| Accounting Policies | 12 Months Ended |
| Dec. 31, 2013 |
| Notes | ' |
| Accounting Policies | ' |
| 1. Business |
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| Commonwealth Income and Growth Fund VI (the “Partnership”) is a limited partnership organized in the Commonwealth of Pennsylvania on January 6, 2006. The Partnership offered for sale up to 2,500,000 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 May 10, 2007. The offering terminated on March 6, 2009 with 1,810,311 units sold for a total of approximately $36,000,000 in limited partner contributions. |
| During the years ended December 31, 2013 and 2012, limited partners redeemed -4,774 and -7,633 units of partnership interest for a total redemption price of approximately $40,000 and $81,000 in accordance with the terms of the Partnership’s Limited Partnership Agreement (the “Agreement”) respectively. |
| The Partnership’s investment objective is to acquire primarily high technology equipment. Information technology has developed rapidly in recent years and is expected to continue to do so. Technological advances have permitted reductions in the cost of information technology processing capacity, speed, and utility. In the future, the rate and nature of equipment development may cause equipment to become obsolete more rapidly. The Partnership also acquires high technology medical, telecommunications and inventory management equipment. The Partnership’s General Partner will seek to maintain an appropriate balance and diversity in the types of equipment acquired. The market for high technology medical equipment is growing each year. Generally, this type of equipment will have a longer useful life than other types of technology equipment. This allows for increased re-marketability, if it is returned before its economic or announcement cycle is depleted. |
| 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), REISA, 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 equipment, make final distributions to partners, and to dissolve. Unless sooner terminated or extended pursuant to the terms of the Agreement, the Partnership will continue until December 31, 2018. |
| Allocations of income and distributions of cash are based on the Agreement. The various allocations under the Agreement prevent any limited partner’s capital account from being reduced below zero and ensure the capital accounts reflect the anticipated sharing ratios of cash distributions, as defined in the Agreement. During years ended December 31, 2013 and 2012, cash distributions to limited partners for each quarter were made at a rate of approximately 10% of their original contributed capital. Distributions during the years ended December 31, 2013 and 2012 were made to limited partners in the amount of approximately $1.98 and $1.98 per unit based on each investor’s number of limited partnership units outstanding during the year. |
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| 2. Summary of Significant Accounting Policies |
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| Use of Estimates |
| The preparation of financial statements is in conformity with accounting principles generally accepted in the United States of America which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and those differences could be material. |
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| Disclosure of Fair Value |
| Fair Value Measurements |
| The Partnership applies the provisions included in the Fair Value Measurements and Disclosures Topic to all financial and non-financial assets and liabilities. This Topic emphasizes that fair value is a market-based measurement, not an entity-specific measurement. It clarifies that fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The Topic requires the use of valuation techniques to measure fair value that maximize the use of observable inputs and minimize use of unobservable inputs. These inputs are prioritized as follows: |
| | | Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities. | | | | | | | | | | | | | | |
| | | Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. | | | | | | | | | | | | | | |
| | | Level 3: Unobservable inputs for which there is little or no market data and which require internal development of assumptions about how market participants price the asset or liability. | | | | | | | | | | | | | | |
| There were no assets or liabilities measured at fair value on a recurring basis at December 31, 2013 and 2012. Fair Value Measurements on a nonrecurring basis as of December 31, 2013 and 2012 are as follows: |
| | | | | | Fair Value Measurements | |
| Using Fair Value Hierarchy |
| | Fair Value as of | | | Level 1 | | | Level 2 | | | Level 3 | |
| 31-Dec-13 |
| Assets | | | | | | | | | | | | |
| Equipment | | $ | 68,000 | | | $ | 0 | | | $ | 68,000 | | | $ | 0 | |
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| | | | | | Fair Value Measurements | |
| Using Fair Value Hierarchy |
| | Fair Value as of | | | Level 1 | | | Level 2 | | | Level 3 | |
| 31-Dec-12 |
| Assets | | | | | | | | | | | | |
| Equipment | | $ | 304,000 | | | $ | 0 | | | $ | 0 | | | $ | 304,000 | |
