Commonwealth Income & Growth Fund VII (CIGF7) 10-Q 18 May 22 2022 Q1 Quarterly report Financial data

Cover

Cover - shares	3 Months Ended
	Mar. 31, 2022	May 14, 2022
Cover [Abstract]
Entity Registrant Name	COMMONWEALTH INCOME & GROWTH FUND VII, LP
Entity Central Index Key	0001450335
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Mar. 31, 2022
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2022
Entity Common Stock Shares Outstanding		0
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	333-156357
Entity Incorporation State Country Code	PA
Entity Tax Identification Number	26-3733264
Entity Address Address Line 1	4532 US Highway 19
Entity Address Address Line 2	Suite 200
Entity Address City Or Town	New Port Richey
Entity Address State Or Province	FL
Entity Address Postal Zip Code	34652
City Area Code	800
Local Phone Number	249-3700
Entity Interactive Data Current	Yes
Entity Incorporation Date Of Incorporation	Nov. 14, 2008

Condensed Balance Sheets

Condensed Balance Sheets - USD ($)	Mar. 31, 2022	Dec. 31, 2021
ASSETS
Cash and cash equivalents	$ 0	$ 4,424
Lease income receivable, net of reserve of approximately $225,000 and $283,000 at March 31, 2022 and December 31, 2021, respectively	248,905	188,540
Accounts receivable, Commonwealth Capital Corp, net of accounts payable of approximately $195,000 and $100,329 at March 31, 2022 and December 31, 2021, respectively	1,027,223	1,167,860
Other receivables, net of reserve of approximately $587,000 and $305,000 at March 31, 2022 and December 31, 2021, respectively	3,245	3,245
Prepaid expenses	7,371	4,337
Total Current Assets	1,286,744	1,368,406
Net investment in finance leases	33,043	35,775
Investment in Commonwealth Opportunity Fund 2	523,548	546,939
Equipment, at cost	13,028,564	12,891,552
Accumulated depreciation	(12,514,164)	(12,431,814)
Equipment Net	514,400	459,738
Equipment acquisition costs and deferred expenses, net of accumulated amortization of approximately $9,000 and $12,000 at March 31, 2022 and December 31, 2021, respectively	10,936	7,427
Total Non-Current Assets	10,936	7,427
Total Assets	2,368,671	2,418,285
LIABILITIES
Accounts payable	194,844	259,651
Accounts payable, CIGF, Inc.	239,867	195,241
Unearned lease income	25,678	28,891
Notes payable	102,548	121,090
Total Liabilities	562,937	604,873
PARTNERS' CAPITAL
General Partner	1,050	1,050
Limited Partners	1,804,684	1,812,362
Total Partners' Capital	1,805,734	1,813,412
Total Liabilities and Partners' Capital	$ 2,368,671	$ 2,418,285

Condensed Balance Sheets (Paren

Condensed Balance Sheets (Parenthetical) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Condensed Balance Sheets
Lease income receivable, reserve	$ 225,000	$ 283,000
Accounts receivable, reserve	195,000	100,329
Other receivables, reserve	587,000	305,000
Equipment, accumulated amortization	$ 9,000	$ 12,000

Condensed Statements of Operati

Condensed Statements of Operations - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revenue
Lease	$ 198,987	$ 348,889
Interest and other	4,241	7,308
Sales and property taxes	11,822	16,821
Gain on sale of equipment	3,936	9,273
Total revenue and gain on sale of equipment	218,986	382,291
Expenses
Operating, excluding depreciation and amortization	77,623	178,214
Equipment management fee, General Partner	10,010	17,505
Interest	1,276	5,639
Depreciation	101,065	286,434
Amortization of equipment acquisition costs and deferred expenses	1,477	11,674
Sales and property taxes	11,822	16,821
Bad debt expense		0
Total expenses	203,273	516,287
Other expenses (loss)
Loss in investment from COF 2	(23,391)	(12,853)
Total other loss	(23,391)	(12,853)
Net loss	(7,678)	(146,849)
Net loss allocated to Limited Partners	$ (7,678)	$ (146,849)
Net loss per equivalent Limited Partnership unit	$ (0.01)	$ (0.10)
Weighted average number of equivalent limited partnership units outstanding during the period	1,529,785	1,534,609

