UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 
 T QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 or
 
 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2010
 
  ̈ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 Commission File Number:  333-108057
 
 COMMONWEALTH INCOME & GROWTH FUND V
 (Exact name of registrant as specified in its charter)
 
 Pennsylvania
65-1189593(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification Number)
 
 Brandywine Bldg. One, Suite 200
 2 Christy Drive
 Chadds Ford, PA 19317
 (Address, including zip code, of principal executive offices)
 
 (484) 785-1480
 (Registrant’s telephone number including area code)
 
 Indicate by check mark whether the registrant (i) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (ii) has been subject to such filing requirements for the past 90 days:
 YES  T      NO   ̈
 
 Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).YES   ̈      NO   ̈
 
 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of "accelerated filer, “large accelerated filer" and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
 Large accelerated filer  ̈
Accelerated filer  ̈Non-accelerated filer  ̈
Smaller reporting company T(Do not check if a smaller reporting company.)
 
 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).      YES   ̈ NO T
 
 
 
 
  1
  
 
 FORM 10-Q
 SEPTEMBER 30, 2010
 
 TABLE OF CONTENTS
 
 PART IItem 1.
Financial Statements
3Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
15Item 3.
Quantitative and Qualitative Disclosures About Market Risk
19Item 4T.
Controls and Procedures
19PART IIItem 1.
Legal Proceedings
20Item 1 A.
Risk Factors
20Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
20Item 3.
Defaults Upon Senior Securities
20Item 4.
Submission of Matters to a Vote of Securities Holders
20Item 5.
Other Information
20Item 6.
Exhibits
21
 
 
 
  2
  
 
 Part I. FINANCIAL INFORMATION
 Item 1. Financial Statements
 
 Commonwealth Income & Growth Fund VCondensed Balance SheetsSeptember 30,


December 31,2010


2009(unaudited)AssetsCash and cash equivalents

$
150,007


$
556,766Lease income receivable, net of reserve of approximately $130,000 and $58,000 at September 30, 2010

and December 31, 2009, respectively


310,486



360,920Accounts receivable, affiliated limited partnerships


-



10,869Other receivables


11,806



16,559Prepaid expenses


5,587



4,447477,886



949,561Technology equipment, at cost


20,515,834



22,568,787Accumulated depreciation


(16,612,339
)


(16,197,086
)3,903,495



6,371,701Equipment acquisition costs and deferred expenses, net of accumulated amortization of

approximately $147,000 and  $353,000 at September 30, 2010 and December 31, 2009, respectively


108,516



160,798Prepaid acquisition fees


43,630



55,491152,146



216,289Total Assets

$
4,533,527


$
7,537,551Liabilities and Partners' CapitalLiabilitiesAccounts payable

$
245,962


$
145,883Accounts payable, General Partner


222,975



54,394Accounts payable, Commonwealth Capital Corp.


16,497



20,748Other accrued expenses


12,312



20,497Unearned lease income


119,211



222,701Notes payable


257,802



260,986Total Liabilities


874,759



725,209Partners' CapitalGeneral Partner


1,000



1,000Limited Partners


3,657,768



6,811,342Total Partners' Capital


3,658,768



6,812,342Total Liabilities and Partners' Capital

$
4,533,527


$
7,537,551see accompanying notes to condensed financial statements
  3
    Commonwealth Income & Growth Fund VCondensed Statements of Operations(unaudited)Three Months Ended


Nine Months EndedSeptember 30,


September 30,2010


2009


2010


2009RevenueLease

$
561,762


$
1,325,909


$
2,276,177


$
4,312,224Interest and other


6,333



40,831



37,966



74,157Gain (loss) on sale of computer equipment


161,754



(2,120
)


252,893



17,040Total revenue


729,849



1,364,620



2,567,036



4,403,421ExpensesOperating, excluding depreciation


158,663



266,140



609,647



1,000,680Equipment management fee, General Partner


14,044



66,295



99,765



215,611Interest


5,529



11,650



14,468



49,530Depreciation


868,835



1,549,182



2,949,933



4,381,119Amortization of equipment acquisition costs and deferred expenses


21,487



51,260



76,304



167,842Bad debt expense


48,383



-



71,992



13,000Total expenses


1,116,941



1,944,527



3,822,109



5,827,782Net (loss)

$
(387,092
)

$
(579,907
)

$
(1,255,073
)

$
(1,424,361
)Net (loss) allocated to Limited Partners

$
(393,278
)

$
(476,010
)

$
(1,273,646
)

$
(1,443,019
)Net (loss) per equivalent Limited Partnership unit

$
(0.32
)

$
(0.38
)

$
(1.03
)

$
(1.16
)Weighted average number of equivalent limited

partnership units outstanding during the period


1,238,193



1,243,204



1,238,200



1,243,960see accompanying notes to condensed financial statements
  4
 Commonwealth Income & Growth Fund VCondensed Statement of Partners' CapitalFor the Nine months ended September 30, 2010(unaudited)General


LimitedPartner


Partner


General


LimitedUnits


Units


Partner


Partners


TotalBalance, January 1, 2010


50



1,242,246


$
1,000


$
6,811,342


$
6,812,342Net income (loss)


-



-



18,573



(1,273,646
)


(1,255,073
)Redemptions


-



(4,806
)


-



(41,214
)


(41,214
)Distributions


-



-



(18,573
)


(1,838,714
)


(1,857,287
)Balance, September 30, 2010


50



1,237,440


$
1,000


$
3,657,768


$
3,658,768see accompanying notes to condensed financial statements
  5
 Commonwealth Income & Growth Fund VCondensed Statements of Cash Flow(unaudited)Nine Months ended


Nine Months endedSeptember 30,


September 30,2010


2009Net cash provided by operating activities

$
1,518,438


$
2,285,399Investing activities:Capital Expenditures


(332,669
)


(3,107,805
)Equipment acquisition fees paid to General Partner


(10,017
)


-Net proceeds from the sale of computer equipment


318,133



160,123Net cash (used in) investing activities


(24,553
)


(2,947,682
)Financing activities:Redemptions


(41,214
)


(29,654
)Distributions to partners


(1,857,287
)


(1,865,900
)Debt placement fee paid to General Partner


(2,143
)


-Net cash (used in) financing activities


(1,900,644
)


(1,895,554
)Net (decrease) in cash and cash equivalents


(406,759
)


(2,557,837
)Cash and cash equivalents beginning of period


556,766



3,053,703Cash and cash equivalents end of period

$
150,007


$
495,866see accompanying notes to condensed financial statements
   6
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 
 1. Business
 
 Commonwealth Income & Growth Fund V (the “Partnership”) is a limited partnership organized in the Commonwealth of Pennsylvania in May 2003.  The Partnership offered for sale up to 1,250,000 units of the limited partnership at the purchase price of $20 per unit (the “offering”).  The Partnership reached the minimum amount in escrow and commenced operations on March 14, 2005.  As of February 24, 2006, the Partnership was fully subscribed.
 
