<PAGE>

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

                                    FORM 10-Q

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2006

[_]  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, L.P.
             (Exact name of registrant as specified in its charter)

          Pennsylvania                                  65-1189593
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
incorporation or organization)

                         Brandywine Bldg. One, Suite 200
                                 2 Christy Drive
                              Chadds Ford, PA 19317
          (Address, including zip code, of principal executive offices)

                                 (610) 594-9600
               (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 [X] 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. (Check
one):

     Large accelerated filer [_] Accelerated filer [_] Non-accelerated filer [X]

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

<PAGE>

                                    FORM 10-Q
                                  JUNE 30, 2006

                                TABLE OF CONTENTS

                                     PART I

Item 1.  Condensed Financial Statements                                        3
Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations                                  12
Item 3.  Quantitative and Qualitative Disclosures About Market Risk           15
Item 4.  Controls and Procedures                                              16

                                     PART II

Item 1.  Legal Proceedings                                                    16
Item 1A. Risk Factors                                                         16
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.         18
Item 3.  Defaults Upon Senior Securities                                      18
Item 4.  Submission of Matters to a Vote of Securities Holders                18
Item 5.  Other Information                                                    18
Item 6.  Index to Exhibits

         Signatures

         Certifications


                                                                               2

<PAGE>

                    COMMONWEALTH INCOME & GROWTH FUND V, L.P.
                             CONDENSED BALANCE SHEET

<TABLE>
<CAPTION>
                                                           JUNE 30,     DECEMBER 31,
                                                             2006           2005
                                                         ------------   ------------
                                                          (UNAUDITED)
<S>                                                       <C>            <C>
ASSETS

Cash and cash equivalents                                 $11,136,299    $10,722,300
Lease income receivable, net of reserves of $0 as of
   June 30, 2006 and December 31, 2005                        262,711         91,047
Other receivable - Affiliates                                 118,870         71,259
Other receivables                                                  --         94,293
Prepaid Fees                                                   13,705             --
                                                          -----------    -----------
                                                           11,531,585     10,978,899
                                                          -----------    -----------
Computer equipment, at cost                                10,344,032      5,480,291
Accumulated depreciation                                   (1,317,229)      (289,811)
                                                          -----------    -----------
                                                            9,026,803      5,190,480
                                                          -----------    -----------
Equipment acquisition costs and deferred expenses, net        361,046        211,190
Prepaid acquisition fees                                      530,963        483,504
                                                          -----------    -----------
                                                              892,009        694,694
                                                          -----------    -----------
TOTAL ASSETS                                              $21,450,397    $16,864,073
                                                          ===========    ===========
LIABILITIES AND PARTNERS' CAPITAL

LIABILITIES
Accounts payable                                          $   343,349    $   138,832
Accounts payable - General Partner                             83,692         61,224
Accounts payable - Commonwealth Capital Corp.                  48,342         39,258
Unearned lease income                                         121,500         45,867
Notes Payable                                               1,837,670        785,157
                                                          -----------    -----------
TOTAL LIABILITIES                                           2,434,553      1,070,338
                                                          -----------    -----------
PARTNERS' CAPITAL

General partner                                                 1,000          1,000
Limited partners                                           19,014,844     15,792,735
                                                          -----------    -----------
TOTAL PARTNERS' CAPITAL                                    19,015,844     15,793,735
                                                          -----------    -----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL                   $21,450,397    $16,864,073
                                                          ===========    ===========
</TABLE>

