**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, 2006**ORo
              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, 4****th****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, or a non-accelerated filer. See definition of “accelerated
        filer and large accelerated filer” in Rule 12b-2 of the Exchange
        Act.
 Large
        accelerated filer ྑ   Accelerated
        filer ྑ  Non-accelerated
        filer þ
  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 shares of the registrant.
  Number
        of
        outstanding limited partnership units of the Registrant on February 28, 2007
        is
        741,530.
 
 **DOCUMENTS
        INCORPORATED BY REFERENCE**
 
 None.
  
 **Table
                  of Contents****Pages****PART
                  I**
              **1****Item
                  1. Business**
              **1****Item
                  1A. Risk Factors**
              **4****Item
                  1B. Unresolved Staff
                  Comments**
              **9****Item
                  2. Properties**
              **9****Item
                  3. Legal Proceedings**
              **9****Item
                  4. Submission of Matters to a Vote of Security
                  Holders******
              **9****PART
                  II**
              **9****Item
                  5. Market for the Registrant's Securities and Related
                  Security Holder Matters**
              **9****Item
                  6. Selected Consolidated Financial
                  Data**
              **11****Item
                  7. General Partner's Discussion and Analysis of
                  Financial Condition and****Results
                  of Operations**
              **12****Item
                  7A. Qualitative and Quantitative Disclosures About
                  Market Risk**
              **26****Item
                  8. Consolidated Financial Statements and Supplementary
                  Data**
              **27****Item
                  9.****Changes
                  in and Disagreements with Accountants on Accounting and****Financial
                  Disclosure**
              **55****Item
                  9A. Controls and
                  Procedures**
              **55****Item
                  9B. Other Information**
              **55****PART
                  III**
              **56****Item
                  10. Directors and Executive Officers of the
                  Registrant's General Partner**
              **56****Item
                  11. Executive
                  Compensation**
              **58****Item
                  12. Security Ownership of Certain Beneficial Owners
                  and General****Partner
                  and Related Security Holder
                  Matters**
              **58****Item
                  13. Certain Relationships and Related
                  Transactions**
              **58****Item
                  14. Principal Accountant Fees and
                  Services**
              **58****PART
                  IV**
              **59****Item
                  15. Exhibits and Financial Statement
                  Schedules**
              **59****SIGNATURES**
              **60**




**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,” “expects,” “intend,” “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.
 
 **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.
 
 Our
        General Partner is ICON Capital Corp. (our “General Partner”), a Connecticut
        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 limited partnership agreement (our “LP Agreement”).
 
 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, 2006
        we
        redeemed 8,470 limited
        partnership units. At December 31, 2006 we had 741,530 limited
        partnership units outstanding.
 
 **Our
        Business**
 
 We
        operate as an equipment leasing program in which the capital our partners
        have
        invested is pooled together to make investments, pay fees and establish a
        small
        reserve. We primarily acquire equipment subject to lease, and, to a lesser
        degree, acquire 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 the other equipment
        leases, we finance the majority of the purchase price. We refer to these
        leases
        as “growth” leases. These growth leases generate little or no current cash flow
        because substantially all of the rental payments from a lessee service the
        indebtedness associated with acquiring or financing the lease. We anticipate
        that the future value of this leased equipment will exceed our cash portion
        of
        the purchase price.
 
 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.
   1
 
 (2) *Reinvestment
        Period* :
        After
        the close of the offering period, we 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 our 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. Our General Partner continues to pursue investment
        opportunities for us and we will continue to pay distributions to our partners
        at the annualized rate of 8.0% per year during the extended reinvestment
        period.
 
 (3) *Liquidation
        Period:* After
        the reinvestment period, we will sell 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 is to complete the liquidation period in three years after the end
        of
        the reinvestment period, but it may take longer to do so.
 
 At
        December 31, 2006 and 2005, we had total assets of $78,651,672 and $91,960,247,
        respectively. For the year ended December 31, 2006, our total rental and
        finance
        income was $16,308,179, which included two lessees that accounted for
        approximately 83.5% of our rental income and finance income. We had a net
        loss
        for the year ended December 31, 2006 of $614,426. For the year ended December
        31, 2005, our total rental income and finance income was $19,990,082, which
        included two lessees that accounted for approximately 85% of our total rental
        income and finance income. We had net income for the year ended December
        31,
        2005 of $3,368,585. For the year ended December 31, 2004, our total rental
        income and finance income was $20,736,899, which included two lessees that
        accounted for approximately 50% of our rental income and finance income.
        We had
        a net loss for the year ended December 31, 2004 of $4,609,006.
 
 At
        December 31, 2006, our current portfolio, which we hold either directly or
        through joint venture investments with affiliates and others, consists primarily
        of the following equipment subject to lease:
 
 *Air
        Transportation Equipment:*
 
 ·
              We
                  have a 90% interest in a joint venture, ICON Aircraft 47820 LLC
                  (“Aircraft
                  47820”), which owns a McDonnell Douglas DC-10-30F aircraft and two spare
                  engines (the “Aircraft and engines”) on lease with Federal Express
                  Corporation (“Fedex”), which lease expires on March 31,
                  2007.
 
 On
        September 21, 2006, FedEx provided Aircraft 47820 its irrevocable notice
        to
        purchase the Aircraft and engines. Pursuant to the lease, Aircraft 47820
        had
        twenty days to agree with FedEx on the fair value of the Aircraft and engines.
        The lease further provides that if the parties do not agree within that time
        period, then they have ten days to appoint a mutually acceptable appraiser.
        If
        the parties could not agree on an appraiser, the lease provided that the
        fair
        value would be determined by independent appraisers, one selected by our
        General
        Partner and one selected by FedEx. Moreover, the lease provided that if those
        appraisers could not agree on the fair value, the two appraisers would appoint
        a
        third nationally recognized independent aircraft appraiser.
 
 Aircraft
        47820 selected a nationally recognized appraiser who is the former Chairman
        of
        the International Society of Transport Aircraft Trading appraisal board and
        received an appraisal value for the Aircraft and engines of $10,460,000.
        In
        addition, the General Partner commissioned an additional nationally recognized
        appraiser to conduct an appraisal on the Aircraft and engines who appraised
        the
        Aircraft and engines at $7,820,000.
 
 The
        appraiser selected by FedEx, however, valued the Aircraft and engines at
        only
        $5,500,000, which was significantly lower than our General Partner’s two
        appraisals and much lower than all publicly available published values for
        this
        type of aircraft.
   2
 
 When
        the
        appraisers chosen by our General Partner and FedEx could not agree on the
        fair
        value, they selected a third appraiser. Although FedEx did not initially
        agree
        to this appraiser, it ultimately did so, but only after substantial delay.
        In
        February 2007, FedEx finally agreed to allow the process to proceed with
        the
        third appraiser and on February 23, 2007, the third appraiser was retained
        by
        the parties.
 
 On
        March
        2, 2007, Aircraft 47820 was notified that the third appraiser valued the
        Aircraft and engines at what our General Partner believes is an exceedingly
        low
        appraisal valuing the Aircraft and engines at $5,450,000. Pursuant to a formula
        in the lease, the two appraisals that are closest in value are to be averaged,
        which resulted in a sales price for the Aircraft and engines of $5,475,000,
        resulting in a loss on the sale of the Aircraft and engines of approximately
        $1,020,000, which will be recorded by Aircraft 47820 during the first quarter
        of
        2007.
  Our
        General Partner has serious concerns about the propriety of the appraisal
        process and has advised FedEx that it believes that FedEx improperly interfered
        with the process and thereby negatively impacted the appraised price of the
        Aircraft and engines. Our General Partner is thoroughly reviewing the facts
        with
        its outside legal counsel On March 30, 2007, Aircraft 47820 sold the aircraft
        and engines to FedEx for $5,475,000. The final lease payment was paid to
        the
        lender, satisfying all remaining debt obligations.
 
 Our General
        Partner concluded, based upon an independent third party appraisal, that
        no
        impairments were required on this Aircraft and engines at December 31, 2006.
        At
        December 31, 2005, our General Partner determined, based upon an independent
        third party appraisal that indicated the Aircraft and engines were impaired
        due
        to a slower than expected recovery in the air transportation industry, and
        recorded an impairment loss of approximately $3,626,000 to more closely
        approximate the adjusted book value to the current fair value of the Aircraft
        and engines.
 
 ·
              We
                  have a 100% interest in one Airbus A340-313X aircraft and 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 on lease to Cathay Pacific Airways Limited (“Cathay”).
                  During March 2006, we entered into an agreement with Cathay with
                  respect
                  to the aircraft in which we have a 100% interest, which extended
                  the lease
                  through October 1, 2011, and also during March 2006, we entered
                  into an
                  agreement with Cathay with respect to the aircraft in which we
                  have a 50%
                  interest, which extended the lease through July 1,
                  2011.
 
 ·
              We
                  have a 100% interest in five aircraft engines on lease to TWA,
                  LLC, a
                  subsidiary of American Airlines. The lease is scheduled to expire
                  on May
                  28, 2008.
 
 For
        a
        discussion of our lease and other significant transactions for the years
        ended
        December 31, 2006, 2005 and 2004, please refer to “Item 7. General Partner’s
        Discussion and Analysis of Financial Condition and Results of
        Operations.”
 
 **Segment
        Information**
  We
        have
        only one operating segment: the business of acquiring and managing equipment
        subject to leases with companies that we generally believe to be
        creditworthy.
 
 **Competition**
 
 The
        equipment leasing industry is highly competitive. When seeking leasing
        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.
 
 
 3
   **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 (“SEC”). The information contained on our
        General Partner’s website is not deemed part of this Annual Report on Form 10-K.
        This information is also available on the SEC’s website, at
        http://www.sec.gov.
 
 **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. 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 business may affect our business,
        operating results and financial condition.**
 
 We
        are
        subject to a number of uncertainties associated with the equipment leasing
        business that may affect our business, operating results and financial
        condition. These include:
 
 ·
              changes
                  in economic conditions, including fluctuations in demand for equipment
                  and
                  interest rates;
 ·
              the
                  technological and economic obsolescence of
                  equipment;
 ·
              potential
                  defaults by lessees;
 ·
              the
                  existence of leverage increases the risk of foreclosure;
                  and
 ·
              increases
                  in our expenses, including taxes and insurance
                  expenses.
 
 **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 its 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 five other equipment leasing businesses. See “Item 13. Certain
        Relationships and Related Transactions.” These conflicts may
        include:
 
 ·
              Our
                  General Partner will receive more fees for making investments if
                  we incur
                  indebtedness to fund these acquisitions than if indebtedness is
                  not
                  incurred;
 ·
              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 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.
   4
 
 **Because
        we borrowed, and may in the future borrow funds, to purchase equipment, losses
        as a result of lessee defaults may be greater than if debt were not incurred.
        Restrictions imposed by the terms of our indebtedness may limit our financial
        flexibility.**
 
 Although
        we have acquired, and may in the future acquire, some of our investments
        for
        cash, we borrowed, and may in the future borrow, a substantial portion of
        the
        purchase price of our equipment investments and there is no limit to the
        amount
        of debt that we may be incur when purchasing equipment. 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.
  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”), 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. See
“Item
        7. General Partner’s Discussion and Analysis of Financial Condition and Results
        of Operations - Liquidity and Capital Resources.”
 
 **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, 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 most 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 assume a residual value for the equipment
        at
        the end of the lease that, when combined with lease payments, is expected
        to be
        enough 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 the following factors, 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;
 ·
              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; and
 ·
              the
                  condition of the equipment when the lease
                  expires.
   5
 
 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
        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.
 
 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.
 
 **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. We would then 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.
 
 **If
        a lessee files for bankruptcy, we may have difficulty enforcing 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.
   6
 
 
 **We
        may invest in options that could become worthless if the option grantor files
        for bankruptcy.**
 
 We
        may
        acquire options to purchase equipment, usually for a fixed price at a future
        date, typically at the end of a lease term. In the event of a bankruptcy
        by the
        party granting the option, we might be unable to enforce the option or recover
        the option price paid.
 
 **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
        invest
        in joint ventures with other businesses our General Partner sponsors and
        manages, as well as with unrelated third parties. Investing in joint ventures
        involves 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.
 
 **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 disaster 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.
 
 **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.
   7
 
 **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 only 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.
 
 **Our
        internal controls over financial reporting may not be effective and our
        independent registered public accounting firm may not be able to certify
        as to
        their effectiveness, which could have a significant and adverse effect on
        our
        business.**
 
 Our
        General Partner is evaluating our internal controls over financial reporting
        in
        order to allow management to report on, and our independent registered public
        accounting firm to attest to, our internal controls over financial reporting,
        as
        required by Section 404 of the Sarbanes-Oxley Act of 2002, as amended, and
        the
        rules and regulations of the SEC there under, which we refer to as “Section
        404.” Our General Partner is in the process of documenting and testing our
        internal control procedures in order to satisfy the requirements of Section
        404,
        which requires annual management assessments of the effectiveness of our
        internal controls over financial reporting and a report by our independent
        registered public accountants addressing these assessments. During the course
        of
        our testing, our General Partner may identify deficiencies that it may not
        be
        able to remediate in time to meet the deadline imposed by the Sarbanes-Oxley
        Act
        for compliance with the requirements of Section 404. We expect that we will
        be
        required to comply with the requirements of Section 404 and issue management’s
        report on our internal controls in connection with our Annual Report on Form
        10-K for our fiscal year ending December 31, 2007. In addition, if we fail
        to
        achieve and maintain the adequacy of our internal controls, as such standards
        are modified, supplemented or amended from time to time, we may not be able
        to
        ensure that we can conclude on an ongoing basis that we have effective internal
        controls over financial reporting in accordance with Section 404. We cannot
        be
        certain as to the timing of completion of our evaluation, testing and any
        remediation actions or the impact of the same on our operations. If we are
        not
        able to implement the requirements of Section 404 in a timely manner or with
        adequate compliance, our independent registered public accounting firm may
        not
        be able to certify as to the effectiveness of our internal control over
        financial reporting in connection with our Annual Report on Form 10-K for
        the
        year ending December 31, 2008, and we may be subject to sanctions or
        investigation by regulatory authorities, such as the SEC. As a result, we
        may be
        required to incur costs in improving our internal control system and the
        hiring
        of additional personnel. Any such action could negatively affect our results
        of
        operations.
 
 
 **We
        compete with a variety of financing sources for our lessees, which may affect
        our ability to achieve our investment objectives.**
 
 The
        commercial leasing 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 industry.
   8
 
 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.
 
 **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 are 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. No material legal
        proceedings 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 2006.
 
 **PART
        II**
  **Item
        5. Market for the Registrant's Securities and Related Security
        Holder Matters**
 
 Our
        limited partnership interests are not publicly traded and there is currently
        no
        market for our limited partnership interests. It is unlikely that any such
        market will develop.
 