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| Equipment is measured at fair value on a non-recurring basis in conjunction with the Partnership’s impairment analysis. An impairment charge of approximately $48,000 and $52,000 was recorded for equipment written down to fair value in 2013 and 2012, respectively, as a component of depreciation expense in the accompanying statement of operations. The fair value of the equipment is calculated using a market approach for 2013. The market approach utilized third party appraisals or comparable sales of similar assets which are inputs classified as level 2 within the fair value hierarchy. The fair value of the equipment is calculated using an income approach for 2012. The income approach utilized discounted cash flows based on inputs classified as level 3, within the fair value hierarchy. The primary inputs for the cash flow models were estimates of cash flows from lease revenue and expected residual values, as determined by management. |
| Fair Value disclosures of financial instruments not recorded at fair value on the balance sheet |
| Estimated fair value was determined by management using available market information and appropriate valuation methodologies. However, judgment was necessary to interpret market data and develop estimated fair value. Cash, receivables, accounts payable and accrued expenses and other liabilities are carried at amounts which reasonably approximate their fair values as of December 31, 2013 and 2012 due to the immediate or short-term nature of these financial instruments. |
| The Partnership’s long-term debt consists of notes payable, which are secured by specific equipment and are nonrecourse liabilities of the Partnership. The estimated fair value of this debt at December 31, 2013 and 2012 approximates the carrying value of these instruments, due to the interest rates on this debt approximating current market values. The Partnership classifies the fair value of its notes payable within Level 2 of the valuation hierarchy based on the observable inputs used to estimate fair value. |
| Revenue Recognition |
| For the year ended December 31, 2013, the Partnership’s lease portfolio consisted of operating leases and finance leases. For operating leases, lease revenue is recognized on a straight-line basis in accordance with the terms of the lease agreement. |
| Finance lease interest income is recorded over the term of the lease using the effective interest method. For finance leases, we record, at lease inception, unearned finance lease income which is calculated as follows: total lease payments, plus any residual value and initial direct costs, less the cost of the leased equipment. |
| Upon the end of the lease term, if the lessee has not met the return conditions as set out in the lease, the Partnership is entitled in certain cases to additional compensation from the lessee. The Partnership’s accounting policy for recording such payments is to treat them as revenue. |
| Gains or losses from sales of leased and off-lease equipment are recorded on a net basis in the Partnership’s Statement of Operations. |
| Gains from the termination of leases are recognized when the lease is modified and terminated concurrently. Gains from lease termination included in lease revenue for the years ended December 31, 2013 and 2012 were approximately $0 and $85,000, respectively. |
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| Other Assets |
| Equipment acquisition costs and deferred expenses are amortized on a straight-line basis over two-to-four year lives based on the original term of the lease and loan, respectively. Unamortized acquisition costs and deferred expenses are charged to amortization expense when the associated leased equipment is sold. |
| Long-Lived Assets |
| Depreciation on technology and inventory management equipment for financial statement purposes is based on the straight-line method estimated generally over useful lives of two to five years. Once an asset comes off lease or is released, the Partnership reassesses the useful life of an asset. |
| 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 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 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, third party appraisals of comparable sales of similar assets, as applicable, based on asset type. An impairment charge of approximately $48,000 and $52,000 was recorded for equipment written down to fair value in 2013 and 2012, respectively, as a component of depreciation expense in the accompanying statement of operations. |
| Residual values are determined by management and are calculated using information from both internal and external sources, as well as other economic indicators. |
| Reimbursable Expenses |