            see accompanying notes to condensed financial statements


                                                                               3

<PAGE>

                       COMMONWEALTH INCOME & GROWTH FUND V
                       CONDENSED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                           FOR THE PERIOD OF
                                                                                               MARCH 14,
                                                       THREE-MONTHS ENDED     SIX-MONTHS    (COMMENCEMENT OF
                                                                                 ENDED         OPERATIONS)
                                                      JUNE 30,     JUNE 30,    JUNE 30,    THROUGH JUNE 30,
                                                        2006         2005        2006             2005
                                                     ----------   ---------   ----------   -----------------
                                                           (UNAUDITED)                  (UNAUDITED)
<S>                                                  <C>          <C>         <C>              <C>
INCOME
Lease                                                $  762,116   $  16,739   $1,366,704       $  17,476
Interest and other                                      118,198           1      167,623               2
                                                     ----------   ---------   ----------       ---------
TOTAL INCOME                                            880,314      16,740    1,534,326          17,478
                                                     ----------   ---------   ----------       ---------
EXPENSES
Operating                                               257,596     205,787      612,086         227,659
Organizational costs                                         --      53,860       36,751          79,799
Equipment management fee - General Partner               41,848         837       72,077             874
Interest                                                 20,885          --       37,057              --
Depreciation                                            587,678      12,527    1,027,417          13,475
Amortization of equipment
   acquisition costs and deferred expenses               33,041         668       57,436             719
Miscellaneous                                               230          --          230              --
                                                     ----------   ---------   ----------       ---------
TOTAL EXPENSES                                          941,278     273,679    1,843,054         322,526
                                                     ----------   ---------   ----------       ---------
NET (LOSS)                                           $  (60,963)  $(256,939)    (308,729)       (305,048)
                                                     ==========   =========   ==========       =========
NET (LOSS) ALLOCATED TO LIMITED PARTNERS             $  (65,730)  $(257,958)    (319,974)       (306,068)
                                                     ==========   =========   ==========       =========
NET (LOSS) PER EQUIVALENT LIMITED
   PARTNERSHIP UNIT                                  $    (0.05)  $   (0.68)       (0.26)          (0.80)
                                                     ==========   =========   ==========       =========
WEIGHTED AVERAGE NUMBER OF EQUIVALENT LIMITED
   PARTNERSHIP UNITS OUTSTANDING DURING THE PERIOD    1,249,951     262,747    1,249,951         232,900
                                                     ==========   =========   ==========       =========
</TABLE>

            see accompanying notes to condensed financial statements


                                                                               4

<PAGE>

                    COMMONWEALTH INCOME & GROWTH FUND V, L.P.

                    CONDENSED STATEMENTS OF PARTNERS' CAPITAL

                     FOR THE SIX MONTHS ENDED JUNE 30, 2006
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                             GENERAL    LIMITED
                             PARTNER    PARTNER     GENERAL     LIMITED
                              UNITS      UNITS      PARTNER     PARTNERS       TOTAL
                             -------   ---------   --------   -----------   -----------
<S>                             <C>    <C>         <C>        <C>           <C>
BALANCE, December 31, 2005      50       985,494   $  1,000   $15,792,735   $15,793,735
Contributions                            264,457                5,254,658     5,254,658
Offering costs                                                   (593,264)     (593,264)
Net income (loss)                                    11,245      (319,974)     (308,729)
Distributions                                       (11,245)   (1,119,311)   (1,130,556)
                                --     ---------   --------   -----------   -----------
BALANCE, JUNE 30, 2006          50     1,249,951   $  1,000   $19,014,844   $19,015,844
                                ==     =========   ========   ===========   ===========
</TABLE>

            see accompanying notes to condensed financial statements


                                                                               5

<PAGE>

                    COMMONWEALTH INCOME & GROWTH FUND V, L.P.

                        CONDENSED STATEMENTS OF CASH FLOW
     FOR THE SIX MONTHS ENDED JUNE 30, 2006 AND THE PERIOD OF MARCH 14, 2005
               (COMMENCEMENT OF OPERATIONS) THROUGH JUNE 30, 2005

                                                          2006         2005
                                                      (UNAUDITED)   (UNAUDITED)
                                                      -----------   -----------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES   $   727,396    $ (136,769)
                                                      -----------    ----------
Capital expenditures                                   (3,589,483)     (456,481)
Prepaid acquisition fees                                  (47,459)     (236,090)
Equipment acquisition fees paid to General Partner       (194,550)      (18,259)
                                                      -----------    ----------
NET CASH (USED IN) INVESTING ACTIVITIES                (3,831,492)     (710,830)
                                                      -----------    ----------
Contributions                                           5,254,658     7,599,940
Distributions                                          (1,130,556)     (101,944)
Offering costs                                           (593,264)     (925,384)
Debt Placement fees paid to General Partner               (12,743)           --
                                                      -----------    ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES               3,518,095     6,572,612
                                                      -----------    ----------
Net increase in cash and cash equivalents                 413,999     5,725,013
Cash and cash equivalents, beginning of period         10,722,300         1,067
                                                      -----------    ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD              $11,136,299    $5,726,080
                                                      ===========    ==========

            see accompanying notes to condensed financial statements


                                                                               6

<PAGE>

                     NOTES TO CONDENSED FINANCIAL STATEMENTS

1. BUSINESS                      Commonwealth Income & Growth Fund V (the
                                 "Partnership") is a limited partnership
                                 organized in the Commonwealth of Pennsylvania
                                 on May 19, 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.