 Number
                  of PartnersTitle
                  of Class
              
              as
                  of February 28, 2007General
                  Partner
              
              1Limited
                  Partners
              
              2,837
 
 We
        pay
        monthly distributions to our partners beginning with their admission 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 $5,934,486, $5,945,540 and $5,955,151, respectively,
        for the years ended December 31, 2006, 2005 and 2004. Additionally, our General
        Partner was paid distributions totaling $59,944, $60,056 and $60,155,
        respectively, for the years ended December 31, 2006, 2005 and 2004. The terms
        of
        the 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.”
   9
 
 In
        order
        for the National Association of Securities Dealers (the “NASD”) 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
        NASD Rule 2710(c)(6) 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 $50.85 per
        Unit
        at September 30, 2006.
  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. 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 $50.85 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 NASD 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 nor is there currently a 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 31,2006
              
              2005
              
              2004
              
              2003
              
              2002Total
                  revenue
              
              $
              16,252,505
              
              $
              25,926,526
              
              $
              21,591,797
              
              $
              25,150,087
              
              $
              25,467,361Net
                  (loss) income (a)
              
              $
              (614,426
              )
              $
              3,368,585
              
              $
              (4,609,006
              )
              $
              (5,181,209
              )
              $
              (136,897
              )Net
                  (loss) income allocable to limited partners
              
              $
              (608,282
              )
              $
              3,334,899
              
              $
              (4,562,916
              )
              $
              (5,129,397
              )
              $
              (135,528
              )Net
                  (loss) income allocable to General Partner
              
              $
              (6,144
              )
              $
              33,686
              
              $
              (46,090
              )
              $
              (51,812
              )
              $
              (1,369
              )Weighted
                  average number of limitedpartner
                  units outstanding
              
              
              741,752
              
              
              743,161
              
              
              744,463
              
              
              747,189
              
              
              749,475Net
                  (loss) income per weighted averagelimited
                  partner unit outstanding
              
              $
              (0.82
              )
              $
              4.49
              
              $
              (6.13
              )
              $
              (6.86
              )
              $
              (0.18
              )Distributions
                  to limited partners
              
              $
              5,934,486
              
              $
              5,945,540
              
              $
              5,955,151
              
              $
              7,008,299
              
              $
              8,056,975Distributions
                  per weighted averagelimited
                  partner unit outstanding
              
              $
              8.00
              
              $
              8.00
              
              $
              8.00
              
              $
              9.38
              
              $
              10.75Distributions
                  to the General Partner
              
              $
              59,944
              
              $
              60,056
              
              $
              60,155
              
              $
              70,347
              
              $
              81,384December
                  31,2006
              
              
              2005
              
              
              2004
              
              
              2003
              
              
              2002Total
                  assets
              
              $
              78,651,672
              
              $
              91,960,247
              
              $
              119,147,022
              
              $
              180,747,120
              
              $
              189,408,747Notes
                  payable
              
              $
              55,697,875
              
              $
              63,746,059
              
              $
              86,305,022
              
              $
              134,938,722
              
              $
              133,631,339Partners'
                  equity
              
              $
              20,277,150
              
              $
              26,937,141
              
              $
              29,597,291
              
              $
              40,363,969
              
              $
              52,820,395
 
 (a)
              In
                  2006, we took an impairment loss of $2,100,000, or $2.83 per limited
                  partnership unit outstanding, on an option thatManagement
                  decided to write-off. In 2005, we sold one of our leases which
                  resulted in
                  a gain of approximately $4,527,000or
                  $6.09 per limited partnership unit outstanding.
   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 contains forward-looking statements. These statements are based
        on
        current expectations and assumptions that are subject to risks and
        uncertainties. Actual results could differ materially because of 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
        have
        invested is pooled together to make investments, pay fees and establish a
        small
        reserve. We primarily acquire equipment subject to lease and, to a lesser
        degree, acquire 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 the other equipment
        leases, we finance the majority of the purchase price. We refer to these
        leases
        as “growth” leases. These growth leases generate little or no current cash flow
        because substantially all of the rental payments received from a lessee is
        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.
 
 *Current
        Business Environment and Outlook*
 
 We
        believe that domestic equipment leasing 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
        2006 is forecasted to be an estimated $794.0 billion from a low of $620.0
        billion in 2002, while the corresponding forecast for equipment leasing volume
        in 2006 is estimated to be $220.0 billion from a low of $182.0 billion in
        2003.
        In addition, we believe that a similar correlation exists in the international
        markets in which we operate. As conditions for capital investment remain
        favorable and indicate continued growth, we anticipate that capital spending
        by
        corporations should continue to increase in 2007. Increased capital spending
        may
        increase available leases thereby creating more opportunities in the leasing
        market, as well as more opportunities for us to sell our assets. While lower
        interest rates will remain a key obstacle for the equipment leasing industries
        because of the increased likelihood of customers choosing to purchase rather
        than lease business investments in equipment, we believe the leasing industry's
        outlook for the foreseeable future is encouraging.
 
 Other
        factors which may negatively affect the leasing industry are the proposed
        legal
        and regulatory changes that may affect tax benefits of leasing and the continued
        misperception by potential lessees, stemming from 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 interest rates
        remain
        higher, we are optimistic that more equipment leasing volume will increase
        as
        more lessees return to the marketplace.
 
 ***Lease
        and Other Significant Transactions***
 
 We
        entered into the following lease and other significant transactions during
        the
        years ended December 31, 2006, 2005 and 2004:
 
 *Sale
        of two McDonnell Douglas DC10-30F aircraft*
 
 During
        February 2003, we and Fund Nine, formed a joint venture, 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 FedEx. The lease
        expires on March 31, 2007. We have 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 cash portion of the
        purchase price was approximately $2,769,000. The
        non-recourse debt accrues interest at 4.035% per year and matures in March
        2007.
        The lender has a security interest in the Aircraft and engines and an assignment
        of the rental payments under the lease. Our
        General Partner was paid an acquisition fee of approximately $819,000 relating
        to this transaction, of which we paid approximately $737,000.
   12
 
 On
        September 21, 2006, FedEx provided Aircraft 47820 its irrevocable notice
        to
        purchase the Aircraft and engines. Pursuant to the lease, Aircraft 47820
        had
        twenty days to agree with FedEx on the fair value of the Aircraft and engines.
        The lease further provides that if the parties do not agree within that time
        period, then they have ten days to appoint a mutually acceptable appraiser.
        If
        the parties could not agree on an appraiser, the lease provided that the
        fair
        value would be determined by independent appraisers, one selected by our
        General
        Partner and one selected by FedEx. Moreover, the lease provided that if those
        appraisers could not agree on the fair value, the two appraisers would appoint
        a
        third nationally recognized independent aircraft appraiser.
 
 Aircraft
        47820 selected a nationally recognized appraiser who is the former Chairman
        of
        the International Society of Transport Aircraft Trading appraisal board and
        received an appraisal value for the Aircraft and engines of $10,460,000.
        In
        addition, our General Partner commissioned an additional nationally recognized
        appraiser to conduct an appraisal on the Aircraft and engines who appraised
        the
        Aircraft and engines at $7,820,000.
 
 The
        appraiser selected by FedEx, however, valued the Aircraft and engines at
        only
        $5,500,000, which was significantly lower than our General Partner’s two
        appraisals and much lower than all publicly available published values for
        this
        type of aircraft.
 
 When
        the
        appraisers chosen by our General Partner and FedEx could not agree on the
        fair
        value, they selected a third appraiser. Although FedEx did not initially
        agree
        to this appraiser, it ultimately did so, but only after substantial delay.
        In
        February 2007, FedEx finally agreed to allow the process to proceed with
        the
        third appraiser and on February 23, 2007, the third appraiser was retained
        by
        the parties.
 
 On
        March
        2, 2007, Aircraft 47820 was notified that the third appraiser valued the
        Aircraft and engines at what our General Partner believes is an exceedingly
        low
        appraisal valuing the Aircraft and engines at $5,450,000. Pursuant to a formula
        in the lease, the two appraisals that are closest in value are to be averaged,
        which resulted in a sales price for the Aircraft and engines of $5,475,000,
        resulting in a loss on the sale of the Aircraft and engines of approximately
        $1,020,000, which will be recorded by Aircraft 47820 during the first quarter
        of
        2007.
 
 Our
        General Partner has serious concerns about the propriety of the appraisal
        process and has advised FedEx that it believes that FedEx improperly interfered
        with the process and thereby negatively impacted the appraised price of the
        Aircraft and engines. Our General Partner is thoroughly reviewing the facts
        with
        its outside legal counsel. On March 30, 2007, Aircraft 47820 sold the aircraft
        and engines to FedEx for $5,475,000. The final lease payment was paid to
        the
        lender, satisfying all remaining debt obligations.
  Our
        General Partner concluded, based upon an independent third party appraisal
        obtained during December 2006 that no impairments were required on this Aircraft
        and engines at December 31, 2006. At December 31, 2005, our General Partner
        determined, based upon an independent third party appraisal that indicated
        the
        Aircraft and engines were impaired due to a slower than expected recovery
        in the
        air transportation industry, and recorded an impairment loss of approximately
        $3,626,000 to more closely approximate the adjusted book value to the current
        fair value of the aircraft.
   13
 
 During
        September 2002, we and Fund Nine formed a joint venture, ICON Aircraft 46835
        LLC
        (“Aircraft 46835”), for the purpose of acquiring an investment in a McDonnell
        Douglas DC-10-30F aircraft on
        lease
        with FedEx. The lease expires on March 31, 2007. We have 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 cash portion of the
        purchase price was approximately $450,000. The
        non-recourse debt accrues interest at 4.04% per year and matures in March
        2007.
        The lender has 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.
 
 On
        September 21, 2006, FedEx provided Aircraft 46835 its irrevocable notice
        to
        purchase the aircraft. Pursuant to the lease, Aircraft 46835 had twenty days
        to
        agree with FedEx on the fair value of the aircraft. The lease further provides
        that if the parties do not agree within that time period, then they have
        ten
        days to appoint a mutually acceptable appraiser. If the parties could not
        agree
        on an appraiser, the lease provided that the fair value would be determined
        by
        independent appraisers, one selected by our General Partner and one selected
        by
        FedEx. Moreover, the lease provided that if those appraisers could not agree
        on
        the fair value, the two appraisers would appoint a third nationally recognized
        independent aircraft appraiser.
 
 Aircraft
        46835 selected a nationally recognized appraiser who is the former Chairman
        of
        the International Society of Transport Aircraft Trading appraisal board and
        received an appraisal value for the aircraft of $7,300,000. In addition,
        our
        General Partner commissioned an additional nationally recognized appraiser
        to
        conduct an appraisal on the aircraft who appraised the aircraft at
        $6,700,000.
 
 The
        appraiser selected by FedEx, however, valued the aircraft at only $4,400,000,
        which was significantly lower than our General Partner’s two appraisals and much
        lower than all publicly available published values for this type of
        aircraft.
 
 When
        the
        appraisers chosen by our General Partner and FedEx could not agree on the
        fair
        value, they selected a third appraiser. Although FedEx did not initially
        agree
        to this appraiser, it ultimately did so, but only after substantial delay.
        In
        February 2007, FedEx finally agreed to allow the process to proceed with
        the
        third appraiser and on February 23, 2007, the third appraiser was retained by
        the parties.
 
 On
        March
        2, 2007, Aircraft 46835 was notified that the third appraiser valued the
        aircraft at what our General Partner believes is an exceedingly low appraisal
        valuing the aircraft at $4,120,000. Pursuant to a formula in the lease, the
        two
        appraisals that are closest in value are to be averaged, which resulted in
        a
        sales price for the aircraft of $4,260,000, resulting in a loss on the sale
        of
        the aircraft of approximately $640,000, which will be recorded by Aircraft
        46835
        during the first quarter of 2007.
 
 Our
        General Partner has serious concerns about the propriety of the appraisal
        process and has advised FedEx that it believes that FedEx improperly interfered
        with the process and thereby negatively impacted the appraised price of the
        aircraft. Our General Partner is thoroughly reviewing the facts with its
        outside
        legal counsel. On March 30, 2007, Aircraft 46835 sold the aircraft to FedEx
        for
        $4,260,000. The final lease payment was paid to the lender, satisfying all
        remaining debt obligations.
 
 Our
        General Partner concluded, based upon an independent third party appraisal
        obtained in December 2006 that no impairments were required on this aircraft
        at
        December 31, 2006. At December 31, 2005, our General Partner determined,
        based
        upon an independent third party appraisal that indicated the aircraft was
        impaired due to a slower than expected recovery in the air transportation
        industry, and recorded an impairment loss of approximately $3,182,000, to
        more
        closely approximate the adjusted book value to the current fair value of
        the
        aircraft.
 
 *Investment
        in Option*
 
 At
        December 31, 2006, the 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 is currently out of
        the money and the probability that we will not exercise the option our General
        Partner does anticipate a recovery in the value of the option.
   14
 
 *K-Mart
        Equipment*
 
 We
        had a
        100% interest in 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 leases 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
        investments in operating leases. These lease extensions ended on or before
        September 30, 2006, and we reclassified the net book value of this equipment
        to
        equipment held for sale.
 
 A
        third
        lease with K-Mart expired on August 31, 2006 and we reclassified the net
        book
        value of this equipment of $37,120 to equipment held for sale at September
        30,
        2006.
 
 At
        September 30, 2006, our General Partner determined, based upon recent
        negotiations with potential buyers, that the Noritsu Optical/Digital equipment
        held by K-Mart was impaired. Accordingly, we recorded an impairment loss
        of
        approximately $320,000 to more closely approximate the adjusted book value
        to
        the current estimated fair value of the Noritsu Optical/Digital equipment,
        net
        of estimated selling costs.
 
 On
        February 9, 2007, we sold all of the remaining equipment previously on lease
        to
        K-Mart for approximately $254,100 and will recognize a gain on the sale of
        this
        equipment of approximately $113,000 which will be 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 100% interest through an investment in ICON Aircraft 123 LLC
        (“Aircraft 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, which
        accrues interest at the London Interbank Offered Rate (“LIBOR”) plus 1.165%,
        matures on October 1, 2011 and has a balloon payment of approximately
        $32,000,000. The variable interest rate of the refinanced non-recourse debt
        was
        fixed at 6.1095% automatically under the terms of the debt agreement, effective
        October 3, 2006.
 
 ICON
        123
        had a commitment with respect to Cathay aircraft in which we have a 100%
        interest, to pay certain of the maintenance overhaul 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
        overhaul costs.
 
 Effective
        March 27, 2006, the owner trustee, in connection with the lease extensions,
        refinanced the non-recourse debt associated with the Cathay aircraft in which
        we
        have a 50% interest through an investment in ICON Aircraft 126 LLC (“ICON 126”)
        a joint venture with Fund Nine. 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 accrues
        interest at LIBOR plus 1.165%, matures on July 1, 2011 and requires a balloon
        payment of approximately $32,000,000. The variable interest rate of the
        refinanced debt was fixed at 6.1095% under the terms of the debt agreement,
        effective October 3, 2006.
   15
 
 During
        2006 ICON 126 recognized a $182,020 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 with respect to the Cathay aircraft that it owns to pay
        certain
        of the maintenance overhaul 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 through December 31, 2006) to pay for its portion of these costs.
        This
        account was funded by the lessee 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 $232,000, which
        includes interest accreted in the amount of approximately $31,000 through
        December 31, 2006, is being held in the maintenance account and used to pay
        down
        the principal balance of the related non-recourse debt.
 
 In
        connection with the original purchase of the aircraft in which we have a
        100%
        interest, 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 short fall when the aircraft are sold.
 
