**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                or other jurisdiction of incorporation or 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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**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 Financial                  Disclosure        | 30       |
|                                                                                                                                                                                                                                                                   | ITEM                  9A: | Controls                  and Procedures                                                                                      | 30       |
|                                                                                                                                                                                                                                                                   | ITEM                  9B: | Other                  Information                                                                                            | 30       |
| **PART                  III**                                                                                                                                                                                                                                          |                      |                                                                                                                               |
|                                                                                                                                                                                                                                                                   | ITEM                  10: | Directors                  and Executive Officers of the Registrant                                                           | 30       |
|                                                                                                                                                                                                                                                                   | ITEM                  11: | Executive                  Compensation                                                                                       | 33       |
|                                                                                                                                                                                                                                                                   | ITEM                  12: | Security                  Ownership of Certain Beneficial Owners and                  Management and Related Unit Holder Matters   | 33       |
|                                                                                                                                                                                                                                                                   | ITEM                  13: | Certain                  Relationships and Related Transactions                                                               | 33       |
|                                                                                                                                                                                                                                                                   | ITEM                  14: | Principal                  Accountant Fees and Services                                                                       | 33       |
| **PART                  IV**                                                                                                                                                                                                                                           |                      |                                                                                                                               |
|                                                                                                                                                                                                                                                                   | ITEM                  15: | Exhibits,                  Financial Statement Schedules and Reports on Form 8-K                                                   | 34       |
| **SIGNATURES**                                                                                                                                                                                                                                                         | 35                        |
|                                                                                                                                                                                                                                                                   |
| **Supplemental                  Information to be Furnished With Reports Filed Pursuant to Section                  15(d)                  of the Act by Registrants Which Have Not Registered Securities                  to Section                  12 of the Act** |

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**Forward-Looking      Statements**

**THE      FOLLOWING DISCUSSION CONTAINS 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 POSITION TO DIFFER      MATERIALLY FROM THOSE ANTICIPATED IN SUCH STATEMENTS. FOR A MORE COMPLETE      DISCUSSION OF THE RISKS AND UNCERTAINTIES TO WHICH THE REGISTRANT IS SUBJECT;      SEE ITEM 1A “RISK FACTORS.”**

**PART      I**

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

**General**

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**Our      Lease Portfolio **

| **Direct                Financing Leases and Notes** |   |                                 |   |                 |   |
|------------------------------------------------------|--------|--------------------------------------|--------|----------------------|--------|
|                                                 |   | **December                31, 2006** |   |                 |   | **December                31, 2005** |   |
| **Type                of Equipment**                 |   | **Net                Investment**    |   |  **Percentage** |   |   | **Type                of Equipment** |   | **Net                Investment** |   |  **Percentage** |   |
| Medical                Equipment                     |   | $                                    | 29,140 |                 |   | 33.0 | % |   | Industrial                Equipment |   | $ | 22,098 |   |   | 27.2 | % |
| Industrial                Equipment                  |   |                                 | 19,100 |                 |   | 21.6 |   |   | Medical                Equipment |   |   | 18,993 |   |   | 23.4 |   |
| Computers                                            |   |                                 | 13,477 |                 |   | 15.3 |   |   | Computers |   |   | 13,302 |   |   | 16.4 |   |
| Office                Equipment                      |   |                                 | 6,944  |                 |   | 7.9 |   |   | Office                Equipment |   |   | 9,398 |   |   | 11.6 |   |
| Software                                             |   |                                 | 3,683  |                 |   | 4.2 |   |   | Software |   |   | 4,269 |   |   | 5.2 |   |
| Garment                Care                          |   |                                 | 3,373  |                 |   | 3.8 |   |   | Garment                Care |   |   | 3,585 |   |   | 4.4 |   |
| Communications                                       |   |                                 | 3,172  |                 |   | 3.6 |   |   | Building                Systems |   |   | 2,980 |   |   | 3.7 |   |
| Restaurant                Equipment                  |   |                                 | 2,432  |                 |   | 2.7 |   |   | Restaurant                Equipment |   |   | 2,976 |   |   | 3.7 |   |
| Building                Systems                      |   |                                 | 2,048  |                 |   | 2.3 |   |   | Communications |   |   | 2,409 |   |   | 3.0 |   |
| Other                                                |   |                                 | 4,923  |                 |   | 5.6 |   |   | Agriculture |   |   | 1,178 |   |   | 1.4 |   |
|                                                 |   | $                                    | 88,292 |                 |   | 100.0 | % |   |   |   | $ | 81,188 |   |   | 100.0 | % |

| **Operating                Leases**  |   |                                 |   |                 |   |
|--------------------------------------|--------|--------------------------------------|--------|----------------------|--------|
|                                 |   | **December                31, 2006** |   |                 |   | **December                31, 2005** |   |
| **Type                of Equipment** |   | **Net                Investment**    |   |  **Percentage** |   |   | **Type              of Equipment** |   | **Net                Investment** |   |  **Percentage** |   |
| Office                Equipment      |   | $                                    | 283    |                 |   | 27.2 | % |   | Office                Equipment |   | $ | 505 |   |   | 29.1 | % |
| Industrial                Equipment  |   |                                 | 266    |                 |   | 25.6 |   |   | Computers |   |   | 476 |   |   | 27.3 |   |
| Computers                            |   |                                 | 243    |                 |   | 23.4 |   |   | Industrial                Equipment |   |   | 380 |   |   | 21.8 |   |
| Communications                       |   |                                 | 205    |                 |   | 19.7 |   |   | Communications |   |   | 323 |   |   | 18.5 |   |
| Medical                Equipment     |   |                                 | 33     |                 |   | 3.2 |   |   | Medical                Equipment |   |   | 41 |   |   | 2.3 |   |
| Software                             |   |                                 | 7      |                 |   | 0.7 |   |   | Software |   |   | 16 |   |   | 0.9 |   |
| Restaurant                Equipment  |   |                                 | 2      |                 |   | 0.2 |   |   | Restaurant                Equipment |   |   | 2 |   |   | 0.1 |   |
|                                 |   | $                                    | 1,039  |                 |   | 100.0 | % |   |   |   | $ | 1,743 |   |   | 100.0 | % |

