**United      States**

**SECURITIES      AND EXCHANGE COMMISSION **

**FORM      10-K **

**ANNUAL      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934**

**TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934**

**LEASE      EQUITY APPRECIATION FUND I, L.P. **

| Delaware                               |   | 68-0492247                                          |
|----------------------------------------|--------|-----------------------------------------------------|
| (State                of Organization) |   | (I.R.S.                Employer Identification No.) |

| Title                of Each Class |   | Name                of Each Exchange on Which Registered |
|------------------------------------|--------|----------------------------------------------------------|
| (None)                             |   | (Not                applicable)                          |

**DOCUMENTS      INCORPORATED BY REFERENCE**

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**[THIS      PAGE INTENTIONALLY LEFT BLANK]**

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**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**INDEX      TO ANNUAL REPORT**
** **

**ON      FORM 10-K**

|                            |                                                                                                                                                       | Page     |
|---------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
|  **PART              I**   |                                                                                                                                                       |     |
|                                 | ITEM              1: Business                                                                                                                         | 3        |
|                            | ITEM              1A: Risk              Factors                                                                                                       | 8        |
|                            | ITEM              1B: Unresolved              Staff Comments                                                                                          |  10 |
|                            | ITEM              2: Properties                                                                                                                       |  10 |
|                            | ITEM              3: Legal              Proceedings                                                                                                   | 10       |
|                            | ITEM                4: Submission                of Matters to a Vote of Security Holders                                                             | 10       |
|  **PART              II**  |                                                                                                                                                       |     |
|                            | ITEM                5: Market                for Registrant's Common Equity and Related Stockholder                Matters                            | 11       |
|                            | ITEM                6: Selected                Financial Data                                                                                         | 11       |
|                            | ITEM                7: Management’s                Discussion and Analysis of Financial Condition and Results                of Operation  | 12       |
|                            | ITEM                7A: Quantitative                and Qualitative Disclosures about Market Risk                                                     | 16       |
|                            | ITEM                8: Financial                Statements and Supplementary Data                                                                     | 17       |
|                            | ITEM                9: Changes                in and Disagreements with Accountants on Accounting and and                Financial Disclosure    | 31       |
|                            | ITEM                9A: Controls                and Procedures                                                                                        | 31       |
|                            | ITEM              9B: Other              Information                                                                                                  |     |
|  **PART              III** |                                                                                                                                                       |     |
|                            | ITEM                10: Directors                and Executive Officers of the Registrant                                                             |  31 |
|                            | ITEM              11: Executive              Compensation                                                                                             |  33 |
|                            | ITEM              12: Securitiy              Ownership of Certain Beneficial Owners and Management                                                    |  33 |
|                            | ITEM              13: Certain              Relationships and Related Transactions                                                                     |  34 |
|                            | ITEM              14: Principal              Accountant Fees and Services                                                                             |  34 |
|  **PART              IV**  |                                                                                                                                                       |     |
|                            | ITEM              15: Exhibits,              Finanical Statement Schedules and Reports on Form 8-K                                                    |  35 |
|                            |                                                                                                                                                       |     |
|  **SIGNATURES**            | 36                                                                                                                                                         |

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**Forward-Looking      Statements**

**THE      DISCUSSIONS CONTAINED IN THIS REPORT INCLUDE FORWARD-LOOKING STATEMENTS      REGARDING EVENTS AND FINANCIAL TRENDS WHICH MAY AFFECT THE REGISTRANT’S FUTURE      OPERATING RESULTS AND FINANCIAL POSITION. SUCH STATEMENTS ARE SUBJECT TO RISKS      AND UNCERTAINTIES THAT COULD CAUSE THE REGISTRANT’S ACTUAL RESULTS AND FINANCIAL      POSISION TO DIFFER MATERIALLY FROM THOSE ANTICIPATED IN SUCH      STATEMENTS.**

**PART      I**

**ITEM      1.** **BUSINESS**

**General**

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**Our      Lease Portfolio **

**Direct      Financing Leases and Notes**

|                                      |   | **December                31, 2005**  |                              |   |   | **December                31, 2004** |
|--------------------------------------|--------|--------------------------------------------|-----------------------------------|--------|--------|--------------------------------------|
| **Type                of Equipment** |   |                                       | **Net                Investment** |   |   | **Percentage**                       |   |   | **Type                of Equipment** |   |   | **Net                Investment** |   |   | **Percentage** |   |
| Industrial                Equipment  |   | $                                          | 22,098                            |   |   | 27.2                                 | % |   | Medical                Equipment |   | $ | 13,872 |   |   | 25.8 | % |
| Medical                Equipment     |   |                                       | 18,993                            |   |   | 23.4                                 |   |   | Industrial                Equipment |   |   | 11,292 |   |   | 21.0 |   |
| Computers                            |   |                                       | 13,302                            |   |   | 16.4                                 |   |   | Computers |   |   | 8,396 |   |   | 15.6 |   |
| Office                Equipment      |   |                                       | 9,398                             |   |   | 11.6                                 |   |   | Software |   |   | 4,705 |   |   | 8.8 |   |
| Software                             |   |                                       | 4,269                             |   |   | 5.2                                  |   |   | Office                Equipment |   |   | 4,305 |   |   | 8.0 |   |
| Building                systems      |   |                                       | 2,980                             |   |   | 3.7                                  |   |   | Garment                Care |   |   | 3,916 |   |   | 7.3 |   |
| Garment                Care          |   |                                       | 3,585                             |   |   | 4.4                                  |   |   | Communications |   |   | 2,612 |   |   | 4.9 |   |
| Restaurant                Equipment  |   |                                       | 2,976                             |   |   | 3.7                                  |   |   | Building                systems |   |   | 2,260 |   |   | 4.2 |   |
| Communications                       |   |                                       | 2,409                             |   |   | 3.0                                  |   |   | Restaurant                Equipment |   |   | 1,892 |   |   | 3.5 |   |
| Agriculture                          |   |                                       | 1,178                             |   |   | 1.4                                  |   |   | Agriculture |   |   | 452 |   |   | 0.9 |   |
|                                 |   | $                                          | 81,188                            |   |   | 100.0                                | % |   |   |   | $ | 53,702 |   |   | 100.0 | % |

**Operating      Leases**

|                                 |   | **December                31, 2005**  |                              |   |   | **December                31, 2004** |
|--------------------------------------|--------|--------------------------------------------|-----------------------------------|--------|--------|--------------------------------------|
| **Type                of Equipment** |   |                                       | **Net                Investment** |   |   | **Percentage**                       |   |   | **Type                of Equipment** |   |   | **Net                Investment** |   |   | **Percentage** |   |
| Office                Equipment      |   | $                                          | 505                               |   |   | 29.1                                 | % |   | Computers |   | $ | 762 |   |   | 48.5 | % |
| Computers                            |   |                                       | 476                               |   |   | 27.3                                 |   |   | Office                Equipment |   |   | 473 |   |   | 30.1 |   |
| Industrial                Equipment  |   |                                       | 380                               |   |   | 21.8                                 |   |   | Communications |   |   | 272 |   |   | 17.3 |   |
| Communications                       |   |                                       | 323                               |   |   | 18.5                                 |   |   | Software |   |   | 36 |   |   | 2.3 |   |
| Medical                Equipment     |   |                                       | 41                                |   |   | 2.3                                  |   |   | Industrial                Equipment |   |   | 15 |   |   | 1.0 |   |
| Software                             |   |                                       | 16                                |   |   | 0.9                                  |   |   | Medical                Equipment |   |   | 9 |   |   | 0.6 |   |
| Restaurant                Equipment  |   |                                       | 2                                 |   |   | 0.1                                  |   |   | Restaurant                Equipment |   |   | 3 |   |   | 0.2 |   |
|                                 |   | $                                          | 1,743                             |   |   | 100.0                                | % |   |   |   | $ | 1,570 |   |   | 100.0 | % |

