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
            September 30, 2008




or





[  ]         Transition
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the





transition
      period from
              
              to





Commission_File_Number_
            333-37504





ICON Income Fund Eight B
    L.P.(Exact
      name of registrant as specified in its
charter)





Delaware
            13-4101114(State
      or other jurisdiction of incorporation or organization)
            (IRS
      Employer Identification Number)





100 Fifth Avenue, 4thFloor, New York, New York
            10011-1505(Address
      of principal executive offices)
            (Zip
      code)





(212) 418-4700Registrant's
      telephone number, including area
code





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [x]   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
the definitions of “large accelerated filer’’, ‘‘accelerated filer” and
“smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large
accelerated filer [  ] Accelerated
filer [  ]   Non-accelerated filer [x] 
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 [x]





Number of
outstanding limited liability company shares of the registrant on October 31,
2008 is 740,380.















ICON Income Fund Eight B L.P.
              Table
      of ContentsPART I - FINANCIAL INFORMATION
            PageItem 1.  Condensed Consolidated Financial
      StatementsCondensed Consolidated Balance Sheets
            1Condensed Consolidated Statements of
      Operations
            2Condensed Consolidated Statements of Changes in Partners’
      Equity
            3Condensed Consolidated Statements of Cash
      Flows
            4Notes to Condensed Consolidated Financial
      Statements
            6Item
      2.  General Partner’s Discussion and Analysis of Financial
      Condition andResults
      of Operations
            15Item 3. Quantitative and Qualitative Disclosures About
      Market Risk
            22Item 4T. Controls and Procedures
            23PART II – OTHER INFORMATIONItem 1. Legal Proceedings
            
            24Item 1A.   Risk
Factors
            
            24Item 2. Unregistered Sales of Equity Securities and Use of
      Proceeds
            24Item 3. Defaults Upon Senior
Securities
            24Item 4. Submission of Matters to a Vote of Security
      Holders
            24Item 5. Other Information
            
            24Item 6. Exhibits
            
            25Signatures
            
            26











Table of Contents







PART I – FINANCIAL INFORMATION





Item 1.  Condensed Consolidated Financial
Statements





ICON Income Fund Eight B L.P.(A
      Delaware Limited Partnership)Condensed
      Consolidated Balance SheetsAssetsSeptember
      30,2008
            
            
            December
      31,(unaudited)
            
            
            2007Current
      assetsCash
      and cash equivalents
            
            $
            160,494
            
            
            $
            414,156Current
      portion of net investment in finance lease
            
            
            1,944,837
            
            
            
            1,764,768Other
      current assets
            
            
            28,653
            
            
            
            22,130Total
      current assets
            
            
            2,133,984
            
            
            
            2,201,054Non-current
      assetsNet
      investment in finance lease, less current portion
            
            
            3,438,635
            
            
            
            4,920,691Leased
      equipment at cost (less accumulated depreciationof
      $28,966,869 and $26,103,232, respectively)
            
            
            46,449,851
            
            
            
            53,201,855Investment
      in joint venture
            
            
            1,333,656
            
            
            
            3,413,505Other
      non-current assets, net
            
            
            1,366,019
            
            
            
            1,376,116Total
      non-current assets
            
            
            52,588,161
            
            
            
            62,912,167Total
      Assets
            
            $
            54,722,145
            
            
            $
            65,113,221Liabilities
      and Partners' EquityCurrent
      liabilitiesCurrent
      portion of non-recourse long-term debt
            
            $
            3,974,906
            
            
            $
            3,795,917Revolving
      line of credit, recourse
            
            
            1,255,000
            
            
            
            1,255,000Deferred
      revenue
            
            
            409,091
            
            
            
            286,364Due
      to affiliate
            
            
            143,070
            
            
            
            143,070Accrued
      expenses and other current liabilities
            
            
            393,246
            
            
            
            239,595Total
      current liabilities
            
            
            6,175,313
            
            
            
            5,719,946Non-current
      liabilitiesNon-recourse
      long-term debt, net of current portion
            
            
            39,349,455
            
            
            
            42,346,303Total
      Liabilities
            
            
            45,524,768
            
            
            
            48,066,249Commitments
      and contingenciesPartners'
      EquityGeneral
      Partner
            
            
            (557,085
            )
            
            
            (478,624
            )Limited
      Partners
            
            
            9,754,462
            
            
            
            17,525,596Total
      Partners' Equity
            
            
            9,197,377
            
            
            
            17,046,972Total
      Liabilities and Partners' Equity
            
            $
            54,722,145
            
            
            $
            65,113,221





See accompanying
notes to condensed consolidated financial statements


1
 Table of Contents





ICON Income Fund Eight B L.P.(A
      Delaware Limited Partnership)Condensed
      Consolidated Statements of Operations(unaudited)Three
      Months Ended September 30,
            
            
            Nine
      Months Ended September 30,2008
            
            
            2007
            
            
            2008
            
            
            2007Revenue:Rental
      income
            
            $
            1,594,091
            
            
            $
            1,654,645
            
            
            $
            4,782,273
            
            
            $
            6,986,662Finance
      income
            
            
            190,311
            
            
            
            247,408
            
            
            
            615,509
            
            
            
            508,191Loss
      from investments in joint ventures
            
            
            (51,498
            )
            
            
            (64,959
            )
            
            
            (2,102,349
            )
            
            
            (223,058
            )Net
      gain on sales of equipment
            
            
            -
            
            
            
            1,052,787
            
            
            
            -
            
            
            
            431,775Interest
      and other income
            
            
            37
            
            
            
            687
            
            
            
            380
            
            
            
            67,417Total
      revenue
            
            
            1,732,941
            
            
            
            2,890,568
            
            
            
            3,295,813
            
            
            
            7,770,987Expenses:Depreciation
      and amortization
            
            
            964,777
            
            
            
            999,505
            
            
            
            2,896,729
            
            
            
            3,620,745Impairment
      loss
            
            
            -
            
            
            
            -
            
            
            
            3,888,367
            
            
            
            -Interest
            
            
            702,058
            
            
            
            849,362
            
            
            
            2,141,410
            
            
            
            2,577,334General
      and administrative
            
            
            234,450
            
            
            
            74,085
            
            
            
            672,855
            
            
            
            341,311Total
      expenses
            
            
            1,901,285
            
            
            
            1,922,952
            
            
            
            9,599,361
            
            
            
            6,539,390(Loss)
      income before minority interest
            
            
            (168,344
            )
            
            
            967,616
            
            
            
            (6,303,548
            )
            
            
            1,231,597Minority
      interest
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (100,178
            )Net
      (loss) income
            
            $
            (168,344
            )
            
            $
            967,616
            
            
            $
            (6,303,548
            )
            
            $
            1,131,419Net
      (loss) income allocable to:Limited
      Partners
            
            $
            (166,661
            )
            
            $
            957,940
            
            
            $
            (6,240,513
            )
            
            $
            1,120,105General
      Partner
            
            
            (1,683
            )
            
            
            9,676
            
            
            
            (63,035
            )
            
            
            11,314$
            (168,344
            )
            
            $
            967,616
            
            
            $
            (6,303,548
            )
            