 ICON
        123
        and ICON 126 are parties to a residual sharing agreement with respect to
        the
        aircraft. (See Note 13 in “Part II, Item 8. Consolidated Financial Statements
        and Supplementary Information”)
 
 *Sale
        of Over the Road Rolling Stock, Manufacturing and Material Handling
        Equipment*
 
 During
        2006, one of our majority owned joint ventures, ICON Cheyenne LLC (“ICON
        Cheyenne”), which was formed with other affiliated entities managed by our
        General Partner, and manages a portfolio of equipment leases consisting of
        over
        the road rolling stock, manufacturing equipment and materials handling equipment
        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
        2006, one of our majority owned joint ventures, ICON SPK 2023-A, LLC (“ICON SPK
        2023”), which was formed with other affiliated entities managed by our General
        Partner, and manages a portfolio of equipment leases consisting of over the
        road
        rolling stock, manufacturing equipment and materials handling equipment 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.
 
 *Assignment
        of Interests in ICON Cheyenne*
 
 On
        September 23, 2004, we acquired from ICON Cash Flow Partners L.P. Seven (“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 pursuant 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. 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 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, 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 pursuant a contribution
        agreement that we had 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 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 independent
        third party appraisal and cash flow analysis. During the year ended December
        31,
        2006, we received approximately $267,000 in cash distributions, related to
        this
        assignment.
 
 *Kenilworth
        and SPK Exchange*
 
 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 Fund
        Nine’s 25.87% interest in ICON SPK 2023. Following the exchange, we have a
        74.87% interest in ICON SPK 2023 and have no interest in Kenilworth.
 
 *Sale
        of Petsmart Equipment*
 
 During
        October 2004, our lease with Petsmart, Inc. (“Petsmart”) expired. Petsmart
        purchased all of the equipment, which consisted of conveyer systems, frames,
        racks, carousels and forklifts, for the equipment’s fair value and we recognized
        a gain on this transaction of approximately $820,000.
 
 *Sale
        of Boeing 767-300ER Aircraft*
 
 During
        July 2004, one of our majority owned subsidiaries, ICON Aircraft 24846 LLC,
        sold
        its only asset, a Boeing 767-300ER aircraft, which resulted in a realized
        net
        loss of approximately $602,000.
 
 **Recent
        Accounting Pronouncements**
 
 In
        April
        2006, the Financial Accounting Standards Board (“FASB”) issued Statement of
        Financial Accounting Standards (“SFAS”) SFAS No. 155, “Accounting for Certain
        Financial Instruments” (“SFAS 155”), an amendment to SFAS No. 133 and SFAS No.
        140. SFAS 155 addresses
        what had been characterized as a temporary exemption from the application
        of the
        bifurcation requirements of SFAS 133 to
        beneficial interests in securitized financial assets.The
        adoption of SFAS 155 did not have any impact on our consolidated financial
        statements.
   17
 
 In
        September 2006, the FASB issued SFAS No. 157 “Accounting for Fair Value
        Measurements” (“SFAS 157”). SFAS 157 establishes a separate framework for
        determining fair values of assets and liabilities that are required by other
        authoritative accounting principles generally accepted in the United States
        of
        America (“GAAP”) pronouncements to be measured at fair value. In addition, SFAS
        157 incorporates and clarifies the guidance in FASB Concepts Statement No.
        7
        regarding the use of present value techniques in measuring fair value. SFAS
        157
        is effective for financial statements with fiscal years beginning after November
        15, 2007. Our General Partner is currently evaluating the impact of this
        pronouncement, but does not currently believe it will have a material impact
        on
        our consolidated financial statements.
 
 In
        September 2006, the SEC staff issued Staff Accounting Bulletin
        No. 108, “Considering the Effects of Prior Year Misstatements when
        Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”). SAB
        108 expresses the views of the SEC staff regarding the process of quantifying
        the materiality of financial misstatements. SAB 108 requires both the balance
        sheet and income statement approaches be used when quantifying the materiality
        of misstated amounts. In addition, SAB 108 contains guidance on correcting
        errors under the dual approach and provides transition guidance for correcting
        errors existing in prior years. SAB 108 is effective for the fiscal years
        ending
        after November 15, 2006. The adoption of SAB 108 did not have an impact on
        our
        consolidated financial statements.
 
 Our
        General Partner does not believe that any other recently issued, but not
        yet
        effective, accounting pronouncements, if currently adopted, would have a
        material effect on the accompanying consolidated financial
        statements.
 
 **Critical
        Accounting Policies**
 
 An
        appreciation of our critical accounting policies is necessary to understand
        our
        financial results. These policies may require our General Partner to make
        difficult and subjective judgments regarding uncertainties, and as a result,
        such estimates may significantly impact our financial results. The precision
        of
        these estimates and the likelihood of future changes depend on a number of
        underlying variables and a range of possible outcomes. 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
 
 *Lease
        Classification and Revenue Recognition*
 
 The
        equipment we expect to lease to third parties will be classified either as
        a
        finance lease or an operating lease, which will be determined based upon
        the
        terms of each lease. Initial direct costs are capitalized and amortized
        over the term of the 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, 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 ratably over the term of the lease.
 
 For
        operating leases, income is recorded as rental income and is recognized on
        the
        straight line method over the lease term.
 
 Our
        General Partner has an investment committee that approves each new equipment
        acquisition and lease transaction. As part of its process it determines the
        residual value 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 industry in which the potential lessee
        operates. Residual values are reviewed in accordance with our policy to review
        all significant assets in our portfolio.
   18
 
 *Asset
        Impairments*
 
 The
        significant assets in our asset portfolio are periodically reviewed, at least
        annually, by our General Partner, to determine whether events or changes
        in
        circumstances indicate that the carrying value of an asset may not be
        recoverable. Our General Partner uses qualified independent third party
        appraisers to assist in the review process. An impairment loss will be
        recognized only if the carrying amount of a long-lived asset is not recoverable
        and exceeds its fair value. In such circumstances, we will estimate the future
        cash flows (undiscounted and without interest charges) expected to result
        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
        cash
        outflows expected to be necessary to obtain those inflows. An impairment
        loss
        will be measured as the amount by which the carrying amount of a long-lived
        asset exceeds its fair value.
 
 The
        events or changes in circumstances which generally indicate that an asset
        may be
        impaired are (i) the estimated fair value of the underlying equipment is
        less
        than our 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 our 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 notes payable where the lessee
        remits their rental payments directly to the lender and we do not recover
        our
        residual position until the non-recourse note payable is repaid in
        full.
 
 *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. The estimated
        residual value is reviewed annually, by our General Partner, to determine
        whether an impairment charge may be required. Our General Partner uses qualified
        independent third party appraisers to assist in the review process. Depreciation
        expense is recorded ratably over the term of the related lease.
 
 **Results
        of Operations for the Years Ended December 31, 2006 (“2006”) and 2005 (“2005”)**
 
 We
        are
        currently in our reinvestment 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. Therefore, we anticipate entering our liquidation
        period during June 2007, unless our General Partner extends the reinvestment
        period, which it may do, at its discretion, for up to an additional 28 months.
        While in our reinvestment period, we will continue to look to purchase equipment
        subject to leases, either with cash or with a combination of cash and financing.
        As such, we expect our revenue will fluctuate due to our selling some equipment,
        while purchasing other equipment subject to leases. We also expect to have
        gains
        and losses from the sales of equipment during this time period. As for our
        expenses, we anticipate interest expense to decrease as our outstanding debt
        decreases. If we enter into an equipment lease where we finance a portion
        of the
        purchase price, then interest expense will increase.
 
 Once
        we
        enter our liquidation period, we will sell our assets in the ordinary course
        of
        business. As we begin to sell our assets, both rental income and finance
        income
        will decrease over time as will expenses related to our assets such as
        depreciation 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.
   19
 
 
 Revenue
        for 2006 and 2005 are summarized as follows:
 
 Years
                  Ended December 31,2006
              
              2005
              
              ChangeTotal
                  revenue
              
              $
              16,252,505
              
              $
              25,926,526
              
              $
              (9,674,021
              )Rental
                  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 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
              
              ChangeTotal
                  expenses
              
              $
              16,866,931
              
              $
              22,557,941
              
              $
              (5,691,010
              )Impairment
                  loss
              
              
              2,493,108
              
              
              3,855,316
              
              
              (1,362,208
              )Depreciation
                  and amortization
              
              
              7,648,323
              
              
              12,573,850
              
              
              (4,925,527
              )Interest
              
              
              3,511,641
              
              
              4,285,629
              
              
              (773,988
              )Management
                  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
              
              
              114,013Maintenance
                  expense
              
              
              1,546,456
              
              
              -
              
              
              1,546,456Bad
                  debt (reversal) expense
              
              
              -
              
              
              (411,742
              )
              
              411,742Minority
                  interest
              
              
              436,749
              
              
              (116,855
              )
              
              553,604
 
 Total
        expenses for 2006 decreased by $5,691,010 or 25.2%, 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 2023 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 overhaul costs incurred on our Airbus
        A340-313X aircraft.
   20
 
 *Net
        (Loss)/ Income*
 
 As
        a
        result of the foregoing factors, the net loss for 2006 was $(614,426) as
        compared to 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 net income per weighted average number of limited partnership
        units
        outstanding for 2005 of $4.49.
 
 **Results
        of Operations for the Years Ended December 31, 2005 (“2005”) and 2004
        (“2004”)**
 
 Revenue
        for 2005 and 2004 are summarized as follows:
 
 Years
                  Ended December 31,2005
              
              2004
              
              ChangeTotal
                  revenue
              
              $
              25,926,526
              
              $
              21,591,797
              
              $
              4,334,729Rental
                  income
              
              
              19,426,643
              
              
              19,602,860
              
              
              (176,217
              )Finance
                  income
              
              
              563,439
              
              
              1,134,039
              
              
              (570,600
              )(Loss)
                  income from investments in joint ventures
              
              
              515,832
              
              
              425,883
              
              
              89,949Net
                  gain on sales of equipment and residual values
              
              
              4,827,527
              
              
              293,932
              
              
              4,533,595Interest
                  and other income
              
              
              593,085
              
              
              135,083
              
              
              458,002
 
 Total
        revenue for 2005 increased by $4,334,729, or 20.1%, as compared to 2004 which
        was primarily attributable to an increase in our net gain on sales of equipment
        and residual values offset by a decrease in finance income. The increase
        in net
        gain on sales of equipment and residual values was due primarily to a $4,482,512
        gain on sale of equipment on lease to BAE which occurred on October 31, 2005.
        The decrease in finance income was primarily from the termination of equipment
        leased to Petsmart which was sold in February 2005.
 
 Expenses
        for 2005 and 2004 are summarized as follows:
 
 Years
                  Ended December 31,2005
              
              2004
              
              ChangeTotal
                  expenses
              
              $
              22,557,941
              
              $
              26,200,803
              
              $
              (3,642,862
              )Impairment
                  loss
              
              
              3,855,316
              
              
              1,801,788
              
              
              2,053,528Depreciation
                  and amortization
              
              
              12,573,850
              
              
              14,749,143
              
              
              (2,175,293
              )Interest
              
              
              4,285,629
              
              
              5,688,282
              
              
              (1,402,653
              )Management
                  fees - General Partner
              
              
              1,311,990
              
              
              1,500,347
              
              
              (188,357
              )Administrative
                  expense reimbursements - General Partner
              
              
              515,934
              
              
              862,030
              
              
              (346,096
              )General
                  and administrative
              
              
              543,819
              
              
              1,188,050
              
              
              (644,231
              )Maintenance
                  expense
              
              
              -
              
              
              171,180
              
              
              (171,180
              )Bad
                  debt (reversal) expense
              
              
              (411,742
              )
              
              411,742
              
              
              (823,484
              )Minority
                  interest
              
              
              (116,855
              )
              
              (171,759
              )
              
              54,904
 
 Total
        expenses for 2005 decreased by $3,642,862 or 13.9%, as compared to 2004.
        The
        decrease was due to a decrease in all expenses. The decrease in depreciation
        and
        amortization, interest and aircraft maintenance expense was a result of the
        sale
        of equipment in (i) ICON Cheyenne and (ii) ICON Aircraft 24846 LLC, during
        2004.
        The decrease in management fees - General Partner and administrative expense
        reimbursements - General Partner was due to lease terminations in 2004 that
        reduced our General Partner’s time spent on our activities during 2005. During
        2005 we incurred an impairment loss on our optical/digital equipment on lease
        to
        K-Mart of approximately $229,000 due to recent technological developments
        in
        this industry and we recorded an impairment to ICON Aircraft 47820 LLC of
        approximately $3,626,000 to more closely approximate the current fair market
        value of the equipment. During 2004 we recorded a one-time impairment loss
        to
        ICON Aircraft 24846 LLC based on an appraisal we received for the aircraft
        in
        2004. The decrease in our bad debt expense was due to a one-time bad debt
        expense we recorded in 2004 related to one K-Mart equipment lease schedule
        that
        K-Mart had been attempting to reject as part of its bankruptcy
        proceeding.
   21
 
 *Net
        Income (Loss)*
 
 As
        a
        result of the foregoing factors, net income for 2005 was $3,368,585 as compared
        to a net loss for 2004 of $(4,609,006).  The net income per weighted
        average number of limited partnership units outstanding for 2005 was $4.49
        as
        compared to a net loss per weighted average number of limited partnership
        units
        outstanding for 2004 of $(6.13).
 
 **Liquidity
        and Capital Resources**
 
 *Sources
        and Uses of Cash* ****
 
 At
        December 31, 2006 and 2005, we had cash and cash equivalents of $762,601
        and
        $848,665, respectively. During our offering period our main source of cash
        was
        from financing activities. During our reinvestment period our main source
        of
        cash has been from investing activities, which we expect to continue during
        the
        liquidation period. During our offering period our main use of cash was from
        investing activities. During our reinvestment period our main use of cash
        has
        been from financing activities, which we anticipate will continue during
        the
        liquidation period.
 
 *Operating
        Activities*
  *Sources
        of Cash*
  Our
        main
        source of cash from operating activities in 2006, 2005 and 2004 was the
        collection of non-financed receivables from finance leases of approximately
        $823,000, $732,000 and $1,589,000, 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*
  Our
        primary source of cash from investing activities in 2006, 2005 and 2004 was
        from
        the proceeds from sales of equipment of approximately $1,053,000, $9,439,000
        and
        $6,005,000, 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. During 2004, we received proceeds of approximately $1,332,000
        relating to the sale of conveyer systems, frames, racks, carousels and forklifts
        previously on lease to Petsmart. Additionally, during 2004 we received
        approximately $925,000 of distributions from our joint ventures.
 
 *Uses
        of Cash*
 
 Our
        principal uses of cash from investing activities in 2006, 2005 and 2004 were
        for
        distributions paid to minority interest partners in several of our joint
        ventures and in 2005 and 2004 we made loans and advances made to affiliates.
        During 2006, 2005 and 2004 we paid approximately $292,000, $350,000 and
        $660,000, 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 2005 and 2004, we made advances to one of our affiliates of approximately
        $673,000 and $1,014,000, respectively.
   22
 
 *Financing
        Activities*
 
 *Sources
        of Cash*
 
 Our
        sole
        source of cash from financing activities during 2006, 2005 and 2004 was from
        the
        proceeds from our recourse borrowings of $3,125,000, $4,160,000 and $1,920,000,
        respectively.
 