 During the nine months ended September 30, 2010 limited partners redeemed 4,806 units of the partnership for a total redemption price of approximately $41,000 in accordance with the terms of the limited partnership agreement.
 
 The Partnership used the proceeds of the offering to acquire, own and lease various types of information technology equipment and other similar capital equipment, which is leased primarily to U.S. corporations and institutions. Commonwealth Capital Corp. (“CCC”), on behalf of the Partnership and other affiliated partnerships, acquires technology equipment subject to associated debt obligations and lease agreements and allocate a participation in the cost, debt and lease revenue to the various partnerships that it manages based on certain risk factors.
 
 The Partnership’s General Partner is Commonwealth Income & Growth Fund, Inc. (the “General Partner”), a Pennsylvania corporation which is an indirect, wholly-owned subsidiary of CCC. CCC is a member of the Investment Program Association (IPA), Financial Planning Association (FPA), and the Equipment Leasing and Finance Association (ELFA).   Approximately ten years after the commencement of operations, the Partnership intends to sell or otherwise dispose of all of its equipment, make final distributions to partners, and to dissolve.  Unless sooner terminated, the Partnership will continue until December 31, 2015.
 
 2. Summary of Significant Accounting Policies
 
 Basis of Presentation
 
 The financial information presented as of any date other than December 31, 2009 has been prepared from the books and records without audit.  Financial information as of December 31, 2009 has been derived from the audited financial statements of the Partnership, but does not include all disclosures required by generally accepted accounting principles to be included in audited financial statements.  In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial information for the periods indicated, have been included.  For further information regarding the Partnership’s accounting policies, refer to the financial statements and related notes included in the Partnership’s annual report on Form 10-K for the year ended December 31, 2009.  Operating results for the nine months ended September 30, 2010 are not necessarily indicative of financial results that may be expected for the full year ended December 31, 2010.
 
 Disclosure of Fair Value of Financial Instruments
 
 Estimated fair value was determined by management using available market information and appropriate valuation methodologies.  However, judgment was necessary to interpret market data and develop estimated fair value.  Cash, receivables, accounts payable and accrued expenses and other liabilities are carried at amounts which reasonably approximate their fair values as of September 30, 2010 and December 31, 2009.
 
 The Partnership’s long-term debt consists of notes payable, which are secured by specific technology equipment and are nonrecourse liabilities of the Partnership. The estimated fair value of this debt at September 30, 2010 and December 31, 2009 approximates the carrying value of these instruments, due to the interest rates approximating current market values.
 
 Disclosure about fair value of financial instruments is based on pertinent information available to management as of September 30, 2010 and December 31, 2009.
 
 Revenue Recognition
 
 Through September 30, 2010, we have solely entered into operating leases.  Lease revenue is recognized on a monthly straight-line basis which is in accordance with the terms of the lease agreement.
 
 Our leases do not contain any step-rent provisions or escalation clauses nor are lease revenues adjusted based on any index.
 
 7
 
 Use of Estimates
 
 The preparation of financial statements is in conformity with accounting principles generally accepted in the United States of America which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.
 
 Intangible Assets
 
 Equipment acquisition costs and deferred expenses are amortized on a straight-line basis over two-to-four year lives based on the original term of the lease and the loan, respectively.  Unamortized acquisition costs and deferred expenses are charged to amortization expense when the associated leased equipment is sold.
 
 Long-Lived Assets
 
 The Partnership evaluates its long-lived assets when events or circumstances indicate that the value of the asset may not be recoverable.  The Partnership determines whether impairment exists by estimating the undiscounted cash flows to be generated by each asset.  If the estimated undiscounted cash flows are less than the carrying value of the asset, impairment exists.  The amount of the impairment is determined based on the difference between the carrying value and the fair value.  The fair value is determined based on estimated discounted cash flows to be generated by the asset.
 
 Depreciation on technology equipment for financial statement purposes is based on the straight-line method estimated generally over useful lives of three or four years.
 
 Reimbursable Expenses
 
 Reimbursable expenses, which are charged to the Partnership by CCC in connection with the administration and operation of the Partnership, are allocated to the Partnership based upon several factors including, but not limited to, the number of investors, compliance issues, and the number of existing leases.  For example, if the Partnership has more investors than another program sponsored by CCC, then higher amounts of expenses related to investor services, mailing and printing costs will be allocated to the Partnership.  Also, while a Partnership is in its offering stage, higher compliance costs are allocated to it than to a program not in its offering stage, as compliance resources are utilized to review incoming investor suitability and proper documentation.  Finally, lease related expenses, such as due diligence, correspondence, collection efforts and analysis and staff costs, increase as programs purchase more leases, and decrease as leases terminate and equipment is sold. All of these factors contribute to CCC’s determination as to the amount of expenses to allocate to the Partnership or to other sponsored programs.  For the Partnership, all reimbursable expenses are expensed as they are incurred.
 
 Accounts Receivable
 
 The Partnership monitors accounts receivable to ensure timely and accurate payment by lessees.  Its Lease Relations department is responsible for monitoring accounts receivable and, as necessary, resolving outstanding invoices. Lease revenue is recognized on a monthly straight-line basis which is in accordance with the terms of the lease agreement.
 
 The Partnership reviews a customer’s credit history before extending credit. In the event of a default it may establish a provision for uncollectible accounts receivable based upon the credit risk of specific customers, historical trends and other information.
 