            $
            1,131,419Weighted
      average number of limitedpartnership
      units outstanding
            
            
            740,380
            
            
            
            740,530
            
            
            
            740,421
            
            
            
            741,138Net
      (loss) income per weighted averagelimited
      partnership units outstanding
            
            $
            (0.23
            )
            
            $
            1.29
            
            
            $
            (8.43
            )
            
            $
            1.51








See accompanying
notes to condensed consolidated financial statements


2
 Table of Contents





ICON Income Fund Eight B L.P.(A
      Delaware Limited Partnership)Condensed
      Consolidated Statements of Changes in Partners' EquityLimitedPartnership
            
            
            
            
            
            
            
            
            TotalUnits
            
            
            Limited
            
            
            General
            
            
            Partners'Outstanding
            
            
            Partners
            
            
            Partner
            
            
            EquityBalance,
      December 31, 2007
            
            
            740,530
            
            
            $
            17,525,596
            
            
            $
            (478,624
            )
            
            $
            17,046,972Limited
      partnership units redeemed
            
            
            (150
            )
            
            
            (3,473
            )
            
            
            -
            
            
            
            (3,473
            )Cash
      distributions to partners
            
            
            -
            
            
            
            (509,118
            )
            
            
            (5,143
            )
            
            
            (514,261
            )Net
      loss
            
            
            -
            
            
            
            (256,691
            )
            
            
            (2,593
            )
            
            
            (259,284
            )Period
      ended March 31, 2008 (unaudited)
            
            
            740,380
            
            
            $
            16,756,314
            
            
            $
            (486,360
            )
            
            $
            16,269,954Cash
      distributions to partners
            
            
            -
            
            
            
            (509,015
            )
            
            
            (5,142
            )
            
            
            (514,157
            )Net
      loss
            
            
            -
            
            
            
            (5,817,161
            )
            
            
            (58,759
            )
            
            
            (5,875,920
            )Period
      ended June 30, 2008 (unaudited)
            
            
            740,380
            
            
            $
            10,430,138
            
            
            $
            (550,261
            )
            
            $
            9,879,877Cash
      distributions to partners
            
            
            -
            
            
            
            (509,015
            )
            
            
            (5,141
            )
            
            
            (514,156
            )Net
      loss
            
            
            -
            
            
            
            (166,661
            )
            
            
            (1,683
            )
            
            
            (168,344
            )Period
      ended September 30, 2008 (unaudited)
            
            
            740,380
            
            
            $
            9,754,462
            
            
            $
            (557,085
            )
            
            $
            9,197,377







See accompanying
notes to condensed consolidated financial statements


3
 Table of Contents







ICON Income Fund Eight B L.P.(A
      Delaware Limited Partnership)Condensed
      Consolidated Statements of Cash Flows(unaudited)Nine
      Months Ended September 30,2008
            
            
            2007Cash
      flows from operating activities:Net
      (loss) income
            
            $
            (6,303,548
            )
            
            $
            1,131,419Adjustments
      to reconcile net (loss) income to net cash provided byoperating
      activities:Rental
      income paid directly to lenders by lessees
            
            
            (4,905,000
            )
            
            
            (6,483,206
            )Finance
      income
            
            
            (615,509
            )
            
            
            (508,191
            )Net
      gain on sales of equipment
            
            
            -
            
            
            
            (431,775
            )Loss
      from investments in joint ventures
            
            
            2,102,349
            
            
            
            223,058Depreciation
      and amortization
            
            
            2,896,729
            
            
            
            3,620,745Impairment
      loss
            
            
            3,888,367
            
            
            
            -Interest
      expense on non-recourse financing paid directly to lenders by
      lessees
            
            
            2,087,141
            
            
            
            2,265,881Interest
      expense from amortization of debt financing costs
            
            
            9,495
            
            
            
            -Minority
      interest
            
            
            -
            
            
            
            100,178Changes
      in operating assets and liabilities:Collection
      of finance lease
            
            
            1,884,403
            
            
            
            1,324,242Accounts
      receivable
            
            
            -
            
            
            
            287,043Due
      to affiliate
            
            
            -
            
            
            
            143,070Other
      assets
            
            
            (5,920
            )
            
            
            (79,718
            )Deferred
      revenue
            
            
            122,727
            
            
            
            109,121Accrued
      expenses and other current liabilities
            
            
            153,651
            
            
            
            (424,753
            )Distributions
      to/from joint ventures and minority interest
            
            
            -
            
            
            
            (99,800
            )Net
      cash provided by operating activities
            
            
            1,314,885
            
            
            
            1,177,314Cash
      flows from investing activities:Distributions
      received from joint ventures
            
            
            -
            
            
            
            633,828Proceeds
      from sales of equipment
            
            
            -
            
            
            
            11,783,785Purchase
      of leased equipment
            
            
            -
            
            
            
            (7,754,746
            )Cash
      investment in joint venture
            
            
            (22,500
            )
            
            
            -Net
      cash (used in) provided by investing activities
            
            
            (22,500
            )
            
            
            4,662,867Cash
      flows from financing activities:Cash
      distributions to partners
            
            
            (1,542,574
            )
            
            
            (3,837,598
            )Proceeds
      from revolving line of credit
            
            
            -
            
            
            
            3,630,000Repayment
      of revolving line of credit
            
            
            -
            
            
            
            (5,500,000
            )Distributions
      paid to minority interest holders
            
            
            -
            
            
            
            (568,490
            )Redemption
      of limited partnership units
            
            
            (3,473
            )
            
            
            (25,298
            )Net
      cash used in financing activities
            
            
            (1,546,047
            )
            
            
            (6,301,386
            )Net
      decrease in cash and cash equivalents
            
            
            (253,662
            )
            
            
            (461,205
            )Cash
      and cash equivalents, beginning of the period
            
            
            414,156
            
            
            
            888,290Cash
      and cash equivalents, end of the period
            
            $
            160,494
            
            
            $
            427,085








See accompanying
notes to condensed consolidated financial statements


4
 Table of Contents





ICON
      Income Fund Eight B L.P.(A
      Delaware Limited Partnership)Condensed
      Consolidated Statements of Cash Flows(unaudited)Nine
      Months Ended September 30,2008
            
            
            2007Supplemental
      disclosure of cash flow information:Cash
      paid during the period for interest
            
            $
            54,566
            
            
            $
            311,453Supplemental
      disclosure of non-cash investing and financing activities:Principal
      and interest paid on non-recourse long-term debt directly to lenders
      by lessees
            
            $
            4,905,000
            
            
            $
            7,775,323Transfer
      of leased equipment to direct finance lease
            
            $
            -
            
            
            $
            7,743,990Payment
      of maintenance costs
            
            $
            -
            
            
            $
            1,546,000






See accompanying
notes to condensed consolidated financial statements


5
 Table of Contents
 ICON Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Condensed Consolidated Financial Statements
 September
30, 2008
 (unaudited)





(1)
            Basis
      of Presentation and Consolidation





The
accompanying condensed consolidated financial statements of ICON Income Fund
Eight B L.P. (the “Partnership”) have been prepared in accordance with U.S.
generally accepted accounting principles (“US GAAP”) for interim financial
information and pursuant to the rules and regulations of the
Securities and Exchange Commission for Quarterly Reports on Form
10-Q.  Accordingly, they do not include all of the information and
footnotes required by US GAAP for complete financial statements.  In
the opinion of ICON Capital Corp. (the “General Partner”), all adjustments
considered necessary for a fair presentation have been
included.  These condensed consolidated financial statements should be
read together with the consolidated financial statements and notes included in
the Partnership’s Annual Report on Form 10-K for the year ended December 31,
2007.  The results for the interim period are not necessarily
indicative of the results for the full year.