 *Uses
        of Cash* ****
 
 Our
        major
        uses of cash from financing activities during 2006, 2005 and 2004 were
        distributions paid to our partners and in 2005 and 2004 we paid down our
        recourse borrowings. During 2006, 2005 and 2004 we paid distributions to
        our
        partners of approximately $5,994,000, $6,006,000 and $6,015,000, respectively.
        During 2005 and 2004 we paid down our revolving line of credit by approximately
        $7,385,000 and $695,000, respectively.
 
 *Financings
        and Borrowings*
 
 We
        have
        two non-recourse debt obligations that are being paid directly to the lenders
        by
        the lessees and accrue interest at 4.035% per year 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
        in
        which we have 100% interest. 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
        accrues interest at the LIBOR plus 1.165%, matures on October 1, 2011 and
        has a
        balloon payment of approximately $32,000,000. The variable interest rate
        of the
        refinanced non-recourse debt was fixed at 6.1095% automatically under the
        terms
        of the debt agreement, effective October 3, 2006.
 
 *Revolving
        Loan Facility*
 
 On
        August
        31, 2005, we, together with certain of our affiliates (entities sponsored
        and
        organized by our General Partner), Fund Nine, Fund Ten, and 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 Borrowers
        are in compliance with these covenants at December 31, 2006. The Loan Agreement
        prohibits the Borrowers from declaring or paying any distribution to investors
        if such a payment would cause the Borrowers to become non-compliant with
        the
        financial covenants in the Loan Agreement.
  
 23
   In
        addition, on August 31, 2005, the Borrowers entered into a Contribution
        Agreement (the “Contribution Agreement”), pursuant to which the Borrowers have
        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 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 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. The
        Borrowers are in compliance with the Contribution Agreement at December 31,
        2006
        and no amounts are due to or payable by us under the Contribution
        Agreement.
 
 On
        December 26, 2006, the Borrowers entered into a Loan Modification Agreement
        (the
“Loan Modification”) to the Loan Agreement. The changes to the Loan Agreement
        are an extension of the Facility from August 31, 2007 to September 30, 2008
        and
        the lowering of (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 in the London Interbank Eurocurrency Market (the “LIBOR Rate”) plus
        2.75% per year to the LIBOR Rate 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, 2006 was 8.25%.
 
 At
        December 31, 2006, we had $3,125,000, outstanding under the Facility, which
        represents the entire amount outstanding for all Borrowers.
 
 Our
        General Partner believes that with the cash we have currently available,
        cash
        being generated from our equipment leases and cash from the proceeds from
        sales
        of equipment, 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’ business that are beyond our control. See “Part II, Item 1A.
        Risk Factors.”
 
 *Distributions*
 
 We
        pay
        monthly distributions to our limited partners beginning with the first month
        after the limited partners’ admission through the termination of our
        reinvestment period, which we anticipate will in June 2007. We paid
        distributions to our limited partners for the years ended December 31, 2006,
        2005 and 2004 of $5,934,486, $5,945,540 and $5,955,151, respectively. We
        paid
        distributions to our General Partner for the years ended December 31, 2006,
        2005
        and 2004 of $59,944, $60,056 and $60,155, respectively.
 
 **Contractual
        Obligations and Commitments**
 
 At
        December 31, 2006 we have both non-recourse and recourse debt obligations.
        The
        lenders have security interests in equipment relating to the non-recourse
        debt
        and an assignment of the rental payments under the leases. If the lessee
        were to
        default on the non-recourse debt the equipment would be returned to the lender
        in extinguishment of the non-recourse debt. At December 31, 2006, our
        outstanding non-recourse indebtedness was $52,572,875. We are a party to
        the
        Facility, as discussed in the financing and borrowings section above. We
        have
        $3,125,000 of borrowings under this Facility at December 31, 2006.
   24
 
 Principal
        maturities of our non-recourse debt and related interest and Facility consist
        of
        the following at December 31, 2006:
 
 Payments
                  Due by PeriodLess
                  Than 1
              
              1
                  -
                  3
              
              4
                  -
                  5
              
              More
                  Than 5Total
              
              Year
              
              Years
              
              Years
              
              YearsNon-recourse
                  debt
              
              $
              52,572,875
              
              $
              6,312,033
              
              $
              7,817,710
              
              $
              38,443,132
              
              $
              -Non-recourse
                  interest
              
              
              12,231,719
              
              
              2,998,025
              
              
              5,262,290
              
              
              3,971,404
              
              
              -Revolving
                  line of credit
              
              
              3,125,000
              
              
              3,125,000
              
              
              -
              
              
              -
              
              
              -$
              67,929,594
              
              $
              12,435,058
              
              $
              13,080,000
              
              $
              42,414,536
              
              $
              -
 
 We
        had a
        commitment with regards to the Cathay aircraft in which we have a 100% interest
        to pay certain of the maintenance overhaul 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. For the year ended December 31, 2006, we
        accrued
        approximately $1,157,000 relating to the maintenance overhaul
        costs.
  We
        entered into remarketing and residual sharing agreements with various third
        parties. In connection with these agreements, remarketing and 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, for the most part, would not be affected by changes in interest
        rates.
  
 25
 
  **Item
        7A. Qualitative and Quantitative 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 our equipment.
 
 
 26
 
  **Item
        8. Consolidated Financial Statements and Supplementary
        Data**
 
 
 PageReport
                  of Independent Registered Public Accounting Firm
              28Consolidated
                  Balance Sheets at December 31, 2006 and
                  2005
              29Consolidated
                  Statements of Operations for the Years Ended
                  December 31, 2006, 2005 and
                  2004
              30Consolidated
                  Statement of Changes in Partners’ Equity for the Years EndedDecember
                  31, 2004, 2005 and 2006
              31Consolidated
                  Statements of Cash Flows for the Years Ended December 31, 2006,
                  2005and
                  2004
              32Notes
                  to Consolidated Financial Statements
              34
 
 
 27
   The
        Partners
 ICON
        Income Fund Eight B L.P.
 
 
 **REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
 
  We
        have
        audited the accompanying consolidated balance sheets of ICON Income Fund
        Eight B
        L.P. (a Delaware limited partnership) and subsidiaries as of December 31,
        2006
        and 2005 and the related consolidated statements of operations, changes in
        partners’ equity, and cash flows for each of the three years in the period ended
        December 31, 2006. Our audits also included the financial statement schedule
        listed in the index at Item 15(a)(2) of Form 10-K. These consolidated financial
        statements and schedule are the responsibility of the Partnership’s management.
        Our responsibility is to express an opinion on these consolidated financial
        statements and schedule based on our audits.
   We
        conducted our audits in accordance with the standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audit to obtain reasonable assurance about whether the financial
        statements are free of material misstatement. The Partnership is not required
        to
        have, nor were we engaged to perform, an audit of its internal control over
        financial reporting. Our 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 includes
        examining, on a test basis, evidence supporting the amounts and disclosures
        in
        the financial statements. An audit also includes assessing the accounting
        principles used and significant estimates made by management, as well as
        evaluating the overall financial statement presentation. We believe that
        our
        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 2005, and the
        results of their operations and their cash flows for each of the three years
        in
        the period ended December 31, 2006, in conformity with accounting principles
        generally accepted in the United States of America. Also, in our opinion,
        the
        related financial statement schedule, when considered in relation to the
        basic
        consolidated financial statements taken as a whole, presents fairly in all
        material respects the information set forth therein.
   /s/
        Hays
& Company LLP
 
 April
        2,
        2007
 New
        York,
        New York
 
 
 28
   ICON
                  Income Fund Eight B L.P.(A
                  Delaware Limited Partnership)Consolidated
                  Balance SheetsDecember
                  31,ASSETS2006
              
              2005Cash
                  and cash equivalents
              
              $
              762,601
              
              $
              848,665Investments
                  in finance leases:Minimum
                  rents receivable
              
              
              67,973
              
              
              2,486,536Estimated
                  unguaranteed residual values
              
              
              -
              
              
              677,390Initial
                  direct costs, net
              
              
              -
              
              
              8,347Unearned
                  income
              
              
              (306
              )
              
              (132,337
              )Net
                  investments in finance leases
              
              
              67,667
              
              
              3,039,936Investments
                  in operating leases:Equipment,
                  at cost
              
              
              111,987,930
              
              
              118,154,977Accumulated
                  depreciation
              
              
              (43,018,821
              )
              
              (41,174,571
              )Net
                  investments in operating leases
              
              
              68,969,109
              
              
              76,980,406Investments
                  in joint ventures
              
              
              4,315,573
              
              
              5,002,985Equipment
                  held for sale
              
              
              140,400
              
              
              -Investment
                  in option, at cost
              
              
              -
              
              
              2,100,000Due
                  from General Partner and affiliates
              
              
              -
              
              
              92,836Other
                  assets, net
              
              
              4,396,322
              
              
              3,895,419Total
                  assets
              
              $
              78,651,672
              
              $
              91,960,247
 
 LIABILITIES
                  AND PARTNERS' EQUITYLiabilities:Notes
                  payable - non-recourse
              
              $
              52,572,875
              
              $
              63,746,059Revolving
                  line of credit
              
              
              3,125,000
              
              
              -Deferred
                  rental income
              
              
              138,021
              
              
              497,303Accounts
                  payable and other liabilities
              
              
              2,040,339
              
              
              426,263Minority
                  interest
              
              
              498,287
              
              
              353,481Total
                  liabilities
              
              
              58,374,522
              
              
              65,023,106Commitments
                  and contingenciesPartners'
                  equity:General
                  Partner
              
              
              (446,575
              )
              
              (380,487
              )Limited
                  Partners (741,530 and 742,830 units outstanding,$100
                  per unit original issue price)
              
              
              20,723,725
              
              
              27,317,628Total
                  partners' equity
              
              
              20,277,150
              
              
              26,937,141Total
                  liabilities and partners' equity
              
              $
              78,651,672
              
              $
              91,960,247
  See
          accompanying notes to consolidated financial statements
 29
 
 
 ICON
                  Income Fund Eight B L.P.(A
                  Delaware Limited Partnership)Consolidated
                  Statements of OperationsYears
                  Ended December 31,2006
              
              2005
              
              2004Revenue:Rental
                  income
              
              $
              16,174,323
              
              $
              19,426,643
              
              $
              19,602,860Finance
                  income
              
              
              133,856
              
              
              563,439
              
              
              1,134,039(Loss)
                  income from investments in joint ventures
              
              
              (778,423
              )
              
              515,832
              
              
              425,883Net
                  gain on sales of equipment and residual values
              
              
              476,020
              
              
              4,827,527
              
              
              293,932Interest
                  and other income
              
              
              246,729
              
              
              593,085
              
              
              135,083Total
                  revenue
              
              
              16,252,505
              
              
              25,926,526
              
              
              21,591,797Expenses:Impairment
                  loss
              
              
              2,493,108
              
              
              3,855,316
              
              
              1,801,788Depreciation
                  and amortization
              
              
              7,648,323
              
              
              12,573,850
              
              
              14,749,143Interest
              
              
              3,511,641
              
              
              4,285,629
              
              
              5,688,282Management
                  fees - General Partner
              
              
              410,842
              
              
              1,311,990
              
              
              1,500,347Administrative
                  expense reimbursements - General Partner
              
              
              161,980
              
              
              515,934
              
              
              862,030General
                  and administrative
              
              
              657,832
              
              
              543,819
              
              
              1,188,050Maintenance
                  expense
              
              
              1,546,456
              
              
              -
              
              
              171,180Bad
                  debt (reversal) expense
              
              
              -
              
              
              (411,742
              )
              
              411,742Minority
                  interest
              
              
              436,749
              
              
              (116,855
              )
              
              (171,759
              )Total
                  expenses
              
              
              16,866,931
              
              
              22,557,941
              
              
              26,200,803Net
                  (loss) income
              
              $
              (614,426
              )
              $
              3,368,585
              
              $
              (4,609,006
              )Net
                  (loss) income allocable to:Limited
                  Partners
              
              $
              (608,282
              )
              $
              3,334,899
              
              $
              (4,562,916
              )General
                  Partner
              
              
              (6,144
              )
              
              33,686
              
              
              (46,090
              )$
              (614,426
              )
              $
              3,368,585
              
              $
              (4,609,006
              )Weighted
                  average number of limitedpartnership
                  units outstanding
              
              
              741,752
              
              
              743,161
              
              
              744,463Net
                  (loss) income per weighted averagelimited
                  partnership unit outstanding
              
              $
              (0.82
              )
              $
              4.49
              
              $
              (6.13
              )
 
 See
          accompanying notes to consolidated financial statements
 30
   ICON
                  Income Fund Eight B L.P.(A
                  Delaware Limited Partnership)Consolidated
                  Statement of Changes in Partners' EquityYears
                  Ended December 31, 2004, 2005 and 2006LimitedPartnership
              
              
              
              
              
              TotalUnits
              
              Limited
              
              General
              
              Partners'Outstanding
              
              Partners'
              
              Partner
              
              EquityBalance,
                  January 1, 2004
              
              
              745,491
              
              $
              40,611,841
              
              $
              (247,872
              )
              $
              40,363,969Limited
                  partnership units redeemed
              
              
              (2,212
              )
              
              (142,366
              )
              
              -
              
              
              (142,366
              )Cash
                  distributions to partners
              
              
              -
              
              
              (5,955,151
              )
              
              (60,155
              )
              
              (6,015,306
              )Net
                  loss
              
              
              -
              
              
              (4,562,916
              )
              
              (46,090
              )
              
              (4,609,006
              )Balance,
                  December 31, 2004
              
              
              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
              )
              $
              20,277,150
 
 See
          accompanying notes to consolidated financial statements
 31
 
 
 ICON
                  Income Fund Eight B L.P.(A
                  Delaware Limited Partnership)Consolidated
                  Statements of Cash FlowsYears
                  Ended December 31,2006
              
              2005
              
              2004Cash
                  flows from operating activities:Net
                  (loss) income
              
              $
              (614,426
              )
              $
              3,368,585
              
              $
              (4,609,006
              )Adjustments
                  to reconcile net (loss) income to net cashprovided
                  by (used in) operating activities:Rental
                  income paid directly to lenders by lessees
              
              
              (13,614,988
              )
              
              (17,076,952
              )
              
              (18,082,778
              )Finance
                  income paid directly to lenders by lessees
              
              
              (133,856
              )
              
              (414,389
              )
              
              (799,636
              )Loss
                  (income) from investments in joint ventures
              
              
              778,423
              
              
              (515,832
              )
              
              (425,883
              )Net
                  gain on sales of equipment and residual values
              
              
              (476,020
              )
              
              (4,827,527
              )
              
              (293,932
              )Impairment
                  loss
              
              
              2,493,108
              
              
              3,855,316
              
              
              1,801,788Depreciation
                  and amortization
              
              
              7,648,323
              
              
              12,573,850
              
              
              14,749,143Interest
                  expense on non-recourse financing paid directly tolenders
                  by lessees
              
              
              3,399,171
              
              
              3,757,058
              
              
              4,956,594Bad
                  debt (reversal) expense
              
              
              -
              
              
              (411,742
              )
              