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| **Direct                Financing Leases and Notes** |   |                                 |   |                 |   |
|------------------------------------------------------|--------|--------------------------------------|--------|----------------------|--------|
|                                                 |   | **December                31, 2006** |   |                 |   | **December                31, 2005** |   |
| **Type                of Business**                  |   | **Net                Investment**    |   |  **Percentage** |   |   | Type              of Business |   | **Net                Investment** |   |  **Percentage** |   |
| Services                                             |   | $                                    | 51,425 |                 |   | 58.2 | % |   | Services |   | $ | 44,929 |   |   | 55.4 | % |
| Manufacturing                                        |   |                                 | 9,030  |                 |   | 10.2 |   |   | Retail                Trade |   |   | 8,897 |   |   | 11.0 |   |
| Retail                Trade                          |   |                                 | 7,747  |                 |   | 8.8 |   |   | Manufacturing |   |   | 8,774 |   |   | 10.8 |   |
| Construction                                    |   |                                 | 4,694  |                 |   | 5.3 |   |   | Construction |   |   | 3,640 |   |   | 4.5 |   |
| Wholesale                Trade                       |   |                                 | 4,386  |                 |   | 5.0 |   |   | Transportation/  Communication/Energy |   |   | 3,826 |   |   | 4.7 |   |
| Transportation/Communication/Energy                  |   |                                 | 3,409  |                 |   | 3.9 |   |   | Finance/Insurance/Real                Estate |   |   | 3,125 |   |   | 3.8 |   |
| Agriculture/Forestry/Fishing                         |   |                                 | 2,829  |                 |   | 3.2 |   |   | Wholesale                Trade |   |   | 3,085 |   |   | 3.8 |   |
| Finance/Insurance/Real                Estate         |   |                                 | 2,552  |                 |   | 2.9 |   |   | Agriculture/Forestry/Fishing |   |   | 2,446 |   |   | 3.0 |   |
| Public                Administration                 |   |                                 | 620    |                 |   | 0.7 |   |   | Public                Administration |   |   | 1,246 |   |   | 1.5 |   |
| Other                                                |   |                                 | 1,600  |                 |   | 1.8 |   |   | Other |   |   | 1,220 |   |   | 1.5 |   |
|                                                 |   | $                                    | 88,292 |                 |   | 100.0 | % |   |   |   | $ | 81,188 |   |   | 100.0 | % |

| **Operating                Leases**                   |   |                                 |   |                 |   |                                 |                          |
|-------------------------------------------------------|--------|--------------------------------------|--------|----------------------|--------|--------------------------------------|-------------------------------|
|                                                  |   | **December                31, 2006** |   |                 |   | **December                31, 2005** |                          |
| **Type                of Business**                   |   | **Net                Investment**    |   |  **Percentage** |   |                                 | Type              of Business |   | **Net                Investment** |   |  **Percentage** |   |
| Services                                              |   | $                                    | 438    |                 |   | 42.2                                 | %                             |   | Services |   | $ | 706 |   |   | 40.3 | % |
| Construction                                          |   |                                 | 313    |                 |   | 30.1                                 |                          |   | Construction |   |   | 451 |   |   | 25.9 |   |
| Wholesale                Trade                        |   |                                 | 82     |                 |   | 7.9                                  |                          |   | Wholesale                Trade |   |   | 199 |   |   | 11.4 |   |
| Finance/Insurance/Real                Estate          |   |                                 | 66     |                 |   | 6.3                                  |                          |   | Manufacturing |   |   | 136 |   |   | 7.8 |   |
| Manufacturing                                    |   |                                 | 63     |                 |   | 6.1                                  |                          |   | Transportation/  Communication/Energy |   |   | 113 |   |   | 6.5 |   |
| Transportation/   Communication/Energy |   |                                 | 61     |                 |   | 5.9                                  |                          |   | Finance/Insurance/Real                Estate |   |   | 102 |   |   | 5.9 |   |
| Retail                Trade                           |   |                                 | 4      |                 |   | 0.4                                  |                          |   | Public                Administration |   |   | 14 |   |   | 0.8 |   |
| Public                Administration                  |   |                                 | 2      |                 |   | 0.2                                  |                          |   | Retail                Trade |   |   | 12 |   |   | 0.7 |   |
| Other                                                 |   |                                 | 10     |                 |   | 0.9                                  |                          |   | Other |   |   | 10 |   |   | 0.7 |   |
|                                                  |   | $                                    | 1,039  |                 |   | 100.0                                | %                             |   |   |   | $ | 1,743 |   |   | 100.0 | % |

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|                                        |   | **December                31,** |     |
|---------------------------------------------|--------|---------------------------------|----------|
|                                        |   | **2006**                        |     | **2005** |   |
| Balance                at beginning of year |   | $                               | 405,000  |   | $ | 120,000 |   |
| Provision                for credit losses  |   |                            | 909,794  |   |   | 1,352,191 |   |
| Net                write-offs               |   |                            | (883,994 | ) |   | (1,067,191 | ) |
| Balance                at end of year       |   | $                               | 430,800  |   | $ | 405,000 |   |

