equipment previously on lease to
K-Mart for approximately $254,100 and recognized a gain on the sale of this
equipment of approximately $111,000 which was recorded during the first quarter
of 2007.





Lease
Extensions and Non-Recourse Debt Refinancing of Two Airbus Aircraft





Effective
March 14, 2006, the owner trustee, in connection with the Cathay lease
extension, refinanced the non-recourse debt related to the Cathay aircraft in
which we have a 100% interest through an investment in ICON Aircraft 123 LLC
(“ICON 123”). The refinancing was entered into because the original non-recourse
debt of approximately $52,850,000 was due to be repaid on March 14, 2006. ICON
123 had established, under the original lease, a reserve account totaling
approximately $282,000, which was used to reduce the balloon payment to
approximately $52,568,000. We refinanced approximately $52,568,000. The
non-recourse debt initially accrued interest at the London Interbank
Eurocurrency Market Rate (“LIBOR”) plus 1.165%, and matures on October 1, 2011
and has a balloon payment of approximately $32,000,000. The interest rate of the
refinanced non-recourse debt was fixed at 6.1095% under the terms of the debt
agreement, effective October 3, 2006. At December 31, 2007, the fair market
value of the non-recourse debt was approximately $47,490,000.








14





ICON 123
had a commitment with respect to Cathay aircraft to pay certain maintenance
costs, which were incurred on or prior to March 14, 2006. ICON 123 had
established, under the original lease, a maintenance reserve cash account, which
totaled approximately $1,398,000 to pay for its portion of these costs. For the
year ended December 31, 2006, we accrued approximately $1,157,000 relating to
the maintenance costs. In January 2007, we had approximately $1,403,000 in the
maintenance reserve cash account, inclusive of accreted interest. This amount
and approximately $143,000 borrowed, as discussed below, was used to pay our
portion of the maintenance costs.





During
February 2002, we and Fund Nine formed ICON Aircraft 126 LLC (“ICON 126”) for
the purpose of acquiring all of the outstanding shares of Delta Aircraft Leasing
Limited (“D.A.L.”), a Cayman Islands registered company that owns, through an
owner trust, an Airbus A340-313X aircraft that is on lease to Cathay. ICON 126
completed the transaction during March 2002. The lease was initially scheduled
to expire in March 2006, but has been extended until July 1, 2011. We and Fund
Nine each have interests of 50.0% in ICON 126. ICON 126 consolidates the
financial position and operations of D.A.L. in its consolidated financial
statements.





Effective
March 27, 2006, the owner trustee, in connection with the lease extensions,
refinanced the non-recourse debt associated with the Cathay aircraft owned by
ICON 126. The refinancing was entered into because the original non-recourse
debt of approximately $52,850,000 was due to be repaid on March 27, 2006. ICON
126 established, under the original lease, a reserve account totaling
approximately $583,000, which was used to reduce the balloon payment to
approximately $52,267,000. The refinanced non-recourse debt initially accrued
interest at LIBOR plus 1.165%, and matures on July 1, 2011 and requires a
balloon payment of approximately $32,000,000 at maturity. The interest rate of
the refinanced debt was fixed at 6.104% under the terms of the debt agreement,
effective October 3, 2006.





During
2006 ICON 126 received $182,020 of capital contribution from both of its members
of which $50,000 was for amounts relating to the maintenance reserve account and
$132,020 related to costs paid by its members relating to the refinancing of the
non-recourse debt.





ICON 126
had a commitment to pay certain maintenance costs, which were incurred on or
prior to March 27, 2006. ICON 126 had established a maintenance account, which
totaled approximately $1,385,000 at September 30, 2006 (including interest
accreted in the amount of approximately $31,000) to pay for its portion of these
costs. This account was funded by free cash from the lease payments in
accordance with the terms of the original lease. During September 2006,
approximately $1,153,000 was paid for the maintenance costs. The excess cash
remaining of approximately $95,000, which includes interest accreted in the
amount of approximately $36,000 through December 31, 2007, is being held in the
maintenance account and used to pay down the principal balance of the related
non-recourse debt.





In
connection with ICON 123’s purchase of the aircraft, the owner trustee entered
into two first priority charge on cash deposit agreements pursuant to which the
maintenance account for the Cathay aircraft owned by ICON 126 was
cross-collateralized with the maintenance account for the Cathay aircraft owned
by ICON 123.  Under the terms of this agreement, ICON 126 was required
to pay on behalf of ICON 123, any maintenance cost shortfalls incurred by the
affiliate. On January 30, 2007, ICON 126 paid approximately $143,000 in
maintenance costs from the remaining balance in its maintenance account on
behalf of ICON 123.  The maintenance account and related security
interests were then terminated.   ICON 123 will reimburse ICON
126 for the maintenance shortfall when the aircraft is sold.





ICON 123
and ICON 126 are parties to a residual sharing agreement with respect to the
aircraft. (See Note 12 in “Part II, Item 8. Consolidated Financial Statements
and Supplementary Information”).





15








Sale
of five Pratt and Whitney 2037 aircraft engine modules





We owned
five Pratt and Whitney 2037 aircraft engine modules (the “Engine Modules”) on
lease to American Airlines, Inc., formerly TWA Airlines, LLC
(“TWA”).  On August 8, 2007, we sold all of our rights in the Engine
Modules to an unaffiliated third party for a gross sales price of $6,050,000. In
connection with the sale, we incurred legal fees and sales commissions of
approximately $331,000, relinquished previously collected security deposits and
prepaid rent related to the Engine Modules of approximately $172,000 and
recorded net proceeds of approximately $5,547,000 and a gain on sale of
approximately $1,042,000.





Sale
of Over the Road Rolling Stock, Manufacturing and Material Handling
Equipment





We had a
97.73% interest in ICON Cheyenne, LLC (“ICON Cheyenne”). ICON Cheyenne was a
joint venture with ICON Cash Flow Partners L.P. Seven (“L.P. Seven”) and ICON
Income Fund Eight A L.P. (“Fund Eight A”), which are entities also managed by
our General Partner. The portfolio consisted of, among other things, over the
road rolling stock, manufacturing equipment and materials handling equipment.
During 2006, ICON Cheyenne sold various pieces of its portfolio of equipment for
approximately $583,000 in cash and recognized a gain of approximately $582,000
on these sales.





During
the second quarter of 2007, ICON Cheyenne sold all of the remaining equipment to
a third party for total sales proceeds of approximately $111,000.  A
total gain on sale of approximately $110,000 was recognized by ICON
Cheyenne.





On
December 1, 2004, we transferred our entire 5.0% interest in ICON/Kenilworth,
LLC (“Kenilworth”), which owned a 25 MW co-generation facility on lease to
Schering-Plough Corporation, to an affiliate, Fund Nine, in exchange for a
25.87% interest in ICON SPK 2023-A, LLC (“ICON SPK”).  Following the
exchange, we had no interest in Kenilworth and we and Fund Nine had a 74.87% and
25.13% interest, respectively, in ICON SPK.





We had a
74.87% interest in ICON SPK.  ICON SPK was a joint venture with Fund
Nine. The portfolio consisted of various equipment leases, including material
handling, telecommunication and computer equipment. During 2006, ICON SPK sold
various pieces of its portfolio for approximately $460,000 in cash and
recognized a loss of approximately $106,000 on these sales.





During
the second quarter of 2007, ICON SPK sold all of its remaining equipment to a
third party for total sales proceeds of approximately $348,000.  A
total gain on sales of approximately $264,000 was recognized by ICON
SPK.





Assignment
of Interests in ICON Cheyenne





On
September 23, 2004, we acquired from L.P. Seven a 9.04% interest in ICON
Cheyenne. This increased our interest in ICON Cheyenne to 96.73%. This
assignment was made in order for L.P. Seven to repay its outstanding debt
obligation to us pursuant to a contribution agreement that we had entered into
with some of our affiliates in connection with the line of credit agreement we
had with Comerica Bank. The fair value was determined using discounted cash flow
projections for ICON Cheyenne's portfolio.





On
December 23, 2005, we acquired from ICON Cash Flow Partners L.P. Six (“L.P.
Six”) its entire 1.0% interest in ICON Cheyenne for approximately $5,000 thereby
increasing our interest in ICON Cheyenne to 97.73%. This amount represented L.P.
Six's fair value in ICON Cheyenne at December 23, 2005. The fair value was
determined using discounted cash flow projections for ICON Cheyenne's
portfolio.





16








Sale
of Flight Simulator





On March
23, 2001, we acquired, for cash and non-recourse debt, one flight simulator on
lease to British Aerospace, Inc. (“BAE”) with an expiration date of March 27,
2006. The non-recourse debt was fully repaid on March 27, 2005. On October 31,
2005, we sold this equipment to the lessee for $8,000,000 in cash. We recognized
a gain of approximately $4,500,000 on the sale of this equipment.





Assignment
of Rowan Cash Flow





On
February 23, 2005, L.P. Seven assigned to us 2.69% of its rights to the profits,
losses, and cash flows from its limited partnership interest in an entity that
owns a 100% interest in a mobile offshore drilling rig that is subject to lease
with Rowan Companies, Inc. L.P. Seven assigned the rights to us as repayment of
its approximately $673,000 outstanding debt obligation to us pursuant to a
contribution agreement that we had with Comerica Bank. This assignment increased
our rights to the profits, losses, and cash flows from L.P. Seven’s limited
partnership interest from 3.24%, which were assigned us in November 2004, to
5.93%. The repayment amount represented our General Partner’s estimated fair
value of L.P. Seven's interest in the mobile offshore drilling rig at February
23, 2005. The fair value of the mobile offshore drilling rig was determined
using an appraisal and cash flow analysis. During the year ended December 31,
2006, we received approximately $267,000 in cash distributions related to this
assignment.





Recent
Accounting Pronouncements





In
September 2006, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards (“SFAS”) No. 157, “Accounting
for Fair Value Measurement” (“SFAS No. 157”).  SFAS No. 157
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles and establishes a hierarchy that
categorizes and prioritizes the sources to be used to estimate fair value. SFAS
No. 157 also expands financial statement disclosures about fair value
measurements. On February 14, 2008, the FASB issued FASB Staff Position SFAS No.
157-1, which amends SFAS No. 157 to exclude SFAS No. 13, “Accounting for
Leases” and other accounting pronouncements that address fair value measurements
of leases from the provisions of SFAS No. 157.  SFAS No. 157 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007. Our General Partner has not yet determined whether
SFAS No. 157 will have a material impact on our financial condition, results of
operations, or cash flow. However, our General Partner believes we will
likely be required to provide additional disclosures as part of our future
financial statements, beginning with the first quarter of 2008.





In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option
for Financial Assets and Financial Liabilities—Including an Amendment of SFAS
No. 115” (“SFAS No. 159”), which permits but does not require us to measure
financial instruments and certain other items at fair value. Unrealized gains
and losses on items for which the fair value option has been elected are
reported in earnings.  This statement is effective for financial
statements issued for fiscal years beginning after November 15,
2007.  Our General Partner is currently evaluating the impact of
adopting SFAS No. 159 on our consolidated financial statements.





In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements—an Amendment of ARB No. 51” (“SFAS No.
160”). SFAS No. 160 establishes accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the retained interest and gain
or loss when a subsidiary is deconsolidated. This statement is effective for
financial statements issued for fiscal years beginning on or after
December 15, 2008 with earlier adoption prohibited. Our General
Partner is currently evaluating the impact of SFAS No. 160 on our consolidated
financial statements.





17








Critical
Accounting Policies





An
understanding of our critical accounting policies is necessary to understand our
financial results. The preparation of financial statements in conformity with
U.S. generally accepted accounting principles (“US GAAP”) requires our General
Partner to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
as of the date of the consolidated financial statements and the reported amounts
of revenues and expenses during the reporting period. Significant estimates
primarily include the determination of allowance for doubtful accounts,
depreciation and amortization, impairment losses, estimated useful lives and
residual values.  Actual results could differ from those estimates. We
applied our critical accounting policies and estimation methods consistently in
all periods presented.  We consider the following accounting policies to be
critical to our business:





·
            Lease
      classification and revenue
recognition,


·
            Asset
      impairments,


·
            Depreciation,


·
            Initial
      direct costs, and


·
            Acquisition
      fees





Lease
Classification and Revenue Recognition





Each
lease with regard to the equipment we lease to third parties will be classified
either as a finance or an operating lease, which will be determined based
upon the terms of each lease. For a finance lease, the initial direct costs
are capitalized and amortized over the term of the lease.  For an operating
lease, the initial direct costs are included as a component of the cost of the
equipment and depreciated over the estimated useful life of the
equipment.





For
finance leases, we record, at lease inception, the total minimum lease payments
receivable from the lessee, the estimated unguaranteed residual value of the
equipment at lease termination, the initial direct costs related to the lease
and the related unearned income.  Unearned income represents the difference
between the sum of the minimum lease payments receivable plus the estimated
unguaranteed residual value minus the cost of the leased equipment.
 Unearned income is recognized as finance income over the term of the lease
using the effective interest rate method.





For
operating leases, rental income is recognized on a straight line basis over the
lease term.  Billed and uncollected operating lease receivables are
included in rents receivable.  Deferred income is the difference
between the timing of the cash payments and the income recognized on a straight
line basis.





Our
General Partner has an investment committee that approves each new equipment and
financing transaction and lease acquisition.  As part of its process
it determines the residual value, if any, to be used once the acquisition has
been approved.  The factors considered in determining the residual
value include, but are not limited to, the creditworthiness of the potential
lessee, the type of equipment being considered, how the equipment is integrated
into the potential lessee's business, the length of the lease and the industry
in which the potential lessee operates.





The
residual value assumes, among other things, that the asset is utilized normally
in an open, unrestricted and stable market. Short-term fluctuations in the
market place are disregarded and it is assumed that there is no necessity either
to dispose of a significant number of the assets, if held in quantity,
simultaneously or to dispose of the asset quickly.  The residual value
is calculated using information from various external sources, such as trade
publications, auction data, equipment dealers, wholesalers and industry experts,
as well as inspection of the physical asset and other economic
indicators.








18





Asset
Impairments





The
significant assets in our portfolio are periodically reviewed, no less
frequently than annually, to determine whether events or changes in
circumstances indicate that the carrying value of an asset may not be
recoverable. An impairment loss will be recognized only if the carrying amount
of a long-lived asset is not recoverable and exceeds its fair market
value. If there is an indication of impairment, we will estimate the future
cash flows (undiscounted and without interest charges) expected from the use of
the asset and its eventual disposition. Future cash flows are the future cash
inflows expected to be generated by an asset less the future outflows expected
to be necessary to obtain those inflows.  If an impairment is determined to
exist, the impairment loss will be measured as the amount by which the carrying
value of a long-lived asset exceeds its fair value and recorded in the
consolidated statement of operations in the period the determination is
made.





The
events or changes in circumstances that generally indicate that an asset may be
impaired are (i) the estimated fair value of the underlying equipment is less
than its carrying value or (ii) the lessee is experiencing financial
difficulties and it does not appear likely that the estimated proceeds from the
disposition of the asset will be sufficient to satisfy the residual position in
the asset and, if applicable, the remaining obligation to the non-recourse
lender.  Generally in the latter situation, the residual position relates
to equipment subject to third party non-recourse debt where the lessee
remits its rental payments directly to the lender and we do not recover its
residual position until the non-recourse debt is repaid in full. The preparation
of the undiscounted cash flows requires the use of assumptions and estimates,
including the level of future rents, the residual value expected to be realized
upon disposition of the asset, estimated downtime between re-leasing events and
the amount of re-leasing costs. Our General Partner’s review for impairment
includes a consideration of the existence of impairment indicators including
third party appraisals, published values for similar assets, recent transactions
for similar assets, adverse changes in market conditions for specific asset
types and the occurrence of significant adverse changes in general industry and
market conditions that could affect the fair value of the asset.





Depreciation





We record
depreciation expense on equipment classified as an operating lease.  In
order to calculate depreciation, we first determine the depreciable equipment
cost, which is the cost less the estimated residual value.  The estimated
residual value is our estimate of the value of the equipment at lease
termination.  Depreciation expense is recorded by applying the
straight-line method of depreciation to the depreciable equipment cost over the
lease term.





Initial
direct costs





We
capitalize initial direct costs associated with the origination and funding of
lease assets in accordance with SFAS No. 91 “Accounting for Nonrefundable
Fees and Costs Associated with Originating or Acquiring Loans and Initial Direct
Costs of Leases.” The costs are amortized on a lease by lease basis based on
actual lease term using a straight-line method for operating leases and the
effective interest rate method for direct finance leases. Costs related to
leases that are not consummated are expensed as an acquisition
expense.





Acquisition
fees





Pursuant
to our LP Agreement, acquisition fees paid to our General Partner are based
on 3% of the equipment purchase price. These fees are capitalized and included
in the cost of the acquired asset.







19








Results
of Operations for the Years Ended December 31, 2007 (“2007”) and 2006
(“2006”)





We are
currently in our liquidation period.  On October 5, 2006 our General
Partner extended the reinvestment period for six months until approximately
April 16, 2007 and subsequently further extended the reinvestment period for an
additional two months to June 2007.