Condensed Statements of Partner

Condensed Statements of Partners Capital - USD ($)	Total	General Partner Units [Member]	Limited Partner Units [Member]	General Partner [Member]	Limited Partner [Member]
Balance, amount at Dec. 31, 2020	$ 2,264,129	$ 50	$ 1,537,535	$ 1,050	$ 2,263,079
Net loss	(146,849)	0	0	0	(146,849)
Redemptions	(37,467)	0	(4,500)	0	(37,467)
Balance, amount at Mar. 31, 2021	2,079,813	50	1,533,035	1,050	2,078,763
Balance, amount at Dec. 31, 2021	1,813,412	50	1,529,785	1,050	1,812,362
Net loss	(7,678)	0	0	0	(7,678)
Balance, amount at Mar. 31, 2022	$ 1,805,734	$ 50	$ 1,529,785	$ 1,050	$ 1,804,684

Condensed Statements of Cash Fl

Condensed Statements of Cash Flow (unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Condensed Statements of Cash Flow (unaudited)
Net cash provided by (used) in operating activities	$ 158,976	$ (212,627)
Cash flows from investing activities
Capital expenditures	(166,380)	0
Net proceeds from the sale of equipment	2,980	9,273
Net cash provided by (used in) investing activities	(163,400)	9,273
Cash flows from financing activities
Redemptions	0	(37,467)
Net cash used in financing activities	0	(37,467)
Net decrease in cash and cash equivalents	(4,424)	(240,821)
Cash and cash equivalents beginning of period	4,424	495,494
Cash and cash equivalents end of period	$ 0	$ 254,673

Business

Business	3 Months Ended
	Mar. 31, 2022
Business
Note- 1 Business	1. Business Commonwealth Income & Growth Fund VII, LP (the “Partnership”) is a limited partnership organized in the Commonwealth of Pennsylvania on November 14, 2008. The Partnership offered for sale up to 2,500,000 units of limited partnership interest at the purchase price of $20 per unit (the “offering”). The Partnership reached the minimum amount in escrow and commenced operations on March 31, 2010. The offering terminated on November 22, 2011 with 1,572,900 units sold for a total of approximately $31,432,000 in limited partner contributions. The Partnership uses the proceeds of the offering to acquire, own and lease various types of computer information technology 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, acquires computer 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 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 Institute for Portfolio Alternatives (“IPA”) 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 its Limited Partnership Agreement (the “Agreement”), the Partnership will continue until December 31, 2026.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2022
Summary of Significant Accounting Policies
Note- 2 Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Basis of Presentation The unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Financial information as of December 31, 2021 has been derived from the audited financial statements of the Partnership, but does not include all disclosures required by generally accepted accounting 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. Operating results for the three months ended March 31, 2022 are not necessarily indicative of financial results that may be expected for the full year ended December 31, 2022. Equity Method Investment The Partnership accounts for its investment in Commonwealth Opportunity Fund 2 (“COF2”) under the equity method in accordance with Accounting Standards Codification (“ASC”) 323. Under the equity method, the Partnership records its proportionate share of COF 2’s net income (loss). Capital contributions to, distributions from and net income (loss) of COF2 are recorded in accordance with the terms of the governing documents. An allocation of net income (loss) may differ from the stated ownership percentage interest in such entity as a result of distributions and allocation formulas, if any, as described in such governing documents. Disclosure of Fair Value of Financial Instruments 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. Receivables, accounts payable and accrued expenses and other liabilities are carried at amounts which reasonably approximate their fair values as of March 31, 2022 and December 31, 2021 due to the 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 March 31, 2022 and December 31, 2021 approximates the carrying value of these instruments, due to the interest rates on the debt approximating current market interest rates. 