 8
 
 Cash and cash equivalents
 
 At September 30, 2010 cash was held in two accounts maintained at one financial institution.  The accounts were, in the aggregate, federally insured for up to $250,000.  At September 30, 2010, the total cash bank balance of approximately $160,000 did not exceed the federally insured limit of $250,000.
 
 The Partnership deposits its funds with a Moody's Aaa-Rated banking institution which is one of only three Aaa-Rated banks listed on the New York Stock Exchange.  The Partnership has not experienced any losses in such accounts, and believes it is not exposed to any significant credit risk. The amount in such accounts will fluctuate throughout 2010 due to many factors, including the pace of additional cash receipts, equipment acquisitions and distributions to investors.
 
 Income Taxes
 
 Pursuant to the provisions of Section 701 of the Internal Revenue Code, the Partnership is not subject to federal income taxes. All income and losses of the Partnership are the liability of the individual partners and are allocated to the partners for inclusion in their individual tax returns. The Partnership does not have any entity-level uncertain tax positions. In addition, the Partnership believes its tax status as a pass-through entity would be sustained under U.S. federal, state or local tax examination. The Partnership files U.S. federal and various state income tax returns and is generally subject to examination by federal, state and local income tax authorities for three years from the filing of a tax return.
 
 Taxable income differs from financial statement net income as a result of reporting certain income and expense items for tax purposes in periods other than those used for financial statement purposes, principally relating to depreciation, amortization, and lease revenue.
 
 Net Income (Loss) Per Equivalent Limited Partnership Unit
 
 The net income (loss) per equivalent limited partnership unit is computed based upon net income (loss) allocated to the limited partners and the weighted average number of equivalent units outstanding during the period.
 
 Recent Accounting Pronouncements
 
 In August 2010, the FASB issued ASU No. 2010-22 (“ASC Update 2010-22”),Accounting for Various Topics – Technical Corrections  to SEC Paragraphs, An announcement made by the staff of the SEC.. This ASU amends various SEC paragraphs of the FASB’s Accounting Standards Codification as a result of external comments received and the issuance of the SEC Staff Accounting Bulletin (SAB) 112 in June of 2009.  The issuance of ASU 2010-22 is not expected to significantly change current practice. This update does not impact the Partnership’s current accounting and reporting practices.
 
 In August 2010, the FASB issued ASU No. 2010-21. (“ASC Update 2010-21”), Accounting for Technical Amendments to Various SEC Rules and Schedules - Amendments to SEC Paragraphs Pursuant to Release No. 33-9026: Technical Amendments to Rules, Forms, Schedules and Codification of Financial Reporting Policies (SEC Update). This ASU amends various SEC paragraphs in the FASC pursuant to SEC Release No. 33-9026. The changes affect provisions relating to consolidation and reporting requirements under conditions of majority and minority ownership positions and ownership by both controlling and non-controlling entities.  The amendments also deal with redeemable and non-redeemable preferred stocks and convertible preferred stocks.  This update does not impact the Partnership’s current accounting and reporting practices.
 
 9
 
 In July 2010, the FASB issued Accounting Standards Update No. 2010-20 (“ASC Update 2010-20”)Receivables (Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses.  The purpose of this ASU is to improve transparency in financial reporting by public and nonpublic companies that hold financing receivables, which include loans, lease receivables, and other long-term receivables.  This ASU requires additional disclosures to assist financial statement users in assessing an entity’s credit risk exposures and evaluating the adequacy of its allowance for credit losses.  For public companies, the amendments that require disclosures as of the end of a reporting period are effective for periods ending on or after December 15, 2010. The amendments that require disclosures about activity that occurs during a reporting period are effective for periods beginning on or after December 15, 2010.  The Partnership is currently evaluating the potential impact of the adoption of this ASU on its financial statements.
 
 In January 2010, the FASB issued Accounting Standards Update No. 2010-06 (“ASC Update 2010-06”) Improving Disclosures about Fair Value Measurements, to enhance the usefulness of fair value measurements. ASU 2010-06 amends the disclosures about fair value measurements in FASB Accounting Standards CodificationTM (ASC) 820-10, Fair Value Measurements and Disclosures.  The amended guidance is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disaggregation requirement for the reconciliation disclosure of Level 3 measurements, which is effective for fiscal years beginning after December 15, 2010 and for interim periods within those years. The Partnership adopted this ASU in the first quarter of 2010. The adoption of this standard did not have a material impact on the Partnership’s financial statements.
 
 In January 2010, the FASB issued Accounting Standards Update No. 2010-04 (“ASC Update 2010-04”)Accounting for Various Topics – Technical Corrections to SEC Paragraphs.  The purpose of this ASU is to make technical corrections to certain guidance issued by the SEC that is included in the FASB Accounting Standards Codification (ASC).  Primarily, this ASU changes references to various FASB and AICPA pronouncements to the appropriate ASC paragraph numbers. The Partnership adopted this ASU in the first quarter of 2010. The adoption of this standard did not have a material impact on the Partnership’s financial statements.
 
 In December 2009, the FASB issued Accounting Standards Update No. 2009-17, (“ASC Update 2009-17”),Consolidations (ASC 810) – Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities. This ASU incorporates FAS 167, Amendments to FASB Interpretation No. 46(R),into the Codification. The new requirements are effective as of the beginning of thePartnership’s first fiscal year beginning after November 15, 2009. During the first quarter of 2010, the Partnership adopted this ASU. The adoption of this standard did not have a material impact on the Partnership’s financial statements.
 
 In December 2009, the FASB issued Accounting Standards Update No. 2009-16, (“ASC Update 2009-16”) Transfers and Servicing (ASC 860) – Accounting for Transfers of Financial Assets. This ASU incorporates FAS 166, Accounting for Transfers of Financial Assets—an amendment of FASB Statement No. 140,into the FASB Accounting Standards Codification (the Codification).The new requirements are effective for transfers of financial assets occurring in fiscal years beginning after November 15, 2009.This standard will require more information about transferred financial assets, including securitization transactions, and where entities have continuing exposure to the risks related to transferred financial assets. During the first quarter of 2010, the Partnership adopted this ASU. The adoption of this standard did not have a material impact on the Partnership’s financial statements.
 