              411,742Minority
                  interest
              
              
              436,749
              
              
              (116,855
              )
              
              (171,759
              )Changes
                  in operating assets and liabilities:Collection
                  of principal - non-financed receivables
              
              
              823,007
              
              
              732,028
              
              
              1,589,028Due
                  to/from General Partner and affiliates
              
              
              92,836
              
              
              (248,308
              )
              
              224,439Other
                  assets
              
              
              78,615
              
              
              (128,620
              )
              
              (287,477
              )Deferred
                  rental income
              
              
              (359,282
              )
              
              237,343
              
              
              378,328Accounts
                  payable and other liabilities
              
              
              1,612,826
              
              
              (346,392
              )
              
              (231,350
              )Net
                  cash provided by (used in) operating activities:
              
              
              2,164,486
              
              
              437,563
              
              
              (790,759
              )Cash
                  flows from investing activities:Proceeds
                  from sales of equipment and residual values
              
              
              1,052,969
              
              
              9,438,738
              
              
              6,004,595Equipment
                  sales advances received
              
              
              -
              
              
              -
              
              
              12,600Loans
                  and advances to affiliates
              
              
              -
              
              
              (672,992
              )
              
              (1,014,384
              )Distributions
                  to minority interest in joint venture
              
              
              (291,943
              )
              
              (350,389
              )
              
              (660,232
              )Cash
                  investment in joint venture
              
              
              (91,011
              )
              
              -
              
              
              (5,616
              )Distributions
                  received from joint ventures
              
              
              -
              
              
              -
              
              
              925,111Net
                  cash provided by investing activities:
              
              
              670,015
              
              
              8,415,357
              
              
              5,262,074Cash
                  flows from financing activities:Cash
                  distributions to partners
              
              
              (5,994,430
              )
              
              (6,005,596
              )
              
              (6,015,306
              )Proceeds
                  from revolving line of credit
              
              
              3,125,000
              
              
              4,160,000
              
              
              1,920,000Repayment
                  of revolving line of credit
              
              
              -
              
              
              (7,385,000
              )
              
              (695,000
              )Repayment
                  of non-recourse borrowings
              
              
              -
              
              
              -
              
              
              (73,046
              )Minority
                  interest contribution, net
              
              
              -
              
              
              -
              
              
              23,080Redemption
                  of limited partnership units
              
              
              (51,135
              )
              
              (23,139
              )
              
              (142,366
              )Net
                  cash used in financing activities:
              
              
              (2,920,565
              )
              
              (9,253,735
              )
              
              (4,982,638
              )Net
                  decrease in cash and cash equivalents
              
              
              (86,064
              )
              
              (400,815
              )
              
              (511,323
              )Cash
                  and cash equivalents, beginning of the year
              
              
              848,665
              
              
              1,249,480
              
              
              1,760,803Cash
                  and cash equivalents, end of the year
              
              $
              762,601
              
              $
              848,665
              
              $
              1,249,480
  See
          accompanying notes to consolidated financial statements
 32
 
 ICON
                  Income Fund Eight B L.P.(A
                  Delaware Limited Partnership)Consolidated
                  Statements of Cash FlowsYears
                  Ended December 31,2006
              
              2005
              
              2004Supplemental
                  disclosure of cash flow information:Cash
                  paid during the year for interest
              
              $
              112,470
              
              $
              779,435
              
              $
              731,688Supplemental
                  disclosure of non-cash investing and financing activities:Principal
                  and interest paid directly to lenders by lessees
              
              $
              14,572,355
              
              $
              19,692,615
              
              $
              20,323,662Notes
                  payable non-recourse cancelled with repossession of equipment
              
              $
              -
              
              $
              3,398,406
              
              $
              34,491,692Joint
                  venture interests acquired from affiliate in exchangefor
                  amounts owed, at fair value
              
              $
              -
              
              $
              672,992
              
              $
              1,014,384Escrow
                  utilized to pay non-recourse debt
              
              $
              281,868
              
              $
              -
              
              $
              -Transfer
                  of equipment from direct finance lease to operating lease
              
              $
              403,565
              
              $
              -
              
              $
              -Transfer
                  of equipment in operating leases to equipment held for sale
              
              $
              239,043
              
              $
              -
              
              $
              -Transfer
                  of equipment from direct finance lease to equipment held for sale
              
              $
              104,360
              
              $
              -
              
              $
              -
 
 33
  ICON
          Income Fund Eight B L.P.
 (A
          Delaware Limited Partnership)
 Notes
          to
          Consolidated Financial Statements
 December
          31, 2006, 2005 and 2004
 (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 primarily engaged in one
        business segment, the business of acquiring equipment subject to
        lease 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) has acquired a diversified portfolio of equipment
        leases and financing transactions, (ii) makes monthly cash distributions
        to its
        partners commencing with each partner's admission through the reinvestment
        period, which the General Partner has extended until June 2007, but may be
        extended for an additional 28 months, (iii) re-invested substantially all
        undistributed cash from operations and cash from sales of equipment and
        financing transactions during the reinvestment period, and (iv) after the
        reinvestment period, which is known as the liquidation period, will dispose
        of
        its investments and distribute the excess cash from sales of such investments
        to
        its partners.
 
 The
        General Partner of the Partnership is ICON Capital Corp. (the "General
        Partner"), a Connecticut corporation. The General Partner manages and controls
        the business affairs of the Partnership, including but not limited to, equipment
        leases and financing transactions that the Partnership enters into under
        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 disposition 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 sold totaling $75,000,000 of capital contributions.
        From 2001 through 2006, the Partnership redeemed 8,470 limited partnership
        units
        leaving 741,530 limited partnership units outstanding at December 31,
        2006.
  The
        Partnership invested most of the net proceeds from its offering in items
        of
        equipment that are subject to a lease. 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 is not needed for
        expenses, reserves and distributions to partners. The investment in additional
        equipment in this manner is called "reinvestment." The Partnership currently
        anticipates purchasing equipment from time to time until approximately June
        2007, unless that date is extended for up to an additional 28 months, in
        the
        General Partner’s sole discretion. After the reinvestment period, the
        Partnership will then sell its assets in the ordinary course of business
        during
        a time frame called the "liquidation period."
 
 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 disposition
        proceeds are allocated 99% to the limited partners and 1% to the General
        Partner
        until each limited partner has received cash distributions and disposition
        proceeds sufficient to reduce their adjusted capital contribution account
        to
        zero and receive, in addition, other distributions and allocations which
        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.
   34
  ICON
          Income Fund Eight B L.P.
 (A
          Delaware Limited Partnership)
 Notes
          to
          Consolidated Financial Statements
 December
          31, 2006, 2005 and 2004
 (2)  Summary
        of Significant Accounting Policies
 
 Basis
        of
        Presentation
 
 The
        consolidated financial statements include the accounts of the Partnership
        and
        its majority owned subsidiaries. All intercompany accounts and transactions
        have
        been eliminated in the consolidation.
 
 The
        Partnership accounts for its noncontrolling interests in joint ventures where
        the Partnership has influence on financial and operational matters, generally
        greater than 5% and less than 50% 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 distributions 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 ownership 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 when purchased.
 
 Concentration
        of Credit Risk
  Concentrations
        of credit risk with respect to lessees are dispersed across 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 segments in which they operate.
 
 Allowance
        for Doubtful Accounts
  When
        evaluating the adequacy of the allowance for doubtful accounts, the Partnership
        estimates 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.
 
 Investments
        in Operating Leases
 
 Investments
        in operating leases are stated at cost less accumulated depreciation.
        Depreciation is being provided for using the straight-line method over the
        term
        of the related equipment lease to its estimated residual value at lease end.
        Upon final disposition of the equipment, the cost and related accumulated
        depreciation will be removed from the accounts and the resulting gain or
        loss is
        reflected in the consolidated statement of operations. Revenues from operating
        leases are recognized on a straight line basis over the lives of the related
        leases.
 
 
 35
  ICON
          Income Fund Eight B L.P.
 (A
          Delaware Limited Partnership)
 Notes
          to
          Consolidated Financial Statements
 December
          31, 2006, 2005 and 2004
 
 (2)  Summary
        of Significant Accounting Policies - continued
 
 Asset
        Impairments
 
 The
        Partnership’s asset portfolio is periodically reviewed, at least annually, to
        determine whether events or changes in circumstances indicate that the carrying
        value of an asset may not be recoverable. An impairment loss is recognized
        only
        if the carrying amount of a long-lived asset is not recoverable and exceeds
        its
        fair value. If there is an indication of impairment, the Partnership estimates
        the future cash flows (undiscounted and without interest charges) expected
        to
        result 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
        cash outflows expected to be necessary to obtain those inflows. If an impairment
        is determined to exist, an impairment loss is measured as the amount by which
        the carrying amount of a long-lived asset exceeds its fair value.
 
 The
        events or changes in circumstances which 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 notes payable where the lessee
        remits their rental payments directly to the lender and the Partnership does
        not
        recover its residual position until the non-recourse note payable is repaid
        in
        full.
 
 Equipment
        Held for Sale or Lease
 
 Equipment
        held for sale or lease 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.
 
 Revenue
        Recognition
 
 The
        Partnership leases equipment to third parties which may be classified as
        either
        a finance lease or an operating lease, which is determined 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 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 method over
        the
        lease term. Billed and uncollected operating lease receivables are included
        in
        other assets. Deferred income is the difference between the timing of the
        cash
        payments and the income recognized on a straight line basis.
 
 
 36
 
 ICON
          Income Fund Eight B L.P.
 (A
          Delaware Limited Partnership)
 Notes
          to
          Consolidated Financial Statements
 December
          31, 2006, 2005 and 2004
 
 (2)  Summary
        of Significant Accounting Policies - continued
 
 Redemption
        of Limited Partnership Units
 
 The
        Partnership may, at its discretion, redeem units from a limited number of
        its
        limited partners, in any one year, as provided for in the LP Agreement. The
        redemption amounts are calculated following a specified redemption formula,
        as
        provided for the LP Agreement. Redeemed units have no voting rights and do
        not
        share in distributions. Redeemed limited partnership units are accounted
        for as
        a reduction from partners' equity.
 
 Per
        Unit
        Data
 
 Net
        income (loss) per limited partnership unit is based upon the weighted average
        number of limited partnership units outstanding during the year.
 
 Income
        Taxes
 
 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.
 
 Use
        of
        Estimates
 
 The
        preparation of consolidated financial statements in conformity with accounting
        principles generally accepted in the United States of America (“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 at the date of the consolidated financial statements and the
        reported amounts of revenues and expenses during the reporting period.
        Significant estimates primarily include the allowance for doubtful accounts,
        depreciation and amortization, residual values and impairments. Actual results
        could differ from those estimates.
 
 Recent
        Accounting Pronouncements
 
 In
        April
        2006, the Financial Accounting Standards Board (“FASB”) issued Statement of
        Financial Accounting Standards (“SFAS”) No. 155, “Accounting for Certain
        Financial Instruments” (“SFAS 155”), an amendment to SFAS No. 133 (“SFAS 133”)
        and SFAS No. 140. SFAS 155 addresses
        what had been characterized as a temporary exemption from the application
        of the
        bifurcation requirements of SFAS 133 to beneficial interests in securitized
        financial assets. The
        adoption of SFAS 155 did not have any impact on the Partnership’s consolidated
        financial statements.
 
 In
        September 2006, the FASB issued SFAS No. 157 “Accounting for Fair Value
        Measurements” (“SFAS 157”). SFAS 157 establishes a separate framework for
        determining fair values of assets and liabilities that are required by other
        authoritative GAAP pronouncements to be measured at fair value. In addition,
        SFAS 157 incorporates and clarifies the guidance in FASB Concepts Statement
        No.
        7 regarding the use of present value techniques in measuring fair value.
        SFAS
        157 is effective for financial statements with fiscal years beginning after
        November 15, 2007. The General Partner is currently evaluating the impact
        of
        this pronouncement, but does not currently believe it will have a material
        impact on the consolidated financial statements.
 
 
 37
 
 ICON
          Income Fund Eight B L.P.
 (A
          Delaware Limited Partnership)
 Notes
          to
          Consolidated Financial Statements
 December
          31, 2006, 2005 and 2004
 
 (2)  Summary
        of Significant Accounting Policies - continued
 
 In
        September 2006, the Securities and Exchange Commission (“SEC”) issued Staff
        Accounting Bulletin No. 108, “Considering the Effects of Prior Year
        Misstatements when Quantifying Misstatements in Current Year Financial
        Statements” (“SAB 108”). SAB 108 expresses the views of the SEC staff regarding
        the process of quantifying the materiality of financial misstatements. SAB
        108
        requires both the balance sheet and income statement approaches be used when
        quantifying the materiality of misstated amounts. In addition, SAB 108 contains
        guidance on correcting errors under the dual approach and provides transition
        guidance for correcting errors existing in prior years. SAB 108 is effective
        for
        the fiscal years ending after November 15, 2006. The adoption of SAB 108
        did not
        have an impact on the Partnership’s **** consolidated
        financial statements.
 
 The
        General Partner does not believe that any other recently issued, but not
        yet
        effective, accounting pronouncements, if currently adopted, would have a
        material effect on the accompanying consolidated financial
        statements.
 
 (3)  Investments
        in Finance Leases
 
 The
        Partnership also had an investment in finance leases consisting of 128 Noritsu
        Optical/Digital photo processing mini-labs subject to lease with K-Mart
        Corporation (“K-Mart”). The leases expire on various dates through April
        2008.
 
 On
        January 22, 2002, 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. This action
        put
        this one 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, relating to the
        rejected lease, which the Partnership reversed during 2005.
 
 On
        April
        30, 2006 and May 31, 2006, two of the 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 was treat ed
        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 investments in operating leases. 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.
 
 
 38
  ICON
          Income Fund Eight B L.P.
 (A
          Delaware Limited Partnership)
 Notes
          to
          Consolidated Financial Statements
 December
          31, 2006, 2005 and 2004
 
 (3)  Investments
        in Finance Leases - continued
 
 A
        third
        lease with K-Mart, expired on August 31, 2006 and the Partnership reclassified
        the net book value of this equipment of $37,120 to equipment held for sale.
        The
        fourth lease with K-Mart expired on November 30, 2006 and the Partnership
        reclassified the net book value of this equipment of $67,295 to equipment
        held
        for sale.
 
 The
        General Partner determined, based upon recent 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, to more closely approximate the adjusted
        book value to the current estimated fair value of the Noritsu Optical/Digital
        equipment, net of estimated selling costs.
 
 At
        December 31, 2005 the General Partner received an appraisal from an independent
        third party on the remaining Noritsu Optical/Digital equipment held by K-Mart
        that indicated the estimated residual value was less than originally estimated
        and 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 to more closely approximate the adjusted book value
        to
        the current fair value.
 
 On
        February 9, 2007, the Partnership sold all of the remaining equipment previously
        on lease to K-Mart for approximately $254,100 and will recognize a gain on
        the
        sale of this equipment of approximately $113,000, will be recorded during
        the
        first quarter of 2007.
 
 The
        Partnership has an investment in a finance lease with Regus Business Centre
        Corp. ("Regus"), which leases 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 from March 15, 2003. At
        December 31, 2006 and 2005, Regus was current on its payments under the amended
        lease. At December 31, 2006, Regus has one remaining minimum rents receivable
        payment that was received during January 2007. On February 28, 2007, the
        lease
        expired and Regus purchased the equipment for $1, as provided for in the
        lease.
 