                                 The Partnership uses the proceeds of the
                                 Offering to acquire, own and lease various
                                 types of computer IT equipment and other
                                 similar capital equipment, which will be leased
                                 primarily to U.S. corporations and
                                 institutions. Commonwealth Capital Corp,
                                 ("CCC"), on behalf of the Partnership and other
                                 affiliated partnerships, will acquire computer
                                 equipment subject to associated debt
                                 obligations and lease agreements and allocate a
                                 participation in the cost, debt and lease
                                 revenue to the various partnerships based on
                                 certain risk factors.

                                 The Partnership's General Partner is
                                 Commonwealth Income & Growth Fund, Inc. (the
                                 "General Partner"), a Pennsylvania corporation
                                 which is an indirect wholly owned subsidiary of
                                 Commonwealth Capital Corp. Approximately ten
                                 years after the commencement of operations, the
                                 Partnership intends to sell or otherwise
                                 dispose of all of its computer equipment, make
                                 final distributions to partners, and to
                                 dissolve. Unless sooner terminated, the
                                 Partnership will continue until December 31,
                                 2015.

2. SUMMARY OF SIGNIFICANT        BASIS OF PRESENTATION
   ACCOUNTING
   POLICIES                      The financial information presented as of any
                                 date other than December 31 has been prepared
                                 from the books and records without audit.
                                 Financial information as of December 31 has
                                 been derived from the audited financial
                                 statements of the Partnership, but does not
                                 include all disclosures required by accounting
                                 principles generally accepted in the United
                                 States of America. 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, 2005. Operating
                                 results for the six-month period ended June 30,
                                 2006 are not necessarily indicative of
                                 financial results that may be expected for the
                                 full year ended December 31, 2006.


                                                                               7

<PAGE>

                                 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 an 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 an
                                 impairment exists. The amount of the impairment
                                 is determined based on the difference between
                                 the carrying value and the fair value. Fair
                                 value is determined based on estimated
                                 discounted cash flows to be generated by the
                                 asset. The partnership determined that no
                                 impairment existed as of June 30, 2006.

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

                                 NET INCOME (LOSS) PER EQUIVALENT LIMITED
                                 PARTNERSHIP UNIT

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

3. COMPUTER EQUIPMENT            The Partnership is the lessor of equipment
                                 under operating leases with periods ranging
                                 from 14 to 48 months. In general, associated
                                 costs such as repairs and maintenance,
                                 insurance and property taxes are paid by the
                                 lessee.

                                 Through June 30, 2006, the Partnership's
                                 leasing operations consisted of operating
                                 leases. Operating lease revenue is recognized
                                 on a monthly basis in accordance with the terms
                                 of the lease agreement.

                                 Remarketing fees are paid to the leasing
                                 companies from which the Partnership purchases
                                 leases. These are fees that are earned by the
                                 leasing companies when the initial terms of the
                                 lease have been met. The General Partner
                                 believes that this strategy adds value since it
                                 entices the leasing company to "stay with the
                                 lease" for potential extensions, remarketing or
                                 sale of equipment. This strategy potentially
                                 minimizes any conflicts the leasing company may
                                 have with a potential new lease and will
                                 potentially assist in maximizing overall
                                 portfolio performance. The remarketing fee is
                                 tied into lease performance thresholds and is
                                 factored in the negotiation of the fee.
                                 Remarketing fees incurred in connection with
                                 lease extensions are accounted for as operating
                                 costs. Remarketing fees incurred in connection
                                 with the sale of computer equipment are
                                 included in our gain or loss calculations. No
                                 remarketing fees were paid for the period ended
                                 June 30, 2006.