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. Cash and cash equivalents The Partnership considers cash equivalents to be highly liquid investments with the original maturity dates of 90 days or less. At March 31, 2022, cash and cash equivalents was held in one bank account maintained at one financial institution with an aggregate balance of approximately $3,000. Bank accounts are federally insured up to $250,000 by the FDIC. At March 31, 2022, the total cash bank balance was as follows: At March 31, 2022 Balance Total bank balance $ 3,000 FDIC insured (3,000 ) Uninsured amount $ - The Partnership believes it mitigates the risk of holding uninsured deposits by only depositing funds with major financial institutions. The Partnership has not experienced any losses in its accounts, and believes it is not exposed to any significant credit risk. The amount in its accounts will fluctuate throughout 2022 due to many factors, including cash receipts, equipment acquisitions, interest rates and distributions to limited partners. Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This standard establishes an impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which is intended to result in a timelier recognition of losses. Under the CECL model, entities will estimate credit losses over the entire contractual term of the instrument (considering estimated prepayments, but not expected extensions or modifications) from the date of initial recognition of the financial instrument. Measurement of expected credit losses are to be based on relevant forecasts that affect collectability. The scope of financial assets within the CECL methodology is broad and includes trade receivables from certain revenue transactions and certain off-balance sheet credit exposures. Different components of the guidance require modified retrospective or prospective adoption. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses. ASU 2018-19 clarifies that receivables arising from operating leases are not within the scope of the credit losses standard. Instead, entities would need to apply other U.S. GAAP, namely Topic 842 (Leases), to account for changes in the collectability assessment for operating leases. Other than operating lease receivables, Partnership trade receivables include receivables from finance leases and equipment sales. Under Topic 606 (Revenue from Contracts with Customers), revenue is recognized when, among other criteria, it is probable that the entity will collect the consideration to which it is entitled for goods or services transferred to a customer. At the point that finance lease receivables are recorded, they become subject to the CECL model and estimates of expected credit losses over their contractual life will be required to be recorded at inception based on historical information, current conditions, and reasonable and supportable forecasts. Trade receivables derived from equipment sales are of short duration and there is not a material difference between incurred losses and expected losses. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which amends and clarifies several provisions of Topic 326. In May 2019, the FASB issued ASU 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief, which amends Topic 326 to allow the fair value option to be elected for certain financial instruments upon adoption. ASU 2019-10 extended the effective date of ASU 2016-13 for the Partnership until December 15, 2022. While the Partnership continues to evaluate the new guidance, including the subsequent updates to Topic 326, it does not anticipate that adoption will have a material impact on the Partnership’s financial statements and related disclosures. For the three months ended March 31, 2022 and 2021, the Partnership’s finance lease revenue subject to CECL represented less than 1% of total lease revenue.