| Reimbursable expenses are comprised of both ongoing operational expenses and fees associated with the allocation of salaries and benefits, referred to as other LP expenses. Reimbursable expenses, which are charged to the Partnership by CCC in connection with the administration and operation of the Partnership, are allocated to the Partnership based upon several factors including, but not limited to, the number of investors, compliance issues, and the number of existing leases. For example, if a partnership has more investors than another program sponsored by CCC, then higher amounts of expenses related to investor services, including mailing and printing costs will be allocated to that partnership. Also, while a partnership is in its offering stage, higher compliance costs are allocated to it than to a program not in its offering stage, as compliance resources are utilized to review incoming investor suitability and proper documentation. Finally, lease related expenses, such as due diligence, correspondence, collection efforts and analysis and staff costs, increase as programs purchase more leases, and decrease as leases terminate and equipment is sold. All of these factors contribute to CCC’s determination as to the amount of expenses to allocate to the Partnership or to other sponsored programs. For the Partnership, all reimbursable items are expensed as they are incurred. |
| Lease Income Receivable |
| Lease income receivable includes current lease income receivable net of allowances for uncollectible amounts, if any. The Partnership monitors lease income receivable to ensure timely and accurate payment by lessees. The Partnership’s Lease Relations department is responsible for monitoring lease income receivable and, as necessary, resolving outstanding invoices. |
| The Partnership reviews a customer’s credit history before extending credit. When the analysis indicates that the probability of full collection is unlikely, the Partnership may establish an allowance for uncollectible lease income receivable based upon the credit risk of specific customers, historical trends and other information. The Partnership writes off its lease income receivable when it determines that it is uncollectible and all economically sensible means of recovery have been exhausted. |
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| Cash and cash equivalents |
| We consider cash and cash equivalents to be cash on hand and highly liquid investments with the original maturity dates of 90 days or less. |
| At December 31, 2013, cash was held in a total of three accounts maintained at one financial institution with an aggregate balance of approximately 31,000.. Bank accounts are federally insured up to $250,000 by the FDIC. At December 31, 2013 and 2012, the aggregate cash balances were as follows: |
| Balance at December 31, | | 2013 | | | 2012 | | | | | | | | | |
| Total bank balance | | $ | 31,000 | | | $ | 866,000 | | | | | | | | | |
| FDIC insured | | $ | (31,000 | ) | | $ | (434,000 | ) | | | | | | | | |
| Uninsured amount | | $ | 0 | | | $ | 432,000 | | | | | | | | | |
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| The FDIC insurance coverage for noninterest-bearing bank accounts provided under the Dodd/Frank Act of 2010 expired on December 31, 2012. |
| The Partnership’s deposits are fully insured by the FDIC as of December 31, 2013. The Partnership has not experienced any losses in our accounts, and believes it is not exposed to any significant credit risk. The amounts in such accounts will fluctuate throughout 2014 due to many factors, including the pace of cash receipts, equipment acquisitions and distributions to limited partners. |
| Income Taxes |
| Pursuant to the provisions of Section 701 of the Internal Revenue Code, the Partnership is not subject to federal income taxes. All income and losses of the Partnership are the liability of the individual partners and are allocated to the partners for inclusion in their individual tax returns. The Partnership does not have any entity-level uncertain tax positions. In addition, the Partnership believes its tax status as a pass-through entity would be sustained under U.S. Federal, state or local tax examination. The Partnership files U.S. federal and various state income tax returns and is generally subject to examination by federal, state and local income tax authorities for three years from the filing of a tax return. |
| Taxable income differs from financial statement net income as a result of reporting certain income and expense items for tax purposes in periods other than those used for financial statement purposes, principally relating to depreciation, amortization, and lease revenue. |
| Net Income (Loss) Per Equivalent Limited Partnership Unit |
| The net income (loss) per equivalent limited partnership unit is computed based upon net income (loss) allocated to the limited partners and the weighted average number of equivalent units outstanding during the period. |
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| Recent Accounting Pronouncements |
| In December 2013, the FASB issued ASU No. 2013-12 (“ASU Updated 2013-12), Definition of a Public Business Entity. This ASU defines the term “public business entity.” The amendment specifies that an entity that is required by the SEC to file or furnish financial statements with the SEC is considered a public business entity. The Partnership adopted this ASU during the fourth quarter of 2013 and determined it had no material impact on its financial statements. |