**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, 2006, 2005 and                2004                were $13,879,                $13,879 and $9,768 and 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 were                $226,438. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | 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, 2006, 2005 and 2004 were                $697,168, $1,211,566 and $850,220 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 earned to the General Partner                for                the years ended December 31, 2006, 2005 and 2004 were $1,063,586,                $840,403                and $383,798, respectively; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | our                General Partner receives 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, 2006, 2005 and                2004; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | our                General Partner receives 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, 2006, 2005 and 2004 were $564,946, $554,611                and $482,180, respectively; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | 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, 2006, 2005 and 2004 were $564,946, $554,611 and $482,180,                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 year ended 2004, underwriting fees of $141,542                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 is 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.*

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

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*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, 2006** |   |
|----------------------------------------------|--------|---------------------------------------------------------------------------------------------------|--------|
| Limited                Partnership Interests |   |                                                                                              | 429    |   |
| General                Partnership Interest  |   |                                                                                              | 1      |   |

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

|                                                                                                                  |   | **For                the Years Ended****December                31,** |      |
|-----------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|-----------|
|                                                                                                                  |   | **2006**                                                              |      | **2005** |   | **2004** |   | **2003** |   |
| Revenues                                                                                                              |   | $                                                                     | 8,412,706 |   | $ | 7,703,829 |   | $ | 3,537,123 |   | $ | 2973,055 |   |
| Expenses                                                                                                              |   | $                                                                     | 8,225,250 |   | $ | 8,387,692 |   | $ | 3,786,797 |   | $ | 1,369,340 |   |
| Net                income (loss)                                                                                      |   | $                                                                     | 187,456   |   | $ | (683,863 | ) | $ | (249,674 | ) | $ | (396,285 | ) |
| Distributions                to Partners                                                                              |   | $                                                                     | 1,387,767 |   | $ | 1,387,861 |   | $ | 977,748 |   | $ | 479,744 |   |
| Weighted                average number of limited partnership units outstanding                during the year        |   | $                                                                     | 171,746   |   | $ | 171,746 |   | $ | 137,000 |   | $ | 61,149 |   |
| Net                income (loss) per weighted limited partnership unit                − basic and fully diluted |   | $                                                                     | 1.08      |   | $ | (3.94 | ) | $ | (1.80 | ) | $ | (6.42 | ) |

|                                                               |   | **As                of December 31,** |       |
|--------------------------------------------------------------------|--------|---------------------------------------|------------|
|                                                               |   | **2006**                              |       | **2005** |   | **2004** |   | **2003** |   | **2002** |   |
| Total                assets                                        |   | $                                     | 97,436,905 |   | $ | 90,792,727 |   | $ | 66,530,058 |   | $ | 28,236,400 |   | $ | 1,001 |   |
| Net                investment in direct financing leases and notes |   | $                                     | 87,860,780 |   | $ | 80,782,648 |   | $ | 53,582,361 |   | $ | 24,240,624 |   | $ | − |   |
| Equipment                under operating leases, net               |   | $                                     | 1,039,378  |   | $ | 1,743,257 |   | $ | 1,569,754 |   | $ | 313,479 |   | $ | − |   |
| Debt                                                               |   | $                                     | 82,363,785 |   | $ | 77,326,886 |   | $ | 51,461,671 |   | $ | 20,386,402 |   | $ | − |   |
| Partners’                capital                             |   | $                                     | 9,961,456  |   | $ | 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, 2006 Compared to Year Ended December 31,      2005*

|   | · | Our                interest income increased to $6,502,165 for the year ended December                31,                2006 as compared to $6,197,420 in the year ended December 31, 2005,                an                increase of $304,745 (4.9%). This is due to an increase in our financing                assets to $87,860,780 in the year ended December 31, 2006 as compared                to                $80,782,648 in the year ended December 31, 2005, an increase of $7,078,132                (8.8%). This growth was driven by our General Partner’s increased sales to                us and marketing efforts supported by lines of                financing. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·   | Our                gain on sale of equipment increased to $542,926 for the year ended                December 31, 2006 as compared to $126,281 in the year ended December                31,                2005, an increase of $416,645 (329.9%). Gains on sale of equipment                may                vary significantly from period to period due to the portfolio                maturing. As the portfolio ages, there will be increased activities                from early lease terminations and end of lease                dispositions. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Other                income increased to $606,797 for the year ended December 31, 2006                as                compared to $387,437 in the year ended December 31, 2005, an increase                of                $219,360 (56.6%). Other income consists primarily of late fee income                and                handling fee income. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Our                rental income decreased to $760,818 for the year ended December 31,                2006                as compared to $992,691 in the year ended December 31, 2005, a decrease                of                $231,873 (23.4%). This decrease is due to operating leases reaching                full                term. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Our                provision for credit losses decreased to $909,794 in the year ended                December 31, 2006 as compared to $1,352,191 in the year ended December                31,                2005, a decrease of $442,397 (32.7%). This decrease is primarily                attributable to an increased investment in collection efforts by                our                General Partner. We provide for bad debts when losses are likely                to occur                based on a migration analysis of past due payments and economic                conditions. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Depreciation                expense from operating leases decreased to $617,079 in the year ended                December 31, 2006 as compared to $820,650 in the year ended December                31,                2005, a decrease of $203,571 (24.8%). This decrease is due to operating                leases reaching full term. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Interest                expense increased to $4,550,017 in the year ended December 31, 2006                as                compared to $4,344,009 in the year ended December 31, 2005, an increase                of                $206,008 (4.7%). This increase is due to the increase of our debt                incurred                to acquire equipment financing assets. Debt increased to $82,363,785                at                December 31, 2006 as compared to $77,326,886 at December 31, 2005,                an                increase of $5,036,899 (6.5%). |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Management                fees increased to $1,063,586 in the year ended December 31, 2006                as                compared to $840,403 in the year ended December 31, 2005, an increase                of                $223,183 (26.6%). This increase is directly attributable to improved                collection efforts by our General Partner and our growth in equipment                financing assets, since management fees are paid based on payments                received. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | General                and administrative expenses increased to $519,828 in the year ended                December 31, 2006 as compared to $475,828 in the year ended December                31,                2005, an increase of $44,000 (9.2%). This increase is primarily                attributable to an increase in legal costs associated with increased                collection efforts. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| ·   | Our                interest income increased to $6,197,420 for the year ended December                31,                2005 as compared to $2,921,349 in the year ended December 31, 2004,                an                increase of $3,276,071 (112.1%). This is due to our increase in equipment                financing assets. Total equipment financing assets increased to                $80,782,648 in the year ended December 31, 2005 as compared to $53,582,361                in the year ended December 31, 2004, an increase of $27,200,287 (50.8%).                This growth was driven by our General Partner’s increased sales and                marketing efforts supported by lines of                financing. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Back          to Index*