                                                                               8

<PAGE>

                                 The Partnership's share of the computer
                                 equipment in which it participates with other
                                 partnerships at June 30, 2006 and December 31,
                                 2005 was approximately $2,378,000 and $932,000,
                                 respectively, which is included in the
                                 Partnership's fixed assets on its balance
                                 sheet, and the total cost of the equipment
                                 shared by the Partnership with other
                                 partnerships at June 30, 2006 and December 31,
                                 2005 was approximately $5,542,000 and
                                 $2,177,000, respectively. The Partnership's
                                 share of the outstanding debt associated with
                                 this equipment at June 30, 2006 and December
                                 31, 2005 was $460,000 and $0, respectively. The
                                 total outstanding debt at June 30, 2006 and
                                 December 31, 2005 was $1,043,000 and $0,
                                 respectively.

                                 The following is a schedule of future minimum
                                 rentals on noncancellable operating leases at
                                 June 30, 2006:
                                                                          Amount
                                 -----------------------------------------------
                                 Six months ending December 31, 2006  $1,753,602
                                 Year ended December 31, 2007          3,416,609
                                 Year ended December 31, 2008          2,550,680
                                 Year ended December 31, 2009            251,240
                                                                      ----------
                                                                      $7,972,131
                                                                      ==========
4. RELATED PARTY TRANSACTIONS    RECEIVABLES/PAYABLES

                                 As of June 30, 2006, the Partnership's related
                                 party receivables and payables are short term,
                                 unsecured, and non-interest bearing.

                                 REIMBURSABLE EXPENSES

                                 The General Partner and its affiliates are
                                 entitled to reimbursement by the Partnership
                                 for the cost of supplies and services obtained
                                 and used by the General Partner in connection
                                 with the administration and operation of the
                                 Partnership from third parties unaffiliated
                                 with the General Partner. In addition, the
                                 General Partner and its affiliates are entitled
                                 to reimbursement for certain expenses incurred
                                 by the General Partner and its affiliates in
                                 connection with the administration and
                                 operation of the Partnership. During the
                                 six-months ended June 30, 2006, the Partnership
                                 recorded $379,613 for reimbursement of expenses
                                 to the General Partner. For the period of March
                                 14, 2005 (Commencement of Operations) through
                                 June 30, 2005, the Partnership recorded
                                 $131,000 for reimbursement of expenses to the
                                 General Partner.

                                 OFFERING COSTS

                                 Offering costs are payments for selling
                                 commissions, dealer manager fees, professional
                                 fees and other offering expenses relating to
                                 the syndication. Selling commissions are 8% of
                                 the partners' contributed capital and dealer
                                 manager fees are 2% of the partners'
                                 contributed capital. These costs have been
                                 deducted from partnership capital in the
                                 accompanying financial statements.


                                                                               9

<PAGE>

                                 EQUIPMENT ACQUISITION FEE

                                 The General Partner is entitled to be paid an
                                 equipment acquisition fee of 4% of the purchase
                                 price of each item of equipment purchased as
                                 compensation for the negotiation of the
                                 acquisition of the equipment and lease thereof
                                 or sale under a conditional sales contract. For
                                 the period ended June 30, 2006, equipment
                                 acquisition fees of approximately $194,550 were
                                 earned by the General Partner. No equipment
                                 acquisition fees were earned by the General
                                 Partner for the period of March 14, 2005
                                 (Commencement of Operations) through June 30,
                                 2005.

                                 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. For the period ended June
                                 30, 2006, debt placement fees of approximately
                                 $12,743 were earned by the General Partner. No
                                 debt placement fees were earned by the General
                                 Partner for the period of March 14, 2005
                                 (Commencement of Operations) through June 30,
                                 2005.

                                 EQUIPMENT MANAGEMENT FEE

                                 The General Partner is entitled to be paid a
                                 monthly fee equal to the lesser of (i) the fees
                                 which would be charged by an independent third
                                 party for similar services for similar
                                 equipment or (ii) the sum of (a) two percent of
                                 (1) the gross lease revenues attributable to
                                 equipment which is subject to full payout net
                                 leases which contain net lease provisions plus
                                 (2) the purchase price paid on conditional
                                 sales contracts as received by the Partnership
                                 and (b) 5% of the gross lease revenues
                                 attributable to equipment which is subject to
                                 operating and capital leases. For the
                                 six-months ended June 30, 2006, equipment
                                 management fees of approximately $72,000 were
                                 earned by the General Partner. For the period
                                 of March 14, 2005 (Commencement of Operations)
                                 through June 30, 2005, equipment management
                                 fees of approximately $874 were earned by the
                                 General Partner.