| In October 2012, the FASB issued ASU No. 2012-04 (“ASU Update 2012-04”), Technical Corrections and Improvements. The amendments in this Update represent changes to clarify the Codification, correct unintended application of guidance, or make minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The amendments in this ASU that will not have transition guidance are effective upon issuance of the ASU, which is the fourth quarter of 2012. The amendments that are subject to transition guidance will be effective for fiscal periods beginning after December 15, 2012. The Partnership adopted this ASU during the first quarter of 2013 and determined it had no material impact on its financial statements. |
| In April 2013, the FASB issued ASU No. 2013-07 (“ASU Updated 2013-07”), Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting. This ASU provides guidance on the application of the liquidation basis of accounting as provided by U.S. GAAP. The guidance will improve the consistency of financial reporting for liquidating entities. The guidance in this ASU is effective for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. The Partnership is currently evaluating the effect that this ASU will have on its financial statements during the liquidation phase of its life cycle. |
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| 3. Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment (“Equipment”) |
| The Partnership is the lessor of equipment under leases with periods that generally will range from 12 to 48 months. In general, associated costs such as repairs and maintenance, insurance and property taxes are paid by the lessee. |
| The Partnership recorded an impairment charge of approximately $48,000 and $52,000 at December 31, 2013 and 2012, respectively, as impairment indicators were noted, and is included in depreciation expense in the accompanying financial statements. |
| Remarketing fees will be paid to the leasing companies from which the Partnership purchases leases. These are fees that are earned by the leasing companies when the initial terms of the lease have been met. The General Partner believes that this strategy adds value since it entices the leasing company to remain actively involved with the lessees for potential extensions, remarketing or sale of equipment. This strategy is designed to minimize any conflicts the leasing company may have with a new lessee and may assist in maximizing overall portfolio performance. The remarketing fee is tied into lease performance thresholds and is a factor in the negotiation of the fee. Remarketing fees incurred in connection with lease extensions are accounted for as operating costs. Remarketing fees incurred in connection with the sale of equipment are included in the gain or loss calculations. During the years ended December 31, 2013 and 2012, remarketing fees were incurred in the amounts of approximately $32,000 and 167,000. For the years ended December 31, 2013 and 2012, approximately $61,000and $157,000 of remarketing fees were paid with cash or netted against receivables due from such parties, respectively. |
| CCC, on behalf of the Partnership and on behalf of other affiliated partnerships, acquires equipment subject to associated debt obligations and lease agreements and allocates a participation in the cost, debt and lease revenue to the various partnerships based on certain risk factors. |
| The Partnership’s share of the cost of the equipment in which it participates with other partnerships at December 31, 2013 was approximately $6,066,000 and is included in the equipment on its balance sheet. The Partnership’s share of the outstanding debt associated with this equipment at December 31, 2013 was approximately $174,000 and is included in the Partnership’s notes payable on its balance sheet. The total cost of the equipment shared by the Partnership with other partnerships at December 31, 2013 was approximately $13,646,000. The total outstanding debt related to the equipment shared by the Partnership at December 31, 2013 was approximately $455,000. |
| The Partnership’s share of the cost of the equipment in which it participates with other partnerships at December 31, 2012 was approximately $7,951,000 and is included in the equipment on its balance sheet. The Partnership’s share of the outstanding debt associated with this equipment at December 31, 2012 was approximately $295,000 and is included in the Partnership’s notes payable on its balance sheet. The total cost of the equipment shared by the Partnership with other partnerships at December 31, 2012 was approximately $22,501,000. The total outstanding debt related to the equipment shared by the Partnership at December 31, 2012 was approximately $610,000. |
| As the Partnership and the other programs managed by the General Partner increase their overall portfolio size, opportunities for shared participation are expected to continue. Sharing in the acquisition of a lease portfolio gives the Partnership an opportunity to acquire additional assets and revenue streams, while allowing the Partnership to remain diversified and reducing its overall risk with respect to one portfolio. Thus, total shared equipment and related debt should continue throughout 2014 as the Partnership continues to acquire equipment for its portfolio. |