| ·   | Our                rental income increased to $992,691 for the year ended December 31,                2005                as compared to $433,373 in the year ended December 31, 2004, an increase                of $559,318 (129.1%). This increase is attributable to our increase                in                assets under operating leases. Investment in operating leases increased                to                $1,743,257 in the year ended December 31, 2005 as compared to $1,569,754                in the year ended December 31, 2004, an increase of $173,503 (11.1%).                This                growth was driven by our General Partner’s increased sales and marketing                efforts supported by lines of financing. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Interest                expense increased to $4,344,009 in the year ended December 31, 2005                as                compared to $1,873,986 in the year ended December 31, 2004, an increase                of                $2,470,023 (131.8%) due to our increase in debt incurred to acquire                equipment subject to leases. Debt increased to $77,326,886 at December                31,                2005 as compared to $51,461,671 at December 31, 2004, an increase                of                $25,865,215 (50.5%). |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Management                fees increased to $840,403 in the year ended December 31, 2005 as                compared                to $383,798 in the year ended December 31, 2004, an increase of $456,605                (119%). This increase is directly attributable to our growth in lease                assets. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Depreciation                expense from operating leases increased to $820,650 in the year ended                December 31, 2005 as compared to $342,865 in the year ended December                31,                2004, an increase of $477,785 (139.4%). This increase is due to an                increase in operating leases acquired. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Liquidity        and Capital Resources**

**General**

|                                                                     |   | **For                the Years Ended December 31,** |       |
|--------------------------------------------------------------------------|--------|-----------------------------------------------------|------------|
|                                                                     |   | **2006**                                            |       | **2005** |   | **2004** |   |
| Net                cash provided by (used in) operating activities  |   | $                                                   | 3,673,209  |   | $ | (285,980 | ) | $ | 2,189,315 |   |
| Net                cash used in investing activities                |   |                                                | (6,376,570 | ) |   | (29,050,817 | ) |   | (30,867,192 | ) |
| Net                cash provided by financing activities            |   |                                                | 3,795,484  |   |   | 30,231,648 |   |   | 29,958,363 |   |
| Increase                in cash                                     |   | $                                                   | 1,092,123  |   | $ | 894,851 |   | $ | 1,280,486 |   |

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**Contractual      Obligations and Commercial Commitments**

|                          |   | **Total** |       | **Less****than                1 Year** |   | **1-3                Years** |   | **4-5                Years** |       | **After                5 years** |   |
|-------------------------------|--------|-----------|------------|----------------------------------------|--------|------------------------------|--------|------------------------------|------------|----------------------------------|--------|
| Long                term debt |   | $         | 82,363,785 |                                   | $      | 32,037,211                   |   | $                            | 36,629,130 |                             | $      | 11,198,244 |   | $ | 2,499,200 |   |

**Recently      Issued Accounting Pronouncements**

*,*

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**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, 2006 AND 2005**

|                                                                                                                                     |   | **December                31,** |       |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|------------|
|                                                                                                                                     |   | **2006**                        |       | **2005** |   |
| **ASSETS**                                                                                                                               |   |                            |       |   |   |
| Cash                                                                                                                                     |   | $                               | 4,297,854  |   | $ | 3,205,731 |   |
| Restricted                cash                                                                                                           |   |                            | 1,738,499  |   |   | 1,887,934 |   |
| Accounts                receivable                                                                                                       |   |                            | 75,893     |   |   | 89,702 |   |
| Due                from lockbox                                                                                                          |   |                            | 895,768    |   |   | 1,343,985 |   |
| Investment                in direct financing leases and notes, net                                                                      |   |                            | 87,860,780 |   |   | 80,782,648 |   |
| Investment                in operating leases, net of accumulated depreciation of $1,377,644                and $1,069,031, respectively |   |                            | 1,039,378  |   |   | 1,743,257 |   |
| Fair                value of interest rate swaps                                                                                         |   |                            | 392,285    |   |   | 658,610 |   |
| Other                assets                                                                                                              |   |                            | 1,136,448  |   |   | 1,080,860 |   |
|                                                                                                                                     |   | $                               | 97,436,905 |   | $ | 90,792,727 |   |
| **LIABILITIES                AND PARTNERS’ CAPITAL**                                                                               |   |                            |       |   |   |   |   |
| **Liabilities:**                                                                                                                         |   |                            |       |   |   |   |   |
| Debt                                                                                                                                |   | $                               | 82,363,785 |   | $ | 77,326,886 |   |
| Accounts                payable and accrued expenses                                                                                |   |                            | 315,665    |   |   | 413,787 |   |
| Security              deposits                                                                                                           |   |                            | 1,782,865  |   |   | 805,727 |   |
| Due                to related parties, net                                                                                          |   |                            | 3,013,134  |   |   | 818,235 |   |
| Total                liabilities                                                                                                    |   |                            | 87,475,449 |   |   | 79,364,635 |   |
| **Partners’                Capital**                                                                                          |   |                            | 9,961,456  |   |   | 11,428,092 |   |
|                                                                                                                                     |   | $                               | 97,436,905 |   | $ | 90,792,727 |   |