On June
17, 2007, we began our liquidation period. During our liquidation period, we
will sell our assets in the ordinary course of business.  As we sell
our assets, both rental income and finance income will decrease over time as
will expenses related to our assets such as depreciation and amortization
expense. Additionally, interest expense should decrease as we reach the
expiration of leases that were financed and the debt is repaid to the
lender.  As leased equipment is sold, we will experience both gains
and losses on these sales. We will continue to liquidate our assets during this
period and we expect to see a reduction in revenue and expenses
accordingly.





Revenue
for 2007 and 2006 are summarized as follows:





Years ended December 31,2007
            
            
            2006
            
            
            ChangeRental
      income
            
            $
            8,580,752
            
            
            $
            16,174,323
            
            
            $
            (7,593,571
            )Finance
      income
            
            
            742,064
            
            
            
            133,856
            
            
            
            608,208Loss
      from investments in joint ventures
            
            
            (282,582
            )
            
            
            (778,423
            )
            
            
            495,841Net
      gain on sales of equipment and residual values
            
            
            493,196
            
            
            
            476,020
            
            
            
            17,176Interest
      and other income
            
            
            72,895
            
            
            
            246,729
            
            
            
            (173,834
            )Total
      revenue
            
            $
            9,606,325
            
            
            $
            16,252,505
            
            
            $
            (6,646,180
            )





Total
revenue for 2007 decreased $6,646,180, or 40.9%, as compared to 2006 primarily
due to the decrease in rental income.  The decrease in rental income
was due to: (i) the sale of the Aircraft and engines on lease to FedEx during
March 2007, (ii) the sale of equipment on lease to K-Mart, (iii) the extension
of our lease with Cathay during March 2006, (iv) the sale of the remaining
equipment on lease to ICON SPK and ICON Cheyenne and (v) the sale of the Engine
Modules on lease to TWA. The sale of the Aircraft and engines in March 2007
resulted in a reduction of total rental payments of approximately $4,900,000 in
2007. The sale of the equipment on lease to K-Mart resulted in a decrease of
approximately $907,000. The extension of our lease with Cathay included a
reduction in total rental payments of approximately $744,000 in 2007. The sale
of all the remaining equipment that was previously on lease to ICON SPK and ICON
Cheyenne resulted in a reduction of approximately $445,000 and $330,000,
respectively. The sale of the Engine Modules during August 2007 resulted in a
reduction of approximately $302,000 in 2007. The decrease in revenue was partly
offset by an increase in finance income primarily due to the addition of the
Global Crossing lease that commenced in April 2007 and the reduction in our net
loss from investments in joint ventures, which was primarily due to the lease
extension completed during March 2006 for ICON 126.







20








Expenses
for 2007 and 2006 are summarized as follows:





Years ended December 31,2007
            
            
            2006
            
            
            ChangeManagement
      fees - General Partner
            
            $
            -
            
            
            $
            410,842
            
            
            $
            (410,842
            )Administrative
      expense reimbursements - General Partner
            
            
            -
            
            
            
            161,980
            
            
            
            (161,980
            )General
      and administrative
            
            
            405,470
            
            
            
            657,832
            
            
            
            (252,362
            )Interest
            
            
            3,326,807
            
            
            
            3,582,860
            
            
            
            (256,053
            )Depreciation
      and amortization
            
            
            4,557,064
            
            
            
            7,577,104
            
            
            
            (3,020,040
            )Impairment
      loss
            
            
            -
            
            
            
            2,493,108
            
            
            
            (2,493,108
            )Maintenance
      expense
            
            
            -
            
            
            
            1,546,456
            
            
            
            (1,546,456
            )Total
      expenses
            
            $
            8,289,341
            
            
            $
            16,430,182
            
            
            $
            (8,140,841
            )





Total
expense for 2007 decreased $8,140,841 or 49.5%, as compared to 2006. The change
was from a decrease in all expense categories. The decrease in depreciation and
amortization expense was due to: (i) the sale of the Aircraft and engines in
March 2007, (ii) the lease extension of our lease with Cathay in March 2006 and
(iii) the sales of the remaining assets on lease with ICON SPK. The sale of the
Aircraft and engines resulted in a total decrease in depreciation and
amortization expense of approximately $1,600,000 for 2007. The lease extension
with Cathay for ICON 123 increased the overall number of total rental payments
but simultaneously decreased the monthly depreciation and amortization expense.
The total decrease for 2007 was approximately $564,000. The sale of the
remaining assets for ICON SPK resulted in an approximately $379,000 decrease in
depreciation and amortization expense for 2007. The impairment loss in 2006 was
due to the following: (i) $2,100,000 from our investment in an option to
purchase a Boeing 737-524 aircraft on lease to a United States based commercial
airline and (ii) approximately $393,000 from our optical/digital equipment
previously on lease to K-Mart. The decrease in general and administrative
expense was primarily due to the approximately $1,546,000 one-time maintenance
charge incurred by ICON 123 in 2006; there was no charge for 2007. The decrease
in both management fees – General Partner and administrative expense
reimbursements – General Partner is due to our General Partner’s decision,
effective May 1, 2006, to waive all future management fees and administrative
expense reimbursements, although the General Partner continues to provide these
services. The decrease in interest expense is due to the general decrease that
occurs as the outstanding non-recourse debt balance is paid down and the March
2006 refinancing of our non-recourse debt on the Cathay lease by ICON
123.





Minority
Interest





Minority
interest expense for 2007 decreased $266,744 or 61.1%, as compared to 2006. The
decrease in minority interest expense was due to the sale of all remaining
assets owned by the joint ventures in 2007, specifically Aircraft 47820, ICON
SPK and ICON Cheyenne.





Net
Income (Loss)





As a
result of the foregoing factors, net income for 2007 was $1,146,979 as compared
to a net loss for 2006 of $(614,426).  The net income per weighted average
number of limited partnership units outstanding for 2007 was $1.53 as compared
to net loss per weighted average number of limited partnership units outstanding
for 2006 of $(0.82).








21





Results
of Operations for the Years Ended December 31, 2006 (“2006”) and 2005
(“2005”)





Revenue
for 2006 and 2005 are summarized as follows:





Years ended December 31,2006
            
            
            2005
            
            
            ChangeRental
      income
            
            $
            16,174,323
            
            
            $
            19,426,643
            
            
            $
            (3,252,320
            )Finance
      income
            
            
            133,856
            
            
            
            563,439
            
            
            
            (429,583
            )(Loss)
      income from investments in joint ventures
            
            
            (778,423
            )
            
            
            515,832
            
            
            
            (1,294,255
            )Net
      gain on sales of equipment and residual values
            
            
            476,020
            
            
            
            4,827,527
            
            
            
            (4,351,507
            )Interest
      and other income
            
            
            246,729
            
            
            
            593,085
            
            
            
            (346,356
            )Total
      revenue
            
            $
            16,252,505
            
            
            $
            25,926,526
            
            
            $
            (9,674,021
            )





Total
revenue for 2006 decreased by $9,674,021, or 37.3%, as compared to 2005 due to
decreases in all revenue categories.  The decrease in rental income
was primarily due to the sale, in October 2005, of a flight simulator previously
on lease to BAE. In addition, during March 2006, we extended our lease with
Cathay and the extension included a reduction in monthly rental payments of
$150,000. The decrease in finance income was consistent with the lease terms of
our finance leases and we expect our finance income to continue to decrease as
we get closer to the expiration of our finance leases. The decrease in our net
income from investments in joint ventures was primarily due to the lease
extension completed during March 2006, which reduced the rental income of our
joint venture, ICON 126, whose sole asset is an Airbus A340-313X aircraft. The
decrease in net gain on sales of equipment is primarily due to the sale of the
flight simulator during October 2005, on which we recognized a gain of
approximately $4,500,000 compared to equipment sales from two of our majority
owned joint ventures, ICON Cheyenne and ICON SPK 2023, which resulted in a gain
of approximately $476,000 during 2006.





Expenses
for 2006 and 2005 are summarized as follows:





Years ended December 31,2006
            
            
            2005
            
            
            ChangeManagement
      fees - General Partner
            
            $
            410,842
            
            
            $
            1,311,990
            
            
            $
            (901,148
            )Administrative
      expense reimbursements - General Partner
            
            
            161,980
            
            
            
            515,934
            
            
            
            (353,954
            )General
      and administrative
            
            
            657,832
            
            
            
            543,819
            
            
            
            114,013Interest
            
            
            3,582,860
            
            
            
            4,285,629
            
            
            
            (702,769
            )Depreciation
      and amortization
            
            
            7,577,104
            
            
            
            12,573,850
            
            
            
            (4,996,746
            )Impairment
      loss
            
            
            2,493,108
            
            
            
            3,855,316
            
            
            
            (1,362,208
            )Maintenance
      expense
            
            
            1,546,456
            
            
            
            -
            
            
            
            1,546,456Reversal
      of bad debt expense
            
            
            -
            
            
            
            (411,742
            )
            
            
            411,742Total
      expenses
            
            $
            16,430,182
            
            
            $
            22,674,796
            
            
            $
            (6,244,614
            )







22





Total
expenses for 2006 decreased by $6,244,614 or 27.5%, as compared to 2005. Our
impairment loss was less in 2006 than in 2005. During 2006, our impairment loss
was due to the following: (i) $2,100,000 from our investment in an option and
(ii) approximately $393,000 from our optical/digital equipment previously on
lease to K-Mart. During 2005, our impairment loss was due the following: (i)
approximately $3,626,000 from our FedEx aircraft and (ii) approximately $229,000
on our optical/digital equipment on lease to K-Mart. The decrease in
depreciation and amortization was primarily a result of the following; (i) the
sale of a flight simulator during October 2005, (ii) the lease extension on our
100% owned Cathay aircraft and (iii) sales of equipment in several of our
majority owned joint ventures, ICON Cheyenne and ICON SPK during 2005. The
decrease in interest expense is due to several factors: (i) the general decrease
that occurs as the outstanding non-recourse debt balance is paid down and (ii)
the refinancing of our non-recourse debt on our 100% owned Cathay aircraft. The
decrease of both management fees – General Partner and administrative expense
reimbursements – General Partner is due to our General Partner’s decision,
effective May 1, 2006, to waive all future management fees and administrative
expense reimbursements, although the General Partner continues to provide these
services. The increase in maintenance expense, which is a one-time charge, was
due solely to required maintenance costs incurred on our Airbus A340-313X
aircraft.





Minority
Interest





Minority
interest expense for 2006 decreased by $553,604 or 473.8%, as compared to 2005.
The
decrease was primarily due to the approximately $3,600,000 impairment loss
recorded by Aircraft 47820 which resulted in additional minority interest
expense of approximately $360,000 in 2005. Additionally, as a result of this
impairment loss, there was a decrease in depreciation expense recognized in
2006.




Net
(Loss) Income





As a
result of the foregoing factors, net loss for 2006 was $(614,426) as compared to
a net income for 2005 of $3,368,585.  The net loss per weighted average
number of limited partnership units outstanding for 2006 was $(0.82) as compared
to a net income per weighted average number of limited partnership units
outstanding for 2005 of $4.49.





Financial
      Condition





This
section discusses the major balance sheet variances from 2007 compared to
2006.





Total
      Assets





Total
assets decreased $13,538,451 from $78,651,672 in 2006 to $65,113,221 in 2007.
The decrease was primarily due to the sale of assets during 2007. We are
currently in our liquidation period and are selling our remaining assets in the
ordinary course of business.  During 2007 we sold the Aircraft and
engines and the Engine Modules previously on lease to FedEx and TWA. In
addition, we sold the Noritsu Optical/Digital equipment that were classified as
held for sale. The decrease in total assets was offset by the addition of the
equipment on lease to Global Crossing.





Current
      Assets





Current
assets decreased $1,637,863 from $3,821,573 in 2006 to $2,183,710 in 2007. The
decrease was primarily due to the sale of the Aircraft and engines previously on
lease to FedEx (we recorded an accounts receivable for FedEx in 2006 for rents
not yet received) and the payment of the maintenance costs by ICON 123 in
January 2007.





23





Total
Liabilities





Total
liabilities decreased $9,809,986 from $57,876,235 in 2006 to $48,066,249 in
2007. The decrease was primarily due to the payment of the remaining debt
obligations upon the sale of the Aircraft and engines during 2007, which
decreased our total remaining non-recourse long-term debt balance. In addition,
the accrued maintenance reserve account for ICON 123 was terminated upon the
payment of the liability in January 2007.





Current
Liabilities





Current
liabilities decreased $6,014,069 from $11,734,015 in 2006 to $5,719,946 in 2007.
The decrease was primarily due to the sale of the Aircraft and engines,
whereupon all remaining debt obligations were fully satisfied. In addition, we
repaid most of the outstanding balance on our revolving line of credit,
recourse.





Total Partners’Equity





Total partners’ equity decreased
$3,230,178 from $20,277,150 in 2006 to $17,046,972 in 2007. During our
liquidation period, we are distributing substantially all distributable cash
from operations and equipment sales to our limited partners. In addition, in
conjunction with the sale of equipment, rental income is expected to decrease,
thereby reducing our net income.





Liquidity
      and Capital Resources





Sources and Uses of
Cash





At
December 31, 2007 and 2006, we had cash and cash equivalents of $414,156 and
$762,601, respectively. During our liquidation period our main source of cash is
expected to be from operating and investing activities from the sale or disposal
of our assets. Our main use of cash during the liquidation period is expected to
be from financing activities, in the form of cash distributions to our
partners.





Operating
Activities





Sources
of Cash





Sources
of cash from operating activities decreased $353,911 from $2,164,486 in 2006 to
$1,810,575 in 2007. The decrease was primarily due to the payment of the
maintenance costs of approximately $1,403,000. This decrease was partly offset
by the addition of our financing lease with Global Crossing, which accounted for
an additional collection of cash of approximately $1,129,000.





Our main
source of cash from operating activities in 2006 and 2005 was the collection of
non-financed receivables from finance leases of approximately $823,000 and
$732,000, respectively. Our only source of cash from the collection of
non-financed receivables was from Regus Business Centre Corp.
(“Regus”).  Our finance lease with Regus expired on February 28,
2007.





Investing
Activities





Sources
of Cash





Sources
of cash from investing activities increased $11,369,816 from $1,052,969 in 2006
to $12,422,785 in 2007. The increase in cash was primarily from the proceeds
received from the sales of equipment of $11,783,785 and $1,052,969 for 2007 and
2006, respectively. During 2007, the sales of the Engine Modules and the
Aircraft and engines resulted in total proceeds of approximately $6,050,000 and
$5,475,000, respectively. In addition, we received approximately $639,000 in
distributions from Aircraft 46835. During 2006, two of our majority owned
subsidiaries, ICON SPK and ICON Cheyenne, had proceeds from the sales of
equipment of approximately $460,000 and $583,000, respectively.





24






Our
primary source of cash from investing activities in 2006 and 2005 was from the
proceeds from sales of equipment of $1,052,969 and $9,438,738, respectively.
During 2006, two of our majority owned subsidiaries, ICON SPK 2023 and ICON
Cheyenne, had proceeds from the sales of equipment of approximately $460,000 and
$583,000, respectively. During 2005, we received proceeds of $8,000,000 relating
to the sale of our flight simulator previously on lease to BAE.





Uses
of Cash





Use of
cash from investing activities increased $7,675,147 from $91,011 in 2006 to
$7,766,158 in 2007. The increase was primarily due to the purchase of
telecommunications equipment from various vendors totaling $7,754,746. The
equipment is on lease to Global Crossing as of April 1, 2007.





Our
principal uses of cash from investing activities in 2006 and 2005 were for
distributions paid to minority interest partners in several of our joint
ventures and in 2005 we made loans and advances made to affiliates. During 2005,
we made advances to one of our affiliates of approximately
$673,000.





Financing
Activities





Sources
of Cash





Source of
cash from financing activities increased $505,000 from $3,125,000 in 2006 to
$3,630,000 in 2007, resulting from an increase of $505,000 in proceeds from the
revolving line of credit.





Our sole
source of cash from financing activities during 2006 and 2005 was from the
proceeds from our recourse borrowings of $3,125,000 and $4,160,000,
respectively.





Uses of Cash





Use of
cash from financing activities increased $4,108,139 from $6,337,508 in 2006 to
$10,445,647 in 2007. The increase was due to the distributions paid to our
partners and the repayment of our recourse borrowings in 2007. During 2007 and
2006 we paid distributions to our partners of $4,351,859, and $5,994,430,
respectively.  During 2007 we repaid our revolving line of credit of
$5,500,000. In addition, we paid distributions to our minority interest partners
in 2007and 2006 of $568,490, and $291,943, respectively.





Our major
uses of cash from financing activities during 2006 and 2005 were distributions
paid to our partners and in 2005 we paid down our recourse borrowings. During
2006 and 2005 we paid approximately $292,000 and $350,000, respectively, for
distributions to our minority interest partners in joint ventures. During 2006,
we paid approximately $275,000 to the other members of ICON SPK 2023 and
approximately $17,000 to the other members of ICON Cheyenne. During 2005, we
paid approximately $298,000 to the other members of ICON SPK 2023 and
approximately $52,000 to the other members of ICON Cheyenne. During 2006 and
2005 we paid distributions to our partners of approximately $5,994,000 and
$6,006,000, respectively.  During 2005 we paid down our revolving line
of credit by approximately $7,385,000.