                                                                              10

<PAGE>

5. NOTES PAYABLE                 Notes payable consisted of the following:

<TABLE>
<CAPTION>
                                                                                  DECEMBER 31,
                                                                  JUNE 30, 2006      2005
                                 -------------------------------------------------------------
<S>                                                                 <C>              <C>
                                 Installment note payable to
                                 bank; interest at 4.61%, due
                                 in monthly instaltlments of
                                 $160, including interest, with
                                 final payment in December
                                 2007.                              $      922            --

                                 Installment notes payable to
                                 banks; interest ranging from
                                 4.65% to 6.3%, due in monthly
                                 installments ranging from
                                 $1,095 to $14,239, including
                                 interest, with final payments
                                 from February through October
                                 2008.                                 925,186       785,157

                                 Installment notes payable to
                                 banks; interest ranging from
                                 6.08% to 6.14%, due in monthly
                                 installments ranging from
                                 $21,364 to $22,990, including
                                 interest, with final payment
                                 in February 2009.                     911,563            --
                                 -------------------------------------------------------------
                                                                    $1,837,671       785,157
                                 -------------------------------------------------------------
</TABLE>

                                 These notes are secured by specific computer
                                 equipment and are nonrecourse liabilities of
                                 the Partnership. Aggregate maturities of notes
                                 payable for each of the periods subsequent to
                                 June 30, 2006 are as follows:

                                          AMOUNT
                                        ----------
   Six months ended December 31, 2006   $  365,341
   Year ended December 31, 2007            763,939
   Year ended December 31, 2008            619,077
   Year ended December 31, 2009             89,314
                                        ----------
                                        $1,837,671
                                        ----------

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

Six months Ended June 30,                           2006     2005
-----------------------------------------------   --------   ----
Lease income, net of interest expense on


                                                                              11

<PAGE>

   notes payable realized as a result of direct
   payment of principal by lessee to bank         $221,744    $--

          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:

Six months Ended June 30,                    2006      2005
---------------------------------------   ----------   ----
   Debt assumed in connection with
      purchase of computer equipment      $1,274,257    $--

   Equipment acquisition fees earned by
      General Partner upon purchase of
      equipment from prepaid
      acquisition fees                    $   47,459    $--

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

CRITICAL ACCOUNTING POLICIES

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

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

FORWARD LOOKING STATEMENTS

Certain statements within this Quarterly Report on Form 10-Q 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


                                                                              12

<PAGE>

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.

COMPUTER EQUIPMENT

CCC, on behalf of the Partnership and other affiliated partnerships, acquires
computer 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 computer equipment
for financial statement purposes is based on the straight-line method over
estimated useful lives of four years.

REVENUE RECOGNITION

Through June 30, 2006, the Partnership's leasing operations consist of operating
leases. Operating lease revenue is recognized on a monthly basis in accordance
with the terms of the lease agreement.

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

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 an 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 an impairment exists. The
amount of the impairment is determined based on the difference between the
carrying value and the fair value. Fair value is determined based on estimated
discounted cash flows to be generated by the asset.


LIQUIDITY AND CAPITAL RESOURCES

The Partnership's primary source of capital for the six-months ended June 30,
2006 and the period of March 14, 2005 (Commencement of Operations) through June
30, 2005, was contributions of approximately $5,200,000 and $7,600,000,
respectively. Equipment in the amount of approximately $3,600,000 was purchased
during the six-months ended June 30, 2006 and distributions in the amount of
$1,100,000 were paid during that same period. Equipment in the amount of
$456,000 was purchased and distributions were paid in the amount of $102,000
during the period of March 14, 2005 (Commencement of Operations) through June
30, 2005.

For the six-months ended June 30, 2006, cash was provided from operations in the
amount of $727,000, which includes a net loss of $309,000 and depreciation and
amortization expenses of approximately $1,085,000. Other non-cash activities
included in the determination of net


                                                                              13

<PAGE>

income include direct payments of lease income by lessees to banks of
approximately $222,000.

For the period of March 14, 2005 (Commencement of Operations) through June 30,
2005, the Partnership used cash for operating activities of approximately
$137,000, which includes a net loss of approximately $305,000, and depreciation
and amortization expenses of approximately $14,000.