Information Technology Medical

Information Technology Medical Technology Telecommunications Technology Inventory Management Equipment (Equipment)	3 Months Ended
	Mar. 31, 2022
Information Technology Medical Technology Telecommunications Technology Inventory Management Equipment (Equipment)
Note- 3 Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment ('Equipment')	3. Information Technology, Medical Technology, Telecommunications Technology, Inventory Management and Other Business-Essential Capital Equipment (“Equipment”) The Partnership is the lessor of equipment under operating 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. CCC, on behalf of the Partnership and on behalf of other affiliated companies and partnerships (“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 companies based on certain risk factors. The Partnership’s share of the cost of the equipment in which it participates with other partnerships at March 31, 2022 was approximately $6,216,000 and is included in the Partnership’s equipment on its balance sheet. The Partnership’s share of the outstanding debt associated with this equipment at March 31, 2022 was approximately $61,000 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 March 31, 2022 was approximately $14,914,000. The total outstanding debt related to the equipment shared by the Partnership at March 31, 2022 was approximately $246,000. The Partnership’s share of the cost of the equipment in which it participates with other partnerships at December 31, 2021 was approximately $6,229,000 and is included in the Partnership’s equipment on its balance sheet. The Partnership’s share of the outstanding debt associated with this equipment at December 31, 2021 was approximately $76,000 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, 2021 was approximately $14,952,000. The total outstanding debt related to the equipment shared by the Partnership at December 31, 2021 was approximately $305,000. 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 fund an opportunity to acquire additional assets and revenue streams, while allowing the fund to remain diversified and reducing its overall risk with respect to one portfolio. As additional investment opportunities arise during 2022, the Partnership expects total shared equipment and related debt to trend higher as the Partnership builds its portfolio. The following is a schedule of approximate future minimum rentals on operating leases: Periods Ended December 31, Amount Nine months ended December 31, 2022 124,000 Year Ended December 31, 2023 77,000 Year Ended December 31, 2024 58,000 Year Ended December 31, 2025 18,000 $ 277,000 Finance Leases: The following lists the components of the net investment in finance leases: At March 31, March 31, 2022 December 31, 2021 Carrying value of lease receivable $ 32,000 $ 33,000 Estimated residual value of leased equipment (unguaranteed) - 2,000 Initial direct costs - finance leases - - Net investment in finance leases $ 32,000 $ 35,000 The Partnership assesses credit risk for all of its customers, including those that lease under finance leases. This credit risk is assessed using an internally developed model which incorporates credit scores from third party providers and the Partnership’s own customer risk ratings and is periodically reviewed. The Partnership’s 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. The Partnership separately takes in to consideration payment history, open lawsuits, liens and judgments. Typically, the Partnership 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. The Partnership’s internally based model may classify a company as high risk based on its 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, the Partnership typically requires deposits from those in this category. A reserve for credit losses is deemed necessary when payment has not been received for one or more months of receivables due on the equipment held under finance leases. At the end of each period, management evaluates the open receivables due on this equipment and determines the need for a reserve based on payment history and any current factors that would have an impact on payments. The following table presents the credit risk profile, by creditworthiness category, of our finance lease receivables at March 31, 2022: Risk Level Percent of Total Low - % Moderate-Low - % Moderate - % Moderate-High 100 % High - % Net finance lease receivable 100 % As of March 31, 2022 and December 31, 2021, the Partnership determined that it did not have a need for an allowance for uncollectible accounts associated with any of its finance leases, as the customer payment histories with the Partnership, associated with these leases, has been positive. CCC, on behalf of the Partnership and on behalf of other affiliated companies and 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 following is a schedule of future minimum rentals on non-cancelable finance leases at March 31, 2022: Periods Ended December 31, Amount Nine months ended December 31, 2022 9,000 Year ended December 31, 2023 12,000 Year ended December 31, 2024 11,000 $ 32,000

Investment in COF 2

Investment in COF 2	3 Months Ended
	Mar. 31, 2022
Investment in COF 2
Note- 4 Investment in COF 2	4. Investment in COF 2 On August 13, 2015, the Partnership purchased 1,648 units for $1,500,000, of COF 2, an affiliate fund of the General Partner. In accordance with the Partnership Agreement, the Partnership is permitted to invest in equipment programs formed by the General Partner or its affiliates. COF 2 is an affiliate program that broke escrow on August 13, 2015. The General Partner believes this action is in the best interests of all the programs. The Partnership accounts for its investment in COF 2 under the equity method in accordance with ASC 323. The Partnership’s net investment in COF 2 at March 31, 2022 and December 31, 2021 was approximately $524,000 and $547,000, respectively (see COF 2 Financial Summary below). During the three months ended March 31, 2022, COF 2 did not declare any first quarter distribution to the Partnership. March 31, December 31, COF 2 Summarized Financial Information 2022 2021 Assets $ 1,555,000 $ 1,847,000 Liabilities $ 132,000 $ 356,000 Partners’ capital $ 1,423,000 $ 1,492,000 Revenue $ 98,000 $ 401,000 Expenses $ 166,000 $ 606,000 Net loss $ (68,000 ) $ (205,000 )