25






Financings
and Borrowings





Non-Recourse
Long-Term Debt





At
December 31, 2007, we had a non-recourse debt obligation that was being paid
directly to the lender by the lessee and was accruing interest at 6.1095% per
year. The outstanding balance of our non-recourse debt was $46,142,220 at
December 31, 2007. At December 31, 2006 and 2005, we had two non-recourse debt
obligations that were being paid directly to the lenders by the lessees which
accrued interest at 4.035% and 6.1095% per year. The outstanding balance of our
non-recourse debt at December 31, 2006 and 2005 was $52,572,875 and $63,746,059,
respectively.





Effective
March 14, 2006, the owner trustee, in connection with the Cathay lease
extension, refinanced the non-recourse debt related to the Cathay aircraft of
which we own 100%. The refinancing was entered into because the original
non-recourse debt of approximately $52,850,000 was due to be repaid on March 14,
2006. We had established, under the original lease, a reserve account totaling
approximately $282,000, which was used to reduce the balloon payment to
approximately $52,568,000. We refinanced approximately $52,568,000, which
initially accrued interest at LIBOR plus 1.165%, and matures on October 1, 2011
and has a balloon payment of approximately $32,000,000. The interest rate of the
refinanced non-recourse debt was fixed at 6.1095% under the terms of the debt
agreement, effective October 3, 2006.





Revolving
Line of Credit, Recourse





On August
31, 2005, we, together with certain of our affiliates (entities sponsored and
organized by our General Partner), Fund Nine, ICON Income Fund Ten, LLC
(“Fund Ten”) and ICON Leasing Fund Eleven, LLC (“Fund Eleven”)
(collectively, the "Borrowers") entered into a Commercial Loan Agreement (the
"Loan Agreement"), with California Bank & Trust (the “Lender”). The Loan
Agreement provides for a revolving line of credit of up to $17,000,000 pursuant
to a senior secured revolving loan facility (the "Facility") which is secured by
all assets of the Borrowers not subject to a first priority lien, as defined in
the Loan Agreement. Each of the Borrowers is jointly and severally liable for
all amounts borrowed under the Facility. Amounts available under the Facility
are subject to a borrowing base that is determined, subject to certain
limitations, on the present value of the future receivables under certain lease
agreements in which the Borrowers have a beneficial interest.





As part
of the Loan Agreement, the Borrowers are required to comply with certain
financial covenants including a minimum debt coverage ratio, a tangible net
worth covenant, a leverage ratio and a minimum liquidity covenant. The Loan
Agreement prohibits any Borrower from declaring or paying any distribution to
investors if such a payment would cause such Borrower to become non-compliant
with the financial covenants in the Loan Agreement. The Borrowers are obligated
to pay a quarterly commitment fee of 0.5% on unused commitments under the
Facility.





In
addition, on August 31, 2005, the Borrowers entered into a Contribution
Agreement (the "Contribution Agreement") pursuant to which the Borrowers agreed
to certain restrictions on the amounts and terms of their respective borrowings
under the Facility in order to minimize the risk that a Borrower would be unable
to repay its portion of the outstanding obligations under the Facility at any
time. These restrictions include, but are not limited to, borrowing in excess of
the lesser of (a) an amount each Borrower could reasonably expect to repay in
one year from its projected free cash flow, or (b) the greater of (i) the
borrowing base, as defined in the Agreement, as applied to such and (ii) 50% of
the net worth of such Borrower. The Contribution Agreement also provides that,
in the event a Borrower pays an amount under the Contribution Agreement in
excess of its share of the total obligations under the Facility, whether by
reason of an event of default or otherwise, the other Borrowers will immediately
make a contribution payment to such Borrower and in such amount that the
aggregate amount paid by each Borrower reflects its allocable share of the
aggregate obligations under the Facility. The Borrowers' obligations to each
other under the Contribution Agreement are collateralized by a subordinate lien
on the assets of each Borrower.






26





On
December 26, 2006, the Borrowers entered into a Loan Modification Agreement (the
“Loan Modification”) to the Loan Agreement. The Loan Modification extended the
Facility from August 31, 2007 to September 30, 2008 and lowered (i) the interest
rate for advances under the Facility from the Lender’s prime rate plus 0.25% to
the Lender’s prime rate and (ii) the interest rate on the five separate advances
that are permitted to be made under the Facility to the rate at which United
States dollar deposits can be acquired by LIBOR plus 2.75% per year to LIBOR
plus 2.5% per year. In addition, pursuant to the terms of the Loan Modification,
the Borrowers no longer have to maintain a cash reserve. The interest rate at
December 31, 2007 was 7.25%.





At
December 31, 2006, we had $3,125,000 outstanding under the Facility, which
represented the entire amount outstanding for all Borrowers.





On June
20, 2007, the Loan Agreement, the Contribution Agreement and the Loan
Modification were modified to admit ICON Leasing Fund Twelve LLC (“Fund Twelve”)
as a permitted borrower.





The
Borrowers were in compliance with the covenants at December 31, 2007. The
Borrowers were also in compliance with the Contribution Agreement at December
31, 2007 and no amounts were due to or payable by us under the Contribution
Agreement.





Aggregate
borrowings by all Borrowers under the Facility amounted to $6,255,000 at
December 31, 2007. We had $1,255,000 in borrowings outstanding under the
Facility as of such date. The balance of $5,000,000 was borrowed by Fund Ten.
Subsequent to December 31, 2007, Fund Ten made repayments on various dates
totaling $5,000,000.





Our
General Partner believes that with the cash we currently have available, the
cash being generated from our remaining leases, and the proceeds from equipment
and asset sales, we have sufficient cash to continue our operations into the
foreseeable future. We have the ability to borrow funds under the Facility if
necessary. However, our ability to generate cash in the future is subject to
general economic, financial, competitive, regulatory and other factors that
affect our lessees’ businesses that are beyond our control.  See “Part
I, Item 1A.  Risk Factors.” At December 31, 2007, we had approximately
$2,184,000 of current assets and approximately $5,720,000 of current
liabilities, which results in approximately a $3,536,000 working capital
deficit. Of this amount, approximately $3,796,000 consisted of direct payments
to a lender made by our lessee. These direct payments are for a debt that had no
corresponding current assets. Therefore, when considering the overall working
capital, direct payments should be excluded. The exclusion of these payments
yields a positive working capital of approximately $260,000 at December 31,
2007.





Distributions





We, at
our General Partner’s discretion, paid monthly distributions to each of our
partners beginning the first month after each such partner was admitted through
the termination of our reinvestment period, which was on June 17, 2007. During
the liquidation period, we plan to make distributions pursuant to the terms of
the LP Agreement. We expect that distributions made during the liquidation
period will vary, depending on the timing of the sale of our assets, our receipt
of rental income, and income from our investments. We paid distributions to our
limited partners for the years ended December 31, 2007, 2006 and 2005 of
$4,308,340, $5,934,486 and $5,945,540, respectively. We paid distributions to
our General Partner for the years ended December 31, 2007, 2006 and 2005 of
$43,519, $59,944 and $60,056, respectively.







27







Contractual
Obligations and Commitments





At
December 31, 2007 we had both non-recourse and recourse debt obligations. The
lenders have security interests in equipment relating to each non-recourse debt
instrument and an assignment of the rental payments under the leases associated
with the equipment. If the lessee were to default on the lease, the equipment
would be returned to the lender in extinguishment of the non-recourse debt. At
December 31, 2007, our outstanding non-recourse indebtedness was $46,142,220. We
are a party to the Facility, as discussed in the financing and borrowings
section above. We had $1,255,000 of borrowings under this Facility at December
31, 2007.





Principal
maturities of our non-recourse debt and related interest and Facility consisted
of the following at December 31, 2007:





Payments Due by PeriodLess
      Than 1
            
            
            
            1 -
      3
            
            
            
            4 -
      5Total
            
            
            Year
            
            
            Years
            
            
            YearsNon-recourse
      debt
            
            $
            46,142,220
            
            
            $
            3,795,917
            
            
            $
            7,856,067
            
            
            $
            34,490,236Non-recourse
      interest
            
            
            9,233,990
            
            
            
            2,744,083
            
            
            
            4,773,927
            
            
            
            1,715,980Revolving
      line of credit
            
            
            1,255,000
            
            
            
            1,255,000
            
            
            
            -
            
            
            
            -$
            56,631,210
            
            
            $
            7,795,000
            
            
            $
            12,629,994
            
            
            $
            36,206,216





We had a
commitment with regards to the Cathay aircraft in which we have a 100% interest
to pay certain maintenance costs, which were incurred on or prior to March 14,
2006. We had established, under the original lease a maintenance reserve cash
account, which totaled approximately $1,398,000 to pay for our portion of these
costs. In January 2007, the outstanding maintenance cost of approximately
$1,546,000 was repaid with the balance in the reserve account of approximately
$1,403,000, inclusive of accrued interest. The remaining balance of
approximately $143,000 was borrowed from ICON 126 and is repayable on
demand.





We
entered into residual sharing agreements with various third parties. In
connection with these agreements, residual proceeds received in excess of
specific amounts will be shared with these third parties based on specific
formulas.





Off-Balance
Sheet Transactions





None.





Inflation
and Interest Rates





The
potential effects of inflation on us are difficult to predict.  If the
general economy experiences significant rates of inflation, however, it could
affect us in a number of ways.  We do not currently have or expect to have
rent escalation clauses tied to inflation in our leases. The anticipated
residual values to be realized upon the sale or re-lease of equipment upon lease
terminations (and thus the overall cash flow from our leases) may be expected to
increase with inflation as the cost of similar new and used equipment
increases.





If
interest rates increase significantly, the lease rates that we can obtain on
future leases may be expected to increase as the cost of capital is a
significant factor in the pricing of lease financing.  Leases already in
place would generally not be affected by changes in interest rates.





28








Item
7A.  Quantitative and Qualitative Disclosures About Market
Risk





We, like
most other companies, are exposed to certain market risks, which include changes
in interest rates and the demand for equipment (and the related residuals) owned
by us.  We believe that our exposure to other market risks, including
foreign currency exchange rate risk, commodity risk and equity price risk, are
insignificant, at this time, to both our financial position and our results of
operations.





In
general, we manage our exposure to interest rate risk by obtaining fixed rate
debt. The fixed rate debt is structured so as to match the cash flows required
to service the debt to the payment streams under fixed rate lease receivables.
The payments under the leases are assigned to the lenders in satisfaction of the
debt.  We may finance leases with a floating interest rate and we are
therefore exposed to interest rate risk until fixed rate financing is
arranged.





We manage
our exposure to equipment and residual risk by monitoring the markets our leased
equipment is in and maximizing remarketing proceeds through the re-lease or sale
of equipment.






29






Item
8. Consolidated Financial Statements and Supplementary Data







PageReports
      of Independent Registered Public Accounting Firms
                31Consolidated
      Balance Sheets
                33Consolidated
      Statements of Operations
                34Consolidated
      Statements of Changes in Partners’ Equity
                35Consolidated
      Statements of Cash Flows
                36Notes
      to Consolidated Financial Statements
                38Schedule
      II – Valuation and Qualifying Accounts
                59







30











REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




The
Partners
 ICON
Income Fund Eight B L.P.




We have
audited the accompanying consolidated balance sheet of ICON Income Fund Eight B
L.P. and subsidiaries (the “Company”) as of December 31, 2007, and the related
consolidated statements of operations, changes in partners’ equity, and cash
flows for the year ended December 31, 2007. Our audit also included the
financial statement schedule listed in the index at Item 15(a)(2). These
financial statements and schedule are the responsibility of the Company’s
management.  Our responsibility is to express an opinion on these
financial statements and schedule based on our audit.






We
conducted our audit 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.  We were
not engaged to perform an audit of the Company’s internal control over financial
reporting.  Our audit 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 Company’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, and evaluating the overall
financial statement presentation.  We believe that our audit provides
a reasonable basis for our opinion.






In our
opinion, the financial statements referred to above present fairly, in all
material respects, the consolidated financial position of ICON Income Fund Eight
B L.P. and subsidiaries at December 31, 2007, and the consolidated
results of their operations and their cash flows for the year ended December 31,
2007, in conformity with U.S. generally accepted accounting principles. 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.











/s/ Ernst
& Young, LLP





April 9,
2008


New York,
New York







31


The
Partners
 ICON
Income Fund Eight B L.P.
 
 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 We
have audited the accompanying consolidated balance sheet of ICON Income Fund
Eight B L.P. (a Delaware limited Partnership) and subsidiaries as of
December 31, 2006 and the related consolidated statements of
operations, changes in partners’ equity, and cash flows for the years ended
December 31, 2006 and 2005.  Our audits also include the
financial statement schedule listed in the index at Item 15(a)(2) of Form
10-K.  These consolidated financial statements are the responsibility
of the Partnership’s management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits.
  We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Partnership is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit 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.
  In
our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of ICON Income Fund
Eight B L.P. and subsidiaries as of December 31, 2006, and the results
of their operations and their cash flows for the years ended
December 31, 2006 and 2005, in conformity with accounting principles
generally accepted in the United States of America.
  /s/
Hays & Company LLP
  April
2, 2007
 New
York, New York





32





ICON
      Income Fund Eight B L.P.(A
      Delaware Limited Partnership)Consolidated
      Balance SheetsAssetsDecember 31,2007
                
                
                2006Current
      assetsCash
      and cash equivalents
                
                $
                414,156
                
                
                $
                762,601Current
      portion of net investment in finance leases
                
                
                1,764,768
                
                
                
                67,667Accounts
      receivable
                
                
                -
                
                
                
                1,593,778Other
      current assets
                
                
                4,786
                
                
                
                1,397,527Total
      current assets
                
                
                2,183,710
                
                
                
                3,821,573Non-current
      assetsNet
      investments in finance leases, less current portion
                
                
                4,920,691
                
                
                
                -Leased
      equipment at cost (less: accumulated depreciationof
      $26,103,232 and $43,018,821, respectively)
                
                
                53,201,855
                
                
                
                68,969,109Equipment
      held for sale
                
                
                -
                
                
                
                140,400Investments
      in joint ventures
                
                
                3,413,505
                
                
                
                4,315,573Other
      non-current assets, net
                
                
                1,393,460
                
                
                
                1,405,017Total
      non-current assets
                
                
                62,929,511
                
                
                
                74,830,099Total
      Assets
                
                $
                65,113,221
                
                
                $
                78,651,672Liabilities
      and Partners' EquityCurrent
      liabilitiesCurrent
      portion of non-recourse long-term debt
                
                $
                3,795,917
                
                
                $
                6,430,655Revolving
      line of credit, recourse
                
                
                1,255,000
                
                
                
                3,125,000Deferred
      rental income
                
                
                286,364
                
                
                
                138,021Due
      to General Partner and affiliates
                
                
                143,070
                
                
                
                -Accrued
      expenses and other liabilities
                
                
                239,595
                
                
                
                2,040,339Total
      current liabilities
                
                
                5,719,946
                
                
                
                11,734,015Non-current
      liabilitiesNon-recourse
      long-term debt, net of current portion
                
                
                42,346,303
                
                
                
                46,142,220Total
      Liabilities
                
                
                48,066,249
                
                
                
                57,876,235Minority
      Interest
                
                
                -
                
                
                
                498,287Commitments
      and contingencies (Note 12)Partners'
      EquityGeneral
      Partner
                
                
                (478,624
                )
                
                
                (446,575
                )Limited
      Partners
                
                
                17,525,596
                
                
                
                20,723,725Total
      Partners' Equity
                
                
                17,046,972
                
                
                
                20,277,150Total
      Liabilities and Partners' Equity
                
                $
                65,113,221
                
                
                $
                78,651,672





See
accompanying notes to consolidated financial
statements






33


ICON
      Income Fund Eight B L.P.(A
      Delaware Limited Partnership)Consolidated
      Statements of OperationsYears Ended December 31,2007
            
            
            2006
            
            
            2005Revenue:Rental
      income
            
            $
            8,580,752
            
            
            $
            16,174,323
            
            
            $
            19,426,643Finance
      income
            
            
            742,064
            
            
            
            133,856
            
            
            
            563,439(Loss)
      income from investments in joint ventures
            
            
            (282,582
            )
            
            
            (778,423
            )
            
            
            515,832Net
      gain on sales of equipment and residual values
            
            
            493,196
            
            
            
            476,020
            
            
            
            4,827,527Interest
      and other income
            
            
            72,895
            
            
            
            246,729
            
            
            
            593,085Total
      revenue
            
            
            9,606,325
            
            
            
            16,252,505
            
            
            
            25,926,526Expenses:Management
      fees - General Partner
            
            
            -
            
            
            
            410,842
            
            
            
            1,311,990Administrative
      expense reimbursements - General Partner
            
            
            -
            
            
            
            161,980
            
            
            