The Partnership's investment strategy of acquiring computer equipment and
generally leasing it under "triple-net leases" to operators who generally meet
specified financial standards minimizes the Partnership's operating expenses. As
of June 30, 2006, the Partnership had future minimum rentals on non-cancelable
operating leases of $1,753,602 for the balance of the year ending December 31,
2006 and $6,218,529 thereafter.

The Partnership's cash from operations is expected to continue to be adequate to
cover all operating expenses, liabilities, and preferred distributions to
Partners during the next 12-month period. If available Cash Flow or Net
Disposition Proceeds are insufficient to cover the Partnership expenses and
liabilities on a short and long term basis, the Partnership will attempt to
obtain additional funds by disposing of or refinancing Equipment, or by
borrowing within its permissible limits. The Partnership may, from time to time,
reduce the distributions to its Partners if it deems necessary. Since the
Partnership's leases are on a "triple-net" basis, no reserve for maintenance and
repairs are deemed necessary.

RESULTS OF OPERATIONS

     Three months ended June 30, 2006 compared to three months ended June 30,
     2005

For the three months ended June 30, 2006, the Partnership recognized income of
approximately $880,000 and expenses of approximately $941,000, resulting in a
net loss of approximately $61,000. For the three-months ended of June 30, 2005,
the Partnership recognized income of approximately $17,000 and expenses of
approximately $274,000, resulting in a net loss of approximately $257,000.

Lease income increased to $762,000 for the three months ended June 30, 2006,
from $17,000 for the three months ended June 30, 2005, primarily due to the fact
that more lease agreements were entered into since the six months ended June 30,
2005 as the fund commenced operations.

Operating expenses, excluding depreciation, primarily consist of accounting,
legal, outside service fees and reimbursement of expenses to CCC, a related
party, for administration and operation of the Partnership. The expenses
increased 25% to approximately $257,000 for the quarter ended June 30, 2006,
from $205,000 for the quarter ended June 30, 2005.

The equipment management fee is approximately 5% of the gross lease revenue
attributable to equipment that is subject to operating leases. The equipment
management fee increased to approximately $40,000 for the quarter ended June 30,
2006, from $800 for the quarter ended June 30, 2005, which is consistent with
the increase in lease income.


                                                                              14

<PAGE>

Depreciation and amortization expenses consist of depreciation on computer
equipment and amortization of equipment acquisition fees. The expenses increased
to approximately $620,000 for the quarter ended June 30, 2006, from $13,000 for
the quarter ended June 30, 2005 due to additional equipment being purchased and
the associated acquisition and finance fees being recorded by the Partnership
since the quarter ended June 30, 2005.

   Six months ended June 30, 2006 compared to March 14, 2005 (Commencement of
                        Operations) through June 30, 2005

For the six months ended June 30, 2006, the Partnership recognized income of
approximately $1,534,000, and expenses of approximately $1,843,000, resulting in
a net loss of approximately $309,000. For the period of to March 14, 2005
(Commencement of Operations) through June 30, 2005, the Partnership recognized
income of approximately $17,000, and expenses of approximately $322,000,
resulting in a net loss of approximately $305,000.

Lease income increased to $1,367,000 for the six months ended June 30, 2006,
from $17,000 for the period of to March 14, 2005 (Commencement of Operations)
through June 30, 2005, primarily due to the fact that more lease agreements were
entered into since the period from June 30, 2005 as the fund commenced
operations.

Operating expenses, excluding depreciation, primarily consist of accounting,
legal, outside service fees and reimbursement of expenses to CCC, a related
party, for administration and operation of the Partnership. The expenses
increased to approximately $612,000 for the six months ended June 30, 2006, from
$228,000 for the period of March 14, 2005 (Commencement of Operations) through
June 30, 2005, primarily due to an increase in the amount charged by CCC, a
related party, to the Partnership for its administration and operation of
approximately $30,000, an increase in due diligence costs of approximately
$7,000 and an increase in accounting fees of approximately $60,000. Such
expenses increased due to the commencement of operations and further activity
within the fund.

The equipment management fee is approximately 5% of the gross lease revenue
attributable to equipment that is subject to operating leases. The equipment
management fee increased to approximately $72,000 for the six months ended June
30, 2006, from $900 for the period ended June 30, 2005, which is consistent with
the increase in lease income.