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

**CONSOLIDATED        STATEMENTS OF OPERATIONS**

**FOR        THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004**

|                                                                                                         |   | **For                the Years Ended December 31,** |      |
|--------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|-----------|
|                                                                                                         |   | **2006**                                            |      | **2005** |   | **2004** |   |
| **Income:**                                                                                                  |   |                                                |      |   |   |   |   |
| Interest                on equipment financings                                                              |   | $                                                   | 6,502,165 |   | $ | 6,197,420 |   | $ | 2,921,349 |   |
| Rental                income                                                                                 |   |                                                | 760,818   |   |   | 992,691 |   |   | 433,373 |   |
| Gains                on sales of equipment and lease dispositions, net                                  |   |                                                | 542,926   |   |   | 126,281 |   |   | 60,764 |   |
| Other                                                                                                        |   |                                                | 606,797   |   |   | 387,437 |   |   | 121,637 |   |
|                                                                                                         |   |                                                | 8,412,706 |   |   | 7,703,829 |   |   | 3,537,123 |   |
|                                                                                                         |   |                                                |      |   |   |   |   |   |   |   |
| **Expenses:**                                                                                                |   |                                                |      |   |   |   |   |   |   |   |
| Interest                expense                                                                              |   |                                                | 4,550,017 |   |   | 4,344,009 |   |   | 1,873,986 |   |
| Provision                for credit losses                                                                   |   |                                                | 909,794   |   |   | 1,352,191 |   |   | 394,928 |   |
| Depreciation                on operating leases                                                              |   |                                                | 617,079   |   |   | 820,650 |   |   | 342,865 |   |
| Administrative                expense reimbursed to related party                                            |   |                                                | 564,946   |   |   | 554,611 |   |   | 482,180 |   |
| Management                fee to related party                                                               |   |                                                | 1,063,586 |   |   | 840,403 |   |   | 383,798 |   |
| General                and administrative expenses                                                           |   |                                                | 519,828   |   |   | 475,828 |   |   | 309,040 |   |
|                                                                                                         |   |                                                | 8,225,250 |   |   | 8,387,692 |   |   | 3,786,797 |   |
| Net                income (loss)                                                                             |   | $                                                   | 187,456   |   | $ | (683,863 | ) | $ | (249,674 | ) |
|                                                                                                         |   |                                                |      |   |   |   |   |   |   |   |
| Weighted                average number of limited partner units outstanding                during the period |   |                                                | 171,746   |   |   | 171,746 |   |   | 137,000 |   |
| Net                income (loss) per weighted average limited partner unit                                   |   | $                                                   | 1.08      |   | $ | (3.94 | ) | $ | (1.80 | ) |

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

**CONSOLIDATED      STATEMENT OF CHANGES IN PARTNERS’ CAPITAL **

**AND      COMPREHENSIVE INCOME (LOSS)**

**FOR      THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004**

|                                                                                 |   | **General                Partner** |    | **Limited                Partners** |   | **Accumulated                Other Comprehensive** |   |   **Partners’                Capital** |       | **Comprehensive                Income (Loss)** |   |
|--------------------------------------------------------------------------------------|--------|------------------------------------|---------|-------------------------------------|--------|----------------------------------------------------|--------|--------------------------------------------------------|------------|------------------------------------------------|--------|
|                                                                                 |   | **Amount**                         |    | **Units**                           |   | **Amount**                                         |   | **Income                (Loss)**                       |       | **Total**                                      |   | **Total** |   |
| Balance                at January 1, 2004                                       |   | $                                  | (7,757  | )                                   |   | 95,693                                             |   | $                                                      | 7,459,856  |                                           | $      | − |   | $ | 7,452,099 |   |   |   |   |
| Partners’                contribution                                          |   |                               | -       |                                |   | 76,053                                             |   |                                                   | 7,552,469  |                                           |   | − |   |   | 7,552,469 |   |   |   |   |
| Offering                costs related to the sale ofPartnership                units |   |                               | -       |                                |   | -                                                  |   |                                                   | (935,940   | )                                              |   | − |   |   | (935,940 | ) |   |   |   |
| Cash                distributions paid                                               |   |                               | (9,768  | )                                   |   | -                                                  |   |                                                   | (967,980   | )                                              |   | − |   |   | (977,748 | ) |   |   |   |
| Net                loss                                                              |   |                               | (2,496  | )                                   |   | -                                                  |   |                                                   | (247,178   | )                                              |   | − |   |   | (249,674 | ) | $ | (249,674 | ) |
| Unrealized                loss on hedging derivative                                 |   |                               | − |                                |   | −                                            |   |                                                   | −    |                                           |   | (52,141 | ) |   | (52,141 | ) |   | (52,141 | ) |
| Balance                at 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                at December 31, 2005                                          |   |                               | (40,739 | )                                   |   | 171,746                                            |   |                                                   | 10,810,221 |                                           |   | 658,610 |   |   | 11,428,092 |   | $ | 26,888 |   |
| Cash                distributions paid                                               |   |                               | (13,879 | )                                   |   | −                                            |   |                                                   | (1,373,888 | )                                              |   | − |   |   | (1,387,767 | ) |   |   |   |
| Net                income                                                            |   |                               | 1,875   |                                |   | −                                            |   |                                                   | 185,581    |                                           |   | − |   |   | 187,456 |   |   | 187,456 |   |
| Unrealized                loss on hedging derivative                                 |   |                               | − |                                |   | −                                            |   |                                                   | −    |                                           |   | (266,325 | ) |   | (266,325 | ) |   | (266,325 | ) |
| Balance                at December 31, 2006                                     |   | $                                  | (52,743 | )                                   |   | 171,746                                            |   | $                                                      | 9,621,914  |                                           | $      | 392,285 |   | $ | 9,961,456 |   | $ | (78,869 | ) |