            515,934General
      and administrative
            
            
            405,470
            
            
            
            657,832
            
            
            
            543,819Interest
            
            
            3,326,807
            
            
            
            3,582,860
            
            
            
            4,285,629Depreciation
      and amortization
            
            
            4,557,064
            
            
            
            7,577,104
            
            
            
            12,573,850Impairment
      loss
            
            
            -
            
            
            
            2,493,108
            
            
            
            3,855,316Maintenance
      expense
            
            
            -
            
            
            
            1,546,456
            
            
            
            -Reversal
      of bad debt expense
            
            
            -
            
            
            
            -
            
            
            
            (411,742
            )Total
      expenses
            
            
            8,289,341
            
            
            
            16,430,182
            
            
            
            22,674,796Income
      (loss) before Minority Interest
            
            
            1,316,984
            
            
            
            (177,677
            )
            
            
            3,251,730Minority
      interest
            
            
            (170,005
            )
            
            
            (436,749
            )
            
            
            116,855Net
      income (loss)
            
            $
            1,146,979
            
            
            $
            (614,426
            )
            
            $
            3,368,585Net
      income (loss) allocable to:Limited
      Partners
            
            $
            1,135,509
            
            
            $
            (608,282
            )
            
            $
            3,334,899General
      Partner
            
            
            11,470
            
            
            
            (6,144
            )
            
            
            33,686$
            1,146,979
            
            
            $
            (614,426
            )
            
            $
            3,368,585Weighted
      average number of limitedpartnership
      units outstanding
            
            
            740,985
            
            
            
            741,752
            
            
            
            743,161Net
      income (loss) per weighted averagelimited
      partnership units
            
            $
            1.53
            
            
            $
            (0.82
            )
            
            $
            4.49







34





ICON
      Income Fund Eight B L.P.(A
      Delaware Limited Partnership)Consolidated
      Statements of Changes in Partners' EquityLimitedPartnership
            
            
            
            
            
            
            
            
            TotalUnits
            
            
            Limited
            
            
            General
            
            
            Partners'Outstanding
            
            
            Partners'
            
            
            Partner
            
            
            EquityBalance,
      January 1, 2005
            
            
            743,279
            
            
            $
            29,951,408
            
            
            $
            (354,117
            )
            
            $
            29,597,291Limited
      partnership units redeemed
            
            
            (449
            )
            
            
            (23,139
            )
            
            
            -
            
            
            
            (23,139
            )Cash
      distributions to partners
            
            
            -
            
            
            
            (5,945,540
            )
            
            
            (60,056
            )
            
            
            (6,005,596
            )Net
      income
            
            
            -
            
            
            
            3,334,899
            
            
            
            33,686
            
            
            
            3,368,585Balance,
      December 31, 2005
            
            
            742,830
            
            
            
            27,317,628
            
            
            
            (380,487
            )
            
            
            26,937,141Limited
      partnership units redeemed
            
            
            (1,300
            )
            
            
            (51,135
            )
            
            
            -
            
            
            
            (51,135
            )Cash
      distributions to partners
            
            
            -
            
            
            
            (5,934,486
            )
            
            
            (59,944
            )
            
            
            (5,994,430
            )Net
      loss
            
            
            -
            
            
            
            (608,282
            )
            
            
            (6,144
            )
            
            
            (614,426
            )Balance,
      December 31, 2006
            
            
            741,530
            
            
            
            20,723,725
            
            
            
            (446,575
            )
            
            
            20,277,150Limited
      partnership units redeemed
            
            
            (1,000
            )
            
            
            (25,298
            )
            
            
            -
            
            
            
            (25,298
            )Cash
      distributions to partners
            
            
            -
            
            
            
            (4,308,340
            )
            
            
            (43,519
            )
            
            
            (4,351,859
            )Net
      income
            
            
            -
            
            
            
            1,135,509
            
            
            
            11,470
            
            
            
            1,146,979Balance,
      December 31, 2007
            
            
            740,530
            
            
            $
            17,525,596
            
            
            $
            (478,624
            )
            
            $
            17,046,972









35





ICON
      Income Fund Eight B L.P.
              (A
      Delaware Limited Partnership)
              Consolidated
      Statements of Cash FlowsYears Ended December 31,2007
            
            
            2006
            
            
            2005Cash
      flows from operating activities:Net
      income (loss)
            
            $
            1,146,979
            
            
            $
            (614,426
            )
            
            $
            3,368,585Adjustments
      to reconcile net income (loss) to net cash provided byoperating
      activities:Rental
      income paid directly to lenders by lessees
            
            
            (8,129,490
            )
            
            
            (13,614,988
            )
            
            
            (17,076,952
            )Finance
      income
            
            
            (742,064
            )
            
            
            (133,856
            )
            
            
            (414,389
            )Net
      gain on sales of equipment
            
            
            (493,196
            )
            
            
            (476,020
            )
            
            
            (4,827,527
            )Loss
      (income) from investments in joint ventures
            
            
            282,582
            
            
            
            778,423
            
            
            
            (515,832
            )Impairment
      loss
            
            
            -
            
            
            
            2,493,108
            
            
            
            3,855,316Depreciation
      and amortization
            
            
            4,557,064
            
            
            
            7,577,104
            
            
            
            12,573,850Interest
      expense on non-recourse financing paid directly to lenders by
      lessees
            
            
            3,021,752
            
            
            
            3,470,390
            
            
            
            3,757,058Reversal
      of bad debt expense
            
            
            -
            
            
            
            -
            
            
            
            (411,742
            )Minority
      interest
            
            
            170,005
            
            
            
            436,749
            
            
            
            (116,855
            )Changes
      in operating assets and liabilities:Collection of principal - non-financed receivables
            
            
            1,952,376
            
            
            
            823,007
            
            
            
            732,028Accounts
      receivable
            
            
            293,255
            
            
            
            -
            
            
            
            -Other
      assets
            
            
            1,404,298
            
            
            
            78,615
            
            
            
            (128,620
            )Deferred
      rental income
            
            
            148,343
            
            
            
            (359,282
            )
            
            
            237,343Due
      to General Partner and affiliates
            
            
            143,070
            
            
            
            92,836
            
            
            
            (248,308
            )Accrued
      expenses and other liabilities
            
            
            (1,844,599
            )
            
            
            1,612,826
            
            
            
            (346,392
            )Distributions to/from joint ventures and minority interest
            
            
            (99,800
            )
            
            
            -
            
            
            
            -Net
      cash provided by operating activities
            
            
            1,810,575
            
            
            
            2,164,486
            
            
            
            437,563Cash
      flows from investing activities:Distributions
      received from joint ventures
            
            
            639,000
            
            
            
            -
            
            
            
            -Loans
      and advances to affiliates
            
            
            -
            
            
            
            -
            
            
            
            (672,992
            )Proceeds
      from sales of equipment and sales advances received
            
            
            11,783,785
            
            
            
            1,052,969
            
            
            
            9,438,738Purchase
      of leased equipment
            
            
            (7,754,746
            )
            
            
            -
            
            
            
            -Cash
      investment in joint ventures
            
            
            (11,412
            )
            
            
            (91,011
            )
            
            
            -Net
      cash provided by investing activities
            
            
            4,656,627
            
            
            
            961,958
            
            
            
            8,765,746Cash
      flows from financing activities:Cash
      distributions to partners
            
            
            (4,351,859
            )
            
            
            (5,994,430
            )
            
            
            (6,005,596
            )Proceeds
      from revolving line of credit
            
            
            3,630,000
            
            
            
            3,125,000
            
            
            
            4,160,000Repayment
      of revolving line of credit
            
            
            (5,500,000
            )
            
            
            -
            
            
            
            (7,385,000
            )Distributions
      paid to minority interest holders
            
            
            (568,490
            )
            
            
            (291,943
            )
            
            
            (350,389
            )Cash
      paid for redemption of limited partnership units
            
            
            (25,298
            )
            
            
            (51,135
            )
            
            
            (23,139
            )Net
      cash used in financing activities
            
            
            (6,815,647
            )
            
            
            (3,212,508
            )
            
            
            (9,604,124
            )Net
      decrease in cash and cash equivalents
            
            
            (348,445
            )
            
            
            (86,064
            )
            
            
            (400,815
            )Cash
      and cash equivalents, beginning of the year
            
            
            762,601
            
            
            
            848,665
            
            
            
            1,249,480Cash
      and cash equivalents, end of the year
            
            $
            414,156
            
            
            $
            762,601
            
            
            $
            848,665








36





ICON
      Income Fund Eight B L.P.
              (A
      Delaware Limited Partnership)
              Consolidated
      Statements of Cash FlowsYears Ended December 31,2007
            
            
            2006
            
            
            2005Supplemental
      disclosure of cash flow information:Cash
      paid during the period for interest
            
            $
            380,594
            
            
            $
            112,470
            
            
            $
            779,435Supplemental
      disclosure of non-cash investing and financing activities:Principal
      and interest on non-recourse long-term debt paid directly
    tolenders
      by lessees
            
            $
            9,421,608
            
            
            $
            14,572,355
            
            
            $
            19,692,615Notes
      payable non-recourse cancelled with repossession of
    equipment
            
            $
            -
            
            
            $
            -
            
            
            $
            3,398,406Joint
      venture interests acquired from affiliate in exchange for
      amountsowed,
      at fair value
            
            $
            -
            
            
            $
            -
            
            
            $
            672,992Escrow
      utilized to pay non-recourse debt
            
            $
            -
            
            
            $
            281,868
            
            
            $
            -Transfer
      of leased equipment to direct finance lease
            
            $
            7,743,990
            
            
            $
            403,565
            
            
            $
            -Transfer
      of leased equipment to equipment held for sale
            
            $
            -
            
            
            $
            239,043
            
            
            $
            -Transfer
      of equipment from direct finance lease to equipment held for
      sale
            
            $
            -
            
            
            $
            104,360
            
            
            $
            -Payment
      of maintenance costs
            
            $
            1,546,000
            
            
            $
            -
            
            
            $
            -







37


ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005





(1)
            Organization





ICON
Income Fund Eight B L.P. (the "Partnership") was formed on February 7, 2000 as a
Delaware limited partnership. The Partnership is engaged in one business
segment, the business of purchasing equipment and leasing it to third parties,
providing equipment and other financing, and to a lesser degree, acquiring
ownership rights to items of leased equipment at lease expiration. The
Partnership will continue until December 31, 2017, unless terminated
sooner.





The
Partnership’s principal investment objective is to obtain the maximum economic
return from its investments for the benefit of its partners. To achieve this
objective the Partnership: (i) acquired a diversified portfolio of equipment
leases and financing transactions, (ii) made monthly cash distributions, at the
General Partner’s discretion, to its partners commencing with each partner's
admission through the liquidation period, which commenced on June 17, 2007,
(iii) re-invested substantially all undistributed cash from operations and cash
from sales of equipment and financing transactions during the reinvestment
period, and (iv) began to dispose of its investments and distribute the excess
cash from sales of such investments to its partners with the commencement of the
liquidation period.





The
Partnership’s reinvestment period ended and the Partnership commenced its
liquidation period on June 17, 2007. During the liquidation period, the
Partnership is distributing substantially all distributable cash from operations
and equipment sales to the limited partners and will continue the orderly
termination of its operations and affairs. The Partnership will not invest in
any additional finance or lease transactions during the liquidation
period.





The
general partner of the Partnership is ICON Capital Corp. (the "General
Partner"), which was originally a Connecticut corporation.  Effective
June 1, 2007, the General Partner was re-incorporated as a Delaware corporation.
The General Partner manages and controls the business affairs of the
Partnership, including, but not limited to, the equipment leases and financing
transactions that the Partnership enters into pursuant to the terms of the
Partnership’s limited partnership agreement (the “LP
Agreement”).  Additionally, the General Partner has a 1% interest in
the profits, losses, cash distributions and liquidation proceeds of the
Partnership.





The
Partnership's maximum offering was $75,000,000. The Partnership commenced
business operations on its initial closing date, June 14, 2000, with the
admission of 15,816 limited partnership units representing $1,581,551 of capital
contributions.  Between June 15, 2000 and October 17, 2001, the final
closing date, 734,184 additional limited partnership units were sold
representing $73,418,449 of capital contributions bringing the total admission
to 750,000 limited partnership units totaling $75,000,000 of capital
contributions. From 2001 through 2007, the Partnership redeemed 9,470 limited
partnership units leaving 740,530 limited partnership units outstanding at
December 31, 2007.





The
Partnership invested most of the net proceeds from its offering in equipment
subject to leases, equipment financing transactions and residual ownership
rights in leased equipment. After the net offering proceeds were invested,
additional investments were made with the cash generated from the Partnership’s
initial investments to the extent that cash was not needed for expenses,
reserves and distributions to partners. The investment in additional equipment
in this manner is called "reinvestment."





38


ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005


(1)
            Organization
      - continued





Partners’
capital accounts are increased for their initial capital contribution plus their
proportionate share of earnings and decreased by their proportionate share of
losses and distributions. Profits, losses, cash distributions and liquidation
proceeds are allocated 99% to the limited partners and 1% to the General Partner
until each limited partner has (a) received cash distributions and liquidation
proceeds sufficient to reduce their adjusted capital contribution account to
zero and (b) received, in addition, other distributions and allocations that
would provide an 8% per year cumulative return on their outstanding adjusted
capital contribution account. After such time, distributions will be allocated
90% to the limited partners and 10% to the General Partner.





(2)
            Summary
      of Significant Accounting Policies





Basis of
Presentation and Consolidation





The
accompanying consolidated financial statements of the Partnership have been
prepared in accordance with U.S. generally accepted accounting principles (“US
GAAP”).





The
consolidated financial statements include the accounts of the Partnership and
its majority owned subsidiaries. All intercompany accounts and transactions have
been eliminated in consolidation.





The
Partnership accounts for its noncontrolling interests in joint ventures where
the Partnership has influence over financial and operational matters, generally
50% or less ownership interest, under the equity method of accounting. In such
cases, the Partnership's original investments are recorded at cost and adjusted
for its share of earnings, losses and distributions.  The Partnership
accounts for investments in joint ventures where the Partnership has virtually
no influence over financial and operational matters using the cost method of
accounting.  In such cases, the Partnership's original investments are
recorded at cost and any distributions received are recorded as
revenue.  All of the Partnership's investments in joint ventures are
subject to its impairment review policies.





In joint
ventures where the Partnership’s interest is majority owned, the financial
condition and results of operations of the joint venture are
consolidated.  Minority interest represents the minority owner’s
proportionate share of its equity in the joint venture. The minority interest is
adjusted for the minority owner’s share of the earnings, losses and
distributions of the joint venture.





Cash and
cash equivalents





Cash and
cash equivalents include cash in banks and highly liquid investments with
original maturity dates of three months or less.





The
Partnership's cash and cash equivalents are held principally at two financial
institutions and at times may exceed insured limits. The Partnership has placed
these funds in high quality institutions in order to minimize risk relating
to exceeding insured limits.






39


ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005




(2)    Summary
      of Significant Accounting Policies –
continued





Risks and
Uncertainties





In the
normal course of business, the Partnership is exposed to two significant types
of economic risk: credit and market.  Credit risk is the risk of a
lessee’s inability or unwillingness to make contractually required
payments.  Concentrations of credit risk with respect to lessees are
dispersed across different industry segments within the United States of America
and throughout the world.  Although the Partnership does not currently
foresee a concentrated credit risk associated with these customers, lease
payments are dependent upon the financial stability of the industry segments in
which they operate.  See Note 11 for concentration of
risk.





Market
risk reflects the change in the value of debt instruments and credit
facilities due to change in interest rate spreads or other market
factors.  The Partnership believes that the carrying value of its
investments is reasonable taking into consideration these risks, along with
estimated collateral values, payment history and other relevant
information.





Allowance
for Doubtful Accounts




When
evaluating the adequacy of the allowance for doubtful accounts, the Partnership
estimates the uncollectibility of receivables by analyzing lessee
concentrations, creditworthiness and current economic trends. The
Partnership records an allowance for doubtful accounts when the analysis
indicates that the probability of full collection is unlikely.  No
allowance was deemed necessary at December 31, 2007 and 2006.





Debt
Financing Costs





Expenses
associated with the issuance of long-term debt are capitalized and amortized
over the term of the debt instrument using the effective interest rate
method.  These costs are included in other non-current
assets.





Leased
Equipment at Cost





Investments
in leased equipment are stated at cost less accumulated
depreciation.  Leased equipment is depreciated on a straight line
basis over the lease term which range from 4 to 5 years to the asset’s residual
value.





The
residual value assumes, among other things, that the asset is utilized normally
in an open, unrestricted and stable market. Short-term fluctuations in the
market place are disregarded and it is assumed that there is no necessity either
to dispose of a significant number of the assets, if held in quantity,
simultaneously or to dispose of the asset quickly.  The residual value
is calculated using information from various external sources, such as trade
publications, auction data, equipment dealers, wholesalers and industry experts,
as well as inspection of the physical asset and other economic
indicators.