Related Party Transactions

Related Party Transactions	3 Months Ended
	Mar. 31, 2022
Related Party Transactions
Note- 5 Related Party Transactions	5. Related Party Transactions Receivables/Payables As of March 31, 2022 and December 31, 2021, the Partnership’s related party receivables and payables are short term, unsecured, and non-interest bearing. Three months ended March 31, 2022 2021 Reimbursable Expenses The General Partner and its affiliates are entitled to reimbursement by the Partnership for the cost of goods, supplies or services obtained and used by the General Partner in connection with the administration and operation of the Partnership from third parties unaffiliated with the General Partner. In addition, the General Partner and its affiliates are entitled to reimbursement of certain expenses incurred by the General Partner and its affiliates in connection with the administration and operation of the Partnership. For the three months ended March 31, 2022 and 2021, the Partnership was charged approximately $44,000 and $77,000 in other LP expense, respectively. $ 75,000 $ 156,000 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 contract. For the three months ended March 31, 2022 and 2021, the General Partner earned acquisition fees from operating and finance leases of approximately $0 and $0, respectively. $ - $ - Debt Placement Fee As compensation for arranging term debt to finance our acquisition of equipment, the Partnership 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 the Partnership incurs such fees to third parties unaffiliated with the General Partner or the lender with respect to such indebtedness. No such fee will be paid with respect to borrowings from the General Partner or its affiliates. The amount the Partnership borrows, and therefore the amount of the fee, will depend upon interest rates at the time of a loan, and the amount of leverage the Partnership determines is appropriate at the time. Fees will increase as the amount of leverage increases, and as turnover in the portfolio increases and additional equipment is purchased using leverage. $ - $ - Equipment Management Fee The Partnership pays our General Partner a monthly fee equal to the lesser of (a) the fees which would be charged by an independent third party in the same geographic market for similar services and equipment or (b) the sum of (i) two percent of gross lease revenues attributable to equipment subject to full payout net leases which contain net lease provisions and (ii) five percent of the gross lease revenues attributable to equipment subject to operating leases. The General Partner, based on its experience in the equipment leasing industry and current dealings with others in the industry, will use its business judgment to determine if a given fee is competitive, reasonable and customary. The amount of the fee will depend upon the amount of equipment managed. Reductions in market rates for similar services would also reduce the amount of this fee. $ 10,000 $ 18,000 Equipment Liquidation Fee Also referred to as a “resale fee.” With respect to each item of equipment sold by the General Partner, the Partnership will pay a fee equal to the lesser of (i) 50% of the competitive equipment sale commission or (ii) three percent of the sales price of the equipment. The payment of this fee is subordinated to the receipt by the limited partners of (i) a return of their capital contributions and a 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. The General Partner, based on its experience in the equipment leasing industry and current dealings with others in the industry, uses its business judgment to determine if a given sales commission is competitive, reasonable and customary. Such fee will be reduced to the extent any liquidation or resale fees are paid to unaffiliated parties. The amount of such fees will depend upon the sale price of equipment sold. Sale prices will vary depending upon the type, age and condition of equipment sold. The shorter the terms of the leases, the more often the Partnership may sell equipment, which will increase liquidation fees. $ 92 $ 287

Notes Payable

Notes Payable	3 Months Ended
	Mar. 31, 2022
Notes Payable
Note- 6 Notes Payable	6. Notes Payable Notes payable consisted of the following approximate amounts: March 31, 2022 December 31, 2021 Installment note payable to bank; interest at 4.10% due in monthly installments of $5,229, including interest, with final payment in March 2023 61,500 76,000 Installment note payable to bank; interest at 5.00% due in monthly installments of $1,377, including interest, with final payment in November 2024 41,000 45,000 $ 102,500 $ 121,000 The notes are secured by specific equipment with a carrying value of approximately $182,000 and are nonrecourse liabilities of the Partnership. As such, the notes do not contain any financial debt covenants with which the Partnership must comply on either an annual or quarterly basis. Aggregate approximate maturities of notes payable for each of the periods subsequent to March 31, 2022 are as follows: Amount Nine months ended December 31, 2022 56,500 Year ended December 31, 2023 31,000 Year ended December 31, 2024 15,000 $ 102,500