 3. Information Technology Equipment
 
 The Partnership is the lessor of equipment under leases with periods that generally will range from 12 to 36 months.  In general, associated costs such as repairs and maintenance, insurance and property taxes are paid by the lessee.
 
 Through September 30, 2010, the Partnership has solely entered into operating leases.  Lease revenue is recognized on a monthly straight-line basis which is generally in accordance with the terms of the operating lease agreements.
 
 10
 The partnership determined no impairment charge was necessary at September 30, 2010.  For the period ended September 30, 2009 we determined that an impairment charge in the amount of approximately $87,000 was necessary.  This amount has been included in depreciation expense in the accompanying financial statements.
 
 Remarketing fees will be paid to the leasing companies from which the Partnership purchases leases.  These are fees that are earned by the leasing companies when the initial terms of the lease have been met and the lessee extends or renews the lease, or the equipment is sold.  The General Partner believes that this strategy adds value since it entices the leasing company to remain actively involved with the lessee and encourages potential extensions, remarketing or sale of equipment.  This strategy is designed to minimize any conflicts the leasing company may have with a new lessee and may assist in maximizing overall portfolio performance.
 
 The remarketing fee is tied into lease performance thresholds and is a factor in the negotiation of the up-front fee paid to the leasing company.  Remarketing fees incurred in connection with lease extensions are accounted for as operating costs.  Remarketing fees incurred in connection with the sale of technology equipment are included in our gain or loss calculations.  For the nine months ended September 30, 2010 and 2009, the Partnership incurred remarketing fees of approximately $97,000 and $51,000, respectively. For the nine months ended September 30, 2010 and 2009 the Partnership paid approximately $53,000 and $37,000, respectively, in such fees.
 
 CCC, on behalf of the Partnership and on behalf of other affiliated partnerships, acquires technology equipment subject to associated debt obligations and lease agreements and allocates a participation in the cost, debt and lease revenue to the various partnerships based on certain risk factors.    The Partnership’s share of the equipment in which it participates with other partnerships at September 30, 2010 was approximately $12,017,000 and is included in the Partnership’s fixed assets on its balance sheet.    The Partnership’s share of the outstanding debt associated with this equipment at September 30, 2010 was approximately $232,000.   The total cost of the equipment shared by the Partnership with other partnerships at September 30, 2010 was approximately $37,219,000.  The total outstanding debt related to the equipment shared by the Partnership at September 30, 2010 was approximately $997,000.
 
 The Partnership’s share of the equipment in which it participates with other partnerships at December 31, 2009 was approximately $11,564,000 and is included in the Partnership’s fixed assets on its balance sheet.  The total cost of the equipment shared by the Partnership with other partnerships at December 31, 2009 was approximately $34,907,000.   The Partnership’s share of the outstanding debt associated with this equipment at December 31, 2009 was $201,000.  The total outstanding debt related to the equipment shared by the Partnership at December 31, 2009 was approximately $973,000.
 
 Sharing in the acquisition of a lease portfolio gives the fund an opportunity to acquire additional assets and revenue streams, while allowing the fund to remain diversified and reducing its overall risk with respect to one portfolio.
 
 11
 
 The following is a schedule of future minimum rentals on non-cancellable operating leases at September 30, 2010:
 
 AmountThree Months ended December 31, 2010
$
543,000Year ended December 31, 2011

981,000Year ended December 31, 2012

328,000Year ended December 31, 2013

52,000$
1,904,000
 
 4. Related Party Transactions
 
 Receivables/Payables
 As of September 30, 2010, the Partnership’s related party receivables and payables are short term, unsecured, and non-interest bearing.
 
 Reimbursable expenses
 Reimbursable expenses, which are charged to the Partnership by CCC in connection with the administration and operation of the Partnership, are allocated to the Partnership based upon several factors including, but not limited to, the number of investors, compliance issues, and the number of existing leases.  See "Summary of Significant Accounting Policies - Reimbursable Expenses," above.
 
 Equipment acquisition fee
 The General Partner earns an equipment acquisition fee of 4% of the purchase price of each item of equipment purchased, as compensation for the negotiation of the acquisition of the equipment and lease thereof, or sale under a conditional sales contract.   At September 30, 2010, the remaining balance of prepaid acquisition fees was approximately $44,000, which is expected to be earned in future periods.
 
 Debt placement fee
 As compensation for arranging term debt to finance the acquisition of equipment by the Partnership, the General Partner is paid a fee equal to 1% of such indebtedness, provided, however, that such fee shall be reduced to the extent the Partnership incurs such fees to third parties, unaffiliated with the General Partner or the lender, with respect to such indebtedness and no such fee will be paid with respect to borrowings from the General Partner or its affiliates.
 
 Equipment management fee
 The General Partner is entitled to be paid for managing the equipment portfolio a monthly fee equal to the lesser of (i) the fees which would be charged by an independent third party for similar services for similar equipment or (ii) the sum of (a) two percent of (1) the gross lease revenues attributable to equipment which is subject to full payout net leases which contain net lease provisions plus (2) the purchase price paid on conditional sales contracts as received by the Partnership and (b) 5% of the gross lease revenues attributable to equipment which is subject to operating and capital leases.
 
 In an effort to increase future cash flow for the fund our General Partner has elected to reduce the percentage of equipment management fees paid to it from 5% to 2.5% of the gross lease revenues attributable to equipment which is subject to operating leases. The reduction of such fees began in July 2010.
 
 12
 
 E quipment liquidation fee
 With respect to each item of equipment sold by the General Partner (other than in connection with a conditional sales contract), a fee equal to the lesser of (i) 50% of the competitive equipment sale commission or (ii) three percent of the sales price for such equipment is payable to the General Partner.  The payment of such fee is subordinated to the receipt by the limited partners of (i) a return of their net capital contributions and a 10% per annum cumulative return, compounded daily, on adjusted capital contributions and (ii) the net disposition proceeds from such sale in accordance with the Partnership Agreement.  Such fee will be reduced to the extent any liquidation or resale fees are paid to unaffiliated parties.
 