| The following is a schedule of future minimum rentals on noncancellable operating leases at December 31 2013: |
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| | | Amount | | | | | | | | | | | | |
| Year Ended December 31, 2014 | | | 2,397,000 | | | | | | | | | | | |
| Year Ended December 31, 2015 | | | 843,000 | | | | | | | | | | | |
| Year Ended December 31, 2016 | | | 162,000 | | | | | | | | | | | |
| | | $ | 3,402,000 | | | | | | | | | | | |
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| The following lists the components of the net investment in direct financing leases at December 31: |
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| | 2013 | | | 2012 | | | | | | | | | |
| Total minimum lease payments to be received | | $ | 98,000 | | | $ | 45,000 | | | | | | | | | |
| Initial direct costs | | | 4,000 | | | | 0 | | | | | | | | | |
| Allowance for bad debt | | | 0 | | | | -8,000 | | | | | | | | | |
| Estimated residual value of leased equipment (unguaranteed) | | | 11,000 | | | | 20,000 | | | | | | | | | |
| Less: unearned income | | | (15,000 | ) | | | (3,000 | ) | | | | | | | | |
| Net investment in direct finance leases | | $ | 98,000 | | | $ | 54,000 | | | | | | | | | |
| Our finance lease customers operate in various industries, and we have no significant customer concentration in any one industry. We assess credit risk for all of our customers, including those that lease under finance leases. This credit risk is assessed using an internally developed model which incorporates credits scores from third party providers and our own customer risk ratings and is periodically reviewed . Our internal ratings are weighted based on the industry that the customer operates in. Factors taken into consideration when assessing risk includes both general and industry specific qualitative and quantitative metrics. We separately take in to consideration payment history, open lawsuits, liens and judgments. Typically, we will not extend credit to a company that has been in business for less than 5 years or that has filed for bankruptcy within the same period. Our internally based model may classify a company as high risk based on our analysis of their audited financial statements and their payment history. Additional considerations of high risk may include history of late payments, open lawsuits and liens or judgments. In an effort to mitigate risk, we typically require deposits from those in this category. |
| The following table presents the credit risk profile, by creditworthiness category, of our finance lease |
| receivables at December 31, 2013: |
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| Risk Level | | Percent of Total | | | | | | | | | | | | | |
| Low | | | 0 | % | | | | | | | | | | | | |
| Moderate-Low | | | 100 | % | | | | | | | | | | | | |
| Moderate | | | 0 | % | | | | | | | | | | | | |
| Moderate-High | | | 0 | % | | | | | | | | | | | | |
| High | | | 0 | % | | | | | | | | | | | | |
| Net finance lease receivable | | | 100 | % | | | | | | | | | | | | |
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| As of December 31, 2013, we determined that we did not have a need for an allowance for uncollectible accounts associated with any of our finance leases, as the customer payment histories with us, associated with these leases, has been positive, with no late payments. |
| The following is a schedule of future minimum rentals on noncancelable direct financing leases at December 31, 2013: |
| | | Amount | | | | | | | | | | | | | |
| Year ended December 31, 2014 | | | 26,000 | | | | | | | | | | | | | |
| Year ended December 31, 2015 | | | 26,000 | | | | | | | | | | | | | |
| Year ended December 31, 2016 | | | 26,000 | | | | | | | | | | | | | |
| Year ended December 31, 2017 | | | $20,000 | | | | | | | | | | | | | |
| | | $ | 98,000 | | | | | | | | | | | | | |
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| During June 2013, CCC, on behalf of the Partnership, negotiated a settlement with a significant lessee related to the buy-out of several operating and finance leases. The Partnership received consideration of approximately $386,000 as a result of the settlement.. Through the settlement, the Partnership reduced its lease income receivable by approximately $269,000 during the year ended December 31, 2013. The consideration for the buyout of equipment under operating leases was approximately $60,000 which resulted in a net loss on the sale of equipment under operating leases of approximately$116,000 during the year ended December 31, 2013. As consideration for the buyout of its finance leases, the Partnership applied payments from the lessee which resulted in a decrease in the net investment in finance receivables of approximately $56,000 and recorded a related gain of approximately $1,000 during the year ended December 31, 2013. |
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| 4. Significant Customers |