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**Direct      Financing Leases and Notes**

|                                                        |   | **December                31, 2005**  |                              |   |   | **December                31, 2004** |
|-------------------------------------------------------------|--------|--------------------------------------------|-----------------------------------|--------|--------|--------------------------------------|
| **Type                of Business**                         |   |                                       | **Net                Investment** |   |   | **Percentage**                       |   |   | **Type                of Business** |   |   | **Net                Investment** |   |   | **Percentage** |   |
| Services                                                    |   | $                                          | 44,929                            |   |   | 55.4                                 | % |   | Services |   | $ | 33,843 |   |   | 63.0 | % |
| Retail                Trade                                 |   |                                       | 8,897                             |   |   | 11.0                                 |   |   | Manufacturing |   |   | 5,775 |   |   | 10.7 |   |
| Manufacturing                                               |   |                                       | 8,774                             |   |   | 10.8                                 |   |   | Retail                Trade |   |   | 5,549 |   |   | 10.3 |   |
| Transportation/    Communication/Energy |   |                                       | 3,826                             |   |   | 4.7                                  |   |   | Finance/Insurance/Real                Estate |   |   | 2,506 |   |   | 4.7 |   |
| Construction                                                |   |                                       | 3,640                             |   |   | 4.5                                  |   |   | Transportation/    Communication/Energy |   |   | 1,993 |   |   | 3.7 |   |
| Finance/Insurance/Real                Estate                |   |                                       | 3,125                             |   |   | 3.8                                  |   |   | Wholesale                Trade |   |   | 1,991 |   |   | 3.7 |   |
| Wholesale                Trade                              |   |                                       | 3,085                             |   |   | 3.8                                  |   |   | Construction |   |   | 1,482 |   |   | 2.8 |   |
| Agriculture/Forestry/Fishing                                |   |                                       | 2,446                             |   |   | 3.0                                  |   |   | Public                Administration |   |   | 534 |   |   | 1.0 |   |
| Public                Administration                        |   |                                       | 1,246                             |   |   | 1.5                                  |   |   | Mining |   |   | 29 |   |   | 0.1 |   |
| Other                                                       |   |                                       | 1,173                             |   |   | 1.4                                  |   |   |  |   |   |  |   |   |   |   |
| Mining                                                      |   |                                       | 47                                |   |   | 0.1                                  |   |   |   |   |   |   |   |   |   |   |
|                                                        |   | $                                          | 81,188                            |   |   | 100.0                                | % |   |   |   | $ | 53,702 |   |   | 100.0 | % |

**Operating      Leases**

|                                                                             |   | **December                31, 2005**  |                              |   |   | **December                31, 2004** |
|-----------------------------------------------------------------------------|--------|--------------------------------------------|-----------------------------------|--------|--------|--------------------------------------|
| **Type                of Business**                                         |   |                                       | **Net                Investment** |   |   | **Percentage**                       |   |   | **Type                of Business** |   |   | **Net                Investment** |   |   | **Percentage** |   |
| Services                                                                    |   | $                                          | 706                               |   |   | 40.3                                 | % |   | Services |   | $ | 862 |   |   | 54.9 | % |
| Construction                                                                |   |                                       | 451                               |   |   | 25.9                                 |   |   | Wholesale                Trade |   |   | 266 |   |   | 16.9 |   |
| Wholesale                Trade                                              |   |                                       | 199                               |   |   | 11.4                                 |   |   | Manufacturing |   |   | 175 |   |   | 11.1 |   |
| Manufacturing                                                               |   |                                       | 136                               |   |   | 7.8                                  |   |   | Transportation/                    Communication/Energy |   |   | 104 |   |   | 6.7 |   |
| Transportation/                    Communication/Energy |   |                                       | 113                               |   |   | 6.5                                  |   |   | Finance/Insurance/Real                Estate |   |   | 96 |   |   | 6.1 |   |
| Finance/Insurance/Real                Estate                                |   |                                       | 102                               |   |   | 5.9                                  |   |   | Construction |   |   | 52 |   |   | 3.3 |   |
| Public                Administration                                        |   |                                       | 14                                |   |   | 0.8                                  |   |   | Mining |   |   | 8 |   |   | 0.5 |   |
| Retail                Trade                                                 |   |                                       | 12                                |   |   | 0.7                                  |   |   | Public                Administration |   |   | 4 |   |   | 0.3 |   |
| Mining                                                                      |   |                                       | 6                                 |   |   | 0.4                                  |   |   | Retail                Trade |   |   | 3 |   |   | 0.2 |   |
| Other                                                                       |   |                                       | 4                                 |   |   | 0.3                                  |   |   |   |   |   |   |   |   |   |   |
|                                                                        |   | $                                          | 1,743                             |   |   | 100.0                                | % |   |   |   | $ | 1,570 |   |   | 100.0 | % |

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|                                             |   | **December                31,**  |
|---------------------------------------------|--------|---------------------------------------|
|                                        |   |                                  | **2005** |   |   | **2004** |   |
| Balance                at beginning of year |   | $                                     | 120,000 |   | $ | 5,000 |   |
| Provision                for credit losses  |   |                                  | 1,352,191 |   |   | 394,928 |   |
| Net                write-offs               |   |                                  | (1,067,191 | ) |   | (279,928 | ) |
| Balance                at end of year       |   | $                                     | 405,000 |   | $ | 120,000 |   |

**Debt      Facilities**

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**Agreements      with our General Partner**