Supplemental Cash Flow Informat

Supplemental Cash Flow Information	3 Months Ended
	Mar. 31, 2022
Supplemental Cash Flow Information
Note- 7 Supplemental Cash Flow Information	7. Supplemental Cash Flow Information No interest or principal on notes payable was paid by the Partnership during 2022 and 2021 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. Other noncash activities included in the determination of net loss are as follows: Three months ended March 31, 2022 2021 Lease revenue net of interest expense on notes payable realized as a result of direct payment of principal by lessee to bank $ 19,000 $ 200,000 During the three months ended March 31, 2022 and 2021, the Partnership wrote-off fully amortized acquisition and finance fees of approximately $0 and $22,000, respectively.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2022
Commitments and Contingencies
Note- 8 Commitments and Contingencies	8. Commitments and Contingencies COVID-19 Pandemic The amount of revenue recognized and the pattern of revenue recognition may be impacted by COVID-19. In December 2019, a strain of coronavirus was reported to have surfaced in Wuhan, China, and has spread globally, and on March 12, 2020, the World Health Organization (“WHO”) declared COVID-19 to be a pandemic. In an effort to contain and mitigate the spread of COVID-19, many countries, including the United States, have imposed unprecedented restrictions on travel, quarantines, and other public health safety measures. Such government-imposed precautionary measures may have been relaxed in certain countries or states, but there is no assurance that more strict measures will be put in place again due to a resurgence in COVID-19 cases. In addition, the COVID-19 virus and other infectious diseases could result in a widespread health crisis that could adversely affect the economies and financial markets worldwide, resulting in an economic downturn that could impact the Company’s business, financial condition, and results of operations. The pattern of revenue recognition may change for delays in rendering services. In periods ended subsequent to the outbreak of COVID-19, the impact on expected credit losses and future cash flow projections used in impairment testing will need to be considered. The Partnership continues to evaluate whether adjustments to the financial statements are required or whether additional disclosures are necessary. In our leasing business, the Partnership is always subject to credit losses as it relates to a customer’s ability to make timely rental payments. The impact of COVID-19 may contribute to risk of non-performance, where a customer may experience financial difficulty and may delay in making timely payments. The Partnership recognizes impairment of receivables and loans when losses are incurred, which is when it is probable that an entity will be unable to collect all amounts due according to the contractual terms of the arrangement. Impairment is measured based on the present value of expected future cash flows discounted at a receivable’s or a loan’s effective interest rate, except that, as a practical expedient, impairment can be measured based on a receivable’s or a loan’s observable market price or the fair value of the underlying collateral. The Partnership believes its estimate of expected losses have been recognized based on historical experience, current conditions, and reasonable forecasts. The impacts of COVID-19 may necessitate additional adjustments in future forecasts of expected losses. Although the Partnership cannot estimate the length or gravity of the impact of the COVID-19 outbreak at this time, if the pandemic continues, it may have a material adverse effect on the Partnership results of future operations, financial position, and liquidity in fiscal year 2022 and beyond. FINRA On May 3, 2013, the FINRA Department of Enforcement filed a complaint naming Commonwealth Capital Securities Corp. (“CCSC”) and the owner of the firm, Kimberly Springsteen-Abbott, as respondents; however, on October 22, 2013, FINRA filed an amended complaint that dropped the allegations against CCSC and reduced the scope of the allegations against Ms. Springsteen-Abbott. The sole remaining charge was that Ms. Springsteen-Abbott had approved the misallocation of some expenses to certain Funds. Management believes that the expenses at issue include amounts that were proper and that were properly allocated to Funds, and also identified a smaller number of expenses that had been allocated in error, but were adjusted and repaid to the affected Funds when they were identified in 2012. During the period in question, Commonwealth Capital Corp. (“CCC”) and Ms. Springsteen-Abbott provided important financial support to the Funds, voluntarily absorbed expenses and voluntarily waived fees in amounts aggregating in excess of any questioned allocations. A Hearing Panel ruled on March 30, 2015, that Ms. Springsteen-Abbott should be barred from the securities industry because the Panel concluded that she allegedly misallocated approximately $208,000 of expenses involving certain Funds over the course of three years. As such, management had already at that time reallocated back approximately $151,225 of the $208,000 (in allegedly misallocated expenses) to the affected funds, which was fully documented, as good faith payments for the benefit of those Income Funds. The decision of the Hearing Panel was stayed when it was appealed to FINRA’s National Adjudicatory Council (the “NAC”) pursuant to FINRA Rule 9311. The NAC issued a decision that upheld the lower panel’s ruling and the bar took effect on August 23, 2016. Ms. Springsteen-Abbott