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*Back          to Index*

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

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

**FOR      THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004**

|                                                                                                                            |   | **Years                Ended December 31,** |        |
|---------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|-------------|
|                                                                                                                            |   | **2006**                                    |        | **2005** |   | **2004** |   |
| **Cash                flows from operating activities:**                                                                        |   |                                        |        |   |   |   |   |
| Net                income (loss)                                                                                           |   | $                                           | 187,456     |   | $ | (683,863 | ) | $ | (249,674 | ) |
| Adjustments                to reconcile net income (loss) to net cashprovided                by (used in) operating activities: |   |                                        |        |   |   |   |   |   |   |   |
| Gain                on sale of equipment and lease dispositions, net                                                       |   |                                        | (542,926    | ) |   | (126,281 | ) |   | (60,764 | ) |
| Depreciation                                                                                                               |   |                                        | 617,079     |   |   | 820,650 |   |   | 342,865 |   |
| Amortization                of deferred financing costs                                                                    |   |                                        | 127,846     |   |   | 132,134 |   |   | 60,765 |   |
| Provision                for credit losses                                                                                 |   |                                        | 909,794     |   |   | 1,352,191 |   |   | 394,928 |   |
| Changes                in operating assets and liabilities:                                                                     |   |                                        |        |   |   |   |   |   |   |   |
| Accounts                receivable                                                                                              |   |                                        | 13,809      |   |   | (32,865 | ) |   | 28,534 |   |
| Due                from lockbox                                                                                                 |   |                                        | 448,217     |   |   | (812,427 | ) |   | 42,688 |   |
| Other                assets                                                                                                     |   |                                        | (180,351    | ) |   | (464,267 | ) |   | 79,707 |   |
| Accounts                payable and accrued expenses                                                                            |   |                                        | (102,614    | ) |   | (334,126 | ) |   | 466,072 |   |
| Due                to related parties, net                                                                                      |   |                                        | 2,194,899   |   |   | (137,126 | ) |   | 1,084,194 |   |
| Net                cash provided by (used in) operating activities                                                         |   |                                        | 3,673,209   |   |   | (285,980 | ) |   | 2,189,315 |   |
|                                                                                                                            |   |                                        |        |   |   |   |   |   |   |   |
| **Cash                flows from investing activities:**                                                                        |   |                                        |        |   |   |   |   |   |   |   |
| Investments                in direct financing leases and notes                                                                 |   |                                        | (45,516,703 | ) |   | (59,584,113 | ) |   | (41,411,989 | ) |
| Acquisitions                of equipment under operating leases                                                                 |   |                                        | −     |   |   | (994,153 | ) |   | (1,599,140 | ) |
| Proceeds                from direct financing leases and notes, net of earned                income                             |   |                                        | 38,162,995  |   |   | 31,153,424 |   |   | 11,736,088 |   |
| Security                deposits, net                                                                                           |   |                                        | 977,138     |   |   | 374,025 |   |   | 407,849 |   |
| Net                cash used in investing activities                                                                            |   |                                        | (6,376,570  | ) |   | (29,050,817 | ) |   | (30,867,192 | ) |
|                                                                                                                            |   |                                        |        |   |   |   |   |   |   |   |
| **Cash                flows from financing activities:**                                                                        |   |                                        |        |   |   |   |   |   |   |   |
| Proceeds                from debt                                                                                               |   |                                        | 42,650,005  |   |   | 80,388,805 |   |   | 57,758,292 |   |
| Repayment                of debt                                                                                                |   |                                        | (37,613,106 | ) |   | (54,523,590 | ) |   | (26,683,023 | ) |
| Decrease                (increase) in restricted cash                                                                           |   |                                        | 149,435     |   |   | 5,754,294 |   |   | (6,046,595 | ) |
| Increase                in deferred financing costs                                                                             |   |                                        | (3,083      | ) |   | − |   |   | (709,092 | ) |
| Limited                Partners’ capital contribution                                                                     |   |                                        | −     |   |   | − |   |   | 7,552,469 |   |
| Partners’** **distributions                paid                                                                      |   |                                        | (1,387,767  | ) |   | (1,387,861 | ) |   | (977,748 | ) |
| Payment                of offering costs incurred for the sale of limited partnership                units                      |   |                                        | −     |   |   | − |   |   | (935,940 | ) |
| Net                cash provided by financing activities                                                                        |   |                                        | 3,795,484   |   |   | 30,231,648 |   |   | 29,958,363 |   |
|                                                                                                                            |   |                                        |        |   |   |   |   |   |   |   |
| Increase                in cash                                                                                            |   |                                        | 1,092,123   |   |   | 894,851 |   |   | 1,280,486 |   |
| Cash,                beginning of year                                                                                     |   |                                        | 3,205,731   |   |   | 2,310,880 |   |   | 1,030,394 |   |
| Cash,                end of year                                                                                           |   | $                                           | 4,297,854   |   | $ | 3,205,731 |   | $ | 2,310,880 |   |