| ·   | our                General Partner has a partnership interest equal to 1% of all of                our                taxable income, losses and cash distributions. Cash distributions                paid to                our General Partner in the years ended December 31, 2005, 2004 and                2003                were $13,879, $9,768 and $4,794,                respectively; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | our                General Partner received an organization and offering expense allowance                of                3% of offering proceeds to reimburse it for expenses incurred in                preparing                us for registration or qualification under federal and state securities                laws and subsequently offering and selling our units. This expense                allowance did not cover underwriting fees or sales commissions, but                did                cover reimbursement of bona fide accountable due diligence expenses                of                selling dealers to a maximum of 1/2 of 1% of offering proceeds.                Organization and offering expenses reimbursed to the General Partner                for                the year ended December 31, 2004 and 2003 were $226,438 and $285,249,                respectively. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | our                General Partner receives fees for acquiring our equipment of 2% of                the                purchase price we pay, including debt we incur or assume in connection                with the acquisition. Fees for acquiring our equipment paid to the                General                Partner for the years ended December 31, 2005, 2004 and 2003 were                $1,211,566, $850,220 and $516,239, respectively; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | our                General Partner receives a subordinated annual asset management fee                of                either 3% of gross rental payments on our operating leases or 2%                of gross                rental payments on our full payout leases and notes. During the five-year                reinvestment period, the management fee will be subordinated to the                payment to limited partners of a cumulative annual distribution of                8% of                their capital contributions, as adjusted by distributions deemed                to be a                return of capital. Asset management fees paid to the General Partner                for                the years ended December 31, 2005, 2004, 2003 were $840,403, $383,798                and                $73,095, respectively; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | our                General Partner will receive a subordinated commission equal to one-half                of a competitive commission, to a maximum of 3% of the contract sales                price, for arranging the sale of our equipment after the expiration                of a                lease. This commission will be subordinated to the return to our                Limited                Partners of the purchase price of their units plus a cumulative annual                distribution, compounded daily, of 8% of their capital contributions,                as                adjusted by distributions deemed to be a return of capital. No commissions                were paid in the years ended December 31, 2005, 2004 and                2003; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | our                General Partner will receive a commission equal to the lesser of                a                competitive rate or 2% of gross rental payments derived from any                re-lease                of equipment, payable as we receive rental payments from re-lease.                We will                not, however, pay a re-lease commission if the re-lease is with the                original lessee or its affiliates. No re-lease commissions were paid                in                the years ended December 31, 2005, 2004 and 2003; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | our                General Partner is reimbursed for operating and administrative expenses,                subject to limitations contained in our partnership agreement. Reimbursed                administrative expenses paid to the General Partner for the years                ended                December 31, 2005 2004 and 2003 were $554,611, $482,180 and $594,985,                respectively; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Anthem                Securities, Inc., which was the dealer-manager for the offering of                our                units and an affiliate of our General Partner, received an underwriting                fee of 2% of the offering proceeds for obtaining and managing the                group of                broker-dealers who sold the units in our offering. From this fee,                Anthem                Securities reimbursed selling broker-dealers up to 1% of the proceeds                of                each unit sold by them for marketing expenses. Anthem Securities                was                entitled to receive sales commissions of 8% of the proceeds of each                unit                sold by it. For the years ended 2004 and 2003, underwriting fees                of                $141,542 and $179,184, respectively, were paid to Anthem Securities.                Anthem Securities did not sell any units and did not receive any                sale                commission during our offering                period. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Competition**

| ·   | a                large number of national, regional and local banks, savings banks,                leasing                companies and other financial institutions; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | captive                finance and leasing companies affiliated with major equipment                manufacturers; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------|

| ·   | other                sources of equipment lease financing, including other publicly- offered                partnerships. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------|

**Employees**

**ITEM      1A.** **RISK      FACTORS**

*Our      success will be subject to risks inherent in the equipment leasing business,      any      of which may affect our ability to operate profitably. *

| ·   | the                quality of the equipment we lease; |
|--------------------|-------------------------------------------------------|

| ·   | the                continuing strength of the equipment manufacturers; |
|--------------------|------------------------------------------------------------------------|

| ·   | the                timing of equipment purchases and our ability to forecast technological                advances; |
|--------------------|---------------------------------------------------------------------------------------------------------------------|

| ·   | technological                and economic obsolescence; |
|--------------------|---------------------------------------------------------|

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

| ·   | defaults                by lessees; and |
|--------------------|-----------------------------------------|

| ·   | increases                in our expenses, including labor, tax and insurance expenses. |
|--------------------|----------------------------------------------------------------------------------------|

*Higher      than expected equipment lease defaults may result in losses. *

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*Using      "leverage" to build our portfolio subjects us to the risk that our revenues      may      not be sufficient to cover our operating costs plus debt service and,      consequently, may result in losses. *

*If      we      are unable to realize the residual value of our equipment, we may incur losses.      *

| ·   | whether                the original lessee desires to retain the equipment; |
|--------------------|-----------------------------------------------------------------------------|

| ·   | the                cost of comparable new equipment; |
|--------------------|------------------------------------------------------|

| ·   | the                obsolescence or poor condition of the leased equipment; and |
|--------------------|--------------------------------------------------------------------------------|

| ·   | the                existence of a secondary market for the type of used equipment. |
|--------------------|------------------------------------------------------------------------------------|

*Interest      rate changes may reduce the value of our portfolio and our returns on it.*

*Damage      or disruptions to our General Partner's operating systems could make us less      attractive as a source of equipment leases. *

*We      may be unable to obtain insurance for certain types of losses.*

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*If      we      are, or become, subject to usury laws, it could result in reduced revenues      or,      possibly, lags on our investment. *

*Investments      in joint ventures may be subject to risks that our co-venturer may have      different business objectives than ours. *

**ITEM      1B.** **UNRESOLVED      STAFF COMMENTS**

**ITEM      2.** **PROPERTIES**

**ITEM      3.** **LEGAL      PROCEEDINGS**

**ITEM      4.** **SUBMISSION      OF MATTERS TO A VOTE OF SECURITY HOLDERS**

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**PART      II**

**ITEM      5.** **MARKET      FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER      MATTERS**

| Title                of Class                |   |   | **Number                of Partners****as                of****December                31, 2005** |   |
|----------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------|--------|
| Limited                Partnership Interests |   |   | 468                                                                                               |   |
| General                Partnership Interest  |   |   | 1                                                                                                 |   |

**ITEM      6.** **SELECTED      FINANCIAL DATA**

|                                                                                                                |   | **For                the Years Ended****December                31,**  |
|----------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------|
|                                                                                                           |   |                                                                        | **2005** |   |   | **2004** |   |   | **2003** |   |
| Revenues                                                                                                       |   | $                                                                           | 7,703,829 |   | $ | 3,537,123 |   | $ | 973,055 |   |
| Expenses                                                                                                       |   | $                                                                           | 8,387,692 |   | $ | 3,786,797 |   | $ | 1,369,340 |   |
| Net                loss                                                                                        |   | $                                                                           | (683,863 | ) | $ | (249,674 | ) | $ | (396,285 | ) |
| Distributions                to Partners                                                                       |   | $                                                                           | 1,387,861 |   | $ | 977,748 |   | $ | 479,744 |   |
| Weighted                average number of limited partnership units outstanding                during the year |   |                                                                        | 171,746 |   |   | 137,000 |   |   | 61,149 |   |
| Net                loss per weighted limited partnership unit − basic and fully diluted                  |   | $                                                                           | (3.94 | ) | $ | (1.80 | ) | $ | (6.42 | ) |

|                                                                    |   | **December                31,**  |
|--------------------------------------------------------------------|--------|---------------------------------------|
|                                                               |   |                                  | **2005** |   |   | **2004** |   |   | **2003** |   |   | **2002** |   |
| Total                assets                                        |   | $                                     | 90,792,726 |   | $ | 66,530,058 |   | $ | 28,236,400 |   | $ | 1,001 |   |
| Net                investment in direct financing leases and notes |   | $                                     | 80,782,648 |   | $ | 53,582,361 |   | $ | 24,240,624 |   |   | − |   |
| Equipment                under operating leases (net)              |   | $                                     | 1,743,257 |   | $ | 1,569,754 |   | $ | 313,479 |   |   | − |   |
| Debt                                                               |   | $                                     | 77,326,886 |   | $ | 51,461,671 |   | $ | 20,386,402 |   |   | − |   |
| Partners’                capital                             |   | $                                     | 11,428,092 |   | $ | 12,789,065 |   | $ | 7,452,099 |   | $ | 1,001 |   |