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





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





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





(2)
            Organization




The
Partnership was formed on February 7, 2000 as a Delaware limited
partnership.  The Partnership is engaged in one business segment, the
business of purchasing equipment and leasing it to third-party end users,
providing equipment and other financing, and to a lesser degree, acquiring
ownership rights to items of leased equipment at lease
expiration.  The Partnership will continue until December 31, 2017,
unless terminated sooner.  The Partnership is currently in its
liquidation period, which commenced on June 17, 2007.





The
General Partner of the Partnership is a Delaware corporation. The General
Partner manages and controls the business affairs of the Partnership, including,
but not limited to, the equipment leases and financing transactions that the
Partnership enters into pursuant to the terms of the Partnership’s amended and
restated agreement of limited partnership (the “LP
Agreement”).  Additionally, the General Partner has a 1% interest in
the profits, losses, cash distributions and liquidation proceeds of the
Partnership.








6
 Table of Contents
 ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Condensed Consolidated Financial Statements
 September
30, 2008
 (unaudited)





(2)
            Organization
      – continued





During
the liquidation period, the Partnership is distributing substantially all
distributable cash from operations and equipment sales to the partners and will
continue the orderly termination of its operations and affairs.  The
Partnership will not invest in any additional finance or lease transactions
during the liquidation period.





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





(3)
            Summary
      of Significant Accounting Policies





Use of
Estimates





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





Reclassifications





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





Asset
Impairments





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








7
 Table of Contents
 ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Condensed Consolidated Financial Statements
 September
30, 2008
 (unaudited)





(3)
            Summary
      of Significant Accounting Policies -
continued





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





Recent
Accounting Pronouncements





In
September 2006, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards (“SFAS”) No. 157, “Accounting
for Fair Value Measurement” (“SFAS No. 157”).  SFAS No. 157
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles and establishes a hierarchy that
categorizes and prioritizes the sources to be used to estimate fair value. SFAS
No. 157 also expands financial statement disclosures about fair value
measurements.  On February 12, 2008, the FASB issued FASB Staff Position
(“FSP”) SFAS No. 157-2 (“FSP 157-2”), which delayed the effective date of SFAS
No. 157 for one year for all non-financial assets and non-financial liabilities,
except those that are recognized or disclosed at fair value in the financial
statements on a recurring basis (at least annually). On February 14, 2008,
the FASB issued FSP No. 157-1, which amended SFAS No. 157 to exclude SFAS
No. 13, “Accounting for Leases” and other accounting pronouncements that address
fair value measurements of leases from the provisions of SFAS No.
157.  SFAS No. 157 and FSP 157-2 are effective for the
Partnership’s financial statements beginning January 1, 2008.  The
General Partner assessed the impact of SFAS No. 157 and concluded that there is
no impact to the condensed consolidated financial statements or the notes to the
condensed consolidated financial statements.





In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option
for Financial Assets and Financial Liabilities—including an Amendment of SFAS
No. 115” (“SFAS No. 159”), which permits but does not require the Partnership to
measure financial instruments and certain other items at fair value. Unrealized
gains and losses on items for which the fair value option has been elected are
reported in earnings.  The Partnership has not elected to fair value
any of its financial instruments under the provisions of SFAS No.
159.





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







8
 Table of Contents
 ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Condensed Consolidated Financial Statements
 September
30, 2008
 (unaudited)





(4)
            Net
      Investment in Finance Lease





Net
investment in finance lease consisted of the following at September 30, 2008 and
December 31, 2007:





September
      30,2008
            
            
            December
      31,(unaudited)
            
            
            2007Minimum
      rents receivable
            
            $
            6,281,344
            
            
            $
            8,165,747Estimated
      residual value
            
            
            1
            
            
            
            1Initial
      direct costs, net
            
            
            51,020
            
            
            
            84,113Unearned
      income
            
            
            (948,893
            )
            
            
            (1,564,402
            )Net
      investment in finance lease
            
            
            5,383,472
            
            
            
            6,685,459Less:  Current
      portion of net investment in finance lease
            
            
            1,944,837
            
            
            
            1,764,768Net
      investment in finance lease, less current portion
            
            $
            3,438,635
            
            
            $
            4,920,691








Non-cancelable
minimum annual amounts due on investment in finance lease over the next five
years were as follows at September 30, 2008:





Years  EndingDecember 31,For
      October 1 to December 31, 2008
            
            $
            628,1342009
            
            
            2,512,5382010
            
            
            2,512,5382011
            
            
            628,134$
            6,281,344





The
Partnership had an investment in finance leases consisting of 120 Noritsu
Optical/Digital photo processing mini-labs subject to lease with K-Mart
Corporation (“K-Mart”).  The leases were scheduled to expire on
various dates through April 2008.  However, on February 9, 2007, the
Partnership sold all of the remaining equipment previously on lease to K-Mart
for approximately $254,100 and recognized a gain on the sale of the equipment of
approximately $111,000.





On March
30, 2007, the Partnership purchased telecommunications equipment totaling
approximately $7,755,000 from various vendors, which was leased to Global
Crossing Telecommunications, Inc. on April 1, 2007.  The lease expires
on March 31, 2011.  Initial direct costs of approximately $124,000
were incurred as part of the purchase.  The General Partner did not take
any acquisition fees on the purchase.







9
 Table of Contents
 ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Condensed Consolidated Financial Statements
 September
30, 2008
 (unaudited)





(5)
            Leased
      Equipment at Cost





Investments
in leased equipment at cost consisted of the following at September 30, 2008 and
December 31, 2007:





September
      30,2008
            
            
            December
      31,(unaudited)
            
            
            2007Aircraft
      and aircraft related equipment
            
            $
            79,305,087
            
            
            $
            79,305,087Less:
      Accumulated depreciation
            
            
            (28,966,869
            )
            
            
            (26,103,232
            )Less:
      Accumulated impairment
            
            
            (3,888,367
            )
            
            
            -$
            46,449,851
            
            
            $
            53,201,855





Depreciation expense for the three
months ended September 30, 2008 and 2007 was $954,545 and $975,891,
respectively.  Depreciation expense for the nine months ended
September 30, 2008 and 2007 was $2,863,636 and $3,558,271,
respectively.





ICON
Aircraft 47820, LLC (“Aircraft 47820”) was a joint venture between the
Partnership and ICON Income Fund Nine, LLC (“Fund Nine”), an entity also managed
by the General Partner, which had ownership interests of 90% and 10%,
respectively.  Aircraft 47820 was formed for the purpose of acquiring
an investment in a McDonnell Douglas DC-10-30F aircraft and two spare engines
(the “Aircraft and Engines”) on lease to Federal Express Corporation
(“FedEx”).  On March 30, 2007, Aircraft 47820 sold the Aircraft and
Engines to FedEx for $5,475,000.  The Partnership recognized a loss on
the sale of the Aircraft and Engines of approximately $1,025,000 in the first
quarter of 2007.