40


ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005


(2)
            Summary
      of Significant Accounting Policies -
continued





Asset
Impairments





The
significant assets in the Partnership’s portfolio are periodically
reviewed, no less frequently than annually, to determine whether events or
changes in circumstances indicate that the carrying value of an asset may not be
recoverable. An impairment loss will be recognized only if the carrying amount
of a long-lived asset is not recoverable and exceeds its fair market
value. If there is an indication of impairment, the Partnership will
estimate the future cash flows (undiscounted and without interest charges)
expected from the use of the asset and its eventual disposition. Future cash
flows are the future cash inflows expected to be generated by an asset less the
future outflows expected to be necessary to obtain those inflows.  If an
impairment is determined to exist, the impairment loss will be measured as the
amount by which the carrying value of a long-lived asset exceeds its fair value
and recorded in the consolidated statement of operations in the period the
determination is made.





The
events or changes in circumstances that generally indicate that an asset may be
impaired are (i) the estimated fair value of the underlying equipment is less
than its carrying value or (ii) the lessee is experiencing financial
difficulties and it does not appear likely that the estimated proceeds from the
disposition of the asset will be sufficient to satisfy the residual position in
the asset and, if applicable, the remaining obligation to the non-recourse
lender.  Generally in the latter situation, the residual position relates
to equipment subject to third party non-recourse debt where the lessee
remits its rental payments directly to the lender and the Partnership does not
recover its residual position until the non-recourse debt is repaid in full. The
preparation of the undiscounted cash flows requires the use of assumptions and
estimates, including the level of future rents, the residual value expected to
be realized upon disposition of the asset, estimated downtime between re-leasing
events and the amount of re-leasing costs. The General Partner’s review for
impairment includes a consideration of the existence of impairment indicators
including third party appraisals, published values for similar assets, recent
transactions for similar assets, adverse changes in market conditions for
specific asset types and the occurrence of significant adverse changes in
general industry and market conditions that could affect the fair value of the
asset.





Equipment
Held for Sale





Equipment
held for sale is recorded at the lower of cost or estimated fair value,
less anticipated costs to sell and consists of equipment previously leased to
end users which has been returned to the Partnership following lease
expiration.





Equipment
held for sale is not depreciated and related deferred costs are not amortized.
Subsequent changes to the asset’s fair value, either increases or decreases, are
recorded as adjustments to the carrying value of the equipment; however, any
such adjustment would not exceed the original carrying value of the equipment
held for sale.





Unguaranteed
Residual Values





The
Partnership carries its investments in estimated unguaranteed residual values at
cost. The net book value is equal to or less than fair value at each reporting
period and is subject to the Partnership's policy relating to impairment
review.





41


ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005


(2)
            Summary
      of Significant Accounting Policies -
continued





Revenue
Recognition





The
Partnership leases equipment to third parties and each such lease may be
classified as either a finance lease or an operating lease, which is based upon
the terms of each lease.  Initial direct costs are capitalized and
amortized over the term of the related lease for a
finance lease.  For an operating lease, the initial direct costs
are included as a component of the cost of the equipment and
depreciated.





For
finance leases, the Partnership records, at lease inception, the total minimum
lease payments receivable from the lessee, the estimated unguaranteed residual
value of the equipment upon lease termination, the initial direct costs related
to the lease and the related unearned income.  Unearned income
represents the difference between the sum of the minimum lease payments
receivable plus the estimated unguaranteed residual value, minus the cost of the
leased equipment.  Unearned income is recognized as finance income
over the term of the lease using the effective interest rate
method.





For
operating leases, rental income is recognized on a straight line basis over the
lease term.  Billed and uncollected operating lease receivables are
included in accounts receivable.  Accounts receivable are stated at
their estimated net realizable value.  Deferred income is the
difference between the timing of the cash payments and the income recognized on
a straight line basis.





The
General Partner has an investment committee that approves each new equipment and
financing transaction and lease acquisition.  As part of its process
it determines the residual value, if any, to be used once the acquisition has
been approved.  The factors considered in determining the residual
value include, but are not limited to, the creditworthiness of the potential
lessee, the type of equipment being considered, how the equipment is integrated
into the potential lessees business, the length of the lease and the industry in
which the potential lessee operates.  Residual values are reviewed for
impairment in accordance with the Partnership’s policy relating to impairment
review.





Initial
direct costs





The
Partnership capitalizes initial direct costs associated with the origination and
funding of lease assets in accordance with Statement of Financial Accounting
Standards (“SFAS”) No. 91 “Accounting for Nonrefundable Fees and Costs
Associated with Originating or Acquiring Loans and Initial Direct Costs of
Leases”. The costs are amortized on a lease by lease basis based on actual lease
term using a straight-line method for operating leases and the effective
interest rate method for direct finance leases. Costs related to leases that are
not consummated are expensed as an acquisition expense.





Acquisition
fees





Pursuant
to the LP Agreement, acquisition fees paid to the General Partner are based on
3% of the equipment purchase price. These fees are capitalized and included in
the cost of the rental equipment.





Income
Taxes





The
Partnership is taxed as a partnership for federal and state income tax
purposes.  No provision for income taxes has been recorded since the
liability for such taxes is that of each of the individual partners rather than
the Partnership. The Partnership's income tax returns are subject to examination
by the federal and state taxing authorities, and changes, if any, could adjust
the individual income tax of the partners.








42


ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005


(2)
            Summary
      of Significant Accounting Policies -
continued





Per Unit
Data





Net
income (loss) per unit is based upon the weighted average number of limited
partnership units outstanding during the year.





Redemption
of Limited Partnership Units





The
Partnership may, at its discretion, redeem units from a limited number of its
limited partners, as provided for in its LP Agreement. The redemption price for
any units approved for redemption is based upon a formula, as provided in the LP
Agreement.  Limited partners are required to hold their units for at
least one year before redemptions will be permitted.





Use of
Estimates





The
preparation of financial statements in conformity with US GAAP requires the
General Partner to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and
liabilities as of the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period.
Significant estimates primarily include the determination of allowance for
doubtful accounts, depreciation and amortization, impairment losses, estimated
useful lives and residual values.  Actual results could differ from
those estimates.





Recent
Accounting Pronouncements





In
September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS
No. 157, “Accounting for Fair Value Measurement” (“SFAS No.
157”).  SFAS No. 157 defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles and establishes
a hierarchy that categorizes and prioritizes the sources to be used to estimate
fair value. SFAS No. 157 also expands financial statement disclosures about fair
value measurements. On February 14, 2008, the FASB issued FASB Staff Position
SFAS No. 157-1, which amends SFAS No. 157 to exclude SFAS No. 13,
“Accounting for Leases” and other accounting pronouncements that address fair
value measurements of leases from the provisions of SFAS No.
157.  SFAS No. 157 is effective for financial statements issued
for fiscal years beginning after November 15, 2007. The General Partner has
not yet determined whether SFAS No. 157 will have a material impact on the
Partnership’s financial condition, results of operations, or cash flow. However,
the General Partner believes the Partnership will likely be required to provide
additional disclosures as part of future financial statements, beginning with
the first quarter of 2008.





In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option
for Financial Assets and Financial Liabilities—Including an Amendment of SFAS
No. 115” (“SFAS No. 159”), which permits but does not require us to measure
financial instruments and certain other items at fair value. Unrealized gains
and losses on items for which the fair value option has been elected are
reported in earnings.  This statement is effective for financial
statements issued for fiscal years beginning after November 15,
2007.  The General Partner is currently evaluating the impact of
adopting SFAS No. 159 on the Partenership's consolidated financial
statements.





43


ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005


(2)
            Summary
      of Significant Accounting Policies -
continued





In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements—an Amendment of ARB No. 51” (“SFAS No.
160”). SFAS No. 160 establishes accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the retained interest and gain
or loss when a subsidiary is deconsolidated. This statement is effective for
financial statements issued for fiscal years beginning on or after
December 15, 2008 with earlier adoption prohibited. The General
Partner is currently evaluating the impact of SFAS No. 160 on the Partnership's
consolidated financial statements.





Reclassifications




Certain
reclassifications have been made to the accompanying consolidated financial
statements in prior years to conform to the current presentation.





(3)
            Net
      Investments in Finance Leases





Net
investments in finance leases consisted of the following at December
31:





2007
            
            
            2006Minimum
      rents receivable
            
            $
            8,165,747
            
            
            $
            67,973Estimated
      residual value
            
            
            1
            
            
            
            -Initial
      direct costs, net
            
            
            84,113
            
            
            
            -Unearned
      income
            
            
            (1,564,402
            )
            
            
            (306
            )Net
      investments in finance leases
            
            
            6,685,459
            
            
            
            67,667Less:  Current
      portion of netinvestment
      in finance leases
            
            
            1,764,768
            
            
            
            67,667Net
      investments in finance leases,less
      current portion
            
            $
            4,920,691
            
            
            $
            -





Non-cancelable
minimum annual amounts due on investments in finance leases over the next five
years were as follows at December 31, 2007:





Years
      EndingDecember 31,2008
            
            
            $
            2,512,5382009
            
            
            
            2,512,5382010
            
            
            
            2,512,5382011
            
            
            
            628,133$
            8,165,747






44


ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005


(3)
            Net
      Investments in Finance Leases -
continued





Digital  Mini-Labs





On
January 22, 2002, K-Mart Corporation (“K-Mart”) and its affiliate debtors filed
a voluntary petition in the United States Bankruptcy Court for the Eastern
District of Illinois (the “Bankruptcy Court”) seeking relief under Chapter 11 of
the United States Bankruptcy Code. The Partnership was the lessor of five lease
schedules representing 179 Noritsu Optical/Digital photo processing mini-labs
located at K-Mart retail locations throughout the United States. Although K-Mart
emerged from Chapter 11 during 2004, the Bankruptcy Court retained jurisdiction
over this matter.





On June
21, 2005, the Bankruptcy Court officially rejected one of the Partnership’s five
equipment leases with K-Mart, consisting of 51 mini-labs, and the equipment was
returned to the Partnership.  Additionally, the Bankruptcy Court
awarded the Partnership approximately $220,000 for overdue property tax payments
previously paid by the Partnership which amount was received on July 5, 2005 and
is included in interest and other income on the accompanying consolidated
statement of operations for the year ended December 31, 2005.  K-Mart
refused to make the required lease payments to the lender on the one rejected
lease, thereby putting the lease in default with the lender and the lender
subsequently repossessed the equipment.  On June 30, 2005, the
Partnership removed the rejected equipment and related non-recourse debt from
its books and recorded a net gain on sales of equipment of approximately
$44,000.  During 2004, the Partnership recorded an allowance for
doubtful accounts of $411,742, related to the rejected lease, which the
Partnership reversed upon receipt of payment during 2005.





The
Partnership had an investment in finance leases with K-Mart that consisted of
128 Noritsu Optical/Digital photo processing mini-labs subject to
lease.





At
December 31, 2005 the General Partner received an appraisal on the remaining
Noritsu Optical/Digital equipment held by K-Mart that indicated the estimated
residual value was less than originally estimated due to recent technological
developments in this industry. As a result, the Partnership recorded an
impairment loss for the year ended December 31, 2005 of approximately
$229,000.





On April
30, 2006 and May 31, 2006, two of the four Partnership’s leases with K-Mart
expired and, pursuant to the terms of the leases, they were extended for an
additional 90 days. The Partnership treated these leases as month-to-month
leases beginning on May 1, 2006 and on June 1, 2006, respectively. Accordingly,
the Partnership reclassified approximately $285,000 and $119,000, respectively,
of the unguaranteed residual values related to these assets to leased equipment
at cost. These lease extensions ended on or before September 30, 2006, and the
Partnership reclassified the net book value of this equipment of approximately
$269,000 to equipment held for sale during 2006.





The
remaining two leases with K-Mart expired during 2006 and the Partnership
reclassified the net book value of this equipment of $37,120 and $67,295,
respectively, to equipment held for sale. The Partnership also sold equipment
for proceeds of $9,360 during the fourth quarter of 2006.





The
General Partner determined, based upon negotiations with potential buyers, that
the Noritsu Optical/Digital equipment held by K-Mart was impaired. For the year
ended December 31, 2006, the Partnership recognized an impairment loss on this
equipment of $393,108, net of estimated selling costs. At December 31, 2006, the
four K-Mart leases represented equipment held for sale totaling
$140,400.





45


ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005





(3)
            Net
      Investments in Finance Leases -
continued





On
February 9, 2007, the Partnership sold all of the remaining equipment previously
on lease to K-Mart for approximately $254,100 and recognized a gain on the sale
of this equipment of approximately $111,000 during the first quarter of
2007.





Office,
Telecommunications and Computer Equipment





The
Partnership had an investment in a finance lease with Regus Business Centre
Corp. ("Regus"), which leased office, telecommunications and computer equipment
from the Partnership under the terms of a finance lease since August
2000.





Regus
filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy
Code on January 14, 2003. The Partnership had been negotiating an amended lease
with Regus which was approved when Regus emerged from bankruptcy
protection.  Under the amended lease, Regus commenced making payments
at a reduced rental rate, with an extension for 48 months, effective March 15,
2003.  At December 31, 2006 and 2005, Regus was current on its
payments under the amended lease. At December 31, 2006, Regus had one remaining
minimum rents receivable payment that was received in January 2007. On February
28, 2007, the lease expired and Regus purchased the equipment for $1, as
provided for in the lease.





On
March 30, 2007, the Partnership purchased telecommunications equipment
totaling approximately $7,755,000 from various vendors, which is being leased to
Global Crossing Telecommunications, Inc. (“Global Crossing”) effective April 1,
2007.  The lease expires on March 31, 2011. Monthly rent is payable in
advance on the first business day of each month.  An initial direct
cost of approximately $124,000 was incurred as part of the purchase. The General
Partner did not take any acquisition fees on the purchase.




(4)
            Leased
      Equipment at Cost


Leased
equipment at cost consisted of the following at December 31:





2007
            
            
            2006Aircraft
      and aircraft related equipment
            
            $
            77,505,910
            
            
            $
            107,935,824Material
      handling, telecommunication, over the road rollingstock,
      manufacturing and computer equipment
            
            
            1,799,177
            
            
            
            4,052,10679,305,087
            
            
            
            111,987,930Accumulated
      depreciation
            
            
            (26,103,232
            )
            
            
            (43,018,821
            )$
            53,201,855
            
            
            $
            68,969,109








Depreciation expense was $4,512,816,
$7,279,941 and $11,535,965 for the years ended December 31, 2007, 2006 and 2005,
respectively.





46


ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005


(4)
            Leased
      Equipment at Cost - continued






Aircraft
and aircraft related equipment





During
March 2003, the Partnership and ICON Income Fund Nine, LLC (“Fund Nine”), an
entity also managed by the General Partner, formed a joint venture, ICON
Aircraft 47820 LLC (“Aircraft 47820”), for the purpose of acquiring an
investment in a McDonnell Douglas DC10-30F aircraft and two spare engines (the
“Aircraft and engines”) on lease to Federal Express Corporation (“FedEx”). The
lease expired on March 31, 2007. The Partnership and Fund Nine had a 90%
interest and a 10% interest, respectively, in this joint venture. On March 11,
2003, Aircraft 47820 acquired the Aircraft and engines for approximately
$27,288,000, which consisted of approximately $3,077,000 in cash and
approximately $24,211,000 of non-recourse debt. The Partnership’s cash portion
of the purchase price was approximately $2,769,000. The non-recourse debt
accrued interest at 4.035% per year and matured in March 2007. The lender had a
security interest in the Aircraft and engines and an assignment of the rental
payments under the lease. The General Partner was paid an acquisition fee of
approximately $819,000 relating to this transaction, of which the Partnership
paid approximately $737,000.





At
December 31, 2005, the General Partner determined that the Aircraft and engines
were impaired, based upon an appraisal that indicated a slower than expected
recovery in the air transportation industry, and recorded an impairment loss of
approximately $3,626,000.





On March
30, 2007, Aircraft 47820 sold the Aircraft and engines to FedEx for $5,475,000
and recognized a loss on the sale of approximately $1,025,000. The final lease
payment was paid to the lender, satisfying all remaining debt
obligations.





Airbus
Aircraft





During
2002, the Partnership formed a wholly-owned subsidiary, ICON Aircraft 123 LLC
(“ICON 123”) for the purpose of acquiring an Airbus A340-313X aircraft on lease
to Cathay Pacific Airways (“Cathay”) for approximately $78,000,000, which
included approximately $2,242,000 of initial direct costs. On March 14, 2006,
the Partnership entered into a lease extension with Cathay with respect to the
aircraft. The original lease with Cathay expired on March 14, 2006 and was
extended until October 1, 2011.





Simultaneously
with the lease extension of the aircraft, the Partnership refinanced the
non-recourse debt associated with the aircraft (See Note 7).





Flight
Simulator





On March
23, 2001 the Partnership acquired a 100% interest for cash and non-recourse debt
in one flight simulator on lease to British Aerospace, Inc. (“BAE”) with an
expiration date of March 27, 2006. The non-recourse debt was fully repaid on
March 27, 2005. On October 31, 2005, the Partnership sold this leased equipment
to BAE for $8,000,000 in cash. The Partnership recognized a gain of
approximately $4,500,000 on the sale of this equipment during the year ended
December 31, 2005.