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**ITEM      7.** **MANAGEMENT'S      DISCUSSION AND ANALYSIS OF****FINANCIAL      CONDITION AND RESULTS OF OPERATIONS**

**General      **

**Results      of Operations **

*Year      Ended December, 31, 2005 Compared to Year Ended December 31,      2004*

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*Year      Ended December, 31, 2004 Compared to Year Ended December 31,      2003*

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**Liquidity      and Capital Resources**

**General**

|                                                                          |   | **For                the Year Ended****December                31,**  |
|--------------------------------------------------------------------------|--------|----------------------------------------------------------------------------|
|                                                                     |   |                                                                       | **2005** |   |   | **2004** |   |
| Net                cash provided by (used in) operating activities  |   | $                                                                          | (285,980 | ) | $ | 2,189,315 |   |
| Net                cash used in investing activities                |   |                                                                       | (29,050,817 | ) |   | (30,867,192 | ) |
| Net                cash provided by financing activities            |   |                                                                       | 30,231,648 |   |   | 29,958,363 |   |
| Increase                in cash                                     |   | $                                                                          | 894,851 |   | $ | 1,280,486 |   |

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| ·   | a                decrease in net borrowings of $5,210,054 in the year ended December                31,                2005 as compared to the year ended December 31,                2004; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a                decrease in partners’ capital contributions and related offering costs of                $7,552,469 and $935,940, respectively, in the year ended December                31, 2005                as compared to the year ended December 31,                2004; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | an                increase in distributions to partners of $410,113 in the year ended                December 31, 2005 as compared to the year ended December 31,                2004; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | restricted                cash increased in 2004 by $6,046,595 and decreased in 2005 by $5,754,294,                resulting in a net change of $11,800,889,                and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a                net decrease in deferred financing costs of $709,092, these costs                were                related to the WestLB facility, in the year ended December 31, 2005                as                compared to the year ended December 31,                2004. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Contractual      Obligations and Commercial Commitments**

|                               |   |   | Total  |   |   | Less                than                1 Year |   |   | 1-3                Years |   |   | 4-5                Years |   |   | After                5 years |   |
|-------------------------------|--------|--------|-------------|--------|--------|------------------------------------------------|--------|--------|--------------------------|--------|--------|--------------------------|--------|--------|------------------------------|--------|
| Long                term debt |   | $      | 77,326,886  |   | $      | 29,101,293                                     |   | $      | 37,263,295               |   | $      | 10,358,173               |   | $      | 604,125                      |   |

**Recently      Issued Accounting Pronouncements**

**Critical      Accounting Policies **

*Revenue      Recognition*

*    Direct      Financing Leases. *

----

*Operating      Leases. *

*Notes      Receivable.*

*Derivative      Instruments and Hedging Activities. *

**ITEM      7A.** **QUANTITIVE      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

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**ITEM      8.** **FINANCIAL      STATEMENTS AND SUPPLEMENTARY DATA**

**REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

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**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**CONSOLIDATED      BALANCE SHEETS**

**DECEMBER      31, 2005 AND 2004**

|                                                                                                                                                                                      |   | **December                31, **  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|
|                                                                                                                                                                                 |   |                                        | **2005** |   |   | **2004** |   |
| **ASSETS**                                                                                                                                                                           |   |                                        |   |   |   |   |   |
| Cash                                                                                                                                                                                 |   | $                                           | 3,205,731 |   | $ | 2,310,880 |   |
| Restricted                cash                                                                                                                                                       |   |                                        | 1,887,933 |   |   | 7,642,227 |   |
| Accounts                receivable                                                                                                                                                   |   |                                        | 89,702 |   |   | 56,837 |   |
| Due                from lockbox                                                                                                                                                      |   |                                        | 1,343,985 |   |   | 531,558 |   |
| Investment                in direct financing leases and notes, net                                                                                                                  |   |                                        | 80,782,648 |   |   | 53,582,361 |   |
| Investment                in operating leases, net of accumulated depreciation of $1,069,031                and $316,084,                      respectively |   |                                        | 1,743,257 |   |   | 1,569,754 |   |
| Fair                value of interest rate swap                                                                                                                                      |   |                                        | 658,610 |   |   | − |   |
| Other                assets                                                                                                                                                          |   |                                        | 1,080,860 |   |   | 836,441 |   |
|                                                                                                                                                                                 |   | $                                           | 90,792,726 |   | $ | 66,530,058 |   |
| **LIABILITIES                AND PARTNERS’ CAPITAL**                                                                                                                           |   |                                        |   |   |   |   |   |
| **Liabilities:**                                                                                                                                                                     |   |                                        |   |   |   |   |   |
| Debt                                                                                                                                                                            |   | $                                           | 77,326,886 |   | $ | 51,461,671 |   |
| Accounts                payable and accrued expenses                                                                                                                            |   |                                        | 418,278 |   |   | 840,118 |   |
| Due                to related parties, net                                                                                                                                      |   |                                        | 818,235 |   |   | 955,361 |   |
| Security                deposits                                                                                                                                           |   |                                        | 801,235 |   |   | 431,702 |   |
| Fair                value of interest rate swap                                                                                                                                 |   |                                        | − |   |   | 52,141 |   |
| Total                liabilities                                                                                                                                                |   |                                        | 79,364,634 |   |   | 53,740,993 |   |
| **Partners’                Capital**                                                                                                                                      |   |                                        | 11,428,092 |   |   | 12,789,065 |   |
|                                                                                                                                                                                 |   | $                                           | 90,792,726 |   | $ | 66,530,058 |   |

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**CONSOLIDATED      STATEMENTS OF OPERATIONS**

**FOR      THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003**

|                                                                                                             |   | **For                the Years Ended December 31,**  |
|-------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------|
|                                                                                                        |   |                                                      | **2005** |   |   | **2004** |   |   | **2003** |   |
| **Income:**                                                                                                 |   |                                                      |   |   |   |   |   |   |   |   |
| Interest                on equipment financings                                                             |   | $                                                         | 6,197,420 |   | $ | 2,921,349 |   | $ | 781,989 |   |
| Rental                income                                                                                |   |                                                      | 992,691 |   |   | 433,373 |   |   | 184,197 |   |
| Gain                (loss) on sale of equipment and lease dispositions, net                       |   |                                                      | 126,281 |   |   | 60,764 |   |   | (10,206 | ) |
| Other                                                                                                       |   |                                                      | 387,437 |   |   | 121,637 |   |   | 17,075 |   |
|                                                                                                        |   |                                                      | 7,703,829 |   |   | 3,537,123 |   |   | 973,055 |   |
|                                                                                                        |   |                                                      |   |   |   |   |   |   |   |   |
| **Expenses:**                                                                                               |   |                                                      |   |   |   |   |   |   |   |   |
| Interest                expense                                                                             |   |                                                      | 4,344,009 |   |   | 1,873,986 |   |   | 321,472 |   |
| Provision                for credit losses                                                                  |   |                                                      | 1,352,191 |   |   | 394,928 |   |   | 5,000 |   |
| Depreciation                on operating leases                                                             |   |                                                      | 820,650 |   |   | 342,865 |   |   | 167,622 |   |
| Administrative                expense reimbursed to related party                                           |   |                                                      | 554,611 |   |   | 482,180 |   |   | 594,985 |   |
| Management                fee to related party                                                              |   |                                                      | 840,403 |   |   | 383,798 |   |   | 73,095 |   |
| General                and administrative expenses                                                          |   |                                                      | 475,828 |   |   | 309,040 |   |   | 207,166 |   |
|                                                                                                        |   |                                                      | 8,387,692 |   |   | 3,786,797 |   |   | 1,369,340 |   |
| Net                loss                                                                                     |   | $                                                         | (683,863 | ) | $ | (249,674 | ) | $ | (396,285 | ) |
|                                                                                                        |   |                                                      |   |   |   |   |   |   |   |   |
| Weighted                average number of limited partner unitsoutstanding                during the period |   |                                                      | 171,746 |   |   | 137,000 |   |   | 61,149 |   |
| Net                loss per weighted average limited partner unit                                           |   | $                                                         | (3.94 | ) | $ | (1.80 | ) | $ | (6.42 | ) |