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

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2006 **

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

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

**Basis      of Presentation**

**Classification**

**Use      of Estimates**

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

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

**December      31, 2006**

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

**Use        of Estimates − (Continued)**

**Concentration      of Credit Risk**

**Revenue      Recognition**

*Direct      Financing Leases. *

*Operating      Leases. *

*Notes      Receivable.*

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

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

**December      31, 2006**

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

**Income      Taxes**

**Supplemental      Disclosure of Cash Flow Information**

**Transfers      of Financial Assets**

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

**Fair      Value of Financial Instruments**

**NOTE      3 − RESTRICTED CASH**

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

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

**December        31, 2006**

**NOTE      4 − DUE FROM LOCKBOX**

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

|                                         |   | **December                31,** |       |
|----------------------------------------------|--------|---------------------------------|------------|
|                                         |   | **2006**                        |       | **2005** |   |
| Direct                financing leases       |   | $                               | 78,470,004 |   | $ | 75,565,985 |   |
| Notes                receivable              |   |                            | 9,821,576  |   |   | 5,621,663 |   |
|                                         |   |                            | 88,291,580 |   |   | 81,187,648 |   |
| Allowance                for possible losses |   |                            | (430,800   | ) |   | (405,000 | ) |
|                                         |   | $                               | 87,860,780 |   | $ | 80,782,648 |   |

|                                                      |   | **December                31,** |        |
|-----------------------------------------------------------|--------|---------------------------------|-------------|
|                                                      |   | **2006**                        |        | **2005** |   |
| Total                future minimum lease payments        |   | $                               | 88,238,229  |   | $ | 84,051,541 |   |
| Unearned                rental income                     |   |                            | (10,650,784 | ) |   | (9,167,115 | ) |
| Residuals,                net of unearned residual income |   |                            | 882,559     |   |   | 681,559 |   |
|                                                      |   | $                               | 78,470,004  |   | $ | 75,565,985 |   |

| **Annual                Periods Ending****December                31,** |   | **Direct****Financing                Leases** |       | **Notes** |   | **Operating                Leases** |   | **Total** |    |
|-------------------------------------------------------------------------|--------|-----------------------------------------------|------------|-----------|--------|-------------------------------------|--------|-----------|---------|
| 2007                                                               |   | $                                             | 36,347,035 |      | $      | 2,739,750                           |   | $         | 483,198 |   | $ | 39,569,983 |   |
| 2008                                                               |   |                                          | 23,766,029 |      |   | 2,238,786                           |   |      | 194,085 |   |   | 26,198,900 |   |
| 2009                                                               |   |                                          | 14,822,299 |      |   | 1,907,623                           |   |      | 107,132 |   |   | 16,837,054 |   |
| 2010                                                               |   |                                          | 7,060,207  |      |   | 1,491,477                           |   |      | − |   |   | 8,551,684 |   |
| 2011                                                               |   |                                          | 3,297,961  |      |   | 894,343                             |   |      | − |   |   | 4,192,304 |   |
| Thereafter                                                         |   |                                          | 2,944,698  |      |   | 549,597                             |   |      | − |   |   | 3,494,295 |   |
|                                                                    |   | $                                             | 88,238,229 |      | $      | 9,821,576                           |   | $         | 784,415 |   | $ | 98,844,220 |   |

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*Back          to Index*

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

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

**December      31, 2006**

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

|                                                                |   | **December                31,** |     |
|---------------------------------------------------------------------|--------|---------------------------------|----------|
|                                                                |   | **2006**                        |     | **2005** |   |
| Allowance                for possible losses, beginning of the year |   | $                               | 405,000  |   | $ | 120,000 |   |
| Provision                for credit losses                          |   |                            | 909,794  |   |   | 1,352,191 |   |
| Net                write-offs                                       |   |                            | (883,994 | ) |   | (1,067,191 | ) |
| Allowance                for possible losses, end of the year       |   | $                               | 430,800  |   | $ | 405,000 |   |

**NOTE      6− OTHER ASSETS**

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

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | **December                31,** |       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | **2006**                        |       | **2005** |   |
| 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 .95%                per                annum. To mitigate fluctuations in interest rates the Fund has entered                into interest rate swap agreements terminating at various dates ranging                from April 2010 to August 2013. The interest rate swap agreements                fix the                interest rate on this facility at 5.63% on a weighted average basis.                Interest and principal are due as payments are received under the                financings. The line of credit is renewable for a one year period                on                December 31, 2007. |   | $                               | 74,589,191 |   | $ | 62,244,034 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                            |       |   |   |   |   |
| 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                                                                                                                                                                                                                                                                                                                          |   |                            | 4,408,101  |   |   | 8,288,944 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                            |       |   |   |   |   |
| 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 8% after security deposit (since 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.                                                                                                                                                                                                                                                                                                                                                                  |   |                            | 3,366,493  |   |   | 6,793,908 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                            |       |   |   |   |   |
| Total                outstanding debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $                               | 82,363,785 |   | $ | 77,326,886 |   |

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

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

**December      31, 2006**

**NOTE      7 **
**-**
**      DEBT − (Continued)**

| 2007       |   | $      | 32,037,211 |   |
|------------|--------|--------|------------|--------|
| 2008       |   |   | 22,079,576 |   |
| 2009       |   |   | 14,549,554 |   |
| 2010       |   |   | 7,305,572  |   |
| 2011       |   |   | 3,892,672  |   |
| Thereafter |   |   | 2,499,200  |   |
|       |   | $      | 82,363,785 |   |

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

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

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

**December      31, 2006 **

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

|                                              |   | **Years                Ended December 31,** |      |
|---------------------------------------------------|--------|---------------------------------------------|-----------|
|                                              |   | **2006**                                    |      | **2005** |   | **2004** |   |
| Acquisition                fees                   |   | $                                           | 697,168   |   | $ | 1,211,566 |   | $ | 850,220 |   |
| Asset                management fees              |   | $                                           | 1,063,586 |   | $ | 840,403 |   | $ | 383,798 |   |
| Reimbursed                administrative expenses |   | $                                           | 564,946   |   | $ | 554,611 |   | $ | 482,180 |   |
| Organization                and offering expenses |   | $                                           | −   |   | $ | − |   | $ | 226,438 |   |
| Underwriting                fees                  |   | $                                           | −   |   | $ | − |   | $ | 141,542 |   |