 (4)  Investments
        in Operating Leases
 
 The
        investments in operating leases consisted of the following at December
        31:
 
 2006
              
              2005Aircraft
                  and aircraft related equipment
              
              $
              107,935,824
              
              $
              109,780,975Material
                  handling, telecommunication, over the road rollingstock,
                  manufacturing and computer equipment
              
              
              4,052,106
              
              
              8,374,002111,987,930
              
              
              118,154,977Accumulated
                  depreciation
              
              
              (43,018,821
              )
              
              (41,174,571
              )$
              68,969,109
              
              $
              76,980,406
 
 
 39
  ICON
          Income Fund Eight B L.P.
 (A
          Delaware Limited Partnership)
 Notes
          to
          Consolidated Financial Statements
 December
          31, 2006, 2005 and 2004
 
 (4)  Investments
        in Operating Leases - continued
 
 *Aircraft
        and aircraft related equipment*
 
 During
        February 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 DC-10-30F aircraft and two spare engines
        (the
“Aircraft and engines”) on lease to FedEx. The lease expires on March 31, 2007.
        The Partnership and Fund Nine have 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 accrues interest at 4.035% per year and matures in March
        2007.
        The lender has 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 $819,000 relating to
        this
        transaction, of which the Partnership paid approximately $737,000.
 
 On
        September 21, 2006, FedEx provided Aircraft 47820 its irrevocable notice
        to
        purchase the Aircraft and engines. Pursuant to the lease, Aircraft 47820
        had
        twenty days to agree with FedEx on the fair value of the aircraft and two
        spare
        engines. The lease further provides that if the parties do not agree within
        that
        time period, then they have ten days to appoint a mutually acceptable appraiser.
        If the parties could not agree on an appraiser, the lease provided that the
        fair
        value would be determined by independent appraisers, one selected by the
        General
        Partner and one selected by FedEx. Moreover, the lease provided that if those
        appraisers could not agree on the fair value, the two appraisers would appoint
        a
        third nationally recognized independent aircraft appraiser.
 
 Aircraft
        47820 selected a nationally recognized appraiser and received an appraisal
        value
        for the Aircraft and engines of $10,460,000. In addition, the General Partner
        commissioned an additional nationally recognized appraiser to conduct an
        appraisal on the Aircraft and engines who appraised the Aircraft and engines
        at
        $7,820,000.
 
 The
        appraiser selected by FedEx, however, valued the Aircraft and engines at
        only
        $5,500,000, which was significantly lower than the General Partner’s two
        appraisals and much lower than all publicly available published values for
        this
        type of aircraft.
 
 When
        the
        appraisers chosen by the General Partner and FedEx could not agree on the
        fair
        value, they selected a third appraiser. Although FedEx did not initially
        agree
        to this appraiser, it ultimately did so, but only after substantial delay.
        In
        February 2007, FedEx finally agreed to allow the process to proceed with
        the
        third appraiser and on February 23, 2007, the third appraiser was retained
        by
        the parties.
 
 On
        March
        2, 2007, Aircraft 47820 was notified that the third appraiser valued the
        Aircraft and engines at what the General Partner believes is an exceedingly
        low
        appraisal valuing the Aircraft and engines at $5,450,000. Pursuant to a formula
        in the lease, the two appraisals that are closest in value are to be averaged,
        which resulted in a sales price for the Aircraft and engines of $5,475,000,
        resulting in a loss on the sale of the Aircraft and engines of approximately
        $1,020,000, which will be recorded by Aircraft 47820 during the first quarter
        of
        2007.
 
 
 40
 
 ICON
          Income Fund Eight B L.P.
 (A
          Delaware Limited Partnership)
 Notes
          to
          Consolidated Financial Statements
 December
          31, 2006, 2005 and 2004
 
 (4)  Investments
        in Operating Leases - continued
  The
        General Partner has serious concerns about the propriety of the appraisal
        process and has advised FedEx that it believes that FedEx improperly interfered
        with the process and thereby negatively impacted the appraised price of the
        Aircraft and engines. The General Partner is thoroughly reviewing the facts
        with
        its outside legal counsel On March 30, 2007, Aircraft 47820 sold the aircraft
        and engines to FedEx for $5,475,000. The final lease payment was paid to
        the
        lender, satisfying all remaining debt obligations.
 
 The
        General Partner concluded, based upon an independent third party appraisal
        obtained in October 2006 that no impairments were required on this Aircraft
        and
        engines at December 31, 2006. At December 31, 2005, the General Partner
        determined, based upon an independent third party appraisal that indicated
        the
        aircraft and two spare engines were impaired due to a slower than expected
        recovery in the air transportation industry, and recorded an impairment loss
        of
        approximately $3,626,000 to more closely approximate the adjusted book value
        to
        the current fair value of the 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”). On March 14, 2006, the Partnership entered
        into a lease extension with Cathay with respect to the Airbus A340-313X
        aircraft. The original lease with Cathay expired on March 14, 2006 and was
        been
        extended until October 1, 2011. ICON 123 is a party to a residual sharing
        agreement with respect to Cathay aircraft (See Note 13).
 
 Simultaneously
        with the lease extension of the aircraft, the Partnership refinanced the
        non-recourse debt associated with the aircraft due to the fact that the balloon
        payment of approximately $52,850,000 was due on March 14, 2006. Pursuant
        to the
        terms of the new loan agreement, the lender agreed to refinance the entire
        amount of the non-recourse debt outstanding and extend the terms to October
        1,
        2011 (See Note 8).
 
 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.
 
 The
        Partnership and two affiliates, ICON Cash Flow Partners L.P. Seven (“L.P.
        Seven”) and ICON Income Fund Eight A L.P. (“Fund Eight A”), both entities
        managed by the General Partner, formed ICON Aircraft 24846 LLC (“Aircraft
        24846”) for the purpose of acquiring an investment in a Boeing 767-300ER
        aircraft on lease to Scandinavian Airline Systems. The Partnership, L.P.
        Seven
        and Fund Eight A had interests of 96.0%, 2.0% and 2.0%, respectively, in
        ICON
        Aircraft 24846.
 
 
 41
 
 ICON
          Income Fund Eight B L.P.
 (A
          Delaware Limited Partnership)
 Notes
          to
          Consolidated Financial Statements
 December
          31, 2006, 2005 and 2004
 
 (4)  Investments
        in Operating Leases - continued
 
 The
        aircraft was sold on July 29, 2004 and Aircraft 24846 recognized a loss on
        the
        sale of approximately $602,000 which was recorded as an impairment loss in
        June
        2004. The
        General Partner had determined that it was in the best interest of Aircraft
        24846 and its members to sell the Boeing 767-300ER aircraft to BTM Capital
        Corp., the lender, for an amount equal to the then outstanding debt balance.
        The
        decision to sell the aircraft was based, in part, on the following factors:
        (i)
        the aircraft's fair market value was estimated to be between $24,000,000
        and
        $27,000,000 and the balance of the outstanding debt was $34,500,000; (ii)
        any
        new lease for the aircraft would have required an additional $850,000 in
        equity
        (at a minimum) in order to reconfigure the aircraft and upgrade the engines;
        and
        (iii) if the Partnership were to continue to remarket the aircraft, the lender
        would have required interest only payments of approximately $100,000 per
        month
        until the aircraft was re-leased.
 
 *Material
        handling, telecommunications, over the road rolling stock, manufacturing
        and
        computer equipment*
 
 The
        Partnership, along with Fund Nine, formed ICON SPK 2023-A LLC (“ICON SPK 2023”)
        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, of which
        four
        remain active at December 31, 2006, with various lease expiration dates through
        April 2008.
 
 On
        December 1, 2004, Fund Nine transferred a 25.87% interest in ICON SPK 2023
        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 has a 74.87% interest in
        ICON
        SPK 2023 and has no interest in ICON/Kenilworth LLC. The General Partner
        computed the fair value of the ICON/Kenilworth LLC interest and the ICON
        SPK
        2023 interest based on their knowledge of current market conditions, discounted
        cash flow analysis and a recent appraisal received for ICON/Kenilworth
        LLC.
 
 During
        2006 ICON SPK 2023 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.
 
 The
        Partnership along with ICON Cash Flow Partners L.P. Six (“L.P. Six”) an entity
        also managed by the General Partner, L.P. Seven and Fund Eight A, formed
        ICON
        Cheyenne LLC (“ICON Cheyenne”) for the purpose of acquiring and managing a
        portfolio of equipment leases consisting of 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, of which three remain active at December 31, 2006, 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 assignment was made in order for
        L.P.
        Seven to repay its outstanding debt obligation to the Partnership pursuant
        to a
        contribution agreement that the Partnership entered into with some of its
        affiliates in connection with a line of credit agreement the Partnership
        had
        with Comerica Bank. 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.
 
 
 42
  ICON
          Income Fund Eight B L.P.
 (A
          Delaware Limited Partnership)
 Notes
          to
          Consolidated Financial Statements
 December
          31, 2006, 2005 and 2004
 
 (4)  Investments
        in Operating Leases - continued
 
 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 and 2005, 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
        October 2004, the Partnership’s lease with Petsmart, Inc. (“Petsmart”) expired.
        Petsmart purchased all of the equipment, which consisted of conveyer systems,
        frames, racks, carousels and forklifts, for the equipment’s fair value and the
        Partnership recognized a gain on this transaction of approximately
        $820,000.
 
 Aggregate
        minimum future rentals receivable from each of the Partnership’s non-cancelable
        leases over the next five years as discussed above, consist of the following
        at
        December 31, 2006:
 
 Year
                  EndingDecember
                  31,2007
              
              $
              8,848,2672008
              
              $
              6,706,5752009
              
              $
              6,376,3682010
              
              $
              6,376,3682011
              
              $
              4,782,276
 
 (5)  Joint
        Ventures
 
 The
        Partnership and its affiliates, entities also managed and controlled by the
        General Partner, formed three 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.
 
 The
        three
        joint ventures described below are minority owned by the
        Partnership.
  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 50.0% in ICON
        126.
        ICON 126 consolidates the financial position and operations of D.A.L. in
        its
        consolidated financial statements.
 
 
 43
  ICON
          Income Fund Eight B L.P.
 (A
          Delaware Limited Partnership)
 Notes
          to
          Consolidated Financial Statements
 December
          31, 2006, 2005 and 2004
 
 (5)  Joint
        Ventures - continued
 
 Simultaneously
        with the lease extension, ICON 126, through the owner trustee, refinanced
        the
        non-recourse debt associated with the aircraft. The refinancing was done 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, which
        accrues interest at the London Interbank Offered Rate (“LIBOR”) plus 1.165%,
        matures on July 1, 2011 and requires balloon payment of approximately
        $32,000,000. The variable 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 paid by its members’ 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 of the
        maintenance overhaul 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 the lessee 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 $232,000, which
        includes interest accreted in the amount of approximately $31,000 through
        December 31, 2006, 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.
 
  44
 
 ICON
          Income Fund Eight B L.P.
 (A
          Delaware Limited Partnership)
 Notes
          to
          Consolidated Financial Statements
 December
          31, 2006, 2005 and 2004
 
 (5)  Joint
        Ventures - continued
 
 ICON
        Aircraft 46835 LLC
 
 During
        September 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 DC-10-30F aircraft on
        lease
        with FedEx that was scheduled to expire on March 31, 2007. The Partnership
        and
        Fund Nine have 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 Partnerships cash portion of the purchase
        price was approximately $450,000. The
        non-recourse debt accrues interest at 4.04% per year and matures in March
        2007.
        The lender has 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.
 
 On
        September 21, 2006, FedEx provided Aircraft 46835 its irrevocable notice
        to
        purchase the aircraft. Pursuant to the lease, Aircraft 46835 had twenty days
        to
        agree with FedEx on the fair value of the aircraft. The lease further provides
        that if the parties do not agree within that time period, then they have ten
        days to appoint a mutually acceptable appraiser. If the parties could not
        agree
        on an appraiser, the lease provided that the fair value would be determined
        by
        independent appraisers, one selected by the General Partner and one selected
        by
        FedEx. Moreover, the lease provided that if those appraisers could not agree
        on
        the fair value, the two appraisers would appoint a third nationally recognized
        independent aircraft appraiser.
 
 Aircraft
        46835 selected a nationally recognized appraiser and received an appraisal
        value
        for the aircraft of $7,300,000. In addition, the General Partner commissioned
        an
        additional nationally recognized appraiser to conduct an appraisal on the
        aircraft who appraised the aircraft at $6,700,000.
 
 The
        appraiser selected by FedEx, however, valued the aircraft at only $4,400,000,
        which was significantly lower than the General Partner’s two appraisals and much
        lower than all publicly available published values for this type of
        aircraft.
 
 When
        the
        appraisers chosen by the General Partner and FedEx could not agree on the
        fair
        value, they selected a third appraiser. Although FedEx did not initially
        agree
        to this appraiser, it ultimately did so, but only after substantial delay.
        In
        February 2007, FedEx finally agreed to allow the process to proceed with
        the
        third appraiser and on February 23, 2007, the third appraiser was retained
        by
        the parties.
 
 On
        March
        2, 2007, Aircraft 46835 was notified that the third appraiser valued the
        aircraft at what the General Partner believes is an exceedingly low appraisal
        valuing the aircraft at $4,120,000. Pursuant to a formula in the lease, the
        two
        appraisals that are closest in value are to be averaged, which resulted in
        a
        sales price for the aircraft of $4,260,000, resulting in a loss on the sale
        of
        the aircraft of approximately $640,000, which will be recorded by Aircraft
        46835
        during the first quarter of 2007.
 
 
 45
  ICON
          Income Fund Eight B L.P.
 (A
          Delaware Limited Partnership)
 Notes
          to
          Consolidated Financial Statements
 December
          31, 2006, 2005 and 2004
 
 (5)  Joint
        Ventures - continued
 
 The
        General Partner has serious concerns about the propriety of the appraisal
        process and has advised FedEx that it believes that FedEx improperly interfered
        with the process and thereby negatively impacted the appraised price of the
        aircraft. The General Partner is thoroughly reviewing the facts with its
        outside
        legal counsel On March 30, 2007, Aircraft 46835 sold the aircraft to FedEx
        for
        $4,260,000. The final lease payment was paid to the lender, satisfying all
        remaining debt obligations.
 
 The
        General Partner concluded, based upon an independent third party appraisal
        obtained in December 2006 that no impairments were required on this aircraft
        at
        December 31, 2006. At December 31, 2005, the General Partner determined,
        based
        upon an independent third party appraisal that indicated the aircraft was
        impaired due to a slower than expected recovery in the air transportation
        industry, and recorded an impairment loss of approximately $3,182,000, to
        more
        closely approximate the adjusted book value to the current fair value of
        the
        aircraft.
 