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**CONSOLIDATED      STATEMENTS OF PARTNERS’ CAPITAL **

**AND      COMPREHENSIVE INCOME (LOSS)**

**FOR      THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003**

|                                                                                                                                 |   |   | **General                  Partner**  |   | **Limited                  Partners** |      | **Accumulated                  Other Comprehensive** |   |       | **Partners’                  Capital** |   |                               | **Comprehensive                  Income (Loss)** |   |
|---------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------------------------------------------|--------|---------------------------------------|-----------|------------------------------------------------------|--------|------------|----------------------------------------------|--------|------------------------------------|--------------------------------------------------|--------|
|                                                                                                                                 |   |   | **Amount**                            |   |                                  | **Units** |                                                 |   | **Amount** |                                         |   | **Income                  (Loss)** |                                             |   | **Total** |   |   | **Total** |   |
| Balance,                  December 31, 2002                                                                                |   | $      | 1,000                                      |   |                                  | 10        |                                                 | $      | 1          |                                         | $      | −                            |                                             | $      | 1,001 |   |   |   |   |
| Limited                  Partners’ contribution                                                                           |   |   | -                                          |   |                                  | 94,310    |                                                 |   | 9,371,139  |                                         |   | −                            |                                             |   | 9,371,139 |   |   |   |   |
| Offering                  costs related to the sale of                  Limited Partnership                     units |   |   | -                                          |   |                                  | -         |                                                 |   | (1,181,175 | )                                            |   | −                            |                                             |   | (1,181,175 | ) |   |   |   |
| Cash                  distributions paid                                                                                   |   |   | (4,794                                     | )      |                                  | -         |                                                 |   | (474,950   | )                                            |   | −                            |                                             |   | (479,744 | ) |   |   |   |
| Cash                  distributions reinvested                                                                             |   |   | -                                          |   |                                  | 1,383     |                                                 |   | 137,164    |                                         |   | −                            |                                             |   | 137,164 |   |   |   |   |
| Redemption                  of Limited Partner Units                                                                       |   |   | -                                          |   |                                  | (10       | )                                                    |   | (1         | )                                            |   | −                            |                                             |   | (1 | ) |   |   |   |
| Net                  loss                                                                                                  |   |   | (3,963                                     | )      |                                  | -         |                                                 |   | (392,322   | )                                            |   | −                            |                                             |   | (396,285 | ) | $ | (396,285 | ) |
| Balance,                  December 31, 2003                                                                                |   |   | (7,757                                     | )      |                                  | 95,693    |                                                 |   | 7,459,856  |                                         |   | −                            |                                             |   | 7,452,099 |   | $ | (396,285 | ) |
| Partners’                  contribution                                                                              |   |   | -                                          |   |                                  | 73,213    |                                                 |   | 7,272,706  |                                         |   | −                            |                                             |   | 7,272,706 |   |   |   |   |
| Offering                  costs related to the sale of Partnership                  units                                       |   |   | -                                          |   |                                  | -         |                                                 |   | (935,940   | )                                            |   | −                            |                                             |   | (935,940 | ) |   |   |   |
| Cash                  distributions paid                                                                                   |   |   | (9,768                                     | )      |                                  | -         |                                                 |   | (967,980   | )                                            |   | −                            |                                             |   | (977,748 | ) |   |   |   |
| Cash                  distributions reinvested                                                                             |   |   | -                                          |   |                                  | 2,840     |                                                 |   | 279,763    |                                         |   | −                            |                                             |   | 279,763 |   |   |   |   |
| Net                  loss                                                                                                  |   |   | (2,496                                     | )      |                                  | -         |                                                 |   | (247,178   | )                                            |   | −                            |                                             |   | (249,674 | ) | $ | (249,674 | ) |
| Unrealized                  loss on hedging derivative                                                                          |   |   | −                                    |   |                                  | −   |                                                 |   | −    |                                         |   | (52,141                            | )                                                |   | (52,141 | ) |   | (52,141 | ) |
| Balance,                  December 31, 2004                                                                                |   |   | (20,021                                    | )      |                                  | 171,746   |                                                 |   | 12,861,227 |                                         |   | (52,141                            | )                                                |   | 12,789,065 |   | $ | (301,815 | ) |
| Cash                  distributions paid                                                                                        |   |   | (13,879                                    | )      |                                  | -         |                                                 |   | (1,373,982 | )                                            |   | −                            |                                             |   | (1,387,861 | ) |   |   |   |
| Net                  loss                                                                                                       |   |   | (6,839                                     | )      |                                  | -         |                                                 |   | (677,024   | )                                            |   | −                            |                                             |   | (683,863 | ) | $ | (683,863 | ) |
| Unrealized                  gain on hedging derivative                                                                          |   |   | −                                    |   |                                  | −   |                                                 |   | −    |                                         |   | 710,751                            |                                             |   | 710,751 |   |   | 710,751 |   |
| Balance,                  December 31, 2005                                                                                |   | $      | (40,739                                    | )      |                                  | 171,746   |                                                 | $      | 10,810,221 |                                         | $      | 658,610                            |                                             | $      | 11,428,092 |   | $ | 26,888 |   |

