FOR THE QUARTERLY PERIOD ENDED JUNE 30, 20072008

Commonwealth Income & Growth Fund V (the “Partnership”) is a limited partnership organized in the Commonwealth of Pennsylvania on May 19, 2003.  The Partnership offered for sale up to 1,250,000 units of the limited partnership at the purchase price of $20 per unit (the “Offering”).  The Partnership reached the minimum amount in escrow and commenced operations on March 14, 2005.  As of February 24, 2006, the Partnership was fully subscribed.

The Partnership used the proceeds of the Offering to acquire, own and lease various types of computer information technology (I.T.) equipment and other similar capital equipment, which is leased primarily to U.S. corporations and institutions.  Commonwealth Capital Corp. (“CCC”), on behalf of the Partnership and other affiliated partnerships, will acquireacquires computer equipment subject to associated debt obligations and lease agreements and allocateallocates a participation in the cost, debt and lease revenue to the various partnerships based on certain risk factors.

The Partnership’s General Partner is Commonwealth Income & Growth Fund, Inc. (the “General Partner”), a Pennsylvania corporation which is an indirect wholly owned subsidiary of CCC.  CCC is a member of the Investment Program Association (IPA), Financial Planning Association (FPA), and the Equipment Leasing and Finance Association (ELFA).  Approximately ten years after the commencement of operations, the Partnership intends to sell or otherwise dispose of all of its computer equipment, make final distributions to partners and to dissolve.  Unless sooner terminated, the Partnership will continue until December 31, 2015.

The financial information presented as of any date other than December 31, 20062007 has been prepared from the books and records without audit.  Financial information as of December 31, 20062007 has been derived from the audited financial statements of the Partnership, but does not include all disclosures required by generally accepted accounting principles.principles to be included in audited financial statements.  In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial information for the periods indicated, have been included.  For further information regarding the Partnership’s accounting policies, refer to the financial statements and related notes included in the Partnership’s annual report on Form 10-K for the year ended December 31, 2006.2007.  Operating results for the six months ended June 30, 20072008 are not necessarily indicative of financial results that may be expected for the full year ended December 31, 2007.2008.

The Partnership evaluates its long-lived assets when events or circumstances indicate that the value of the asset may not be recoverable.  The Partnership determines whether an impairment exists by estimating the undiscounted cash flows to be generated by each asset.  If the estimated undiscounted cash flows are less than the carrying value of the asset, then an impairment exists.  The amount of the impairment is determined based on the difference between the carrying value and the fair value.  Fair value is determined based on estimated discounted cash flows to be generated by the asset.  The partnershipPartnership determined that no impairment in the amount of approximately $15,000 existed as of June 30, 2008. No impairment was recorded for the six months ended June 30, 2007.

As compensation for arranging term debt to finance the acquisition of equipment by the Partnership, the General Partner is paid a fee equal to 1% of such indebtedness; provided, however, that such fee shall be reduced to the extent the Partnership incurs such fees to third parties, unaffiliated with the General Partner or the lender, with respect to such indebtedness and no such fee will be paid with respect to borrowings from the General Partner or its affiliates.  For the six months ended June 30, 20072008 and 2006,2007 debt placement fees of approximately $22,200$3,000 and $13,000,$22,000, respectively, were earned by the General Partner.

The General Partner is entitled to be paid a monthly fee equal to the lesser of (i) the fees which would be charged by an independent third party for similar services for similar equipment or (ii) the sum of (a) two percent of (1) the gross lease revenues attributable to equipment which is subject to full payout net leases which contain net lease provisions plus (2) the purchase price paid on conditional sales contracts as received by the Partnership and (b) 5% of the gross lease revenues attributable to equipment which is subject to operating and capital leases.  For the six months ended June 30, 2007,2008 and 20062007, equipment management fees of approximately $156,000,$178,000, and $72,000,$156,000, respectively, were earned by the General Partner.

With respect to each item of equipment sold by the General Partner (other than in connection with a conditional sales contract), a fee equal to the lesser of (i) 50% of the competitive equipment sale commission or (ii) three percent of the sales price for such equipment is payable to the General Partner.  The payment of such fee is subordinated to the receipt by the limited partners of the net disposition proceeds from such sale in accordance with the Partnership Agreement.  Such fee will be reduced to the extent any liquidation or resale fees are paid to unaffiliated parties.  For the six months ended June 30, 2008 and 2007, equipment liquidation fees of approximately $17,000 and $23, respectively, were earned by the General Partner.  For the six months ended June 30, 2006 there were no equipment liquidation fees earned by the General Partner.

These notes are secured by specific computer equipment and are nonrecourse liabilities of the Partnership.  Aggregate maturities of notes payable for each of the periods subsequent to June 30, 20072008 are as follows:

Other noncash activities included in the determination of net loss are as follows:

No interest or principal on notes payable was paid by the Partnership because direct payment was made by lessee to the bank in lieu of collection of lease income and payment of interest and principal by the Partnership.