Depreciation and amortization expenses consist of depreciation on computer
equipment and amortization of equipment acquisition fees. The expenses increased
to approximately $1,085,000 for the six months ended June 30, 2006; from $14,000
for the period ended June 30, 2005 due to additional equipment being purchased
and the associated acquisition and finance fees being recorded by the
Partnership since the period ended June 30, 2005.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Partnership believes its exposure to market risk is not material due to the
fixed interest rate of its long-term debt. There are no material changes to this
disclosure related to these items since the filing of our Annual Report on Form
10-K for the year ended December 31, 2005.


                                                                              15

<PAGE>

ITEM 4. CONTROLS AND PROCEDURES

The Chief Executive Officer and Financial Officer of the General Partner have
conducted a review of the General Partner's disclosure controls and procedures
as of June 30, 2006.

The Company's disclosure controls and procedures include the Partnership's
controls and other procedures designed to ensure that information required to be
disclosed in this and other reports filed under the Securities Exchange Act of
1934, as amended (the " Exchange Act") is accumulated and communicated to the
General partner's management, including its chief executive officer and a
financial officer, to allow timely decisions regarding required disclosure and
to ensure that such information is recorded, processed, summarized and reported
with the required time periods.

Based upon this review, the General Partner's Chief Executive Officer and
Financial Officer have concluded that the General Partner's disclosure controls
(as defined in pursuant to Rule 13a-14 c promulgated under the Exchange Act) are
sufficiently effective to ensure that the information required to be disclosed
by the General Partner in the reports it files under the Exchange Act is
recorded, processed, summarized and reported with adequate timeliness.

There have been no changes in the General Partner's internal controls or in
other factors that could materially affect our disclosure controls and
procedures in the quarter ended June 30, 2006, that have materially affected or
are reasonably likely to materially affect the General Partner's internal
controls over financial reporting.

PART II: OTHER INFORMATION

                       COMMONWEALTH INCOME & GROWTH FUND V

     Item 1.  LEGAL PROCEEDINGS.

              N/A

     Item 1A. RISK FACTORS

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

There exists no public market for the units, and the General Partner does not
expect a public market for units to develop. The units cannot be pledged or
transferred without the consent of the General Partner. The units should be
purchased as a long-term investment only. The General Partner intends to limit
the number of transfers to no more than that number permitted by one of the safe
harbors available under the tax laws and regulations to prevent CIGF5 from being
taxed as a corporation. Generally, these safe harbors require that all nonexempt
transfers and redemptions of units in any calendar year not exceed two percent
of the outstanding interests in the capital or profits of CIGF5.

The General Partner has sole discretion in deciding whether we will redeem units
in the future. Consequently, you may not be able to liquidate your investment in
the event of an


                                                                              16

<PAGE>

emergency. You must be prepared to hold your units for the life of CIGF5.
CIGF5's life cycle will last approximately 10 to 12 years, and any extension of
this period will require an amendment to the partnership agreement, which must
be approved by a majority of the Limited Partners. You may be able to resell
your units, if at all, only at a discount to the offering price, which may be
significant, and the redemption or sale price may be less than the price you
originally paid for your units.

INFORMATION TECHNOLOGY EQUIPMENT WE PURCHASE WILL DEPRECIATE IN VALUE AND/OR
BECOME OBSOLETE OR LOSE VALUE AS NEW TECHNOLOGY IS DEVELOPED, WHICH CAN REDUCE
THE VALUE OF YOUR UNITS AND YOUR ULTIMATE CASH RETURN.

Residual value is the amount realized upon the sale or release of equipment when
the original lease has expired. The residual value of our equipment may decline
if technological advancements make it obsolete or change market preferences. The
residual value depends on, among other factors, the condition of the equipment,
the cost of comparable new equipment, the technological obsolescence of the
equipment and supply and demand for the equipment.

In either of these events, the equipment we purchased may have little or no
residual value. This will result in insufficient assets for us to distribute
cash in a total amount equal to the invested capital of the Limited Partners
over the term of our existence. Also, such an occurrence may reduce the value of
the units. Although currently we expect CIGF5 to acquire predominantly new
equipment, CIGF5 may purchase used equipment. There is no limitation on the
amount of used equipment which CIGF5 may acquire. The acquisitions of used
equipment may increase the risk that such equipment will become obsolete so that
it will have little or no residual value.