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

**FOR      THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003**

|                                                                                                                                                                 |   | **Years                Ended December 31,**  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------|
|                                                                                                                                                            |   |                                              | **2005** |   |   | **2004** |   |   | **2003** |   |
| **Cash                flows from operating activities:**                                                                                                        |   |                                              |   |   |   |   |   |   |   |   |
| Net                loss                                                                                                                                    |   | $                                                 | (683,863 | ) | $ | (249,674 | ) | $ | (396,285 | ) |
| Adjustments                to reconcile net loss to net cash provided by (used                in)                     operating activities: |   |                                              |   |   |   |   |   |   |   |   |
| (Gain)                Loss on sale of equipment and lease dispositions net                                                                                 |   |                                              | (126,281 | ) |   | (60,764 | ) |   | 10,206 |   |
| Depreciation                                                                                                                                               |   |                                              | 820,650 |   |   | 342,865 |   |   | 167,622 |   |
| Amortization                of deferred financing costs                                                                                                    |   |                                              | 132,134 |   |   | 60,765 |   |   | 6,399 |   |
| Provision                for credit losses                                                                                                                 |   |                                              | 1,352,191 |   |   | 394,928 |   |   | 5,000 |   |
| Changes                in operating assets and liabilities:                                                                                                     |   |                                              |   |   |   |   |   |   |   |   |
| Accounts                receivable                                                                                                                              |   |                                              | (32,865 | ) |   | 28,534 |   |   | (85,372 | ) |
| Due                from lockbox                                                                                                                                 |   |                                              | (812,427 | ) |   | 42,688 |   |   | (574,246 | ) |
| Other                assets                                                                                                                                     |   |                                              | (464,267 | ) |   | 79,707 |   |   | (113,506 | ) |
| Accounts                payable and accrued expenses                                                                                                            |   |                                              | (334,126 | ) |   | 466,072 |   |   | 374,046 |   |
| Due                to related parties, net                                                                                                                      |   |                                              | (137,126 | ) |   | 1,084,194 |   |   | (128,833 | ) |
| Net                cash (used in) provided by operating activities                                                                                         |   |                                              | (285,980 | ) |   | 2,189,315 |   |   | (734,969 | ) |
|                                                                                                                                                            |   |                                              |   |   |   |   |   |   |   |   |
| **Cash                flows from investing activities:**                                                                                                        |   |                                              |   |   |   |   |   |   |   |   |
| Acquisitions                of equipment under operating leases                                                                                                 |   |                                              | (994,153 | ) |   | (1,599,140 | ) |   | (657,952 | ) |
| Investments                in direct financing leases and notes                                                                                                 |   |                                              | (59,584,113 | ) |   | (41,411,989 | ) |   | (26,666,040 | ) |
| Proceeds                from direct financing leases and notes, net of earned income                                                                            |   |                                              | 31,153,424 |   |   | 11,736,088 |   |   | 2,587,062 |   |
| Security                deposits, net                                                                                                                           |   |                                              | 374,025 |   |   | 407,849 |   |   | 23,853 |   |
| Net                cash used in investing activities                                                                                                            |   |                                              | (29,050,817 | ) |   | (30,867,192 | ) |   | (24,713,077 | ) |
|                                                                                                                                                            |   |                                              |   |   |   |   |   |   |   |   |
| **Cash                flows from financing activities:**                                                                                                        |   |                                              |   |   |   |   |   |   |   |   |
| Decrease                (increase) in restricted cash                                                                                                           |   |                                              | 5,754,294 |   |   | (6,046,595 | ) |   | (1,595,632 | ) |
| Decrease                (increase) in deferred financing costs                                                                                                  |   |                                              | − |   |   | (709,092 | ) |   | (160,715 | ) |
| Proceeds                from debt                                                                                                                               |   |                                              | 80,388,805 |   |   | 57,758,292 |   |   | 36,972,482 |   |
| Repayment                of debt                                                                                                                                |   |                                              | (54,523,590 | ) |   | (26,683,023 | ) |   | (16,586,080 | ) |
| Limited                Partners’ capital contribution                                                                                                     |   |                                              | − |   |   | 7,552,469 |   |   | 9,508,303 |   |
| Partners’** **distributions                paid                                                                                                      |   |                                              | (1,387,861 | ) |   | (977,748 | ) |   | (479,744 | ) |
| Payment                of offering costs incurred for the sale of limited partnership                units                                                      |   |                                              | − |   |   | (935,940 | ) |   | (1,181,175 | ) |
| Net                cash provided by financing activities                                                                                                        |   |                                              | 30,231,648 |   |   | 29,958,363 |   |   | 26,477,439 |   |
|                                                                                                                                                            |   |                                              |   |   |   |   |   |   |   |   |
| Increase                in cash                                                                                                                            |   |                                              | 894,851 |   |   | 1,280,486 |   |   | 1,029,393 |   |
| Cash,                beginning of year                                                                                                                     |   |                                              | 2,310,880 |   |   | 1,030,394 |   |   | 1,001 |   |
| Cash,                end of year                                                                                                                           |   | $                                                 | 3,205,731 |   | $ | 2,310,880 |   | $ | 1,030,394 |   |

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2005 **

**NOTE      1 **
**-**
**      ORGANIZATION AND NATURE OF BUSINESS**

**NOTE      2 **
**-**
**      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**Basis      of Presentation**

**Reclassifications**

**Classification      **

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS **
**-**
**      (Continued)**

**December      31, 2005**

**NOTE      2 **
**-**
**      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES **
**-**
**      (Continued)**

**Use      of Estimates**

**Concentration      of Credit Risk**

**Revenue      Recognition**

*Direct      Financing Leases. *

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS **
**-**
**      (Continued)**

**December      31, 2005**

**NOTE      2 **
**-**
**      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES **
**-**
**      (Continued)**

**Revenue      Recognition − (Continued)**

*Operating      Leases. *

*Notes      Receivable.*

**Income      Taxes**

**Supplemental      Disclosure of Cash Flow Information**

**Transfers      of Financial Assets**

*Accounting      for Transfers and Servicing of Financial Assets and Extinguishments of      Liabilities,*

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS **
**-**
**      (Continued)**

**December      31, 2005**

**NOTE      2 **
**-**
**      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES **
**-**
**      (Continued)**

**Fair      Value of Financial Instruments**

**NOTE      3 − RESTRICTED CASH**

**NOTE      4 − DUE FROM LOCKBOX**

**NOTE      5 **
**-**
**INVESTMENT      IN DIRECT FINANCING LEASES AND NOTES**

|                                              |   | **December                31,**  |
|----------------------------------------------|--------|---------------------------------------|
|                                         |   |                                  | **2005** |   |   | **2004** |   |
| Direct                financing leases       |   | $                                     | 75,565,985 |   | $ | 51,892,114 |   |
| Notes                receivable              |   |                                  | 5,621,663 |   |   | 1,810,247 |   |
|                                         |   |                                  | 81,187,648 |   |   | 53,702,361 |   |
| Allowance                for possible losses |   |                                  | (405,000 | ) |   | (120,000 | ) |
|                                         |   | $                                     | 80,782,648 |   | $ | 53,582,361 |   |

|                                                      |   | **December                31,**  |
|-----------------------------------------------------------|--------|---------------------------------------|
|                                                      |   |                                  | **2005** |   |   | **2004** |   |
| Total                future minimum lease payments        |   | $                                     | 84,051,541 |   | $ | 58,892,148 |   |
| Unearned                rental income                     |   |                                  | (9,167,115 | ) |   | (7,401,200 | ) |
| Residuals,                net of unearned residual income |   |                                  | 681,559 |   |   | 401,166 |   |
|                                                      |   | $                                     | 75,565,985 |   | $ | 51,892,114 |   |

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS **
**-**
**      (Continued)**