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





In light
of unprecedented high fuel prices and the related impact on the airline
industry, on June 30, 2008, the General Partner reviewed the Partnership’s
investment in an Airbus A340-313X, a four- engine aircraft (“Aircraft 123”), in
ICON Aircraft 123, LLC (“ICON 123”), a wholly-owned subsidiary.  In
accordance with the provisions of FASB Statement No. 144, “Accounting for the
Impairment or Disposal of Long-Lived Assets” (“SFAS No. 144”) and based upon
recent changes in the airline industry, the General Partner determined that
Aircraft 123 was impaired.





The
following factors, among others, indicated that the full residual value of
Aircraft 123 might not be recoverable: (i) indications that lenders are willing
to finance less of the acquisition cost of four-engine aircraft, which is
increasing with each dollar rise of the price of fuel, thereby undermining the
residual value expectations of such aircraft; (ii) the rising cost of fuel is
increasing the operating costs of four-engine aircraft and similar capacity
twin-engine aircraft, thereby making such aircraft less attractive investments
at this time and thereby depressing the current market for Aircraft 123; and
(iii) the likelihood of aircraft operators switching to more efficient aircraft,
thereby depressing the market for Aircraft 123.








10
 Table of Contents
 ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Condensed Consolidated Financial Statements
 September
30, 2008
 (unaudited)




(5)
            Leased
      Equipment at Cost - continued





Based on
the General Partner’s review, the residual value of Aircraft 123 exceeded the
expected undiscounted future cash flows of Aircraft 123 and, as a result, the
Partnership recognized an impairment charge representing the difference between
the aircraft residual value and the fair market value of Aircraft 123.  The
fair market value of Aircraft 123 was determined using a market approach, a
recent appraisal for Aircraft 123 and recent sales of similar aircraft, as well
as other factors, including those discussed above.  As a result, the
Partnership recognized an impairment loss on Aircraft 123 of $3,888,367 in the
second quarter of 2008.





ICON
Cheyenne, LLC (“ICON Cheyenne”) was a joint venture among the Partnership, ICON
Cash Flow Partners L.P. Seven and ICON Income Fund Eight A L.P., entities also
managed by the General Partner, which had ownership interests of 97.73%, 1.27%,
and 1.00%, respectively.  During the second quarter of 2007, ICON
Cheyenne sold all of its remaining equipment to a third party for total sales
proceeds of approximately $111,000.  ICON Cheyenne recognized a total
gain on the sale of approximately $110,000.





ICON SPK
2023-A, LLC (“ICON SPK”) was a joint venture between the Partnership and Fund
Nine, which had ownership interests of 74.87% and 25.13%,
respectively.  During the second quarter of 2007, ICON SPK sold all of
its remaining equipment to a third party for total sales proceeds of
approximately $348,000.  ICON SPK recognized a gain on the sale of
approximately $264,000.





Aggregate
annual minimum future rentals receivable from each of the Partnership’s
non-cancelable operating leases consisted of the following at September 30,
2008:





Years  EndingDecember 31,For
      October 1 to December 31, 2008
            
            $
            1,635,0002009
            
            $
            6,540,0002010
            
            $
            6,090,0002011
            
            $
            4,455,000





(6)
            Investments
      in Joint Ventures




ICON
Aircraft 46835, LLC





ICON
Aircraft 46835, LLC (“Aircraft 46835”) was a joint venture between the
Partnership and Fund Nine, which had ownership interests of 15% and 85%,
respectively.  Aircraft 46835 was formed for the purpose of acquiring
an investment in a McDonnell Douglas DC-10-30F aircraft (the “Aircraft”) on
lease with FedEx.  On March 30, 2007, Aircraft 46835 sold the Aircraft
to FedEx for $4,260,000 and recognized a loss on the sale of the Aircraft of
approximately $640,000.  The final lease payment was paid to the
lender, satisfying all remaining debt obligations.











11
 Table of Contents
 ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Condensed Consolidated Financial Statements
 September
30, 2008
 (unaudited)




(6)
            Investments
      in Joint Ventures - continued





ICON
Aircraft 126, LLC





ICON
Aircraft 126, LLC (“ICON 126”) is a joint venture between the Partnership and
Fund Nine, which was formed for the purpose of acquiring all of the outstanding
shares of Delta Aircraft Leasing Limited, a Cayman Islands registered company
that owns, through an owner trust, an Airbus A340-313X aircraft (“Aircraft 126”)
that is on lease to Cathay Pacific Airways Limited. The lease is scheduled to
expire on July 1, 2011.  The Partnership and Fund Nine each have a 50%
interest in ICON 126.





On
January 30, 2007, ICON 126 paid approximately $143,000 in maintenance costs from
the remaining balance in its maintenance account on behalf of ICON
123.  ICON 123 will reimburse ICON 126 for the maintenance shortfall
when the aircraft owned by ICON 123 is sold.





In light
of unprecedented high fuel prices and the related impact on the airline
industry, on June 30, 2008, the General Partner reviewed the Partnership’s
investment in Aircraft 126.  In accordance with the provisions of SFAS
No. 144 and based upon recent changes in the airline industry, the General
Partner determined that Aircraft 126 was impaired.





The
following factors, among others, indicated that the full residual value of
Aircraft 126 might not be recoverable: (i) indications that lenders are willing
to finance less of the acquisition cost of four-engine aircraft, which is
increasing with each dollar rise of the price of fuel, thereby undermining the
residual value expectations of such aircraft; (ii) the rising cost of fuel is
increasing the operating costs of four-engine aircraft and similar capacity
twin-engine aircraft, thereby making such aircraft less attractive investments
at this time and thereby depressing the current market for Aircraft 126; and
(iii) the likelihood of aircraft operators switching to more efficient aircraft,
thereby depressing the market for Aircraft 126.





Based on
the General Partner’s review, the residual value of Aircraft 126 exceeded the
expected undiscounted future cash flows of Aircraft 126 and, as a result, ICON
126 recognized an impairment charge representing the difference between the
aircraft residual value and the fair market value of Aircraft 126.  The
fair market value of Aircraft 126 was determined using a market approach, a
recent appraisal for Aircraft 126 and recent sales of similar aircraft, as well
as other factors, including those discussed above.  As a result, in
the second quarter of 2008, ICON 126 recognized an impairment loss on Aircraft
126 of approximately $3,900,000, of which the Partnership’s share was
approximately $1,950,000.