Certain statements within this Quarterly Report on Form 10-Q may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”). These statements are being made pursuant to the PSLRA, with the intention of obtaining the benefits of the “safe harbor” provisions of the PSLRA, and, other than as required by law, we assume no obligation to update or supplement such statements. Forward-looking statements are those that do not relate solely to historical fact. They include, but are not limited to, any statement that may predict, forecast, indicate or imply future results, performance, achievements or events. You can identify these statements by the use of words such as “may,” “will,” “could,” “anticipate,” “believe,” “estimate,” “expects,“expect,” “intend,” “predict” or “project” and variations of these words or comparable words or phrases of similar meaning. These forward-looking statements reflect our current beliefs and expectations with respect to future events and are based on assumptions and are subject to risks and uncertainties and other factors outside our control that may cause actual results to differ materially from those projected.

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

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

Commonwealth Capital Corp., on behalf of the Partnership and other affiliated partnerships, acquires computer equipment subject to associated debt obligations and lease revenue and allocates a participation in the cost, debt and lease revenue to the various partnerships based on certain risk factors. Depreciation on computer equipment for financial statement purposes is based on the straight-line method estimated generally over estimated useful lives of three or four years.

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

The Partnership evaluates its long-lived assets when events or circumstances indicate that the value of the asset may not be recoverable.  The Partnership determines whether an impairment exists by estimating the undiscounted cash flows to be generated by each asset.  If the estimated undiscounted cash flows are less than the carrying value of the asset, an impairment exists.  The amount of the impairment is determined based on the difference between the carrying value and the fair value.  Fair value is determined based on estimated discounted cash flows to be generated by the asset.  The Partnership determined that impairment in the amount of approximately $15,000 existed as of June 30, 2008.   No impairment was recorded for the six months ended June 30, 2007.

The Partnership’s primary source of capital for the six months ended June 30, 2008 and 2007 was cash provided by operating activities of approximately $1,790,000.  For the six months ended June 30, 2006, the Partnership’s primary source of capital was from contributions of approximately $5,200,000.$1,019,000 and $1,788,000.  Equipment was purchased in the amount of approximately $3,560,000$584,000 during the six months ended June 30, 2008 and distributions were paid in the amount of approximately $1,250,000.  Equipment was purchased in the amount of approximately $3,563,000 during the six months ended June 30, 2007 and distributions were paid in the amount of approximately $1,250,000.  Equipment in the amount of approximately $3,600,000 was purchased during the six months ended June 30, 2006 and distributions were paid in the amount of $1,100,000.

The Partnership intends to invest approximately $6,192,000$2,000,000 in additional equipment for the remainder of 2007.2008.  The acquisition of this equipment will be funded by debt financing fromand cash flows from lease rental payments.

For the six months ended June 30, 2007,2008, the Partnership generated cash flows from operating activities in the amount of $1,790,000,approximately $1,019,000, which includes a net loss of approximately $117,000,$272,000, and depreciation and amortization expenses of approximately $2,470,000.$2,915,000.  Other non-cash activities included in the determination of net income include direct payments of lease income by lessees to banks of approximately $796,000.

For the six months ended June 30, 2006,2007, the Partnership generated cash flows from operating activities in the amount of $727,000,approximately $1,788,000, which includes a net loss of approximately $309,000,$117,000, and depreciation and amortization expenses of approximately $1,085,000.$2,473,000.  Other non-cash activities included in the determination of net income include direct payments of lease income by lessees to banks of approximately $222,000.$796,000.

The Partnership's investment strategy of acquiring computer equipment and generally leasing it under “triple-net leases” to operators who generally meet specified financial standards minimizes the Partnership's operating expenses.  As of June 30, 2007,2008, the Partnership had future minimum rentals on non-cancelable operating leases of approximately $3,422,000$3,041,000 for the balance of the year ending December 31, 20072008 and approximately $9,565,000$3,656,000 thereafter.  As of June 30, 2007,2008, the outstanding debt was approximately $3,744,000$2,428,000 with interest rates ranging from 4.61%4.65% to 6.3%6.30%, and will be payable through January 2010.2011.

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

The Partnership’s share of the computer equipment in which it participates with other partnerships at June 30, 20072008 and December 31, 20062007 was approximately $7,977,000$8,991,000 and $3,923,000$8,381,000, respectively, which is included in the Partnership’s fixed assets on its balance sheet.  The total cost of the equipment shared by the Partnership with other partnerships at June 30, 20072008 and December 31, 20062007 was approximately $15,750,000$20,827,000 and $8,188,000,$17,371,000, respectively.  The Partnership’s share of the outstanding debt associated with this equipment at June 30, 20072008 and December 31, 20062007 was $2,138,000$1,457,000 and $526,000,$1,683,000, respectively.  The total outstanding debt associated with this equipment at June 30, 20072008 and December 31, 20062007 was $4,074,500$3,585,000 and $1,148,000,$3,187,000, respectively.