**December      31, 2005**

**NOTE      5 **
**-**
**INVESTMENT      IN DIRECT FINANCING LEASES AND NOTES − (Continued)**

|                                                                     |   | **December                31,**  |
|---------------------------------------------------------------------|--------|---------------------------------------|
|                                                                |   |                                  | **2005** |   |   | **2004** |   |
| Allowance                for possible losses, beginning of the year |   | $                                     | 120,000 |   | $ | 5,000 |   |
| Provision                for credit losses                          |   |                                  | 1,352,191 |   |   | 394,928 |   |
| Net                write-offs                                       |   |                                  | (1,067,191 | ) |   | (279,928 | ) |
| Allowance                for possible losses, end of the year       |   | $                                     | 405,000 |   | $ | 120,000 |   |

| **Years                Ending****December                31,** |   |   | **Direct****Financing                Leases** |   |   | **Notes** |   |   | **Operating                Leases** |   |   | **Total**  |   |
|----------------------------------------------------------------|--------|--------|-----------------------------------------------|--------|--------|-----------|--------|--------|-------------------------------------|--------|--------|------------|--------|
| 2006                                                      |   | $      | 34,375,279                                    |   | $      | 1,444,792 |   | $      | 809,329                             |   | $      | 36,629,400 |   |
| 2007                                                      |   |   | 24,753,616                                    |   |   | 1,313,536 |   |   | 472,466                             |   |   | 26,539,618 |   |
| 2008                                                      |   |   | 15,312,706                                    |   |   | 983,112   |   |   | 202,086                             |   |   | 16,497,904 |   |
| 2009                                                      |   |   | 7,731,021                                     |   |   | 869,334   |   |   | 107,132                             |   |   | 8,707,487  |   |
| 2010                                                      |   |   | 1,600,869                                     |   |   | 590,327   |   |   | −                             |   |   | 2,191,196  |   |
| Thereafter                                                |   |   | 278,050                                       |   |   | 420,562   |   |   | −                             |   |   | 698,612    |   |
|                                                           |   | $      | 84,051,541                                    |   | $      | 5,621,663 |   | $      | 1,591,013                           |   | $      | 91,264,217 |   |

**NOTE      6− OTHER ASSETS**

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS **
**-**
**      (Continued)**

**December      31, 2005 **

**NOTE      7 **
**-**
**      DEBT**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | **December                31, 2005**  |   |   | **December                31, 2004** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------------------------------------------|--------|--------|--------------------------------------|--------|
| WestLB                AG, New York Branch revolving line of credit, with an aggregate borrowing                limit of $75.0 million collateralized by specific lease receivables                and                related equipment, with a 1% credit reserve of the outstanding line                of                credit. Interest on this facility is calculated at LIBOR plus 1.10%                per                annum. To mitigate fluctuations in interest rates the Fund has entered                into interest rate swap agreements. The interest rate swap agreements                terminate at various dates ranging from August 2011 to May 2012. The                interest rate swap agreements fix the interest rate on this facility                at                5.15% on a weighted average basis. Interest and principal are due                as                payments are received under the financings. The line of credit is                renewable for one year periods on December 31, 2006 and                2007. |   | $      | 62,244,034                                 |   | $      | 23,258,244                           |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |                                       |   |   |                                 |   |
| OFC                Capital, a division of ALFA Financial Corporation, collateralized                by                specific lease receivables equal to 93% of the aggregate payments                due                under the related equipment lease or equipment finance transaction,                discounted at an interest rate of 6.9%, funded subject to a credit                reserve                of 3% of the loan amount. The loan is repayable as payments are made                under                the leases or equipment financing transactions collateralizing the                loan,                with a final maturity date of February 15, 2009                                                                                                                                                                                                                                                                                                                                                                                      |   |   | 8,288,944                                  |   |   | 12,748,767                           |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |                                       |   |   |                                 |   |
| National                City Commercial Capital Corporation f/k/a Information Leasing Corporation,                collateralized by specified lease receivables, generally equal to                the sum                of the receivables, discounted to present value at 5.79%, less a                credit                reserve of 15% after security deposit (reduced to 8% as of July 30,                2004).                The loan is repayable as payments are made under the leases or equipment                financing transactions collateralizing the loan, with a final maturity                date of June 10, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   | 6,793,908                                  |   |   | 12,017,788                           |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |                                       |   |   |                                 |   |
| Sovereign                Bank, revolving warehouse line of credit, with an aggregate borrowing                limit of $10.0 million collateralized by specific finance receivables                and                related equipment. Interest on this facility is calculated at LIBOR                plus                2.5% per annum. Interest and principal are due monthly. The line                was paid                in full in December 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | −                                    |   |   | 3,436,872                            |   |
| Total                outstanding debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | $      | 77,326,886                                 |   | $      | 51,461,671                           |   |

|   | 2006             |   | $      | 29,101,293 |   |
|--------|------------------|--------|--------|------------|--------|
|   |  2007       |   |   | 22,725,630 |   |
|   |  2008       |   |   | 14,537,665 |   |
|   |  2009       |   |   | 8,111,109  |   |
|   |  2010       |   |   | 2,247,064  |   |
|   |  Thereafter |   |   | 604,125    |   |
|   |             |   | $      | 77,326,886 |   |

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS **
**-**
**      (Continued)**

**December      31, 2005 **

**NOTE      8 **
**-**
**      DERIVATIVE INSTRUMENTS**

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS **
**-**
**      (Continued)**

**December      31, 2005 **

**NOTE      9 **
**-**
**      TRANSACTIONS WITH AFFILIATES**

|                                                   |   | **Years                Ended December 31,**  |
|---------------------------------------------------|--------|---------------------------------------------------|
|                                              |   |                                              | **2005** |   |   | **2004** |   |   | **2003** |   |
| Acquisition                fees                   |   | $                                                 | 1,211,566 |   | $ | 850,220 |   | $ | 516,239 |   |
| Asset                management fees              |   | $                                                 | 840,403 |   | $ | 383,798 |   | $ | 73,095 |   |
| Reimbursed                administrative expenses |   | $                                                 | 554,611 |   | $ | 482,180 |   | $ | 594,985 |   |
| Organization                and offering expenses |   | $                                                 | − |   | $ | 226,438 |   | $ | 285,249 |   |
| Underwriting                fees                  |   | $                                                 | − |   | $ | 141,542 |   | $ | 179,184 |   |

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)**

**December      31, 2005 **

**NOTE      10 **
**-**
**      ALLOCATION OF PARTNERSHIP INCOME, LOSS AND CASH      DISTRIBUTIONS**

**NOTE      11 **
**-**
**      COMPREHENSIVE INCOME (LOSS)**

**NOTE      12 **
**-**
** **
**NET      LOSS PER LIMITED PARTNERSHIP UNIT**

----

**ITEM      9.** **CHANGES      IN AND DISAREEMENTS WITH ACCOUNTANTS ON ACCOUNTING****AND      FINANCIAL DISCLOSURE**

**ITEM      9A.** **CONTROLS      AND PROCEDURES**

*Evaluation      of Disclosure Controls and Procedures *

**ITEM      9B.** **OTHER      INFORMATION**

**PART      III**

**ITEM      10.** **DIRECTORS      AND EXECUTIVE OFFICERS OF THE GENERAL PARTNER**

| **Name**                               |   |   | **Age** |   |   | **Position**                                                                  |   |
|----------------------------------------|--------|--------|---------|--------|--------|-------------------------------------------------------------------------------|--------|
| Crit                S. DeMent          |   |   | 53      |   |   | Chairman                of the Board of Directors and Chief Executive Officer |   |
| Miles                Herman            |   |   | 46      |   |   | President,                Chief Operating Officer and Director                |        |
| Jonathan                Z. Cohen       |   |   | 35      |   |   | Director                                                                      |   |
| Alan                D. Schreiber, M.D. |   |   | 62      |   |   | Director                                                                      |   |
| Linda                Richardson        |   |   | 58      |   |   | Director                                                                      |        |
| Robert                K. Moskovitz     |   |   | 49      |   |   | Chief                Financial Officer and Treasurer                          |   |
| David                H. English        |   |   | 56      |   |   | Executive                Vice President                                       |   |
| Darshan                V. Patel        |   |   | 35      |   |   | General                Counsel and Secretary                                  |   |
| Daniel                G. Courtney      |   |   | 43      |   |   | Senior                Vice President - Investment Programs                    |   |
| Scott                A. Smith          |   |   | 46      |   |   | Vice                President - Corporate Development                         |   |