Information
as to the results of operations of ICON 126 for the three and nine months ended
September 30, 2008 and 2007, respectively, are summarized below:




Three
      Months Ended September 30,
              
              
              Nine
      Months Ended September 30,(unaudited)
              
              
              (unaudited)2008
              
              
              2007
              
              
              2008
              
              
              2007Net
      loss
              
              $
              (102,997
              )
              
              $
              (118,922
              )
              
              $
              (4,204,698
              )
              
              $
              (457,750
              )Partnership's
      share of net loss
              
              $
              (51,498
              )
              
              $
              (59,461
              )
              
              $
              (2,102,349
              )
              
              $
              (228,875
              )





12
 Table of Contents
 ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Condensed Consolidated Financial Statements
 September
30, 2008
 (unaudited)




(7)
            Non-Recourse
      Long-Term Debt





The
Partnership’s non-recourse long-term debt is paid directly to the lender by the
lessee and accrues interest at 6.1095% per year. The outstanding balance of the
non-recourse long-term debt at September 30, 2008 and December 31, 2007 was
$43,324,361 and $46,142,220, respectively.





The
Partnership had another non-recourse long-term debt obligation in connection
with Aircraft 47820, which was also paid directly to the lender by the lessee.
The debt accrued interest at 4.035% per year. The final lease payment of
approximately $2,900,000 was paid to the lender of the non-recourse
long-term debt upon the sale of the Aircraft and Engines on March 30, 2007
(see Note 5), satisfying all remaining debt obligations.





(8)
            Revolving
      Line of Credit, Recourse





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





The
Facility was originally set to expire on September 30, 2008 and established (i)
the interest rate for advances under the Facility at the Lender’s prime rate and
(ii) the interest rate on the five separate advances that are permitted to be
made under the Facility at which United States dollar deposits can be acquired
by the Lender at the London Interbank Eurocurrency Market Rate plus 2.5%. The
interest rate at September 30, 2008 was 5%.





On May 1,
2008, the Borrowers entered into a Loan Modification Agreement. The agreement
increased the revolving line of credit up to $30,000,000 and extended the
expiration date to April 30, 2010. The Borrowers may request a one year
extension to the revolving line of credit within 390 days of the expiration
date, but the Lender has no obligation to extend. The quarterly unused
commitment fee of 0.5% was reduced to 0.25% on unused commitments under the
Facility.





The
Borrowers were in compliance with the covenants under the Loan Agreement at
September 30, 2008.





Aggregate
borrowings by all Borrowers under the Facility amounted to $1,255,000 at
September 30, 2008, all of which was borrowed by the
Partnership.  Subsequent to September 30, 2008, the Partnership repaid
$70,000, which reduced the outstanding loan balance to $1,185,000.





13
 Table of Contents
 ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Condensed Consolidated Financial Statements
 September
30, 2008
 (unaudited)





(9)
            Transactions
      with Related Parties





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





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





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





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





The
General Partner also has a 1% interest in the Partnership’s profits, losses,
cash distributions and liquidation proceeds.  The Partnership paid
distributions to the General Partner of $15,426 for the nine months ended
September 30, 2008.  The General Partner’s interest in the
Partnership’s net (loss) income for the three months ended September 30, 2008
and 2007 was $(1,683) and $9,676, respectively. The General Partner’s interest
in the Partnership’s net (loss) income for the nine months ended September 30,
2008 and 2007 was $(63,035) and $11,314, respectively.





In
January 2007, ICON 123 repaid outstanding maintenance costs of approximately
$1,546,000 with the balance in its reserve account of approximately $1,403,000,
inclusive of accreted interest. The remaining balance of approximately $143,000
was borrowed from ICON 126 and will be reimbursed when the aircraft owned by
ICON 123 is sold.  At September 30, 2008, ICON 126’s balance in its
reserve account was approximately $97,000, inclusive of accreted
interest.




(10)
              Concentrations


At
September 30, 2008, the Partnership had approximately 84.9% of its assets and
approximately 95.2% of its liabilities concentrated in the airline industry. At
December 31, 2007, the Partnership had approximately 81.8% of its assets and
approximately 95.9% of its liabilities concentrated in the airline
industry.





For the
three and nine months ended September 30, 2008, the Partnership had two lessees
that accounted for 100% of total rental and finance income.  For the
three and nine months ended September 30, 2007, the Partnership had one lessee
that accounted for 83.8% of total rental income and one lessee that accounted
for 63.8% of total finance income.








14
 Table of Contents





Item 2.  General Partner’s Discussion and Analysis of
Financial Condition and Results of Operations





The
following is a discussion of our results of operations and current financial
position. This discussion should be read together with our unaudited condensed
consolidated financial statements and related notes included elsewhere in this
Quarterly Report on Form 10-Q and the audited consolidated financial statements
and related notes included in our Annual Report on Form 10-K for the year ended
December 31, 2007.  This discussion should also be read in conjunction
with the disclosure below regarding “Forward-Looking Statements” and the “Risk
Factors” set forth in Item 1A herein.




As used
in this Quarterly Report on Form 10-Q, references to “we,” “us,” “our” or
similar terms include ICON Income Fund Eight B L.P. and its consolidated
subsidiaries.





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 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,” “continue,” “further,” “plan,” “seek,”
“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. We undertake no obligation to update publicly or review
any forward-looking statement, whether as a result of new information, future
developments or otherwise.





Overview





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





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







15
 Table of Contents







At
September 30, 2008, our portfolio, which we hold either directly or through
joint venture investments with affiliates, consisted primarily of the following
equipment subject to lease:





Air
Transportation Equipment





·
            We
      own an Airbus A340-313X aircraft and have a 50% interest in a second
      Airbus A340-313X aircraft, both on lease to Cathay Pacific Airways Limited
      (“Cathay”).  The leases are scheduled to expire on October 1,
      2011 and July 1, 2011,
respectively.





Telecommunications
Equipment





·
            We
      own telecommunications equipment on lease to Global Crossing
      Telecommunications, Inc. (“Global Crossing”). The lease is scheduled to
      expire on March 31, 2011.





Energy
Equipment





·
            We
      have a 5.93% interest in the rights to the profits, losses and cash flows
      from an entity that owns a 50% interest in a mobile offshore drilling rig
      subject to a lease with Rowan Companies,
Inc.





Recent
Accounting Pronouncements





In
September 2006, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards (“SFAS”) No. 157, “Accounting
for Fair Value Measurement” (“SFAS No. 157”).  SFAS No. 157
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles and establishes a hierarchy that
categorizes and prioritizes the sources to be used to estimate fair value. SFAS
No. 157 also expands financial statement disclosures about fair value
measurements.  On February 12, 2008, the FASB issued FASB Staff Position
(“FSP”) SFAS No. 157-2 (“FSP 157-2”), which delayed the effective date of SFAS
No. 157 for one year for all non-financial assets and non-financial liabilities,
except those that are recognized or disclosed at fair value in the financial
statements on a recurring basis (at least annually). On February 14, 2008,
the FASB issued FSP No. 157-1, which amended SFAS No. 157 to exclude SFAS
No. 13, “Accounting for Leases” and other accounting pronouncements that address
fair value measurements of leases from the provisions of SFAS No.
157.  SFAS No. 157 and FSP 157-2 are effective for our financial
statements beginning January 1, 2008.  Our General Partner assessed
the impact of SFAS No. 157 and concluded that there is no impact to the
condensed consolidated financial statements or the notes to the condensed
consolidated financial statements.