 Information
        as to the unaudited financial position and results of operations of ICON
        46835
        at December 31, 2006 and 2005 and for the years ended December 31, 2006,
        2005
        and 2004 are summarized below:
 
 December
                  31,2006
              
              2005Assets
              
              $
              6,845,622
              
              $
              9,149,068Liabilities
              
              $
              2,678,396
              
              $
              7,882,894Equity
              
              $
              4,167,226
              
              $
              1,266,174Partnership's
                  share of equity
              
              $
              625,084
              
              $
              189,926
 
 Years
                  Ended December 31,2006
              
              2005
              
              2004Net
                  income (loss)
              
              $
              2,901,052
              
              $
              (2,758,625
              )
              $
              227,796Partnership's
                  share of net income (loss)
              
              $
              435,158
              
              $
              (413,794
              )
              $
              34,169
 
 
 ICON/Kenilworth
        LLC
 
 T he
        Partnership and an affiliate, Fund Nine, formed ICON/Kenilworth LLC
        (“Kenilworth”) for the purpose of acquiring a natural gas-fired 25MW
        co-generation facility on lease to Schering-Plough Corporation. The base
        lease
        for the co-generation facility expired in July 2004 and was extended until
        2009.
        The outstanding balance of the non-recourse debt was fully repaid at the
        end of
        the base lease term in July 2004. As discussed in Note 4, on December 1,
        2004,
        the Partnership transferred its entire 5% ownership interest in Kenilworth
        Fund
        Nine.
 
 (6)  Investment
        in Option
 
 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 Boeing 737-524 aircraft 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 was paid in full.
 
 
 46
  ICON
          Income Fund Eight B L.P.
 (A
          Delaware Limited Partnership)
 Notes
          to
          Consolidated Financial Statements
 December
          31, 2006, 2005 and 2004
 
 (6)  Investment
        in Option - continued
 
 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, 2006 and 2005 was $19,923,856 and $21,434,830,
        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 together with two
        engines was impaired and accordingly, the Partnership recognized an impairment
        loss of $2,100,000. The General Partner’s decision was because the option is
        currently out of the money and the probability that we will not exercise
        the
        option our General Partner does anticipate a recovery in the value of the
        option.
 
 (7)  Investment
        in Unguaranteed Residual Values
 
 During
        the year ended December 31, 2001, the Partnership acquired residual interests
        in
        a portfolio of technology and other equipment leases for $2,406,128. Leases
        in
        this portfolio had expiration dates through March 2005. The Partnership received
        $320,097 and $756,903, respectively, in proceeds from sales of these interests
        for the years ended December 31, 2005 and 2004.
 
 (8)  Notes
        Payable - Non-Recourse
 
 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 accrues interest at LIBOR plus 1.165%, matures
        on
        October 1, 2011 and has a balloon payment of approximately $32,000,000. The
        variable interest rate of the refinanced non-recourse debt was fixed at 6.1095%
        automatically 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, 2006 and 2005, the outstanding balance of the
        non-recourse debt was $49,688,022 and $53,687,798, respectively.
 
 The
        Partnership’s two non-recourse notes payable are paid directly to the lenders by
        the lessees and accrue interest at 4.035% per year and 6.1095% per year,
        respectively. The outstanding balances of the non-recourse debt at December
        31,
        2006 and 2005 were $52,572,875 and $63,746,059, respectively.
 
 The
        aggregate maturities of notes payable - non recourse, including the effects
        of
        refinancing discussed above, over the next five years, consist of the following
        at December 31, 2006:
 
 Year
                  EndingDecember
                  31,2007
              
              $
              6,312,0332008
              
              $
              3,788,1422009
              
              $
              4,029,5682010
              
              $
              3,826,9772011
              
              $
              34,616,155
 
 
 47
 
 ICON
          Income Fund Eight B L.P.
 (A
          Delaware Limited Partnership)
 Notes
          to
          Consolidated Financial Statements
 December
          31, 2006, 2005 and 2004
 (9)  Revolving
        Loan Facility - 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 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, based
        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 Borrowers
        are in compliance with these covenants at December 31, 2006. The Loan Agreement
        prohibits the Borrowers from declaring or paying any distribution to investors
        if such a payment would cause the Borrowers to become non-compliant with
        the
        financial covenants in the Loan Agreement.
 
 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. The Borrowers are in compliance with the
        Contribution Agreement at December 31, 2006, and no amounts are due to or
        payable by the Partnership under the Contribution Agreement.
 
 On
        September 7, 2005, certain of the Borrowers were advanced approximately
        $10,200,000 under the Facility, which amount was used to completely repay
        all of
        the outstanding indebtedness incurred by certain of the Borrowers and their
        affiliates under a line of credit agreement they had with Comerica Bank.
 
 The
        line
        of credit agreement with Comerica Bank was subsequently terminated and the
        Borrowers entered into the new line of credit agreement with California Bank
        & Trust.
 
 
 48
 
 ICON
          Income Fund Eight B L.P.
 (A
          Delaware Limited Partnership)
 Notes
          to
          Consolidated Financial Statements
 December
          31, 2006, 2005 and 2004
 
 (9)  Revolving
        Loan Facility - recourse - continued
 
 On
        December 26, 2006, the Borrowers entered into a Loan Modification Agreement
        (the
“Loan Modification”) to the Agreement. The changes to the Loan Agreement are an extension
        of the Facility from August 31, 2007 to September 30, 2008 and the lowering
        of
        (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
        in the
        London Interbank Eurocurrency Market (the “LIBOR Rate”) plus 2.75% per year to
        the LIBOR Rate 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, 2006 was 8.25%.
 
 At
        December 31, 2006, the Partnership had $3,125,000, outstanding under the
        Facility, which represents the entire amount outstanding for all
        Borrowers.
 
 (10)  Transactions
        with Related Parties
 
 Prior
        to
        May 1, 2006, 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 received either directly by the Partnership or
        through
        joint ventures and (ii) acquisition fees, through the reinvestment period,
        of
        3%, calculated based on the gross value of the Partnership’s acquisition
        transactions. In addition, the General Partner was reimbursed for administrative
        expenses incurred in connection with the Partnership’s operations.
 
 The
        General Partner performs
        certain services relating to the management of the Partnership’s equipment
        leasing 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 and 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 salary and related costs, travel expenses and other administrative
        costs incurred by individuals with a controlling interest in the General
        Partner.
 
 Effective
        May 1, 2006, the General Partner waived its rights to 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 $59,944, $60,056 and $60,155, respectively, for
        the
        years ended December 31, 2006, 2005 and 2004. Additionally, the General
        Partner’s interest in the Partnership’s net (loss) income was $(6,144), $33,686
        and $(46,090), respectively, for the years ended December 31, 2006, 2005
        and
        2004.
  
 49
  ICON
          Income Fund Eight B L.P.
 (A
          Delaware Limited Partnership)
 Notes
          to
          Consolidated Financial Statements
 December
          31, 2006, 2005 and 2004
 (10)  Transactions
        with Related Parties - continued
 
 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, 2005 and
        2004,
        respectively, were as follows:
 
 Entity
              
              Capacity
              
              Description
              
              2006
              
              2005
              
              2004ICON
                  Capital Corp.
              
              General
                Partner
              
              Management
                fees
              
              $
              410,842
              
              $
              1,311,990
              
              $
              1,500,347ICON
                  Capital Corp.
              
              General
                Partner
              
              Administrative
                fees
              
              $
              161,980
              
              $
              515,934
              
              $
              862,030
 
 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.
 
 (11)  Fair
        Value of Financial Instruments
 
 SFAS
        No.
        107, "Disclosures About Fair Values of Financial Instruments," requires
        disclosures about the fair value of financial instruments. Separate disclosure
        of fair value information at December 31, 2006 and 2005 with respect to the
        Partnership's assets and liabilities is not separately provided since (i)
        SFAS
        No. 107 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 non-recourse debt, approximates
        fair value due to their short-term maturities .
        The
        fair value of the Partnership’s non-recourse debt at December 31, 2006 and 2005
        is $36,220,232 and $61,524,689, respectively.
 
 (12)  Concentrations
 
 The
        Partnership's cash and cash equivalents are held principally at one financial
        institution and at times may exceed insured limits. The Partnership has placed
        these funds in a high quality institution in order to minimize the risk of
        loss.
 
 The
        Partnership has approximately 89.2% of its assets and approximately 92.9%
        of its
        liabilities concentrated in the airline industry at December 31, 2006 and
        had
        approximately 83.9% of its assets and approximately 96.5% of its liabilities
        concentrated in the airline industry at December 31, 2005.
 
 For
        the
        years ended December 31, 2006, 2005 and 2004 the Partnership had two lessees
        that accounted for approximately 83.5%, 85% and 50%, respectively, of rental
        income and finance income.
 
 (13)  Commitments
        and Contingencies
  The
        Partnership has entered into remarketing and residual sharing agreements
        with
        various third parties. In connection with these agreements remarketing and
        residual proceeds received in excess of specific amounts will be shared with
        these third parties based on specific formulas.
 
 
 50
 ICON
          Income Fund Eight B L.P.
 (A
          Delaware Limited Partnership)
 Notes
          to
          Consolidated Financial Statements
 December
          31, 2006, 2005 and 2004
 
 (13)  Commitments
        and Contingencies - continued
 
 ICON
        123
        has a commitment to pay certain of the maintenance overhaul costs, which
        were
        incurred on or prior to March 14, 2006. The total costs for this overhaul
        were
        approximately $1,157,000. ICON 123 established, under the terms of the lease,
        a
        maintenance reserve cash account which totaled approximately $1,398,000 at
        December 31, 2006, to pay for the Partnership’s portion of these costs. The
        maintenance reserve cash account is included in other assets in the accompanying
        consolidated financial statements. Any excess cash remaining after the
        maintenance over haul was performed and will be used to pay down the principal
        balance payment of the related non-recourse debt.
 
 ICON
        123
        and ICON 126 are parties to a residual sharing agreement (the “Airtrade Residual
        Sharing Agreement”) with Airtrade Capital Corp. (“Airtrade”) with respect to the
        100% owned and 50% owned Cathay aircraft. Pursuant to the terms of the Airtrade
        Residual Sharing Agreement, all proceeds received in connection with the
        sales
        or lease renewal of the aircrafts 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 independent third party
        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.
 
 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 will not have a material
        adverse effect on the consolidated financial condition of the Partnership
        taken
        as a whole.
 
 (14)  Income
        Taxes (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, 2006 and 2005 the partners’ capital accounts included in the
        consolidated financial statements totaled $20,277,150 and $26,937,141,
        respectively, compared to the partners’ capital accounts for Federal income tax
        purposes of $28,432,392 and $30,710,325, 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.
 
 
 51
  ICON
          Income Fund Eight B L.P.
 (A
          Delaware Limited Partnership)
 Notes
          to
          Consolidated Financial Statements
 December
          31, 2006, 2005 and 2004
 (14)  Income
        Taxes (Unaudited) - continued
 
 The
        following table reconciles net (loss) income for consolidated financial
        statement reporting purposes to the net income for Federal income tax purposes,
        for the years ended December 31, 2006, 2005 and 2004:
 
 2006
              
              2005
              
              2004Net
                  (loss) income per consolidated financial statements
              
              $
              (614,426
              )
              $
              3,368,585
              
              $
              (4,609,006
              )Adjustments
                  for direct finance lease
              
              
              2,047,705
              
              
              3,338,435
              
              
              4,397,303Deferred
                  income
              
              
              169,685
              
              
              -
              
              
              -Depreciation
                  and impairments
              
              
              8,807,781
              
              
              11,924,358
              
              
              9,137,941Tax
                  gain (loss) from consolidated joint venture
              
              
              544,659
              
              
              (10,028,932
              )
              
              (8,983,754
              )Gain
                  (loss) on sale of equipment
              
              
              (491,734
              )
              
              3,116,920
              
              
              (185,056
              )Other
                  items
              
              
              (6,696,038
              )
              
              (376,239
              )
              
              2,375,505Net
                  income for Federal income tax purposes
              
              $
              3,767,632
              
              $
              11,343,127
              
              $
              2,132,933
 
 (15)  Limited
        Partnership Redemptions
 
 The
        General Partner consented to the Partnership redeeming 1,300, 449 and 2,212
        limited partnership units for the years ended December 31, 2006, 2005 and
        2004,
        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.
 
 (16)  Selected
        Quarterly Financial Data (Unaudited)
 
 The
        following table is a summary of selected financial data, by quarter, for
        the
        years ended December 31, 2006 and 2005:
 
 Quarters
                  Ended in 2006June
                  30,
              
              September
                  30,March
                  31,
              
              (Restated)
              
              (Restated)
              
              December
                  31,Total
                  revenue
              
              $
              4,052,719
              
              $
              4,355,442
              
              $
              3,299,874
              
              $
              4,544,470Net
                  (loss) income allocable to limited partners
              
              $
              (836,482
              )
              $
              828,834
              
              $
              (416,746
              )
              $
              (183,888
              )Net
                  (loss) income per weighted averagelimited
                  partnership units
              
              $
              (1.13
              )
              $
              1.12
              
              $
              (0.56
              )
              $
              (0.25
              )
 
 Quarters
                  Ended in 2005March
                  31,
              
              June
                  30,
              
              September
                  30,
              
              December
                  31,Total
                  revenue
              
              $
              5,614,228
              
              $
              5,534,618
              
              $
              5,638,764
              
              $
              9,138,916Net
                  (loss) income allocable to limited partners
              
              $
              (228,049
              )
              $
              679,266
              
              $
              964,836
              
              $
              1,918,846Net
                  (loss) income per weighted averagelimited
                  partnership units
              
              $
              (0.31
              )
              $
              0.91
              
              $
              1.30
              
              $
              2.59
 
  52
 
 ICON
          Income Fund Eight B L.P.
 (A
          Delaware Limited Partnership)
 Notes
          to
          Consolidated Financial Statements
 December
          31, 2006, 2005 and 2004
 
 (16)  Selected
        Quarterly Financial Data (Unaudited)
 
 During
        the preparation of the Partnership’s consolidated financial statements for the
        year ended December 31, 2006, the General Partner determined that ICON 123
        and
        ICON 126 did not properly estimate the end of lease residual value for their
        aircraft when they entered into lease extensions on June 12, 2006 and March
        14,
        2006, respectively. Corrections made by ICON 123 and ICON 126 to properly record these transactions
        are summarized as follows: (i) to record the proper amount of depreciation
        expense relating to the ICON 123 aircraft and (ii) to properly record net
        income
        (loss) from investments in joint ventures due to a change in depreciation
        expense for ICON 126. The corrections for these errors have been reflected
        in
        the above table, however, were not reflected in the Partnership’s previously
        filed unaudited condensed consolidated financial statements included in the
        Partnership’s Form 10-Q for June 30, 2006 and September 30, 2006. The correction
        of these errors does not have an impact on the Partnership’s cash flows for the
        quarters ended June 30, 2006 and September 30, 2006 or the Partnership’s
        financial condition at December 31, 2006, or its results of operations or
        cash
        flows for the year ended December 31, 2006.
 
 The
        following tables show the impact of the errors on the relevant captions of
        the
        Partnership’s consolidated financial statements for the three months ended June
        30, 2006 and September 30, 2006. These tables contain only the corrected
        balances and do not represent the complete condensed consolidated statements
        of
        operations.
 