For the three months ended June 30, 2008, the Partnership recognized revenue of approximately $1,848,000 and expenses of approximately $2,028,000, resulting in a net loss of approximately $180,000.  For the three months ended June 30, 2007, the Partnership recognized incomerevenue of approximately $1,784,000 and expenses of approximately $1,873,000, resulting in a net loss of approximately $89,000.  For

Lease income increased to approximately $1,740,000 for the three months ended June 30, 2006, the Partnership recognized income of approximately $880,000 and expenses of approximately $941,000, resulting in a net loss of approximately $61,000.

Operating expenses, excluding depreciation, primarily consist of accounting, legal, outside service fees and reimbursement of expenses to CCC for administration and operation of the Partnership.  With the exception of legal and accounting fees, CCC has determined that in the best interest of the Partnership, the majority of shared expenses will not be allocated to the Partnership.  In accordance with the American Institute of Certified Public Accountants, Statement of Position (SOP) 98-05, costs relating to start-up activities and organization costs (accounting, legal, printing, etc.) are expensed as incurred. The expenses increased 44%14% to approximately $422,000 for the three months ended June 30, 2008, from $370,000 for the three months ended June 30, 2007, from $257,000 for the three months ended June 30, 2006.2007.  This increase is primarily attributable to an increase in Partnership taxes, LPlimited partnership expenses and employee bonuses.remarketing fees.

The equipment management fee is approximately 5% of the gross lease revenue attributable to equipment that is subject to operating leases. The equipment management fee increased 108%6% to approximately $92,000 for the three months ended June 30, 2008, from $87,000 for the three months ended June 30, 2007, from $40,000 for the three months ended June 30, 2006, which is consistent with the increase in lease income.

Depreciation and amortization expenses consist of depreciation on computer equipment and amortization of equipment acquisition fees. These expenses increased 122%7% to approximately $1,474,000 for the three months ended June 30, 2008, from $1,374,000 for the three months ended June 30, 2007, from $620,000 for the three months ended June 30, 2006.2007. This increase was due to the acquisition of new equipment attributable to the purchase of new leases.

For the six months ended June 30, 2008, the Partnership recognized income of approximately $3,699,000, and expenses of approximately $3,972,000, resulting in a net loss of approximately $272,000.  For the six months ended June 30, 2007, the Partnership recognized income of approximately $3,237,000, and expenses of approximately $3,354,000, resulting in a net loss of approximately $117,000.  For

Lease income increased 14% to $3,567,000 for the six months ended June 30, 2006, the Partnership recognized income of approximately $1,534,000, and expenses of approximately $1,843,000, resulting in a net loss of approximately $309,000.

Operating expenses, excluding depreciation, primarily consist of accounting, legal, outside service fees and reimbursement of expenses to CCC, a related party, for administration and operation of the Partnership.  The expenses increased to approximately $796,000 for the six months ended June 30, 2008, from $656,000 for the six months ended June 30, 2007, from $612,000 for the six months ended June 30, 2006, primarily due to an increase in other LPlimited partnership expenses, and Partnership taxes which was set off by a decrease inand legal fees, blue sky expenses and office and printing expenses.fees.

The equipment management fee is approximately 5% of the gross lease revenue attributable to equipment that is subject to operating leases. The equipment management fee increased to approximately $178,000 for the six months ended June 30, 2008, from $156,000 for the six months ended June 30, 2007, from $72,000 for the six months ended June 30, 2006, which is consistent with the increase in lease income.

The Partnership believes its exposure to market risk is not material due toOur management, under the fixed interest rate of its long-term debtsupervision and its associated fixed revenue streams.

In April 2007, our lessee Quick Loan Funding, Inc. began defaulting on its lease payments.  From April 2007 through the first quarter of 2008 we attempted several times to collect payment of outstanding lease payments and to recover the equipment from this lessee. On April 2, 2008, we filed suit in the Superior Court of Orange County, California (Docket No. 30-2008-00104785) against Quick Loan Funding, Inc. and its owner, Daniel Sadek, to recover the unpaid lease payments, late fees and the equipment. In July 2008, we recovered a portion of the equipment leased to Quick Loan Funding, and we are continuing to pursue all available means to recover the remainder of the equipment and the outstanding amounts owed to us.  We anticipate the entry of a judgment in our favor during the third quarter of 2008, and will then focus on enforcement of the judgment against any available assets of Quick Loan Funding.   While we believe Quick Loan Funding is currently insolvent, to our knowledge no proceedings in bankruptcy have been initiated, and we believe that Quick Loan Funding may have sufficient assets to cover our anticipated judgment against it.  To date, the Partnership has recorded a reserve against all outstanding rentals in the amount of approximately $43,000 and has impaired the equipment leased to Quick Loan Funding by 10% this quarter. The Partnership determined that impairment in the amount of approximately $15,000 existed as of June 30, 2007, that have materially affected or are reasonably likely2008.  Prior to materially affect the General Partner’s internal controls over financial reporting.first quarter of 2008, the Partnership had impaired these assets by approximately 15%.