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

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

**December      31, 2006 **

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

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

**NOTE      12 **
**-**
** **
**NET      INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT**

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**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          | 54            | Chairman                of the Board of Directors and Chief Executive Officer |
| Miles                Herman            | 47            | President,                Chief Operating Officer and Director                |
| Jonathan                Z. Cohen       | 36            | Director                                                                      |
| Alan                D. Schreiber, M.D. | 65            | Director                                                                      |
| Linda                Richardson        | 59            | Director                                                                      |
| Robert                K. Moskovitz     | 50            | Chief                Financial Officer and Treasurer                          |
| David                H. English        | 57            | Executive                Vice President                                       |
| Darshan                V. Patel        | 36            | General                Counsel and Secretary                                  |
| Daniel                G. Courtney      | 44            | Senior                Vice President - Investment                Programs     |

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**    CRIT      S.      DEMENT**

**    MILES      HERMAN**

**    JONATHAN      Z.      COHEN**

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

**    LINDA      RICHARDSON**

**    ROBERT      K.      MOSKOVITZ**

**    DAVID      H.      ENGLISH**

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**    DARSHAN      V.      PATEL**

**    DANIEL      G.      COURTNEY**

**Code      of Business Conduct and Ethics**

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

**ITEM        12.**
**SECURITY        OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND **
**MANAGEMENT        AND RELATED UNIT HOLDER MATTERS**

| (a)   | The                Fund had approximately 429 limited                partners as of December 31, 2006. |
|-----------------|-------------------------------------------------------------------------------------------------------------|
| (b)   | In                2004, the Fund’s General Partner contributed $1,000 to its capital as the                General Partner and received its General Partner interest in the                Fund. As                of December 31, 2006, the Fund’s General Partner owned 8,055 of the Fund’s                limited partner units. These purchases of limited partner units by                the                Fund’s General Partner and its affiliates were at a price discounted by                the 7% sales commission which was paid by most of the Fund’s other limited                partners. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (c)   | The                Fund knows of no arrangements that would, at any date subsequent                to the                date of this report, result in a change in control of                us. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**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.*

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**PART      IV**

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

|   | 1. | **Financial                  Statements** |
|--------|----|-------------------------------------------|

|   | 2. | **Financial                  Statement Schedules** |
|--------|----|----------------------------------------------------|

|   | 3. | **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                         |   | WestLB                  AG, New York Branch Amendment to West LB Agreement Secured Loan                  Agreement                  (3)                                                                                                                        |
|   | 10.2                         |   | First                  Amendment to WestLB AG Secured Loan Agreement (7)                                                                                                                                                                                       |
|   | 10.3                         |   | Third                  Amendment to WestLB AG Secured Loan Agreement (8)                                                                                                                                                                                       |
|   | 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                         |   | Certification                  of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley                  Act of 2002.                                                                                                                          |
|   | 31.2                         |   | Certification                  of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley                  Act of 2002.                                                                                                                          |
|   | 32.1                         |   | Certification                  of Chief Executive Officer pursuant to Section 1350 18 U.S.C.,                  as adopted                  pursuant to Section 906 of the Sarbanes-Oxley Act of                  2002.                                         |
|   | 32.2                         |   | Certification                  of Chief Financial Officer pursuant to Section 1350 18 U.S.C.,                  as adopted                  pursuant to Section 906 of the Sarbanes-Oxley Act of                  2002.                                         |

| (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 and                by this                reference incorporated herein. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)   | Filed                previously as an Exhibit to Amendment No. 1 to our Registration Statement                on Form S-1 filed on June 7, 2002 and by this reference incorporated                herein. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (3)   | Filed                previously as an exhibit to our Annual Report on Form 10-K for the                year                ended December 31, 2004 and by this reference incorporated                herein. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (4)   | Filed                previously on Form 8-K, filed on September 19, 2003 and by this reference                incorporated herein. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------|
| (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 and                by this                reference incorporated herein. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (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 and                by this                reference incorporated herein. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (7)   | Filed                previously as an exhibit to our Annual Report on Form 10-K for the                fiscal                year ended December 31, 2005 and by this reference incorporated                herein. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (8)   | Filed                previously on August 14, 2006 as an exhibit to our Quarterly Report                on                Form 10-Q for the quarter ended June 30, 2006 and by this reference                incorporated herein. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**SIGNATURES**

|                                               |                                                    |                                                                                           |
|----------------------------------------------------|---------------------------------------------------------|------------------------------------------------------------------------------------------------|
|                                               | **LEASE              EQUITY APPRECIATION FUND I, L.P.** |
|                                          |                                               |  Delaware                Limited PartnershipBy:                LEAF Financial Corporation |
| Date: March              30, 2007   | By:                                           | /s/ CRIT              S.              DEMENT                               |
|                                               | CRIT              S. DEMENT                             |
|                                               | Chairman              and Chief Executive Officer       |

| /s/                Crit S. DeMentCRIT                S. DEMENT                   | Chairman                of the Board, Chief Executive Officer of the General                Partner  | March                30, 2007 |
|----------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------|-------------------------------|
|                                                                             |                                                                                                 |                          |
| /s/                Miles Herman MILES                HERMAN                 | President,                Chief Operating Officer and Director of the General                Partner | March                30, 2007 |
|                                                                             |                                                                                                 |                          |
| /s/                Robert K. MoskovitzROBERT                K. MOSKOVITZ         | Chief                Financial Officer, Treasurer of                the General Partner              | March                30, 2007 |
|                                                                             |                                                                                                 |                          |
| /s/                Jonathan Z. CohenJONATHAN                Z. COHEN             | Director                of the General Partner                                                       | March                30, 2007 |
|                                                                             |                                                                                                 |                          |
| /s/                Alan D. Schreiber, M.D.ALAN                D. SCHREIBER, M.D. | Director                of the General Partner                                                       | March                30, 2007 |
|                                                                             |                                                                                                 |                          |
| /s/                Linda RichardsonLINDA                RICHARDSON               | Director                of the General Partner                                                       | March                30, 2007 |

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