 
 **Three
                  Months Ended June 30, 2006**PreviouslyReported
              
              Adjustments
              
              RestatedLoss
                  from investments in joint ventures
              
              $
              (994,408
              )
              $
              597,822
              
              $
              (396,586
              )Total
                  revenue
              
              $
              7,810,339
              
              $
              597,822
              
              $
              8,408,161Depreciation
                  and amortization
              
              $
              5,259,692
              
              $
              (710,387
              )
              $
              4,549,305Total
                  expenses
              
              $
              9,126,273
              
              $
              (710,387
              )
              $
              8,415,886Net
                  loss
              
              $
              (1,315,934
              )
              $
              1,308,209
              
              $
              (7,725
              )Net
                  loss allocable to:Additional
                  Members
              
              $
              (1,302,775
              )
              $
              1,295,127
              
              $
              (7,648
              )Manager
              
              $
              (13,159
              )
              $
              13,082
              
              $
              (77
              )Net
                  loss per weighted average additionalmembers'
                  share outstanding
              
              $
              (1.76
              )
              $
              1.75
              
              $
              (0.01
              )
 
  53
 
 ICON
          Income Fund Eight B L.P.
 (A
          Delaware Limited Partnership)
 Notes
          to
          Consolidated Financial Statements
 December
          31, 2006, 2005 and 2004
 
 (16)  Selected
        Quarterly Financial Data (Unaudited) - continued
 
 **Three
                  Months Ended September 30, 2006**PreviouslyReported
              
              Adjustments
              
              RestatedLoss
                  from investments in joint ventures
              
              $
              (727,631
              )
              $
              571,428
              
              $
              (156,203
              )Total
                  revenue
              
              $
              2,728,446
              
              $
              571,428
              
              $
              3,299,874Depreciation
                  and amortization
              
              $
              2,828,231
              
              $
              (892,856
              )
              $
              1,935,375Total
                  expenses
              
              $
              4,613,686
              
              $
              (892,856
              )
              $
              3,720,830Net
                  loss
              
              $
              (1,885,240
              )
              $
              1,464,284
              
              $
              (420,956
              )Net
                  loss allocable to:Additional
                  Members
              
              $
              (1,866,388
              )
              $
              1,449,641
              
              $
              (416,746
              )Manager
              
              $
              (18,852
              )
              $
              14,643
              
              $
              (4,210
              )Net
                  loss per weighted average additionalmembers'
                  share outstanding
              
              $
              (2.52
              )
              $
              1.95
              
              $
              (0.56
              )
 
 
 (17)  Subsequent
        Event
 
 On
        March
        30, 2007, the Partnership acquired title to approximately $7,755,000 of
        information technology equipment which will be leased back to Global Crossing
        Telecommunications, Inc. The base term is for 48 months commencing on April
        1, 2007. The lessee will pay monthly rent of approximately $209,000,
        payable in advance on the first business day of each month.
 
 
 54
   **Schedule
                  II**ICON
                  Income Fund Eight B L.P.(A
                  Delaware Limited Partnership)Valuation
                  and Qualifing AccountsBalance
                  at
              
              Charged
                  to
              
              
              
              
              
              
              
              
              Balance
                  atBeginning
              
              Costs
                  and
              
              
              
              
              
              
              
              
              Endof
                  Period
              
              Expenses
              
              
              
              
              Deduction
              
              
              
              of
                  PeriodYear
                  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
              
              (b)
              
              $
              -Year
                  ended December 31, 2004Allowance
                  for doubtful accounts(deducted
                  from investments in finance leases)
              
              $
              -
              
              $
              411,742
              
              (a)
              
              
              $
              -
              
              
              
              $
              411,742
 
 (a)
                  Due to K-Mart Corporation filing for Chapter 11 bankruptcy protection
                  and
                  challenging one of our five equipment leases withK-Mart,
                  we recorded a bad debt allowance due to the uncertainity of future
                  collections regarding the one lease in dispute.(b)
                  During the year ended December 31, 2005, the disputed lease with
                  K-Mart
                  Corporation was resolved and removed from ourbooks
                  thereby reducing the bad debt allowance set up in 2004.
 
  S-1
   **Item
        9.****Changes
        in and Disagreements with Accountants on Accounting and Financial
        Disclosure** ****
 
 During
        the year ended December 31, 2006 we had no disagreements with our accountants
        on
        any matters of accounting or financial reporting.
 
 **Item
        9A. 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, 2006, 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 Chief Executive Officer and the Principal Financial and Accounting
        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, except as noted below, the Chief Executive Officer
        and the
        Principal Financial and Accounting Officer concluded that our General Partner’s
        disclosure controls and procedures were effective.
 
 While
        evaluating our General Partner’s disclosure controls and procedures, our General
        Partner recognized that greater internal controls were needed to aid in a
        more
        efficient closing of our financial statements, thereby requiring our
        General Partner to hire  additional
        skilled accounting staff.  Our General Partner hired an additional
        accounting staff member during 2006 who is a certified public accountant
        and
        experienced with public reporting entities. Subsequently, in 2007 our General
        Partner hired two additional senior accountants with more than 16 and 8 years,
        respectively, of experience with public reporting entities. Our General Partner
        will continue to evaluate its disclosure controls and procedures to determine
        their effectiveness and adequacy and will take the steps necessary, in our
        General Partner’s opinion, to ensure the adequacy of our General Partner’s
        disclosure controls and procedures.
 
 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 Chief Executive Officer and Principal Financial and Accounting
        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 report.
 
 **Item
        9B. Other Information**
 
 Not
        applicable.
   55
 
 
 **PART
        III**
 
 **Item
        10. Directors and Executive Officers of the Registrant's
        General Partner**
 
 **Name**
                
                **Age**
                
                **Position**Beaufort
                    J.B. Clarke
                
                60
                
                Chairman,
                    Chief Executive Officer and DirectorThomas
                    W. Martin
                
                53
                
                President,
                    Chief Operating Officer and DirectorMichael
                    A. Reisner
                
                36
                
                Executive
                    Vice President and Chief Financial OfficerMark
                    Gatto
                
                34
                
                Executive
                    Vice President-Business DevelopmentPatricia
                    Palmer
                
                43
                
                Executive
                    Vice PresidentRichard
                    L. Specker
                
                52
                
                Senior
                    Managing DirectorJoel
                    S. Kress
                
                34
                
                Senior
                    Vice President and General CounselDavid
                    J. Verlizzo
                
                34
                
                Vice
                    President and Deputy General CounselDavid
                    C. Wright
                
                49
                
                Senior
                    Vice President-AccountingAnthony
                    J. Branca
                
                38
                
                Senior
                    Vice President-FinanceCraig
                    A. Jackson
                
                48
                
                Vice
                    President-Remarketing and Portfolio
                    Management
 
 Our
        General Partner’s officers and directors are:
 
 ***Beaufort
        J. B. Clarke*** has been
        Chairman, Chief Executive Officer and a Director since August 1996. He was
        President from August of 1996 until December 31, 1998. Prior to his present
        positions, Mr. Clarke was a founder, President and Chief Executive Officer
        of
        Griffin Equity Partners, Inc. (a purchaser of equipment leasing portfolios)
        from
        October 1993 through August 1996. Prior to that, Mr. Clarke was President
        of
        Gemini Financial Holdings, Inc. (an equipment leasing company) from June
        1990
        through September 1993. Previously, Mr. Clarke was a Vice President of AT&T
        Systems Leasing. Mr. Clarke formerly was an attorney with Shearman and Sterling
        LLP. Mr. Clarke received a B.A. degree from the George Washington University
        and
        a J.D. degree from the University of South Carolina. Mr. Clarke has been
        in the
        equipment leasing business, as a business person and lawyer, since 1979.
  ***Thomas
        W. Martin*** has been
        President since February, 2007, Chief Operating Officer since February 2006,
        has
        been a Director (and Director, President and Treasurer of ICON Securities
        Corp.
        as well) since August 1996, and was Chief Financial Officer from May 2003
        through January 2007. Mr. Martin was the Executive 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 the University of
        New
        Hampshire. Mr. Martin has been in the equipment leasing business since 1983.
  ***Michael
        A. Reisner*** has been
        Executive Vice President and Chief Financial Officer since January 2007 and
        was
        Executive Vice President-Acquisitions from February 2006 through January
        2007.
        Mr. Reisner was Senior Vice President and General Counsel from January 2004
        through January 2006. Mr. Reisner was Vice President and Associate General
        Counsel from March 2001 until December 2003. Previously, from 1996 to 2001,
        Mr.
        Reisner was an attorney with Brodsky Altman and 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*** has been
        Executive Vice President-Business Development since February 2006. Mr. Gatto
        is
        responsible for business and corporate development, including the acquisition
        of
        equipment subject to lease. Before serving as Associate General Counsel from
        November 1999 through October 2000, 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.
   56
   ***Patricia
        Palmer*** has been
        Executive Vice President (and Executive Vice President of ICON Securities
        Corp.
        as well) since February 2007, has been a Director of ICON Securities Corp.
        since
        December 2002, and was Senior Vice President (and Senior Vice President of
        ICON
        Securities Corp. as well) from July 2002 through February 2007. Ms. Palmer,
        who
        joined our General Partner in December 1996, is responsible for our General
        Partner’s product development, hiring and training, and the coordination of ICON
        Securities Corp.’s national sales and marketing efforts. Prior to joining our
        General Partner, Ms. Palmer was a Regional Marketing Director at PLM Securities
        Corp. and a Product Manager at Phoenix Leasing, Inc. Ms. Palmer received
        a B.A.
        from the University of California, Berkeley. Ms. Palmer has more than 18
        years
        of experience in the securities and equipment leasing industries.
  ***Richard
        L. Specker*** has been
        Senior Managing Director since April 2006 and was a consultant to our General
        Partner from September 2005 through April 2006. Mr. Specker is responsible
        for
        certain portfolio strategy and management functions, including arranging
        and
        managing portfolio lease asset restructuring, lease debt refinancing
        transactions and strategic asset sales. Mr. Specker has over 25 years of
        experience in asset-based finance and leasing, including as President of
        the
        Global Lease Finance Division of Fleet Capital Leasing and as Senior Vice
        President and Manager of the Structured Lease Finance Group at NationsBanc
        Leasing Corporation. Mr. Specker received an M.B.A. from the University of
        North
        Carolina at Chapel Hill and a B.A. from Duke University. Mr. Specker is a
        former
        member of the Board of Directors of the Equipment Leasing and Finance
        Association.
  ***Joel
        S. Kress*** has been
        Senior Vice President and General Counsel since February 2006. Mr. Kress
        was
        Vice President and Associate General Counsel from August 2005 until January
        2006. 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.
  ***David
        Verlizzo*** has been
        Vice President and Deputy General Counsel since February 2006. Mr. Verlizzo
        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.
  ***David
        C. Wright*** is a
        certified public accountant and has been Senior Vice President-Accounting
        since
        February 2005. Mr. Wright was Vice President-Accounting from August 2004
        until
        January 2005. Previously, from 1989 through 2004, Mr. Wright was employed
        as a
        manager at several regional and national accounting firms, including Grant
        Thornton LLP, Goldstein Golub Kessler LLP and Hays & Company LLP, having
        responsibility for both public and private engagements. Mr. Wright received
        a
        B.A. from Ohio Wesleyan University.
  ***Anthony
        J. Branca*** has been
        Senior Vice President-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*** has been
        Vice President-Remarketing and Portfolio Management since February 2006.
        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.
   57
 
 **Code
        of Ethics**
  Our
        General Partner, on our behalf, has adopted a code of ethics for its Chief
        Executive Officer, Chief Financial Officer and Chief Accounting 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,
        4 th Floor,
        New York, New York 10011.
 
 **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, 2005 and 2004.
 
 Entity
              
              Capacity
              
              Description
              
              2006
              
              2005
              
              2004ICON
                  Capital Corp.
              
              General
                Partner
              
              Management
                fees
              
              $
              410,842
              
              $
              1,311,990
              
              $
              1,500,347ICON
                  Capital Corp.
              
              General
                Partner
              
              Administrative
                fees
              
              $
              161,980
              
              $
              515,934
              
              $
              862,030
 
 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 $59,944, $60,056 and $60,155, respectively, for the years ended
        December 31, 2006, 2005 and 2004. Additionally, our General Partner’s interest
        in our net (loss) income was $(6,144), $33,686 and $(46,090), respectively,
        for
        the years ended December 31, 2006, 2005 and 2004.
 
 **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 28, 2007, no Directors and Officers of our General
                  Partner 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**
 
 See
        Item
        11 for a discussion of our related party transactions. See Notes 5, 10 and
        12 to
        our consolidated financial statements included in Part II, “Item 8. Consolidated
        Financial Statements and Supplementary Information” for a discussion of our
        investments in joint ventures, transactions with related parties and commitments
        and contingencies.
 
 **Item
        14. Principal Accountant Fees and
        Services** ****
  During
        the years ended December 31, 2006 and 2005 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.  Their fees are shown in the table below:
 
 2006
              
              2005Audit
                  fees
              
              $
              111,000
              
              $
              85,150Audit
                  related fees
              
              
              -
              
              
              -Tax
                  fees (compliance)
              
              
              26,074
              
              
              24,050$
              137,074
              
              $
              109,200
 
 
 58
   **PART
        IV**
  **Item
        15. Exhibits and Financial Statement
        Schedules**
 
 (a)
              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 filed with this
        Annual Report on Form 10-K.
 Schedules
        not listed above have been omitted because 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 (Incorporated by reference
        to
        Exhibit 4.1 to Post-Effective Amendment No. 6 to Form S-1 Registration Statement
        No. 333-54001 filled with the Securities and Exchange Commission on May 19,
        2000).
 
 4.1  Certificate
        of Limited Partnership of the Partnership (Incorporated herein by reference
        to
        Exhibit 4.3 to Post-Effective Amendment No. 6 Form S-1 Registration Statement
        No. 333-54001 filed with the Securities and Exchange Commission on 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
                  herein by reference to Exhibit 10.1 to ICON Income Fund Eight B’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.
                  Exhibit 10.1 to our Current Report on Form 8-K dated December 29,
                  2006 is
                  incorporated herein by reference.
  31.1  Rule
        13a-14(a)/15d-14(a) certifications.
 
 31.2  Rule
        13a-14(a)/15d-14(a) certifications.
 
 32.1  Certification
        of Chairman and Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted
        pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
  Certification
        of Chairman and Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted
        pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 (c)  Financial
        Statements of ICON Aircraft 126 LLC
 
 
 59
   **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.
 
 *Date:
        April 4, 2007*
 
 */s/
        Beaufort J.B. Clarke*
 Beaufort
        J.B. Clarke
 Chairman,
        Chief Executive Officer and Director
 (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.
 Sole
        General Partner of the Registrant
 
 *Date:
        April 4, 2007*
 
 */s/
        Beaufort J.B. Clarke*
 Beaufort
        J.B. Clarke
 Chairman,
        Chief Executive Officer and Director
 (Principal
        Executive Officer)
 
 *Date:
        April 4, 2007*
 
 */s/
        Thomas W. Martin*
 Thomas
        W.
        Martin
 President,
        Chief Operating Officer and Director
 
 *Date:
        April 4, 2007*
 
 */s/
        Michael A. Reisner*
 Michael
        A. Reisner
 Executive
        Vice President and Chief Financial Officer
 (Principal
        Financial and Accounting Officer)
 
 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. An annual report
        will be sent to the partners and a copy will be forwarded to the Commission.
   60