 
 For the nine months ended September 30,

2010


2009we incurred the following:Reimbursable expenses

$
563,000


$
926,000Equipment acquisition fee

$
22,000


$
124,000Debt placement fee

$
2,000


$
-Equipment management fee

$
100,000


$
216,000Equipment liquidation fee

$
11,000


$
5,000
 
 5. Notes Payable
 
 Notes payable consisted of the following amounts:
 
 September 30,

2010

December 31,

2009Installment notes payable to banks; interest ranging from 5.40% to 5.85% due in quarterly installments of  $23,643 and  $31,661, including interest, with final payments from January through July 2010

$
-


$
115,000Installment note payable to bank; interest at 5.75% due in quarterly installments of $22,756 including interest, with final payment in January 2011


45,000



109,000Installment note payable to bank; interest at 6.21%, due in monthly installments of $1,368, including interest, with final payment in May 2012


26,000



37,000Installment note payable to bank; interest at 7.50%, due in monthly installments of $6,666, including interest, with final payment in April 2013


187,000



-$
258,000


$
261,000
 
 These notes are secured by specific technology equipment and are nonrecourse liabilities of the Partnership.  As such, the notes do not contain any debt covenants with which we must comply on either an annual or quarterly basis.  Aggregate maturities of notes payable for each of the periods subsequent to June 30, 2010 are as follows:
 
 AmountThree months ending December 31, 2010
$
43,000Year ended December 31, 2011

107,000Year ended December 31, 2012

82,000Year ended December 31, 2013

26,000$
258,000
 
 
 13
 
 6. Supplemental Cash Flow Information
 
 Other noncash activities included in the determination of net loss are as follows:
 
 Nine months ended September 30,
2010
2009Lease revenue net of interest expense on notes payable realized as a result of  direct payment of principal by lessee to bank
$  217,000
$  1,023,000
 
 No interest or principal on notes payable was paid by the Partnership because direct payment was made by lessee to the bank in lieu of collection of lease income and payment of interest and principal by the Partnership.
 
 Noncash investing and financing activities include the following:
 
 Nine months ended September 30,,
2010
2009Debt assumed in connection with purchase of technology equipment
$  214,000
$  -Equipment acquisition fees earned by General Partner, upon purchase of equipment
$  22,000
$  124,000
 
 During the period ended September 30, 2010, the Partnership wrote-off fully amortized acquisition and finance fees of approximately $282,000.
 
 7. Commitments and Contingencies
 
 On June 18, 2010, Commonwealth Capital Corp. (the parent of our general partner) filed suit on our behalf against Allied Health Care Services Inc. (“Allied”).  Allied is a lessee of medical equipment, and has failed to make its monthly lease payments since March 2010.  Our suit for breach of contract against Allied and its owner, Charles K. Schwartz, pursuant to a partial personal guaranty, was filed in the U.S. District Court for the District of New Jersey (Case No 2:10-cv-03135), and seeks payment of all outstanding rents, the value of leased equipment, and all costs of collection, including attorney’s fees.
 
 On August 19, 2010, an involuntary petition for relief under Chapter 7 of the Bankruptcy Code was filed against Allied in the U.S. Bankruptcy Court for the District of New Jersey.  On September 3, 2010, Charles Schwartz, the owner of Allied, was arrested by the FBI for alleged mail fraud in connection with his medical equipment leasing business.  Additionally, Commonwealth was one of the petitioning creditors in an involuntary Chapter 7 bankruptcy petition filed against Mr. Schwartz personally on September 17, 2010, in the same court.
 
 In an effort to reduce potential loss related to the Allied matter, our general partner ceased booking revenues on the Allied leases completely in July 2010, thereby eliminating future equipment management fees on the Allied leases.
 
 Due to the bankruptcy proceedings, management can not determine, at this time, the status of the equipment leased to Allied or the amounts that may ultimately be paid to us from the bankruptcy estates.  Our share of exposure related to the equipment of the Allied default (if no rent is collected, the equipment is not paid for and/or we are unable to obtain performance under partial personal guaranty) is approximately $822,000 as of September 30, 2010 net of an approximately 70% reserve taken against the Allied receivables.
 
 The Partnership’s legal proceedings against the City of Tempe, Arizona remain open.  Please see the description of the MobilePro/Tempe proceedings in the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 under the heading “Legal Proceedings” for a more complete description of this matter.  The parties have each submitted motions for summary judgment, as well as briefs in support of these motions.  Tempe’s motion for summary judgment was denied, and our motion for summary judgment was granted in part (as to an issue regarding ownership of the equipment) and denied in part.  Therefore, the case is progressing toward trial.  Our General Partner may engage in settlement discussions with the City of Tempe prior to trial.  To date, the Partnership has taken reserves against outstanding rentals of approximately $31,000 to cover potential loss exposure.
 
 14
 
 Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
 FORWARD LOOKING STATEMENTS
 
 Forward-looking statement disclaimers, or the “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995.
 
 This section, as well as other portions of this document, includes certain forward-looking statements about our business and our prospects, tax treatment of certain transactions and accounting matters, sales of securities, expenses, cash flows, distributions, investments and operating and capital requirements. Such forward-looking statements include, but are not limited to: acquisition policies of our general partner; the nature of present and future leases; provisions for uncollectible accounts; the strength and sustainability of the U.S. economy; the continued difficulties in the credit markets and their impact on the economy in general; and the level of future cash flow, debt levels, revenues, operating expenses, amortization and depreciation expenses. You can identify those statements by the use of words such as “could,” “should,” “would,” “may,” “will,” “project,” “believe,” “anticipate,” “expect,” “plan,” “estimate,” “forecast,” “potential,” “intend,” “continue” and “contemplate,” as well as similar words and expressions.
 
 Actual results may differ materially from those in any forward-looking statements because any such statements involve risks and uncertainties and are subject to change based upon various important factors, including, but not limited to, nationwide economic, financial, political and regulatory conditions; the health of debt and equity markets, including interest rates and credit quality; the level and nature of spending in the information, medical and telecommunications technologies markets; and the effect of competitive financing alternatives and lease pricing.
 