| Lessees equal to or exceeding 10% of lease revenue for the year ended December 31: |
| 2013 | | | | | | | | | | | | | | | | |
| Cummins, Inc. | 16% | | | | | | | | | | | | | | | |
| Aetna Life Insurance | 14% | | | | | | | | | | | | | | | |
| Cargill, Inc. | 12% | | | | | | | | | | | | | | | |
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| 2012 | | | | | | | | | | | | | | | | |
| Cargill, Inc. | 10% | | | | | | | | | | | | | | | |
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| Lessees equal to or exceeding 10% of net lease income receivable at December 31: |
| 2013 | | | | | | | | | | | | | | | | |
| Aerojet General Corporation | 47% | | | | | | | | | | | | | | | |
| Alliant Techsystems | 17% | | | | | | | | | | | | | | | |
| Motorola, Inc. | 10% | | | | | | | | | | | | | | | |
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| 2012 (restated) | | | | | | | | | | | | | | | | |
| Arinc Incorporated | 48% | | | | | | | | | | | | | | | |
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| 4. Related Party Transactions |
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| As of December 31, 2013, the Company’s related party receivables and payables are short term, unsecured and non-interest bearing. |
| Year ended | | 31-Dec-13 | | | 31-Dec-12 | | | | | | | | | |
| Reimbursable Expenses – Reimbursable expenses, which are charged to the Partnership by CCC in connection with the administration and operation of the Partnership, are allocated to the Partnership based upon several factors including, but not limited to, the number of investors, compliance issues, and the number of existing leases. For the years ended December 31, 2013 and 2012, the Partnership was charged approximately $427,000 and $523,000 in other LP expense, respectively. | | 805,000 | | | 1,052,000 | | | | | | | | | |
| Equipment management fee – The General Partner is entitled to be paid a monthly fee equal to the lesser of (i) the fees which would be charged by an independent third party for similar services for similar equipment or (ii) the sum of a (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. | | | 206,000 | | | | 321,000 | | | | | | | | | |
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| Equipment acquisition fee – The General Partner earned an equipment acquisition fee of 4% of the purchase price of each item of equipment purchased as compensation for the negotiation of the acquisition of the equipment and lease thereof or sale under a conditional sales contact. | | | 49,000 | | | | 110,000 | | | | | | | | | |
| Debt placement fee – As compensation for arranging term debt to finance our acquisition of equipment, we will pay the General Partner a fee equal to one percent of such indebtedness; provided, however, that such fee shall be reduced to the extent we incur such fees to third parties unaffiliated with the General Partner of the lender with respect to such indebtedness. No such fee will be paid with respect to borrowings from the General Partner or its affiliates. We intend to initially acquire leases on an all cash basis with the proceeds of this offering, but may borrow funds after the offering proceeds have been invested. The amount we borrow, and therefore the amount of the fee, will depend upon interest rates at the time of a loan, and the amount of leverage we determine is appropriate at the time. We do not intend to use more than 30% leverage overall in the portfolio. Fees will increase as the amount of leverage we use increases, and as turnover in the portfolio increases and additional equipment is purchased using leverage. | | | 1,000 | | | | 1,000 | | | | | | | | | |
| Equipment liquidation fee – 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 fees is subordinated to the receipt by the limited partners of (i) the return of their net capital contributions and 10% per annum cumulative return, compounded daily, on adjusted capital contributions and (ii) 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. During the year ended December 31, 2013 and 2012, the General Partner waived approximately $2,000 and $0 of equipment liquidation fees, respectively. | | | 9,000 | | | | 38,000 | | | | | | | | | |
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| Partnership Interest and Distribution. The General Partner has a present and continuing one percent interest of $1,000 in the Partnership’s item of income, gain, loss, deduction, credit, and tax preference. In addition, the General Partner receives one percent of Cash Available for Distribution until the Limited Partners have received distributions of Cash Available for Distribution equal to their Capital Contributions plus the 10% Cumulative Return and thereafter, the General Partner will receive 10% of Cash Available for Distribution. |
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| December 31, 2013 |
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| $36,000 |
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| 31-Dec-12 |
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| $37,000 |
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| 0RJ60WNH»] |
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