In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option
for Financial Assets and Financial Liabilities—including an Amendment of SFAS
No. 115” (“SFAS No. 159”), which permits but does not require us to measure
financial instruments and certain other items at fair value. Unrealized gains
and losses on items for which the fair value option has been elected are
reported in earnings.  We did not elect to fair value any of our
financial instruments under the provisions of SFAS No. 159.





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





16
 Table of Contents





Results
of Operations for the Three Months Ended September 30, 2008 (the “2008 Quarter”)
and 2007 (the “2007 Quarter”)





Revenue
for the 2008 Quarter and 2007 Quarter are summarized as follows:





Three Months Ended September
      30,2008
            
            
            2007
            
            
            ChangeRental
      income
            
            $
            1,594,091
            
            
            $
            1,654,645
            
            
            $
            (60,554
            )Finance
      income
            
            
            190,311
            
            
            
            247,408
            
            
            
            (57,097
            )Loss
      from investments in joint ventures
            
            
            (51,498
            )
            
            
            (64,959
            )
            
            
            13,461Net
      gain on sales of equipment
            
            
            -
            
            
            
            1,052,787
            
            
            
            (1,052,787
            )Interest
      and other income
            
            
            37
            
            
            
            687
            
            
            
            (650
            )Total
      revenue
            
            $
            1,732,941
            
            
            $
            2,890,568
            
            
            $
            (1,157,627
            )





Total
revenue for the 2008 Quarter decreased $1,157,627, or 40.0%, as compared to the
2007 Quarter.  The decrease in total revenue was largely attributable
to the net gain on sales of equipment reported for the 2007
Quarter.  The sale of five Pratt and Whitney 2037 aircraft engine
modules (the “Engine Modules”) previously on lease to American Airlines, Inc.
(formerly TWA Airlines, LLC) on August 8, 2007 resulted in a net gain on sale of
equipment of approximately $1,042,000.





Expenses
for the 2008 Quarter and the 2007 Quarter are summarized as
follows:





Three Months Ended September
      30,2008
            
            
            2007
            
            
            ChangeDepreciation
      and amortization
            
            $
            964,777
            
            
            $
            999,505
            
            
            $
            (34,728
            )Interest
            
            
            702,058
            
            
            
            849,362
            
            
            
            (147,304
            )General
      and administrative
            
            
            234,450
            
            
            
            74,085
            
            
            
            160,365Total
      expenses
            
            $
            1,901,285
            
            
            $
            1,922,952
            
            
            $
            (21,667
            )





Total
expenses for the 2008 Quarter decreased $21,667, or 1.1%, from the 2007
Quarter.  General and administrative expenses increased predominantly
due to professional fees incurred during the 2008 Quarter.  The
decrease in interest expense was largely attributable to a reduction in the
balance of non-recourse long-term debt outstanding.  Depreciation and
amortization expense decreased primarily due to the sale of the Engine Modules
on August 8, 2007, which accounted for approximately $21,000 of the decrease in
depreciation expense.





Net
(Loss) Income





As a
result of the foregoing factors, net (loss) income for the 2008 Quarter and 2007
Quarter was $(168,344) and $967,616, respectively.  The net (loss) income
per weighted average number of limited partnership units outstanding for the
2008 Quarter and 2007 Quarter was $(0.23) and $1.29, respectively.







17
 Table of Contents





Results
of Operations for the Nine Months Ended September 30, 2008 (the “2008 Period”)
and 2007 (the “2007 Period”)





Revenue
for the 2008 Period and the 2007 Period are summarized as follows:





Nine Months Ended September
    30,2008
            
            
            2007
            
            
            ChangeRental
      income
            
            $
            4,782,273
            
            
            $
            6,986,662
            
            
            $
            (2,204,389
            )Finance
      income
            
            
            615,509
            
            
            
            508,191
            
            
            
            107,318Loss
      from investments in joint ventures
            
            
            (2,102,349
            )
            
            
            (223,058
            )
            
            
            (1,879,291
            )Net
      gain on sales of equipment
            
            
            -
            
            
            
            431,775
            
            
            
            (431,775
            )Interest
      and other income
            
            
            380
            
            
            
            67,417
            
            
            
            (67,037
            )Total
      revenue
            
            $
            3,295,813
            
            
            $
            7,770,987
            
            
            $
            (4,475,174
            )





Total
revenue for the 2008 Period decreased $4,475,174, or 57.6%, as compared to the
2007 Period.  The decrease in rental income was predominantly due to
(i) the sale of a McDonnell Douglas DC-10-30F aircraft and two spare engines
(the “Aircraft and Engines”), in which we had a 90% ownership interest, on March
30, 2007 and (ii) the sale of the Engine Modules on August 8,
2007.  These leases accounted for approximately $2,048,000 of the
decrease in rental income.  The increase in loss from investments in
joint ventures was primarily related to a higher net loss reported by ICON 126,
LLC (“ICON 126”), a non-consolidated subsidiary in which we have a 50% ownership
interest.  ICON 126 recognized an impairment loss of approximately
$3,900,000 in the 2008 Period, of which our share was approximately $1,950,000;
no impairment charge was reported in the 2007 Period.  The net gain on
sales of equipment reported in the 2007 Period represented (i) the net gains
recognized on the sales of the Engine Modules, the assets owned by ICON SPK
2023-A, LLC (“ICON SPK”) and ICON Cheyenne, LLC (“ICON Cheyenne”), and the
equipment previously on lease to K-Mart Corporation (“K-Mart”), and (ii) the net
loss recognized on the sale of the Aircraft and Engines.





Expenses
for the 2008 Period and the 2007 Period are summarized as follows:





Nine Months Ended September
    30,2008
            
            
            2007
            
            
            ChangeDepreciation
      and amortization
            
            $
            2,896,729
            
            
            $
            3,620,745
            
            
            $
            (724,016
            )Impairment
      loss
            
            
            3,888,367
            
            
            
            -
            
            
            
            3,888,367Interest
            
            
            2,141,410
            
            
            
            2,577,334
            
            
            
            (435,924
            )General
      and administrative
            
            
            672,855
            
            
            
            341,311
            
            
            
            331,544Total
      expenses
            
            $
            9,599,361
            
            
            $
            6,539,390
            
            
            $
            3,059,971





Total
expenses for the 2008 Period increased $3,059,971, or 46.8%, from the 2007
Period.  The increase in impairment loss was due to the impairment
charge recognized on the aircraft held by ICON 123, LLC (“ICON 123”), a
wholly-owned subsidiary, in June 2008.  Depreciation and amortization
expense decreased mainly due to the sales of (i) the Aircraft and Engines on
March 30, 2007 and (ii) the Engine Modules on August 8, 2007.  The
decrease in interest expense was largely attributable to a reduction in the
balance of non-recourse long-term debt outstanding.  General and
administrative expense increased primarily due to professional fees incurred
during the 2008 Period.







18
 Table of Contents








Minority
Interest





Minority
interest expense for the 2008 Period decreased $100,178, or 100%, as compared to
the 2007 Period. The decrease was due to the sale of the assets owned by ICON
SPK and ICON Cheyenne, majority-owned subsidiaries, during the 2007
Period.