 Readers are also directed to other risks and uncertainties discussed in other documents we file with the SEC, including, without limitation, those discussed in Item 1A. “Risk Factors.” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2009 filed with the SEC. We undertake no obligation to update or revise any forward-looking information, whether as a result of new information, future developments or otherwise.
 
 CRITICAL ACCOUNTING POLICIES
 
 Our discussion and analysis of our financial condition and results of operations are based upon our financial statements which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We base these estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
 
 We believe that our critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements.
 
 See Note 2 to our condensed financial statements included herein for a discussion of recent accounting pronouncements.
 
 INFORMATION TECHNOLOGY EQUIPMENT
 
 CCC, on our behalf and on behalf of other affiliated partnerships, acquires information technology equipment subject to associated debt obligations and lease revenue and allocates a participation in the cost, debt and lease revenue to the various partnerships based on certain risk factors.  Depreciation on information technology equipment for financial statement purposes is based on the straight-line method estimated generally over useful lives of three to four years.
 
 According to the North American Equipment Dealers Association, American companies are increasing their purchases of equipment and software at the fastest pace since the late 1990's, in order to replace older equipment or to improve efficiency.
 
 In October 2010, the ELFA released its 2010 State of the Equipment Finance Industry Report.  According to the report, the Commerce Department stated that equipment purchases in the second quarter of 2010 increased by nearly 22% (based on an inflation-adjusted annual rate). Also, with more restrictive bank regulations and capital requirements, corporations have reduced commercial borrowing for new equipment purchases.  Given the tighter lending environment, corporations have been relying on internal liquidity to finance new equipment investments, according to the report.
 
 The ELFA reports states that the trend of equipment finance volume improved significantly from April 2010 to July 2010, as evidenced by the slowing decline of month over month new business volume comparisons, and that many industry leaders and analysts expect significant growth to return over the next 4 quarters.
 
 ACCOUNTS RECEIVABLE
 
 We monitor our accounts receivable to ensure timely and accurate payment by lessees.  Our Lease Relations department is responsible for monitoring accounts receivable and, as necessary, resolving outstanding invoices. Lease revenue is recognized on a monthly straight-line basis which is in accordance with the terms of the lease agreement.
 
 We review a customer’s credit history before extending credit. In the event of a default, we may establish a provision for uncollectible accounts receivable based upon the credit risk of specific customers, historical trends or other information.
 
 15
 
 REVENUE RECOGNITION
 
 Through September 30, 2010, we have solely entered into operating leases.  Lease revenue is recognized on a monthly straight-line basis which is in accordance with the terms of the lease agreement.
 
 Our leases do not contain any step-rent provisions or escalation clauses nor are lease revenues adjusted based on any index.
 
 LONG-LIVED ASSETS
 
 We evaluate our long-lived assets when events or circumstances indicate that the value of the asset may not be recoverable.  We determine whether impairment exists by estimating the undiscounted cash flows to be generated by each asset.  If the estimated undiscounted cash flows are less than the carrying value of the asset then impairment exists.  The amount of the impairment is determined based on the difference between the carrying value and the fair value.  The fair value is determined based on estimated discounted cash flows to be generated by the asset.
 
 LIQUIDITY AND CAPITAL RESOURCES
 
 Sources of Cash
 
 Our primary source of cash for the nine months ended September 30, 2010 was provided by operating activities of approximately $1,518,000 and the proceeds from the sale of technology equipment of approximately $318,000.  This compares to the nine months ended September 30, 2009 where our primary source of cash was from operating activities of approximately $2,285,000 and proceeds from the sale of information technology equipment of approximately $160,000.
 
 Uses of Cash
 
 Our primary use of cash for the nine months ended September 30, 2010 was for distributions to partners of approximately $1,857,000 and for the purchase of new information technology equipment of approximately $333,000.  For the nine months ended September 30, 2009 distributions to partners were approximately $1,866,000, and our capital expenditures were approximately $3,108,000.
 
 Capital expenditures and distributions are expected to generally remain constant during the remainder of 2010. We intend to invest approximately $200,000 in additional equipment during the remainder of 2010.  The acquisition of this equipment will be primarily funded by debt financing. Any debt service will be funded from cash flows from lease rental payments, and not from public offering proceeds.
 
 In an effort to increase future cash flow for the fund our General Partner has elected to reduce the percentage of equipment management fees paid to it from 5% to 2.5% of the gross lease revenues attributable to equipment which is subject to operating leases. The reduction of such fees began in July 2010.
 
 Cash from Operating Activities
 
 Cash was provided by operating activities for the nine months ended September 30, 2010 of approximately $1,518,000, which includes a net loss of approximately $1,255,000 and depreciation and amortization expenses of approximately $3,026,000. Other non-cash activities included in the determination of net loss include direct payments of lease income by lessees to banks of approximately $217,000. Additionally we had a gain on the sale of equipment in the amount of $253,000.
 
 For the nine months ended September 30, 2009, the Partnership generated cash flows from operating activities of approximately $2,285,000, which includes a net loss of approximately $1,424,000, a gain on sale of computer equipment of approximately $17,000 and depreciation and amortization expenses of approximately $4,549,000.  Other non-cash activities included in the determination of net income include direct payments of lease income by lessees to banks of approximately $1,023,000.
 
 16
 
 Cash and cash equivalents
 
 At September 30, 2010 cash was held in two accounts maintained at one financial institution.  The accounts were, in the aggregate, federally insured for up to $250,000.  At September 30, 2010, the total cash bank balance of approximately $160,000 did not exceed the federally insured limit of $250,000.
 
 We deposit our funds with a Moody's Aaa-Rated banking institution which is one of only three Aaa-Rated banks listed on the New York Stock Exchange.  We have not experienced any losses in such accounts, and believe we are not exposed to any significant credit risk. The amount in such accounts will fluctuate throughout 2010 due to many factors, including the pace of additional cash receipts, equipment acquisitions and distributions to investors.
 
 As of September 30, 2010, we had future minimum rentals on non-cancelable operating leases of approximately $543,000 for the balance of the year ending December 31, 2010 and approximately $1,361,000 thereafter.
 