----

**CRIT      S. DEMENT**

**MILES      HERMAN**

**JONATHAN      Z. COHEN**

**ALAN      D. SCHREIBER, M.D.**

**LINDA      RICHARDSON**

**ROBERT      K. MOSKOVITZ**

**DAVID      H. ENGLISH**

----

**DARSHAN      V. PATEL**

**DANIEL      G. COURTNEY**

**SCOTT      A. SMITH**

**Code      of Business Conduct and Ethics**

**ITEM      11.** **EXECUTIVE      COMPENSATION**

**ITEM      12.** **SECURITY      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND****MANAGEMENT**

----

**ITEM      13.** **CERTAIN      RELATIONSHIPS AND RELATED TRANSACTIONS**

**ITEM      14.** **PRINCIPAL      ACCOUNTANT FEES AND SERVICES**

**Audit      Fees. **

**Audit-Related      Fees.**

**Tax      Fees.**

**All      Other Fees. **

*Procedures      for Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services      of      Independent Auditor.*

----

**PART      IV**

**ITEM      15.** **EXHIBITS,      FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K**

**Financial      Statements**

**Financial      Statements Schedules**

**Exhibits**

| Exhibit                  No. |         | Description                                                                                                                                                                                                                                                    |
|------------------------------|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1                          |         | Amended                  and Restated Agreement of Limited Partnership (1)                                                                                                                                                                                     |
| 3.2                          |         | Certificate                  of Limited Partnership (2)                                                                                                                                                                                                        |
| 4             |    | Forms                  of letters sent to limited partners confirming their investment                  (2)                                                                                                                                                    |
| 10.1                         |         | Sovereign                  Bank Revolving Credit Agreement (3)                                                                                                                                                                                                 |
| 10.2                         |         | WestLB                  AG, New York Branch Amendment to West LB Agreement Secured Loan                  Agreement                  (3)                                                                                                                        |
| 10.3                         |         | First                  Amendment to WestLB AG Secured Loan Agreement                                                                                                                                                                                           |
| 10.4                         |         | Origination                  and Servicing Agreement among LEAF Financial Corporation, Lease                  Equity                  Appreciation Fund I, L.P. and LEAF Funding, Inc., dated April 4,                  2003                  (4)              |
| 10.5                         |         | Master                  Program Agreement among LEAF Financial Corporation, Lease Equity                  Appreciation Fund I, L.P. and Information Leasing Corporation dated                  September 29, 2003 (5)                                          |
| 10.6                         |         | Master                  Loan and Security Agreement between Lease Equity Appreciation Fund                  I, L.P.                  and OFC Capital, a division of Alpha Financial Corporation, dated                  November                  26, 2003 (6) |
| 31.1                         |         | Rule                  13a-14(a)/Rule 15d-14(a) Certification of Chief Executive                  Officer.                                                                                                                                                      |
| 31.2                         |         | Rule                  13a-14(a)/Rule 15d-14(a) Certification of Chief Financial                  Officer.                                                                                                                                                      |
| 32.1                         |         | Certification                  of Chief Executive Officer pursuant to Section 1350 of Chapter                  63 of Title                  18 of the United States Code.                                                                                      |
| 32.2                         |         | Certification                  of Chief Financial Officer pursuant to Section 1350 of Chapter                  63 of Title                  18 of the United States Code.                                                                                      |

| (1)   | Filed                previously as Appendix A to our Post-Effective Amendment No. 3 to                our                Registration Statement on Form S-1, filed on January 24,                2004. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)   | Filed                previously as an Exhibit to Amendment No. 1 to our Registration Statement                on Form S-1 filed on June 7, 2002. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------|
| (3)   | Filed                previously as an exhibit to our Annual Report on Form 10-K for the                year                ended December 31, 2004. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|
| (4)   | Filed                previously on Form 8-K, filed on September 19,                2003. |
|-----------------|------------------------------------------------------------------------------------------|
| (5)   | Filed                previously as an exhibit to our Post-Effective Amendment No. 1 to                our                Registration Statement on Form S-1, filed on November 10,                2003. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (6)   | Filed                previously as an exhibit to our Post-Effective Amendment No. 2 to                our                Registration Statement on Form S-1, filed on January 13,                2004. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (1)   | Filed                previously as Appendix A to our Post-Effective Amendment No. 3 to                our                Registration Statement on Form S-1, filed on January 24,                2004. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Filed                previously as an Exhibit to Amendment No. 1 to our Registration Statement                on Form S-1 filed on June 7, 2002. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Filed                previously on Form 8-K, filed on September 19,                2003. |
|-----------------|------------------------------------------------------------------------------------------|

| (4)   | Filed                previously as an exhibit to our Post-Effective Amendment No. 1 to                our                Registration Statement on Form S-1, filed on November 10,                2003. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5)   | Filed                previously as an exhibit to our Post-Effective Amendment No. 2 to                our                Registration Statement on Form S-1, filed on January 13,                2004. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**SIGNATURES**

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

| /s/                Crit DementCRIT                S. DEMENT                      | Chairman                of the Board, Chief Executive Officer of the General                Partner  | March                30, 2006 |
|----------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------|-------------------------------|
|                                                                             |                                                                                                 |                          |
|                                                                             |                                                                                                 |                          |
| /s/                Miles Herman MILES                HERMAN                 | President,                Chief Operating Officer and Director of the General                Partner | March                30, 2006 |
|                                                                             |                                                                                                 |                          |
|                                                                             |                                                                                                 |                          |
| /s/                Robert K. MoskovitzROBERT                K. MOSKOVITZ         | Chief                Financial Officer, Treasurer of                the General Partner              | March                30, 2006 |
|                                                                             |                                                                                                 |                          |
|                                                                             |                                                                                                 |                          |
| /s/                Jonathan Z. CohenJONATHAN                Z. COHEN             | Director                of the General Partner                                                       | March                30, 2006 |
|                                                                             |                                                                                                 |                          |
|                                                                             |                                                                                                 |                          |
| /s/                Alan D. Schreiber, M.D.ALAN                D. SCHREIBER, M.D. | Director                of the General Partner                                                       | March                30, 2006 |
|                                                                             |                                                                                                 |                          |
|                                                                             |                                                                                                 |                          |
| /s/                Linda RichardsonLINDA                RICHARDSON               | Director                of the General Partner                                                       | March                30, 2006 |

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