Net
(Loss) Income





As a
result of the foregoing factors, net (loss) income for the 2008 Period and 2007
Period was $(6,303,548) and $1,131,419, respectively.  The net (loss)
income per weighted average number of limited partnership units outstanding for
the 2008 Period and 2007 Period was $(8.43) and $1.51,
respectively.




Financial
Condition





This
section discusses the major balance sheet variances at September 30, 2008
compared to December 31, 2007.





Total
Assets





Total
assets decreased by $10,391,076 from $65,113,221 at December 31, 2007
to $54,722,145 at September 30, 2008.  The decrease was
predominantly due to impairment losses recognized by ICON 123, a wholly-owned
subsidiary, and ICON 126, a non-consolidated subsidiary in which we have a 50%
ownership interest, during the 2008 Period.  These charges represented
$5,838,367 of the decrease in total assets.  The depreciation of our
leased equipment of $2,863,636 and distributions paid to our partners of
$1,542,574 also contributed to the decrease in total assets.  This
decrease was partly offset by the recognition of unearned income related to our
finance lease with Global Crossing during the 2008 Period.





Current
Assets





Current
assets decreased by $67,070 from $2,201,054 at December 31, 2007 to $2,133,984
at September 30, 2008.  The decrease reflected the decline in our cash
position resulting from a reduction in cash inflows during the 2008
Period.  This was partially offset by an increase in our current
portion of the finance lease with Global Crossing.





Total
Liabilities





Total
liabilities decreased by $2,541,481 from $48,066,249 at December 31,
2007 to $45,524,768 at September 30, 2008.  The decrease was mainly
due to the repayment of a portion of the outstanding balance on
the non-recourse long-term debt obligation related to the aircraft on lease
to Cathay.





Current
Liabilities





Current
liabilities increased by $455,367 from $5,719,946 at December 31, 2007 to
$6,175,313 at September 30, 2008.  The increase was primarily due to
accrued professional fees and the change in deferred revenue related to the
aircraft on lease to Cathay.





Total Partners’Equity





Total partners’ equity
decreased by $7,849,595 from $17,046,972 at December 31, 2007 to $9,197,377
at September 30, 2008.  The decrease was largely attributable to the net
loss reported during the 2008 Period.  In addition, during our
liquidation period, we are distributing substantially all distributable cash
from operations and equipment sales to our limited partners.







19
 Table of Contents








Liquidity
and Capital Resources





Sources and Uses of
Cash





At
September 30, 2008 and December 31 2007, we had cash and cash equivalents of
$160,494 and $414,156, respectively.  During our liquidation period,
our main source of cash is expected to be from operating and investing
activities from the sale or disposal of our assets.  Our main use of
cash during the liquidation period is expected to be from financing activities,
in the form of cash distributions to our partners.





Operating
Activities





Sources
of Cash





Sources
of cash from operating activities increased $137,571 from $1,177,314 in the 2007
Period to $1,314,885 in the 2008 Period.  The increase was primarily
due to the collection of our finance lease with Global Crossing ̧ which was
partially offset by a reduction in overall lease activity due to the asset sales
discussed below and the fact that we are in our liquidation period.





Investing
Activities





Sources
of Cash





Sources
of cash from investing activities decreased from $12,417,613 in the 2007 Period
to $0 in the 2008 Period.  The decrease was due to the absence of any
sale of equipment during the 2008 Period.  During the 2007 Period, our
sources of cash resulted from the sales of (i) the Engine Modules, (ii) the
assets owned by ICON SPK and ICON Cheyenne, (iii) the equipment previously on
lease to K-Mart, (iv) the Aircraft and Engines, and (v) a McDonnell Douglas
DC-10-30F aircraft in which we had a 15% ownership interest.





Uses
of Cash





Uses of
cash in investing activities decreased $7,732,246 from $7,754,746 in the 2007
Period to $22,500 in the 2008 Period.  During the 2007 Period, we
purchased the telecommunications equipment currently on lease to Global
Crossing.  We did not purchase any additional equipment during the
2008 Period as we are in our liquidation period.





Financing
Activities





Sources
of Cash





Sources
of cash from financing activities decreased from $3,630,000 in the 2007 Period
to $0 in the 2008 Period.  During the 2007 Period, we borrowed
$3,630,000 from our revolving line of credit.  There were no
borrowings during the 2008 Period.





Uses of Cash





Uses of
cash in financing activities decreased $8,385,339 from $9,931,386 in the 2007
Period to $1,546,047 in the 2008 Period.  The repayment of the
revolving line of credit was the principal use of cash in financing activities
during the 2007 Period.  We did not repay any portion of the debt
outstanding during the 2008 Period.  A reduction in the distributions
paid to our partners in the 2008 Period also contributed to the
decrease.  During the 2008 Period and 2007 Period, we paid
distributions to our partners of $1,542,574, and $3,837,598,
respectively.








20
 Table of Contents





Financings
and Borrowings





Non-Recourse Long-Term
Debt





At
September 30, 2008 and December 31, 2007, we had non-recourse long-term debt
obligations that were being paid directly to the lender by the lessee and were
accruing interest at 6.1095% per year.  At September 30, 2008 and
December 31, 2007, our outstanding non-recourse debt obligations were
$43,324,361 and $46,142,220, respectively.





Revolving
Line of Credit, Recourse





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





The
Facility was originally set to expire on September 30, 2008 and established (i)
the interest rate for advances under the Facility at the Lender’s prime rate and
(ii) the interest rate on the five separate advances that are permitted to be
made under the Facility at which United States dollar deposits can be acquired
by the Lender at the London Interbank Eurocurrency Market Rate plus 2.5%. The
interest rate at September 30, 2008 was 5%.





On May 1,
2008, the Borrowers entered into a Loan Modification Agreement. The agreement
increased the revolving line of credit up to $30,000,000 and extended the
expiration date to April 30, 2010. The Borrowers may request a one year
extension to the revolving line of credit within 390 days of the expiration
date, but the Lender has no obligation to extend. The quarterly unused
commitment fee of 0.5% was reduced to 0.25% on unused commitments under the
Facility.





The
Borrowers were in compliance with the covenants under the Loan Agreement at
September 30, 2008.





Aggregate
borrowings by all Borrowers under the Facility amounted to $1,255,000 at
September 30, 2008, all of which was borrowed by us.  Subsequent to
September 30, 2008, we repaid $70,000, which reduced the outstanding loan
balance to $1,185,000.





Distributions





We paid
monthly distributions to each of our partners beginning the first month after
each such partner was admitted through the termination of our reinvestment
period, which was on June 17, 2007.  During the liquidation period, we
plan to make distributions in accordance with the terms of our amended and
restated agreement of limited partnership (the “LP Agreement”). We expect that
distributions made during the liquidation period will vary, depending on the
timing of the sale of our assets, our receipt of rental income, and income from
our investments.  We paid distributions to our limited partners and
our General Partner in the 2008 Period of $1,527,148 and $15,426,
respectively.