 As of September 30, 2010, our debt was approximately $258,000, with interest rates ranging from 5.40% to 7.50%, payable through April 2013.
 
 Our cash from operations is expected to continue to be adequate to cover all operating expenses, liabilities, and distributions to Partners during the next 12-month period.   If available cash flow or net equipment disposition proceeds are insufficient to cover our expenses and liabilities on a short and long term basis, we will attempt to obtain additional funds by disposing of or refinancing equipment, or by borrowing within our permissible limits.  Since our leases are triple-net leases, and therefore no reserve for maintenance and repairs is deemed necessary.
 
 RESULTS OF OPERATIONS
 
 Three months ended September 30, 2010 compared to
 three months ended September 30, 2009
 Revenue
 
 For the three months ended September 30, 2010, we recognized revenue of approximately $730,000.   This compares to the three months ended September 30, 2009, where we recognized revenue of approximately $1,365,000.  The decrease in revenue from the prior period is primarily due to a decrease in lease revenue.
 
 Our lease revenue decreased to approximately $562,000 for the three months ended September 30, 2010, from approximately $1,326,000 for the three months ended September 30, 2009.  This decrease was primarily due to more lease agreements ending versus new lease agreements being acquired during the three months ended September 30, 2010.
 
 Interest revenue from cash held at financial institutions decreased to approximately $6,000 for the three months ended September 30, 2010 from approximately $41,000 for the three months ended September 30, 2009 which is consistent with the decrease in cash due to new equipment purchases and distributions for the same period. The amounts in such accounts that generate interest revenue will fluctuate throughout 2010 due to many factors, including the pace of cash receipts, equipment acquisitions and distributions to limited partners.
 
 Sale of Information Technology Equipment
 
 We sold equipment with a net book value of approximately $20,000 for the three months ended September 30, 2010, for a net gain of approximately $162,000. This compared to equipment that we sold for the three months ended September 30, 2009 with a net book value of approximately $109,000, for a net loss of approximately $2,000.
 
 17
 Operating Expenses
 
 Our operating expenses, excluding depreciation, primarily consist of accounting and legal fees, outside service fees and reimbursement of expenses to CCC for administration and operation of the Partnership.  These expenses decreased to approximately $159,000 for the three months ended September 30, 2010, from approximately $266,000 for the three months ended September 30, 2009.  This decrease is primarily attributable to decreases in accounting, legal remarketing and various administrative expenses. This decrease was partially offset by an increase in investor services related expenses.
 
 Equipment Management Fees
 
 We pay an equipment management fee to our General Partner for managing our equipment portfolio. In an effort to increase future cash flow for the fund our General Partner has elected to reduce the percentage of equipment management fees paid to it from 5% to 2.5% of the gross lease revenues attributable to equipment which is subject to operating leases. The reduction of such fees began in July 2010.  The equipment management fee decreased to approximately $14,000 for the three months ended September 30, 2010 from approximately $66,000 for the three months ended September 30, 2009, which is consistent with the decrease in lease revenue and the reduction of the percentage used to calculate equipment management fee.
 
 Depreciation and Amortization Expense
 
 Depreciation and amortization expenses consist of depreciation on information technology equipment and amortization of equipment acquisition fees. These expenses decreased to approximately $890,000 for the three months ended September 30, 2010, from approximately $1,600,000 for the three months ended September 30, 2010. This decrease was due to equipment being fully depreciated and not being replaced with new equipment, and to the full amortization of acquisition fees.
 
 The partnership determined no impairment charge was necessary for the three months ended September 30, 2010 and 2009.
 
 Net Income (Loss)
 
 For the three months ended September 30, 2010, we recognized revenue of approximately $730,000 and expenses of approximately $1,117,000, resulting in a net loss of approximately $387,000.  This net loss is primarily due to depreciation and amortization expenses for the three months ended September 30, 2010 which were greater than lease revenue for the same period.  We depreciate equipment over its useful life, usually 48 months while lease revenue is recognized over the term of the lease which is typically 36 months.  Several of our leases reached the end of their lease term but equipment continued being depreciated. Therefore depreciation expense was greater than lease revenue.  For the three months ended September 30, 2009, we recognized revenue of approximately $1,365,000 and expenses of approximately $ 1,945,000, resulting in a net loss of approximately $580,000.
  Nine months ended September 30, 2010 compared to
 nine months ended September 30, 2009
 Revenue
 
 For the nine months ended September 30, 2010, we recognized revenue of approximately $2,567,000.  This compares to the nine months ended September 30, 2009, where we recognized revenue of approximately $4,403,000.    The decrease in revenue from the prior period is primarily due to a decrease in lease revenue.
 
 Our lease revenue decreased to approximately $2,276,000 for the nine months ended September 30, 2010, from approximately $4,312,000 for the nine months ended September 30, 2009.  This decrease was primarily due to more lease agreements ending versus new lease agreements being acquired during the nine months ended September 30, 2010.
 
 Sale of Information Technology Equipment
 
 We sold equipment with a net book value of approximately $62,000 for the nine months ended September 30, 2010, for a net gain of approximately $253,000. This compares to equipment that we sold for the nine months ended September 30, 2009 with a net book value of approximately $143,000, for a net gain of approximately $17,000.
 
 18
 
 Operating Expenses
 
 Our operating expenses, excluding depreciation, primarily consist of accounting and legal fees, outside service fees and reimbursement of expenses to CCC for administration and operation of the Partnership.  These expenses decreased to approximately $610,000 for the nine months ended September 30, 2010, from approximately $1,001,000 for the nine months ended September 30, 2009.  This decrease is primarily attributable to decreases in accounting, legal, remarketing and various administrative expenses. This decrease was partially offset by an increase in investor services related expenses.
 
 Equipment Management Fees
 
 We pay an equipment management fee to our General Partner for managing our equipment portfolio. In an effort to increase future cash flow for the fund our General Partner has elected to reduce the percentage of equipment management fees paid to it from 5% to 2.5% of the gross lease revenues attributable to equipment which is subject to operating leases. The reduction of such fees began in July 2010.  The equipment management fee decreased to approximately $100,000 for the nine months ended September 30, 2010 from approximately $216,000 for the nine months ended September 30, 2009, which is consistent with the decrease in lease revenue and the reduction of the percentage used to calculate the equipment management fee.
 