47


ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005


(4)         Leased
Equipment at Cost - continued





Over
the Road Rolling Stock, Manufacturing and Material Handling
Equipment





On
September 1, 2000, the Partnership, along with ICON Cash Flow Partners L.P. Six
(“L.P. Six”), an entity also managed by the General Partner, ICON Cash Flow
Partners L.P. Seven (“L.P. Seven”) and ICON Income Fund Eight A L.P. (“Fund
Eight A”), formed ICON Cheyenne LLC (“ICON Cheyenne”) for the purpose of
acquiring and managing a portfolio of equipment leases consisting of, among
other things, over the road rolling stock, manufacturing equipment and materials
handling equipment. The original transaction involved acquiring from Cheyenne
Leasing Company a portfolio of 119 leases with various expiration dates through
September 2007.





On
September 23, 2004, L.P. Seven assigned a 9.04% interest in ICON Cheyenne to the
Partnership for approximately $204,000, thereby increasing the Partnership's
interest in ICON Cheyenne to 96.73%. This price was determined by the General
Partner to represent the estimated fair value of L.P. Seven's investment in ICON
Cheyenne determined using a cash flow analysis of the remaining
leases.





On
December 23, 2005, L.P. Six sold its 1.0% interest in ICON Cheyenne to the
Partnership for approximately $5,000 thereby increasing the Partnership’s
interest to 97.73%. This price was determined by the General Partner to
represent the estimated fair value of L.P. Six's investment in ICON Cheyenne
determined using a cash flow analysis of the remaining leases.





At
December 31, 2006, the Partnership, L.P. Seven and Fund Eight A had interests of
97.73%, 1.27%, and 1.0%, respectively, in ICON Cheyenne.  The
outstanding balance of the non-recourse debt secured by these assets was paid in
full during 2006.





During
2006, ICON Cheyenne sold various pieces of its portfolio of equipment for
approximately $583,000 in cash and recognized a gain of approximately $582,000
on these sales.





During
the second quarter of 2007, ICON Cheyenne sold all of its remaining equipment to
a third party for total sales proceeds of approximately
$111,000.  ICON Cheyenne recognized a total gain on the sale of
approximately $110,000.





On
December 31, 2001, the Partnership, along with Fund Nine, formed ICON SPK
2023-A, LLC (“ICON SPK”) for the purpose of acquiring and managing a portfolio
of equipment leases consisting of materials handling, telecommunication and
computer equipment.  The original transaction involved acquiring a
portfolio of 32 leases with various lease expiration dates through April
2008.





On
December 1, 2004, Fund Nine transferred a 25.87% interest in ICON SPK to the
Partnership in exchange for the Partnership's entire 5% interest in
ICON/Kenilworth LLC.  The Partnership and Fund Nine entered into this
transaction in order to minimize the New Jersey State income tax obligations of
the Partnership. After the exchange, the Partnership had no interest in
ICON/Kenilworth LLC and the Partnership and Fund Nine had interests of 74.87%
and 25.13%, respectively, in ICON SPK. The General Partner computed the fair
value of the ICON/Kenilworth LLC interest and the ICON SPK interest based on its
knowledge of current market conditions, discounted cash flow analysis and a
recent appraisal received for ICON/Kenilworth LLC.





48


ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005


(4)         Leased
Equipment at Cost - continued





During
2006, ICON SPK sold various pieces of its portfolio of equipment for
approximately $460,000 in cash and recognized a loss of approximately $106,000
on these sales.





During
the second quarter of 2007, ICON SPK sold all of its remaining equipment to a
third party for total sales proceeds of approximately $348,000.  ICON
SPK recognized a gain on the sale of approximately $264,000.





Five
Pratt and Whitney 2037 Aircraft Engine Modules





On August
8, 2007, the Partnership sold all of its rights in five Pratt and Whitney 2037
aircraft engine modules on lease to American Airlines, Inc. (formerly TWA
Airlines LLC), to an unaffiliated third party for a gross sales price of
$6,050,000.  In connection with the sale, the Partnership incurred
legal fees and sales commissions of approximately $331,000, relinquished
previously collected security deposits and prepaid rent related to the engine
modules of approximately $172,000 and recorded net proceeds of approximately
$5,547,000 and a gain on sale of approximately $1,042,000.





Aggregate
minimum future rentals receivable from all of the Partnership’s non-cancelable
leases consisted of the following at December 31, 2007:





Years
      EndingDecember 31,2008
            
            
            $
            6,540,0002009
            
            
            $
            6,540,0002010
            
            
            $
            6,090,0002011
            
            
            $
            4,455,000






(5)
            Investments
      in Joint Ventures





The
Partnership and certain of its affiliates, entities also managed and controlled
by the General Partner, formed two joint ventures, discussed below, for the
purpose of acquiring and managing various assets.  The Partnership and
these affiliates have substantially identical investment objectives and
participate on the same terms and conditions.  The Partnership and the
other members have a right of first refusal to purchase the equipment, on a
pro-rata basis, if any of the other members desire to sell their interests in
the equipment or joint venture.





ICON
Aircraft 126, LLC





During
February 2002, the Partnership and Fund Nine formed ICON Aircraft 126 LLC (“ICON
126”) for the purpose of acquiring all of the outstanding shares of Delta
Aircraft Leasing Limited (“D.A.L.”), a Cayman Islands registered company that
owns, through an owner trust, an Airbus A340-313X aircraft that is on lease to
Cathay. ICON 126 completed the transaction during March 2002. The lease was
initially scheduled to expire in March 2006, but has been extended until July 1,
2011. The Partnership and Fund Nine each have interests of 50% in ICON 126. ICON
126 consolidates the financial position and operations of D.A.L. in its
consolidated financial statements.





49


ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005


(5)
            Investments
      in Joint Ventures - continued





Effective
March 27, 2006, the owner trustee, in connection with the lease extensions,
refinanced the non-recourse debt associated with the aircraft. The refinancing
was entered into because the original non-recourse debt of approximately
$52,850,000 was due to be repaid on March 27, 2006. ICON 126 established, under
the original lease, a reserve account totaling approximately $583,000, which was
used to reduce the balloon payment to approximately $52,267,000. The refinanced
non-recourse debt initially accrued interest at the London Interbank
Eurocurrency Market Rate (“LIBOR”) plus 1.165%, and matures on July 1, 2011 and
requires a balloon payment of approximately $32,000,000 at maturity. The
interest rate of the refinanced debt was fixed at 6.104% under the terms of the
debt agreement, effective October 3, 2006.





During
2006, ICON 126 received $182,020 of capital contributions from both of its
members of which $50,000 was for amounts relating to the maintenance reserve
account and $132,020 related to costs paid by its members relating to the
refinancing of the non-recourse debt.





ICON 126
had a commitment with respect to its Cathay aircraft to pay
certain maintenance costs, which were incurred on or prior to March 27,
2006.  ICON 126 had established a maintenance account, which totaled
approximately $1,385,000 at September 30, 2006 to pay for its portion of these
costs. This account was funded by free cash from the lease payments in
accordance with the terms of the original lease. During September 2006,
approximately $1,153,000 was paid for the maintenance costs. The excess cash
remaining of approximately $95,000, which includes interest accreted in the
amount of approximately $36,000 through December 31, 2007, is being held in the
maintenance account and will be used to pay down the principal balance of the
related non-recourse debt.





In
connection with the original purchase of the Cathay aircraft owned by ICON 126,
the owner trustee entered into two first priority charge on cash deposit
agreements pursuant to which the maintenance account for the Cathay aircraft
owned by ICON 126 was cross-collateralized with the maintenance account for the
Cathay aircraft owned by ICON 123. Under the terms of this agreement, ICON 126
was required to pay on behalf of ICON 123, the Partnership’s wholly-owned
subsidiary, any maintenance costs shortfalls. On January 30, 2007, ICON 126 paid
approximately $143,000 in maintenance costs from the remaining balance in its
maintenance account on behalf of ICON 123. The maintenance account and related
security interest were then terminated. ICON 123 will reimburse ICON 126 for the
maintenance shortfall when the aircraft in ICON 123 is sold.





ICON 126
is a party to a residual sharing agreement (the “Airtrade Residual Sharing
Agreement”) with ICON 123, and Airtrade Capital Corp. (“Airtrade”). Pursuant to
the terms of the Airtrade Residual Sharing Agreement, all proceeds received in
connection with the sale or lease extension of the aircraft owned by ICON 123
and ICON 126 in excess of $8,500,000 (in the aggregate) of the debt associated
with each aircraft (net of expenses) will be allocated 55% to ICON 126 or ICON
123, as applicable, and 45% will be allocated to Airtrade.






50


ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005




(5)
            Investments
      in Joint Ventures - continued





Information
as to the financial position and results of operations of ICON 126 at December
31, 2007 and 2006 and for the years ended December 31, 2007, 2006 and 2005 are
summarized below:







December 31,2007
                  
                  
                  2006Assets
                  
                  
                  $
                  53,292,710
                  
                  
                  $
                  57,312,242Liabilities
                  
                  
                  $
                  46,493,816
                  
                  
                  $
                  49,931,268Equity
                  
                  
                  $
                  6,798,894
                  
                  
                  $
                  7,380,974LLC's
      share of equity
                  
                  
                  $
                  3,399,447
                  
                  
                  $
                  3,690,487Contributions
                  
                  
                  $
                  11,415
                  
                  
                  $
                  25,000Years Ended December 31,2007
                  
                  2006
                  
                  
                  2005Revenue
                  $  6,406,476
                  
                  $
                  6,816,667
                  
                  
                  $
                  8,231,334Expense
                  $           (7,011,386
                  )
                  $
                  (8,440,872
                  )
                  
                  $
                  (7,435,492
                  )Net
      (loss) income
                  $               (604,909
                  )
                  $
                  (1,624,205
                  )
                  
                  $
                  795,842LLC's
      share of net (loss) income
                  $              
      (302,455
                  )
                  $
                  (812,103
                  )
                  
                  $
                  397,921


ICON
Aircraft 46835 LLC





During
December 2002, the Partnership and Fund Nine formed a joint venture, ICON
Aircraft 46835 LLC (“Aircraft 46835”), for the purpose of acquiring an
investment in a McDonnell Douglas DC10-30F aircraft on lease with FedEx that was
scheduled to expire on March 31, 2007. The Partnership and Fund Nine had an
interest in the joint venture of 15% and 85%, respectively. On December 27,
2002, Aircraft 46835 acquired the aircraft for approximately $25,292,000,
consisting of approximately $3,000,000 in cash and approximately $22,292,000 of
non-recourse debt. The Partnership’s cash portion of the purchase price was
approximately $450,000. The non-recourse debt accrued interest at 4.04% per year
and matured in March 2007. The lender had a security interest in the aircraft
and an assignment of the rental payments under the lease. The General Partner
was paid an acquisition fee of approximately $759,000 relating to this
transaction, of which the Partnership paid approximately $114,000.





At
December 31, 2005, the General Partner determined that the aircraft was impaired
based upon an appraisal that indicated a slower than expected recovery in the
air transportation industry, and recorded an impairment loss of approximately
$3,182,000.





On March
30, 2007, Aircraft 46835 sold the Aircraft to FedEx for $4,260,000 and
recognized a loss on the sale of approximately $640,000. The final lease payment
was paid to the lender, satisfying all remaining debt obligations.





51


ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005


(5)
            Investments
      in Joint Ventures - continued





Information
as to the financial position and results of operations of ICON 46835 at December
31, 2007 and 2006 and for the years ended December 31, 2007, 2006 and 2005 are
summarized below:





December 31,2007
            
            
            2006Assets
            
            $
            -
            
            
            $
            6,845,622Liabilities
            
            $
            -
            
            
            $
            2,678,396Equity
            
            $
            -
            
            
            $
            4,167,226Partnership's
      share of equity
            
            $
            -
            
            
            $
            625,084








Years Ended December 31,2007
            
            
            2006
            
            
            2005Net
      income (loss)
            
            $
            (92,774
            )
            
            $
            2,901,052
            
            
            $
            (2,758,625
            )Partnership's
      share of net income (loss)
            
            $
            (13,916
            )
            
            $
            435,158
            
            
            $
            (413,794
            )











(6)
            Investment
      in Options





During
the fourth quarter of 2001, the Partnership invested $2,100,000 (including
$900,000 in acquisition fees paid to the General Partner) in an option to
purchase a 1994 Boeing 737-524 aircraft together with two engines on lease to a
United States based commercial airline.  The purchase price of the
option included an 8.5% $400,000 promissory note, which was to mature in May
2012. On August 29, 2003, the promissory note and all accrued interest were paid
in full.





The
exercise price of the option decreases according to a predetermined schedule
over the term of the option from $30 million in 2001 to $9 million in 2012. The
exercise price at December 31, 2007 and 2006 was $18,225,102 and $19,923,856,
respectively. The option expires in 2012.





At
December 31, 2006, the General Partner determined that the Partnership’s
investment in an option to purchase a 1994 Boeing 737-524 aircraft together with
two engines was impaired and accordingly, the Partnership recognized an
impairment loss of $2,100,000 which reduced the carrying value of the option to
zero.





(7)
            Non-Recourse
      Long-Term Debt





Simultaneously
with the lease extension for the 100% owned Cathay aircraft (See Note 4), the
Partnership refinanced the non-recourse debt related to the aircraft. The
refinancing was entered into because the original non-recourse debt of
approximately $52,850,000 was due to be repaid on March 14, 2006. The
Partnership established, under the original lease, a reserve account totaling
approximately $282,000 which was used to reduce the balloon payment to
approximately $52,568,000. The Partnership refinanced approximately $52,568,000
of non-recourse debt, which initially accrued interest at LIBOR plus 1.165%, and
matures on October 1, 2011 and has a balloon payment of approximately
$32,000,000. The interest rate of the refinanced non-recourse debt was fixed at
6.1095% under the terms of the debt agreement, effective October 3, 2006. The
Partnership capitalized approximately $144,000 of fees associated with the
refinancing. At December 31, 2007 and 2006, the outstanding balance of the
non-recourse debt was $46,142,220 and $49,688,022, respectively. At December 31,
2007, the fair market value of the non-recourse debt was approximately
$47,490,000.





52


ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005


(7)
            Non-Recourse
      Long-Term Debt - continued





The
Partnership had two non-recourse notes payable that were paid directly to the
lenders by the lessees and accrued interest at 4.035% and 6.1095% per year,
respectively. The outstanding balance of the non-recourse debt at December 31,
2006 was $52,572,875, of which $49,688,022 pertained to the non-recourse debt
related to the Cathay aircraft and $2,884,853 pertained to the non-recourse debt
of Aircraft 47820.





The
aggregate maturities of non-recourse long-term debt, including the effects of
refinancing discussed above consisted of the following at December 31,
2007:





Years
      EndingDecember 31,2008
            
            
            $
            3,795,9172009
            
            
            
            4,029,2702010
            
            
            
            3,826,7972011
            
            
            
            34,490,236$
            46,142,220








(8)
            Revolving
      Line of Credit, Recourse





On August
31, 2005, the Partnership, together with certain of its affiliates (entities
sponsored and organized by the General Partner), Fund Nine, ICON Income
Fund Ten, LLC (“Fund Ten”) and ICON Leasing Fund Eleven, LLC (“Fund Eleven”)
(collectively, the “Borrowers”) entered into a Commercial Loan Agreement (the
“Loan Agreement”), with California Bank & Trust (the “Lender”). The Loan
Agreement provides for a revolving line of credit of up to $17,000,000 pursuant
to a senior secured revolving loan facility (the “Facility”) which is secured by
all assets of the Borrowers not subject to a first priority lien, as defined in
the Loan Agreement. Each of the Borrowers is jointly and severally liable
for all amounts borrowed under the Facility. Amounts available under the
Facility are subject to a borrowing base that is determined, subject to certain
limitations, on the present value of the future receivables under certain lease
agreements in which the Borrowers have a beneficial interest.





As part
of the Loan Agreement, the Borrowers are required to comply with certain
financial covenants, including a minimum debt coverage ratio, a tangible
net worth covenant, a leverage ratio and a minimum liquidity covenant. The
Loan Agreement prohibits any Borrower from declaring or paying any distribution
to investors if such a payment would cause such Borrower to become non-compliant
with the financial covenants in the Loan Agreement. The Borrowers are obligated
to pay a quarterly commitment fee of 0.5% on unused commitments under the
Facility.





53


ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005


(8)
            Revolving
      Line of Credit, Recourse -
continued





In
addition, on August 31, 2005, the Borrowers entered into a Contribution
Agreement (the “Contribution Agreement”) pursuant to which the Borrowers agreed
to certain restrictions on the amounts and terms of their respective borrowings
under the Facility in order to minimize the risk that a Borrower would be
unable to repay its portion of the outstanding obligations under the Facility
at any time. These restrictions include, but are not limited to, borrowing
in excess of the lesser of (a) an amount each Borrower could reasonably expect
to repay in one year from its projected free cash flow, or (b) the greater of
(i) the borrowing base, as defined in the Loan Agreement, as applied to such
Borrower and (ii) 50% of the net worth of such Borrower. The Contribution
Agreement also provides that, in the event a Borrower pays an amount under the
Contribution Agreement in excess of its share of the total obligations under the
Facility, whether by reason of an event of default or otherwise, the other
Borrowers will immediately make a contribution payment to such Borrower and in
such amount that the aggregate amount paid by each Borrower reflects its
allocable share of the aggregate obligations under the Facility. The Borrowers'
obligations to each other under the Contribution Agreement
are collateralized by a subordinate lien on the assets of each
Borrower.