21
 Table of Contents







Contractual
Obligations and Commitments and Off Balance Sheet Transactions





At
September 30, 2008, we had both non-recourse and recourse debt
obligations.  The lenders have security interests in the equipment
relating to each non-recourse long-term debt instrument and, in some cases, an
assignment of the rental payments under the leases associated with the
equipment. In that case, the lender is being paid directly by the
lessee.  If the lessee were to default on the non-recourse long-term
debt, the equipment would be returned to the lender in extinguishment of the
non-recourse long-term debt. At September 30, 2008, our outstanding non-recourse
long-term debt obligations were $43,324,361.  We are a party to the
Facility, as discussed in the financing and borrowings section
above.  We had $1,255,000 of borrowings outstanding under this
Facility at September 30, 2008.





Item 3. Quantitative and Qualitative Disclosures About Market
Risk





We, like
most other companies, are exposed to certain market risks, which include changes
in interest rates and the demand for equipment (and the related residuals) owned
by us.  We believe that our exposure to other market risks, including
commodity risk and equity price risk, are insignificant, at this time, to both
our financial position and our results of operations.  There were no
other material changes to the disclosure related to these items since the filing
of our Annual Report on Form 10-K for the year ended December 31,
2007.




We
currently have three outstanding notes payable, two of which are non-recourse
long-term debt and the other is associated with our recourse revolving line of
credit.  Due to the fixed nature of the non-recourse long term debt,
the conditions in the credit markets as of September 30, 2008 have not had any
impact on us.  With respect to our revolving line of credit, which is
subject to variable interest, our General Partner has evaluated the impact of
the condition of the credit markets on the outstanding balance and has
determined that it will not have any material impact on
us.  Furthermore, we are currently in our liquidation period and,
therefore, as we have no current intentions of obtaining additional external
financing or refinancing our existing indebtedness, we do not expect any adverse
impact on our cash flows should credit conditions in general remain the same or
deteriorate further.





22
 Table of Contents





Item 4T. Controls and Procedures





Evaluation of disclosure controls
and procedures





In
connection with the preparation of this Quarterly Report on Form 10-Q for the
period ended September 30, 2008, as well as the financial statements for our
General Partner, our General Partner carried out an evaluation, under the
supervision and with the participation of the management of our General Partner,
including its Co-Chief Executive Officers and Chief Financial Officer, of the
effectiveness of the design and operation of our General Partner’s disclosure
controls and procedures as of the end of the period covered by this Report
pursuant to the Securities Exchange Act of 1934. Based on the foregoing
evaluation, the Co-Chief Executive Officers and the Chief Financial Officer
concluded that our General Partner’s disclosure controls and procedures were
effective.





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





Evaluation of internal control over
financial reporting





There
have been no changes in our internal control over financial reporting during our
most recently completed fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.







23
 Table of Contents





PART II - OTHER INFORMATION





Item 1. Legal Proceedings





In the
ordinary course of conducting our business, there may be certain claims, suits
and complaints filed against us.  In the opinion of management, the
outcome of such matters, if any, will not have a material impact on our
consolidated financial position or results of operations.  No material
legal proceedings are currently pending or threatened, to our knowledge, against
us or against any of our assets.





Item 1A. Risk Factors





There
have been no material changes from the risk factors disclosed in “Item 1A. Risk
Factors” of our Annual Report on Form 10-K for the year ended December 31,
2007.





Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds





There
were 150 limited partnership units redeemed during the 2008
Period.  The redemption amounts are calculated according to a
specified redemption formula in accordance with the
LP Agreement.  Redeemed units have no voting rights and do not
share in distributions.  The LP Agreement limits the number of
limited partnership units which can be redeemed in any one year and redeemed
limited partnership units may not be reissued.  The following table
details our limited partnership redemptions:





Total
      Number of
            
            
            Price
      Paid PerLimited
      Partnership
            
            
            Limited
      PartnershipUnits Redeemed
            
            
            UnitJanuary
      1, 2008 through January 31, 2008
            
            
            -
            
            
            $
            -February
      1, 2008 through February 29, 2008
            
            
            -
            
            
            $
            -March
      1, 2008 through March 31, 2008
            
            
            150
            
            
            $
            23.15April
      1, 2008 through April 30, 2008
            
            
            -
            
            
            $
            -May
      1, 2008 through May 31, 2008
            
            
            -
            
            
            $
            -June
      1, 2008 through June 30, 2008
            
            
            -
            
            
            $
            -July
      1, 2008 through July 31, 2008
            
            
            -
            
            
            $
            -August
      1, 2008 through August 31, 2008
            
            
            -
            
            
            $
            -September
      1, 2008 through September 30, 2008
            
            
            -
            
            
            $
            -





Item 3. Defaults Upon Senior Securities





Not
applicable.





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





No
matters were submitted to a vote of security holders during the 2008
Quarter.





Item 5. Other Information





Not
applicable.






24
 Table of Contents








Item 6. Exhibits





3.1
            Amended
      and Restated Agreement of Limited Partnership of Registrant (Incorporated
      by reference to Exhibit 4.1 to Registrant’s Post-Effective Amendment No. 6
      to Form S-1 Registration Statement No. 333-54011 dated May 19,
      2000).4.1
            Certificate
      of Limited Partnership of Registrant (Incorporated by reference to Exhibit
      4.3 to Registrant’s Post-Effective Amendment No. 6 Form S-1 Registration
      Statement No. 333-54011 dated May 19, 2000).10.1
            Commercial
      Loan Agreement, by and between California Bank & Trust, ICON Income
      Fund Eight B L.P., ICON Income Fund Nine, LLC, ICON Income Fund Ten,
      LLC and ICON Leasing Fund Eleven, LLC, dated August 31, 2005 (Incorporated
      by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K
      dated August 31, 2005).10.2
            Loan
      Modification Agreement, by and between California Bank & Trust and
      ICON Income Fund Eight B L.P., ICON Income Fund Nine, LLC, ICON
      Income Fund Ten, LLC and ICON Leasing Fund Eleven, LLC, dated December 26,
      2006 (Incorporated by reference to Exhibit 10.1 to Registrant’s Current
      Report on Form 8-K dated December 29, 2006).10.3
            Loan
      Modification Agreement dated as of May 1, 2008 between California Bank
      & Trust and ICON Income Fund Eight B L.P., ICON Income Fund Nine,
      LLC, ICON Income Fund Ten, LLC, ICON Leasing Fund Eleven, LLC and ICON
      Leasing Fund Twelve, LLC (Incorporated by reference to Exhibit 10.4 to
      Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31,
      2008, filed May 15, 2008).31.1
            Rule
      13a-14(a)/15d-14(a). Certification of Co-Chief Executive
      Officer.31.2
            Rule
      13a-14(a)/15d-14(a). Certification of Co-Chief Executive
      Officer.31.3
            Rule
      13a-14(a)/15d-14(a). Certification of Chief Financial
    Officer.32.1
            Certification
      of Co-Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.32.2
            Certification
      of Co-Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.32.3
            Certification
      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.





25
 Table of Contents






SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacity and on the dates indicated.





File No.
333-37504


ICON
Capital Corp.


General
Partner of the Registrant





October 31,
2008





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





October 31,
2008





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





October 31,
2008





/s/
      Anthony J. BrancaAnthony
      J. BrancaChief
      Financial Officer
              (Principal
      Accounting and Financial Officer)




26