 Depreciation and Amortization Expense
 
 Depreciation and amortization expenses consist of depreciation on information technology equipment and amortization of equipment acquisition fees. These expenses decreased to approximately $3,026,000 for the nine months ended September 30, 2010, from $4,549,000 for the nine months ended September 30, 2010. This decrease was due to equipment and acquisition fees being fully depreciated and not being replaced with new equipment, and to the full amortization of acquisition fees.
 
 The partnership determined no impairment charge was necessary at September 30, 2010.  For the period ended September 30, 2009 we determined that an impairment charge in the amount of approximately $87,000 was necessary.  This amount has been included in depreciation expense in the accompanying financial statements.
 
 Net Income (Loss)
 
 For the nine months ended September 30, 2010, we recognized revenue of approximately $2,567,000 and expenses of approximately $3,822,000, resulting in a net loss of approximately $1,255,000.  This net loss is primarily due to depreciation and amortization expenses for the nine months ended September 30, 2010 which were greater than lease revenue for the same period.  We depreciate equipment over its useful life, usually 48 months while lease revenue is recognized over the term of the lease which is typically 36 months.  Several of our leases reached the end of their lease term but equipment continued being depreciated.  Therefore depreciation expense was greater than lease revenue.  For the nine months ended September 30, 2009, we recognized revenue of approximately $4,403,000 and expenses of approximately $5,828,000, resulting in a net loss of approximately $1,425,000.
 
 Item 3.Quantitative and Qualitative Disclosures About Market Risk
 
 N/A
 
 Item 4T.  Controls and Procedures
 
 Our management, under the supervision and with the participation of the principal executive officer and principal financial officer, have evaluated the effectiveness of our controls and procedures related to our reporting and disclosure obligations as of September 30, 2010 which is the end of the period covered by this Quarterly Report on Form 10-Q.  Based on that evaluation, the principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are effective to provide that (a) material information relating to us, including our consolidated affiliates is made known to these officers by us and our consolidated affiliates’ other employees, particularly material information related to the period for which this periodic report is being prepared; and (b) this information is recorded, processed, summarized, evaluated and reported, as applicable, within the time periods specified in the rules and forms promulgated by the Securities and Exchange Commission.  There have been no significant changes in the General Partner’s internal controls or in other factors that could significantly affect our disclosure controls and procedures in the third quarter of 2010 or subsequent to the date of the evaluation.
 
 19
 
 Part II:   OTHER INFORMATION
 
 Item 1.  Legal Proceedings
 
 On June 18, 2010, Commonwealth Capital Corp. (the parent of our general partner) filed suit on our behalf against Allied Health Care Services Inc. (“Allied”).  Allied is a lessee of medical equipment, and has failed to make its monthly lease payments since March 2010.  Our suit for breach of contract against Allied and its owner, Charles K. Schwartz, pursuant to a partial personal guaranty, was filed in the U.S. District Court for the District of New Jersey (Case No 2:10-cv-03135), and seeks payment of all outstanding rents, the value of leased equipment, and all costs of collection, including attorney’s fees.
 
 On August 19, 2010, an involuntary petition for relief under Chapter 7 of the Bankruptcy Code was filed against Allied in the U.S. Bankruptcy Court for the District of New Jersey.  On September 3, 2010, Charles Schwartz, the owner of Allied, was arrested by the FBI for alleged mail fraud in connection with his medical equipment leasing business.  Additionally, Commonwealth was one of the petitioning creditors in an involuntary Chapter 7 bankruptcy petition filed against Mr. Schwartz personally on September 17, 2010, in the same court.
 
 In an effort to reduce potential loss related to the Allied matter, our general partner ceased booking revenues on the Allied leases completely in July 2010, thereby eliminating future equipment management fees on the Allied leases.
 
 Due to the bankruptcy proceedings, management can not determine, at this time, the status of the equipment leased to Allied or the amounts that may ultimately be paid to us from the bankruptcy estates.  Our share of exposure related to the equipment of the Allied default (if no rent is collected, the equipment is not paid for and/or we are unable to obtain performance under partial personal guaranty) is approximately $822,000 as of September 30, 2010 net of an approximately 70% reserve taken against the Allied receivables.
 
 Commonwealth is aggressively pursuing all of our rights against both Allied and Mr. Schwartz to recover any potential assets to the greatest extent possible.
 
 The Partnership’s legal proceedings against the City of Tempe, Arizona remain open.  Please see the description of the MobilePro/Tempe proceedings in the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 under the heading “Legal Proceedings” for a more complete description of this matter.  The parties have each submitted motions for summary judgment, as well as briefs in support of these motions.  Tempe’s motion for summary judgment was denied, and our motion for summary judgment was granted in part (as to an issue regarding ownership of the equipment) and denied in part.  Therefore, the case is progressing toward trial.  Our General Partner may engage in settlement discussions with the City of Tempe prior to trial.  To date, the Partnership has taken reserves against outstanding rentals of approximately $31,000 to cover potential loss exposure.
 
 Item 1A.
Risk FactorsN/AItem 2.
Unregistered Sales of Equity Securities and Use of ProceedsN/AItem 3.
Defaults Upon Senior SecuritiesN/AItem 4.
Submission of Matters to a Vote of Securities HoldersN/AItem 5.
Other InformationN/A   20
  Item 6.
Exhibits
  31.1 THE RULE 15d-14(a) CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
 31.2 THE RULE 15d-14(a) CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
 32.1 SECTION 1350 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
 32.2 SECTION 1350 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
 
 
 SIGNATURES
 
 Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 COMMONWEALTH INCOME & GROWTH FUND VBY: COMMONWEALTH INCOME & GROWTH FUND, INC., General Partner
 
 
 November 15, 2010
By: /s/ Kimberly A. Springsteen-AbbottDate
Kimberly A. Springsteen-AbbottChief Executive OfficerNovember 15, 2010
By: /s/  Lynn A. FranceschinaDate
Lynn A. FranceschinaExecutive Vice President, Chief Operating Officer