WE PAY SIGNIFICANT FEES TO THE GENERAL PARTNER AND AFFILIATES, WHICH WILL REDUCE
CASH AVAILABLE FOR DISTRIBUTIONS.

The General Partner and its affiliates, including Commonwealth Capital
Securities Corp.("CCSC"), will receive substantial fees. Some fees will be paid
without regard to the amount of distributions paid or the success or
profitability of CIGF5's operations and investments. For example, an increase in
portfolio turnover or the amount of leverage used to purchase equipment may
increase the fees we pay to the General Partner. Such compensation and fees were
established by the General Partner and are not based on arm's-length
negotiations.

CIGF5 HAS A LIMITED OPERATING HISTORY UPON WHICH YOU CAN EVALUATE PERFORMANCE.
THERE CAN BE NO ASSURANCE THAT ANY OF THE INVESTMENT OBJECTIVES WILL BE
ATTAINED.

Our operations may not ultimately be successful and we may be unable to meet our
stated investment objectives. Specifically, sufficient cash may ultimately not
be available for distribution to investors. Our General Partner sponsors four
other public equipment leasing programs with investment objectives similar to
CIGF5. The General Partner has also sponsored several privately held equipment
leasing programs. Results for these prior public and private programs have in
some cases been lower than originally anticipated.

ANY DELAY IN ACQUIRING EQUIPMENT WILL DIMINISH OUR RETURNS.


                                                                              17

<PAGE>

Due to competition with other lessors, we may experience difficulty in obtaining
and leasing appropriate equipment. Our ability to acquire and lease equipment
may also be adversely affected by interest rates, the availability of capital or
increases in corporate liquidity, since prospective lessees may prefer to raise
capital, incur debt or use internally-generated cash to purchase equipment
rather than enter the leasing market.

     Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

             N/A

     Item 3. DEFAULTS UPON SENIOR SECURITIES.

             N/A

     Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS.

             N/A

     Item 5. OTHER INFORMATION.

             N/A

     Item 6. EXHIBITS AND REPORTS ON FORM 8-K

             a)   Exhibits

                  31.1 THE RULE 15D-14(A)
                  31.2 THE RULE 15D-14(A)
                  32.1 SECTION 1350 CERTIFICATION OF CEO
                  32.2 SECTION 1350 CERTIFICATION OF CFO

             b)   Report on Form 8-K:

On April 24, 2006 COMMONWEALTH INCOME & GROWTH FUND V issued an 8-K statement to
the SEC. Items reported in this statement consisted of the following: George S.
Springsteen, Founder and former Chairman of the Board, CEO and Treasurer of the
general partner's parent company, Commonwealth Capital Corp. ("CCC"), passed
away unexpectedly on April 18, 2006. The Board of Directors immediately took
action and adopted the following changes in management effective April 24, 2006:
Mr. Springsteen's spouse, Kimberly A. Springsteen, 46, has been appointed as
Chairman of the Board, Chief Executive Officer and Treasurer of CCC, CIGF, Inc.
and CCSC, and remains a Director and Chief Operating Officer of each. Henry J.
Abbott, 55, has been appointed as President of CCC, CIGF, Inc. and CCSC. Jay M.
Dugan, 58, has been appointed as Executive Vice President of CCC, CIGF, Inc. and
CCSC. Lynn A. Franceschina, 34, has been appointed as Executive Vice President
of CCC, CIGF, Inc. and CCSC. James Pruett, 40, has been appointed as a Vice
President of CCC, CIGF, Inc. and CCSC. Donnamarie D. Abbott, 46, has been
appointed as a Vice President of CCC, CIGF, Inc. and CCSC.


                                                                              18

<PAGE>

Also included in the April 24, 2006 8-K statement were changes among the Board
of Directors as follows: Effective as of April 18, 2006, Jay M. Dugan, Katrina
M. Mason and Lynn A. Franceschina have joined Ms. Springsteen and Mr. Abbott on
the Board of Directors of CCC and CIGF, Inc. Ms. Springsteen has been appointed
as the Chairman of the Board of Directors and Katrina M. Mason, 33, has been
appointed President of CCSC, effective as of the date hereof.

                                    SIGNATURE

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 V

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


August 14, 2006                         By: /s/ Kimberly A. Springsteen
Date                                        ------------------------------------
                                        Kimberly A. Springsteen
                                        Chief Executive Officer


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