On
December 26, 2006, the Borrowers entered into a Loan Modification Agreement (the
“Loan Modification”) to the Loan Agreement. The Loan Modification extended the
Facility from August 31, 2007 to September 30, 2008 and lowered (i) the
interest rate for advances under the Facility from the Lender’s prime rate plus
0.25% to the Lender’s prime rate and (ii) the interest rate on the five
separate advances that are permitted to be made under the Facility at the rate
at which United States dollar deposits can be acquired by the Lender at LIBOR
plus 2.75% per year to LIBOR plus 2.5% per year. In addition, pursuant to the
terms of the Loan Modification, the Borrowers no longer have to maintain a
cash reserve. The interest rate at December 31, 2007 was 7.25%.





At
December 31, 2006, the Partnership had $3,125,000 outstanding under the
Facility, which represented the entire amount outstanding for all
Borrowers.





On June
20, 2007, the Loan Agreement, the Contribution Agreement and the Loan
Modification were modified to admit ICON Leasing Fund Twelve, LLC (“Fund
Twelve”) as a permitted borrower.





The
Borrowers were in compliance with the covenants at December 31, 2007. The
Borrowers were also in compliance with the Contribution Agreement at December
31, 2007 and no amounts were due to or payable by the Partnership under the
Contribution Agreement as of such date.





Aggregate
borrowings by all Borrowers under the Facility amounted to $6,255,000 at
December 31, 2007. The Partnership had $1,255,000 in borrowings outstanding
under the Facility as of such date. The balance of $5,000,000 was borrowed by
Fund Ten. Subsequent to December 31, 2007, Fund Ten made repayments on various
dates totaling $5,000,000.





(9)
            Transactions
      with Related Parties





Prior to
May 1, 2006 and in accordance with the terms of the LP Agreement, the
Partnership paid the General Partner (i) management fees ranging from 1% to 7%
based on a percentage of the rentals recognized either directly by the
Partnership or through its joint ventures and (ii) acquisition fees, through the
reinvestment period, of 3% of the gross value of the Partnership’s acquisition
transactions.  In addition, the General Partner was reimbursed for
certain administrative expenses incurred in connection with the Partnership’s
operations.






54


ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005





(9)
            Transactions
      with Related Parties - continued





The
General Partner performs certain services relating to the management of the
Partnership’s equipment leasing and financing activities.  Such
services include the collection of lease payments from the lessees of the
equipment, re-leasing services in connection with equipment which is off-lease,
inspections of the equipment, liaison with and general supervision of lessees to
assure that the equipment is being properly operated and maintained, monitoring
performance by the lessees of their obligations under the leases and the payment
of operating expenses.





Administrative
expense reimbursements are costs incurred by the General Partner that are
necessary to the Partnership’s operations.  These costs include the General
Partner’s legal, accounting, investor relations and operations personnel, as
well as professional fees and other costs that are charged to the Partnership
based upon the percentage of time such personnel dedicate to the
Partnership.  Excluded are salaries and related costs, travel expenses and
other administrative costs incurred by individuals with a controlling interest
in the General Partner or expenses for rent, depreciation or utilities of the
General Partner.





Although
the General Partner continues to provide these services, effective May 1, 2006,
the General Partner waived its rights to all future management fees and
administrative expense reimbursements.





The
General Partner also has a 1% interest in the Partnership’s profits, losses,
cash distributions and liquidation proceeds. The Partnership paid distributions
to the General Partner of $43,519, $59,944 and $60,056, for the years ended
December 31, 2007, 2006 and 2005, respectively. Additionally, the General
Partner’s interest in the Partnership’s net income (loss) was $11,470, $(6,144)
and $33,686, for the years ended December 31, 2007, 2006 and 2005,
respectively.





Fees and
other expenses charged to operations by the Partnership and paid to the General
Partner or its affiliates for the years ended December 31, 2006 and 2005,
respectively, were as follows:





Entity
            Capacity
            Description
            
            2006
            
            
            2005ICON Capital Corp.
            General
      Partner
            Management
      fees
            
            $
            410,842
            
            
            $
            1,311,990ICON Capital Corp.
            General
      Partner
            Administrative
      fees
            
            $
            161,980
            
            
            $
            515,934





The
Partnership had a receivable due from the General Partner and affiliates of
$92,836 at December 31, 2005. The Partnership was owed $88,070 from Fund Nine
for distributions and rental payments received on the Partnership’s behalf and
$4,766 due from the General Partner for the Partnership’s overpayment of
administrative expenses.





In
January 2007, ICON 123 repaid the outstanding maintenance costs of approximately
$1,546,000 with the balance in the reserve account of approximately $1,403,000,
inclusive of accreted interest. The remaining balance of approximately $143,000
was borrowed from ICON 126 and is repayable on demand.




(10)
              Fair
      Value of Financial
Instruments




Fair
value information with respect to the Partnership's leased assets and
liabilities is not separately provided since (i) SFAS No. 107, “Disclosures
About Fair Values of Financial Instruments,” does not require fair value
disclosures of lease arrangements and (ii) the carrying value of financial
assets, other than lease related investments, and the recorded value of recourse
notes payable, if any, approximates fair value due to their short-term
maturities and variable interest rates.





55


ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005


(11)
            Concentrations





The
Partnership's cash and cash equivalents are held principally at two financial
institutions and at times may exceed insured limits. The Partnership has placed
these funds in high quality institutions in order to minimize the risk of loss,
relating to exceeding insured limits.





Concentrations
of credit risk with respect to lessees are dispersed across the different
industry segments within the United States of America and throughout the world;
accordingly, the Partnership is exposed to business and economic risk. Although
the Partnership does not currently foresee a concentrated credit risk associated
with these lessees, lease payments are dependent upon the financial stability of
the lessees.





The
Partnership has approximately 81.8% of its assets and approximately 95.9% of its
liabilities concentrated in the airline industry at December 31, 2007 and had
approximately 89.2% of its assets and approximately 92.9% of its liabilities
concentrated in the airline industry at December 31, 2006.





For the
years ended December 31, 2007, 2006 and 2005 the Partnership had two lessees
that accounted for approximately 85.8%, 83.5% and 85.0%, respectively, of rental
income and finance income.





(12)
            Commitments
      and Contingencies and Off-Balance Sheet
  Transactions





The
Partnership has entered into residual sharing agreements with various third
parties.  In connection with these agreements residual proceeds
received in excess of specific amounts will be shared with these third parties
based on specific formulas.





ICON 123
had a commitment to pay certain of the maintenance costs, which were incurred on
or prior to March 14, 2006. The total maintenance costs were approximately
$1,546,000. ICON 123 established, under the terms of the lease, a maintenance
reserve cash account which totaled approximately $1,403,000, inclusive of
accrued interest, as of January 2007, to pay for the Partnership’s portion of
these costs.





Pursuant
to the terms of the Airtrade Residual Sharing Agreement, all proceeds received
in connection with sales or lease renewals of the aircraft in excess of
$8,500,000 of the applicable loan balance associated with each aircraft will be
allocated 55% to ICON 126 or 123, as applicable, and 45% will be allocated to
Airtrade.





On
February 23, 2005, L.P. Seven assigned to the Partnership 2.69% of its rights to
the profits, losses, and cash flows from its limited partnership interest in an
entity that owns a 100% interest in a mobile offshore drilling rig that is
subject to lease with Rowan Companies, Inc. L.P. Seven assigned the rights to
the Partnership as repayment of its $672,992 outstanding debt obligation
pursuant a contribution agreement that the Partnership had Comerica Bank. This
assignment increased the Partnership’s rights to the profits, losses, and cash
flows from L.P. Seven’s limited partnership interest from 3.24%, which were
assigned to the Partnership in November 2004 to 5.93%. The repayment amount
represented the General Partner’s estimated fair value of L.P. Seven's interest
in the mobile offshore drilling rig at February 23, 2005. The fair value of the
mobile offshore drilling rig was
determined using an appraisal and cash flow analysis.  During the year
ended December 31, 2006, the Partnership received approximately $267,000 in cash
distributions, related to this assignment.





56


ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005


(12)
            Commitments
      and Contingencies and Off-Balance Sheet Transactions -
      continued





At the
time the Partnership acquires or divests of its interest in an equipment lease
or other leasing transaction, the Partnership may, under very limited
circumstances, agree to indemnify the seller or buyer for specific contingent
liabilities. The General Partner believes that any liability of the Partnership
that may arise as a result of any such indemnification obligation will not have
a material adverse effect on the consolidated financial condition of the
Partnership taken as a whole.





(13)
            Geographic
      Information





All
long-lived assets, which include finance leases and operating leases and
revenues, are within the United States.





(14)
            Limited
      Partnership Redemptions





The
General Partner consented to the Partnership redeeming 1,000, 1,300 and 449
limited partnership units for the years ended December 31, 2007, 2006 and 2005,
respectively. The redemption amounts are calculated according to a specified
redemption formula that is calculated pursuant to the LP Agreement. Redeemed
units have no voting rights and do not share in distributions. The LP Agreement
limits the number of units which can be redeemed in any one year and redeemed
units may not be reissued. Redeemed limited partnership units are accounted for
as a reduction of partners' equity.





(15)
            Selected
      Quarterly Financial Data





The
following table is a summary of selected financial data, by quarter, for the
years ended December 31, 2007 and 2006:





(unaudited)Quarters Ended in 2007
            
            
            Year
      EndedMarch 31,
            
            
            June 30,
            
            
            September 30,
            
            
            December 31,
            
            
            December 31, 2007Total
      revenue
            
            $
            2,516,098
            
            
            $
            2,364,321
            
            
            $
            2,890,568
            
            
            $
            1,835,338
            
            
            $
            9,606,325Net
      (loss) income allocable to limited partners
            
            $
            (119,821
            )
            
            $
            281,986
            
            
            $
            957,940
            
            
            $
            15,404
            
            
            $
            1,135,509Weighted
      average number of limitedpartnership
      units outstanding
            
            
            741,530
            
            
            
            741,365
            
            
            
            740,530
            
            
            
            740,985
            
            
            
            740,985Net
      (loss) income per weighted averagelimited
      partnership units
            
            $
            (0.16
            )
            
            $
            0.38
            
            
            $
            1.29
            
            
            $
            0.02
            
            
            $
            1.53





(unaudited)Quarters Ended in 2006Year
      EndedMarch 31,
            
            
            June 30,
            
            
            September 30,
            
            
            December 31,
            
            
            December 31, 2006Total
      revenue
            
            $
            4,052,719
            
            
            $
            4,355,442
            
            
            $
            3,299,874
            
            
            $
            4,544,470
            
            
            $
            16,252,505Net
      (loss) income allocable to limited partners
            
            $
            (836,482
            )
            
            $
            828,834
            
            
            $
            (416,746
            )
            
            $
            (183,888
            )
            
            $
            (608,282
            )Weighted
      average number of limitedparternship
      units outstanding
            
            
            742,142
            
            
            
            741,656
            
            
            
            741,530
            
            
            
            741,752
            
            
            
            741,752Net
      (loss) income per weighted averagelimited
      partnership units
            
            $
            (1.13
            )
            
            $
            1.12
            
            
            $
            (0.56
            )
            
            $
            (0.25
            )
            
            $
            (0.82
            )





57


ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005





(16)         Income
Tax Reconciliation (unaudited)





No
provision for income taxes has been recorded by the Partnership since the
liability for such taxes is the responsibility of each of the individual
partners rather than the Partnership. The Partnership's income tax returns are
subject to examination by the federal and state taxing authorities, and changes,
if any, could adjust the individual income taxes of the partners.





At
December 31, 2007 and 2006 the partners’ capital accounts included in the
consolidated financial statements totaled $17,046,972 and $20,277,150,
respectively, compared to the partners’ capital accounts for federal income tax
purposes of $29,216,797 and $28,432,392, respectively. The differences arise
primarily from sales and offering expenses reported as a reduction in the
limited partners’ capital accounts for financial reporting purposes but not for
federal income tax reporting purposes, and differences in depreciation and
amortization between financial reporting purposes and federal income tax
purposes.





The
following table reconciles net income (loss) for financial statement reporting
purposes to the net income for federal income tax purposes, for the years ended
December 31, 2007, 2006 and 2005:





2007
            
            
            2006
            
            
            2005Net
      income (loss) per consolidated financial statements
            
            $
            1,146,979
            
            
            $
            (614,426
            )
            
            $
            3,368,585Adjustments
      for direct finance lease
            
            
            1,470,400
            
            
            
            2,047,705
            
            
            
            3,338,435Deferred
      Income
            
            
            -
            
            
            
            169,685
            
            
            
            -Depreciation
      and impairments
            
            
            6,249,533
            
            
            
            8,807,781
            
            
            
            11,924,358Tax
      loss from consolidated joint venture
            
            
            (8,122,961
            )
            
            
            544,659
            
            
            
            (10,028,932
            )Gain
      (Loss) on sale of equipment
            
            
            5,456,803
            
            
            
            (491,734
            )
            
            
            3,116,920Other
      items
            
            
            (954,177
            )
            
            
            (6,696,038
            )
            
            
            (376,239
            )Net
      income for federal income tax purposes
            
            $
            5,246,577
            
            
            $
            3,767,632
            
            
            $
            11,343,127





58








ICON
      Income Fund Eight B L.P.(A
      Delaware Limited Partnership)Schedule
      II - Valuation and Qualifying AccountsBalance
      at
            
            
            Charged
      to
            
            
            
            
            
            
            Balance
      atBeginning
            
            
            Costs
      and
            
            
            
            
            
            
            Endof Year
            
            
            Expenses
            
            
            Deduction
            
            
            
            of YearYear
      ended December 31, 2007Allowance
      for doubtful accounts(deducted
      from investments in finance leases)
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            
            $
            -Year
      ended December 31, 2006Allowance
      for doubtful accounts(deducted
      from investments in finance leases)
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            
            $
            -Year
      ended December 31, 2005Allowance
      for doubtful accounts(deducted
      from investments in finance leases)
            
            $
            411,742
            
            
            $
            -
            
            
            $
            411,742
            
            (a)
            
            $
            -(a) During
      the year ended December 31, 2005, the disputed lease with K-Mart
      Corporation was resolved and, therefore, the baddebt
      allowance that was previously recorded in 2004 was
    reversed.





59







Item
9. Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure





On
November 26, 2007, ICON Income Fund Eight B L.P. (the “Registrant”) terminated
the services of Hays & Company LLP (“Hays”) as its independent registered
public accounting firm for the fiscal year ended December 31,
2007.  The decision to dismiss Hays was recommended and approved by
the board of directors of ICON Capital Corp. (the “General Partner”), the
General Partner of the Registrant (“Board of Directors”).




The audit
report of Hays on the balance sheet as of December 31, 2006 contained no adverse
opinion or disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principle.





During
the Registrant’s fiscal year ended December 31, 2006, and the subsequent interim
period through November 26, 2007, (i) there were no “disagreements” (as defined
in Item 304(a)(1)(iv) of Regulation S-K and related instructions) with Hays on
any matter of accounting principle or practice, financial statement disclosure,
or auditing scope or procedure that, if not resolved to the satisfaction of
Hays, would have caused Hays to make reference to the subject matter of the
disagreement in connection with its report and (ii) there were no “reportable
events” (as defined in Item 304(a)(1)(v) of Regulation S-K and related
instructions), except the following with regard to the internal controls of the
Registrant’s General Partner:




While
evaluating the General Partner’s disclosure controls and procedures during 2006,
Hays advised the General Partner and the General Partner recognized that greater
internal controls were needed to aid in a more efficient closing of the
Registrant’s financial statements, thereby requiring the General Partner to hire
additional skilled accounting staff.  In response, the General Partner
hired several additional accounting staff members who are certified public
accountants and/or are experienced with public reporting entities, including
three additional senior accountants with more than 16, 10, and 9 years,
respectively, of experience with public reporting entities, the most senior of
those accountants was appointed Senior Vice President of
Accounting.




The
Registrant provided Hays with a copy of this disclosure and Hays furnished the
Registrant with a letter dated November 30, 2007, addressed to the Securities
and Exchange Commission (the “SEC”) stating whether or not it agrees with the
above statements.  A copy of Hays’ letter dated November 30, 2007, is
attached as Exhibit 16.1 to the Form 8-K that was filed with the SEC on November
30, 2007.





On
November 26, 2007, the Board of Directors engaged Ernst & Young LLP (“Ernst
& Young”) as the Registrant’s independent registered public accounting firm
for the fiscal year ending December 31, 2007. During the Registrant’s fiscal
year ended December 31, 2006 and the subsequent interim period through November
26, 2007, neither the Registrant nor any one acting on its behalf consulted with
Ernst & Young regarding (i) the application of accounting principles to a
specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on the Registrant’s consolidated financial
statements and no written report or oral advice was provided by Ernst &
Young to the Registrant that Ernst & Young concluded was an important factor
considered by the Registrant in reaching a decision as to the accounting,
auditing or financial reporting issue, (ii) any matter that was either the
subject of a “disagreement” (as defined in Item 304(a)(1)(iv) of Regulation S-K
and related instructions) or a “reportable event” (as defined in Item
304(a)(1)(v) of Regulation S-K and related instructions).





60







Item 9A(T). Controls and Procedures





Evaluation of disclosure controls
and procedures





In
connection with the preparation of this Annual Report on Form 10-K for the
period ended December 31, 2007, as well as the financial statements for our
General Partner, our General Partner carried out an evaluation, under the
supervision and with the participation of the management of our General Partner,
including its Co-Chief Executive Officers and Chief Financial Officer, of the
effectiveness of the design and operation of our General Partner’s disclosure
controls and procedures as of the end of the period covered by this Report
pursuant to the Securities Exchange Act of 1934. Based on the foregoing
evaluation, the Co-Chief Executive Officers and the Chief Financial Officer
concluded that our General Partner’s disclosure controls and procedures were
effective.





In
designing and evaluating our General Partner’s disclosure controls and
procedures, our General Partner recognized that disclosure controls and
procedures, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the disclosure
controls and procedures are met. Our General Partner’s disclosure controls and
procedures have been designed to meet reasonable assurance standards. Disclosure
controls and procedures cannot detect or prevent all error and fraud. Some
inherent limitations in disclosure controls and procedures include costs of
implementation, faulty decision-making, simple error and mistake. Additionally,
controls can be circumvented by the individual acts of some persons, by
collusion of two or more people, or by management override of the controls. The
design of any system of controls is based, in part, upon certain assumptions
about the likelihood of future events, and there can be no assurance that any
design will succeed in achieving its stated goals under all anticipated and
unanticipated future conditions. Over time, controls may become inadequate
because of changes in conditions, or the degree of compliance with established
policies or procedures.





Our
General Partner’s Co-Chief Executive Officers and Chief Financial Officer have
determined that no weakness in disclosure controls and procedures had any
material effect on the accuracy and completeness of our financial reporting and
disclosure included in this Annual Report on Form 10-K.





Evaluation
of internal control over financial reporting





Our
General Partner is responsible for establishing and maintaining adequate
internal control over financial reporting. Internal control over financial
reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Securities
Exchange Act of 1934, as amended, as a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally
accepted accounting principles and includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately
and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles, and that receipts and expenditures of
the company are being made only in accordance with authorizations of management
and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition
of the company's assets that could have a material effect on the financial
statements.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Projections of any evaluation of effectiveness
to future periods are subject to the risks that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.





61





Our
General Partner assessed the effectiveness of its internal control over
financial reporting as of December 31, 2007. In making this assessment,
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in "Internal Control —
Integrated Framework."





Based on
its assessment, our General Partner believes that, as of December 31, 2007, its
internal control over financial reporting is effective.





This
annual report does not include an attestation report of the Partnership’s
registered public accounting firm pursuant to the temporary rules of the
Securities and Exchange Commission that permits the Partnership to only provide
management’s reports in this annual report.





Item
9B. Other Information





Not
applicable.






62






PART III





Item
10. Directors, Executive Officers of the Registrant's General Partner and
Corporate Governance





Our
General Partner, ICON Capital Corp., a Delaware corporation, was formed in 1985
as a Connecticut corporation and was re-incorporated in Delaware effective June
1, 2007.  Our General Partner's principal offices are located at 100
Fifth Avenue, 4th Floor, New York, New York 10011, and the telephone number is
(212) 418-4700.





In
addition to the primary services related to our acquisition and disposition
of equipment, our General Partner provides services relating to the
day-to-day management of our equipment. These services include collecting
payments due from lessees, remarketing equipment that is off-lease, inspecting
equipment, serving as a liaison with lessees, supervising equipment maintenance,
and monitoring performance by lessees of their obligations, including payment of
rent and all operating expenses.





Name
            
            Age
            
            TitleThomas W. Martin
            
            53
            
            Chairman
      and DirectorMichael A. Reisner
            
            37
            
            Co-Chief
      Executive Officer, Co-President, Chief Financial Officer, and
      DirectorMark Gatto
            
            35
            
            Co-Chief
      Executive Officer, Co-President,  Chief Acquisitions Officer,
      and DirectorJoel S. Kress
            
            35
            
            Executive
      Vice President — Business and Legal AffairsH. Daniel Kramer
            
            56
            
            Senior
      Vice President and Chief Marketing OfficerDavid J. Verlizzo
            
            35
            
            Senior
      Vice President — Business and Legal AffairsAnthony J. Branca
            
            39
            
            Senior
      Vice President — Accounting and FinanceCraig A. Jackson
            
            49
            
            Senior
      Vice President — Remarketing and Portfolio
  Management




Thomas W.
Martin, Chairman, has been a Director since August 1996.  Prior
to joining ICON, Mr. Martin was the Executive Vice President, Chief Financial
Officer, and a co-founder of Griffin Equity Partners, Inc. from October 1993 to
August 1996.  Prior to that, Mr. Martin was Senior Vice President of Gemini
Financial Holdings, Inc. from April 1992 to October 1993 and he held the
position of Vice President at Chancellor Corporation (an equipment leasing
company) for 7 years. Mr. Martin has a B.S. degree from University of New
Hampshire. Mr. Martin has been in the equipment leasing business since
1983.





Michael A.
Reisner, Co-Chief Executive Officer, Co-President, Chief Financial
Officer, and Director, joined ICON in 2001. Mr. Reisner was previously Executive
Vice President, Chief Financial Officer, and Director.  In addition, Mr.
Reisner was formerly General Counsel and he also formerly held the position of
Executive Vice President – Acquisitions.  Previously, from 1996
to 2001, Mr. Reisner was an attorney with Brodsky Altman & McMahon, LLP in
New York, concentrating on commercial transactions.  Mr. Reisner received a
J.D. from New York Law School and a B.A. from the University of
Vermont.





Mark
Gatto, Co-Chief Executive Officer, Co-President, Chief Acquisitions
Officer, and Director, originally joined ICON in 1999 and was previously
Executive Vice President and Chief Acquisitions Officer.  Mr. Gatto was
formerly Executive Vice President – Business Development from February 2006 to
May 2007 and Associate General Counsel from November 1999 through October 2000.
 Mr. Gatto is responsible for business and corporate development, including
the acquisition of equipment subject to lease.  Before serving as Associate
General Counsel, Mr. Gatto was an attorney with Cella & Goldstein in New
Jersey, concentrating on commercial transactions and general litigation matters.
From November 2000 to June 2003, Mr. Gatto was Director of Player Licensing for
the Topps Company and, in July 2003, he co-founded a specialty business
consulting firm in New York City and served as its managing partner before
re-joining our General Partner in April 2005.  Mr. Gatto received an M.B.A
from the W. Paul Stillman School of Business at Seton Hall University, a J.D.
from Seton Hall University School of Law, and a B.S. from Montclair State
University.






63






Joel S.
Kress, Executive Vice President – Business and Legal Affairs, started his
tenure with our General Partner in August 2005 as Vice President and Associate
General Counsel.  In February 2006, he was promoted to Senior Vice
President and General Counsel, and in May 2007 he was promoted to his current
position.  Previously, from 2001 to 2005, Mr. Kress was an attorney with
Fried, Frank, Harris, Shriver & Jacobson LLP in New York and London,
England, concentrating on mergers and acquisitions, corporate finance and
financing transactions (including debt and equity issuances) and private equity
investments.  Mr. Kress received a J.D. from Boston University School of
Law and a B.A. from Connecticut College.





H. Daniel
Kramer, Senior Vice President and Chief Marketing Officer, joined our
General Partner in 2008.  Mr. Kramer has more than 30 years of equipment
leasing and structured finance experience. Most recently, Mr. Kramer was part of
CIT Commercial Finance, Equipment Finance Division offering equipment leasing
and financing solutions to complement public and private companies’ capital
structure.  Prior to that role, Mr. Kramer was Senior Vice President,
National Sales Manager with GMAC Commercial Equipment Finance leading a direct
sales origination team, Senior Vice President and National Sales Manager for
ORIX Commercial Structured Equipment Finance division, and President of
Kramer, Clark & Company for 12 years providing financial consulting services
to private and public companies, including structuring and syndicating private
placements, equipment leasing and recapitalizations.





David J.
Verlizzo has been Senior Vice President – Business and Legal
Affairs since July 2007.  Mr. Verlizzo was formerly Vice
President and Deputy General Counsel from February 2006 to July 2007 and was
Assistant Vice President and Associate General Counsel from May 2005 until
January 2006.  Previously, from 2001 to 2005, Mr. Verlizzo was an
attorney with Cohen Tauber Spievack & Wagner LLP in New York,
concentrating on public and private securities offerings, securities law
compliance and corporate and commercial transactions.  Mr. Verlizzo
received a J.D. from Hofstra University School of Law and a B.S. from The
University of Scranton.





Anthony J.
Branca has been Senior Vice President – Accounting and Finance since
January 2007. Mr. Branca was Director of Corporate Reporting & Analysis
for The Nielsen Company (formerly VNU) from May 2005 until January 2007, and
held various other management positions with The Nielsen Company from July 1997
through May 2005.  Previously, from 1994 through 1997, Mr. Branca was
employed as a senior accountant at Fortune Brands and started his career as an
auditor with KPMG Peat Marwick in 1991.  Mr. Branca received a B.B.A.
from Pace University.





Craig A.
Jackson was Vice President – Remarketing and Portfolio Management
since February 2006.  He became a Senior Vice President in March 2008.
Previously, from October 2001 to 2006, Mr. Jackson was President and
founder of Remarketing Services, Inc., a transportation equipment remarketing
company. Prior to 2001, Mr. Jackson served as Vice President of Remarketing
and Vice President of Operations for Chancellor Fleet Corporation (an equipment
leasing company).  Mr. Jackson received a B.A. from Wilkes
University.





Code
of Ethics





Our
General Partner, on our behalf, has adopted a code of ethics for its Co-Chief
Executive Officers and Chief Financial Officer. The Code of Ethics is available
free of charge by requesting it in writing from our General Partner. Our General
Partner's address is 100 Fifth Avenue, 4th Floor,
New York, New York 10011.








64





Item
11. Executive Compensation





We have
no directors or officers.  Our General Partner and its affiliates were
paid or accrued the following compensation and reimbursement for costs and
expenses for the years ended December 31, 2006 and 2005.





Effective
May 1, 2006, our General Partner waived its rights to all future management fees
and administrative expense reimbursements.








Entity
            Capacity
            Description
            
            2006
            
            
            2005ICON Capital Corp.
            General
      Partner
            Management
      fees
            
            $
            410,842
            
            
            $
            1,311,990ICON Capital Corp.
            General
      Partner
            Administrative
      fees
            
            $
            161,980
            
            
            $
            515,934








Our
General Partner also has a 1% interest in our profits, losses, cash
distributions and liquidation proceeds. We paid distributions to our General
Partner of $­­­­43,519, $59,944 and $60,056, for the years ended
December 31, 2007, 2006 and 2005, respectively. Our General Partner’s interest
in our net income (loss) was $11,470, $(6,144) and $33,686, for the years ended
December 31, 2007, 2006 and 2005, respectively.





Item
12. Security Ownership of Certain Beneficial Owners and General Partner and
Related Security Holder Matters





(a)
            We
      do not have any securities authorized for issuance under any equity
      compensation plan. No person of record owns, or is known by us to own,
      beneficially more than 5% of any class of our
  securities.





(b)
            As
      of February 29, 2008, Directors and Officers of our General Partner do not
      own any of our equity securities.





(c)
            Neither
      we nor our General Partner are aware of any arrangements with respect to
      our securities, the operation of which may at a subsequent date result in
      a change of control of us.





Item 13. Certain Relationships and Related Transactions, and
Director Independence





See Item
11 for a discussion of our related party transactions. See Notes 5, 9 and 12 to
our consolidated financial statements for a discussion of our investments in
joint ventures and transactions with related parties.








65





Item
14. Principal Accounting Fees and Services





During
the years ended December 31, 2007 and 2006, our auditors provided audit services
relating to our Annual Report on Form 10-K and our quarterly reports on Form
10-Q.  Additionally, our auditors provided other services in the form of
tax compliance work.





Hays
& Company LLP (“Hays”) was our independent registered public accounting firm
in 2006 and 2007.  On November 26, 2007, the Board of Directors of our
General Partner terminated the services of Hays as our independent registered
public accounting firm.  As a result of Hays’ termination, Hays did
not complete the audit of our financial statements for the year ended December
31, 2007.   On November 26, 2007, the Board of Directors engaged
Ernst & Young LLP as the Registrant’s independent registered public
accounting firm for the fiscal year ending December 31, 2007.  The
following table presents the fees for both audit and non – audit services
rendered for the years ended December 31, 2007 and 2006.





Principal Audit Firm - Ernst & Young LLP2007
            
            
            2006Audit fees
            
            $
            175,000
            
            
            $
            -Tax fees
            
            
            -
            
            
            
            -$
            175,000
            
            
            $
            -Predecessor Audit Firm - Hays & Company LLP2007
            
            
            2006Audit
      fees
            
            $
            54,444
            
            
            $
            135,680Tax fees
            
            
            -
            
            
            
            64,967$
            54,444
            
            
            $
            200,647







66






PART IV




Item 15. Exhibits,  Financial Statement
Schedules





1.
Financial Statements





See index to financial statements included as Item 8 to this Annual Report on
Form 10-K hereof.





2. Financial Statement Schedules


Financial Statement Schedule II - Valuation and Qualifying Accounts
      is filled with this Annual Report on Form 10-K.Schedules 
      not listed above havebeenomittedbecause
      they are not applicable or the information required to be set forth
      therein is included in the financial statements or
      notes thereto.


3. Exhibits:





3.1
            Amended
      and Restated Agreement of Limited Partnership of Registrant (Incorporated
      by reference to Exhibit 4.1 to Registrant’s Post-Effective Amendment No. 6
      to Form S-1 Registration Statement No. 333-54001 dated May 19,
      2000).





4.1
            Certificate
      of Limited Partnership of Registrant (Incorporated by reference to Exhibit
      4.3 to Registrant’s Post-Effective Amendment No. 6 Form S-1 Registration
      Statement No. 333-54001 dated May 19,
2000).




10.1
            Commercial
      Loan Agreement, by and between California Bank & Trust, ICON Income
      Fund Eight B L.P.,  ICON Income Fund Nine,  LLC; ICON
      Income Fund Ten, LLC and ICON Leasing Fund Eleven, LLC, dated August 31,
      2005 (Incorporated by reference to Exhibit 10.1 to Registrant’s Current
      Report on Form 8-K dated August 31,
2005).




10.2
            Loan
      Modification Agreement, by and between California Bank & Trust and
      ICON Income Fund Eight B L.P., ICON Income Fund Nine, LLC, ICON Income
      Fund Ten, LLC and ICON Leasing Fund Eleven, LLC, dated December 26, 2006
      (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report
      on Form 8-K dated December 29,
2006).




31.1
            Rule
      13a-14(a)/15d-14(a) Certification of Co-Chief Executive
      Officer.




31.2
            Rule
      13a-14(a)/15d-14(a) Certification of Co-Chief Executive
      Officer.





31.3
            Rule
      13a-14(a)/15d-14(a) Certification of Chief Financial
    Officer.





32.1
            Certification
      of Co-Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.





32.2
            Certification
      of Co-Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.





32.3
            Certification
      of Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.






67


SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, we have duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.





333-37504
File No.


ICON
Income Fund Eight B L.P. (Registrant) by its General Partner, ICON Capital
Corp.





April 11,
2008





/s/
      Michael A. ReisnerMichael
      A. ReisnerCo-Chief
      Executive Officer, Co-President and Chief Financial Officer
              (Co-Principal
      Executive Officer and Principal Financial Officer)





/s/
      Mark GattoMark
      GattoCo-Chief
      Executive Officer, Co-President and Chief Acquisitions
Officer
              (Co-Principal
      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
capacity and on the dates indicated.





ICON
Capital Corp.


General
Partner of the Registrant





April 11,
2008





/s/
      Michael A. ReisnerMichael
      A. ReisnerCo-Chief
      Executive Officer, Co-President, Chief Financial Officer
              (Co-Principal
      Executive Officer and Principal Financial Officer)





April 11,
2008





/s/
      Mark GattoMark
      GattoCo-Chief
      Executive Officer, Co-President, Chief Acquisitions Officer
              (Co-Principal
      Executive Officer)





April 11,
2008





/s/
      Thomas W. MartinThomas
      W. MartinChairman





Supplemental
Information to be furnished with reports filed pursuant to Section 15(d) of the
Act by Registrant which have not registered securities pursuant to Section 12 of
the Act.





No annual
report or proxy material has been sent to security holders.





68