appealed the NAC’s decision to the U.S. Securities and Exchange Commission (the “SEC”). On March 31, 2017, the SEC criticized that decision as so flawed that the SEC could not even review it, and remanded the matter back to FINRA for further consideration consistent with the SEC’s remand, but did not suggest any view as to a particular outcome. On July 21, 2017, FINRA reduced the list of 1,840 items totaling $208,000 to a remaining list of 87 items totaling $36,226 (which includes approximately $30,000 of continuing education expenses for personnel providing services to the Funds), and reduced the proposed fine from $100,000 to $50,000, but reaffirmed its position on the bar from the securities industry. Respondents promptly appealed FINRA’s revised ruling to the SEC. All the requested or allowed briefs have been filed with the SEC. Despite offering no additional evidence or legal reasoning from when SEC originally remanded this matter (for FINRA’s opinion being an unreviewably flawed opinion), the SEC upheld FINRA’s new order on February 7, 2020 as to the bar; however, FINRA’s fine was voided. Ms. Springsteen-Abbott has filed a Petition for Review in the United States Court of Appeals for the District of Columbia Circuit to review a final order entered against her by the U.S. Securities and Exchange Commission. On February 26, 2021, the United States Court of Appeals for the District of Columbia Circuit, made their ruling. They dismissed in part and denied in part Ms. Springsteen-Abbott’s petition. This was regardless of CCC’s good faith reimbursements made many years ago of the questioned expense items of $208,000 (due to improper documentation), initially claimed misallocations by FINRA, even prior to FINRA’s reducing its final claim to $36,226. Prior to the original appeal to the SEC, Ms. Springsteen-Abbott discovered CCC’s required documentation of these items for FINRA review, which FINRA refused to consider, despite such efforts the District Court upheld the bar, despite admittingly not addressing her “due process” rights, for legal administrative procedural reasons. However, given the SEC’s prior removal of FINRA’s fine and the District Court upholding that removal, the General Partner anticipates that this ruling will not result in any material financial impact to the Funds.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2022
Summary of Significant Accounting Policies (Policies)
Basis of Presentation	The unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Financial information as of December 31, 2021 has been derived from the audited financial statements of the Partnership, but does not include all disclosures required by generally accepted accounting 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. Operating results for the three months ended March 31, 2022 are not necessarily indicative of financial results that may be expected for the full year ended December 31, 2022.
Equity Method Investment	1. Business The Partnership accounts for its investment in Commonwealth Opportunity Fund 2 (“COF2”) under the equity method in accordance with Accounting Standards Codification (“ASC”) 323. Under the equity method, the Partnership records its proportionate share of COF 2’s net income (loss). Capital contributions to, distributions from and net income (loss) of COF2 are recorded in accordance with the terms of the governing documents. An allocation of net income (loss) may differ from the stated ownership percentage interest in such entity as a result of distributions and allocation formulas, if any, as described in such governing documents.
Disclosure of Fair Value of Financial Instruments	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. Receivables, accounts payable and accrued expenses and other liabilities are carried at amounts which reasonably approximate their fair values as of March 31, 2022 and December 31, 2021 due to the 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 March 31, 2022 and December 31, 2021 approximates the carrying value of these instruments, due to the interest rates on the debt approximating current market interest rates. 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.
Cash and Cash Equivalents	The Partnership considers cash equivalents to be highly liquid investments with the original maturity dates of 90 days or less. At March 31, 2022, cash and cash equivalents was held in one bank account maintained at one financial institution with an aggregate balance of approximately $3,000. Bank accounts are federally insured up to $250,000 by the FDIC. At March 31, 2022, the total cash bank balance was as follows: At March 31, 2022 Balance Total bank balance $ 3,000 FDIC insured (3,000 ) Uninsured amount $ - The Partnership believes it mitigates the risk of holding uninsured deposits by only depositing funds with major financial institutions. The Partnership has not experienced any losses in its accounts, and believes it is not exposed to any significant credit risk. The amount in its accounts will fluctuate throughout 2022 due to many factors, including cash receipts, equipment acquisitions, interest rates and distributions to limited partners.
Recent Accounting Pronouncements Not Yet Adopted	In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This standard establishes an impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which is intended to result in a timelier recognition of losses. Under the CECL model, entities will estimate credit losses over the entire contractual term of the instrument (considering estimated prepayments, but not expected extensions or modifications) from the date of initial recognition of the financial instrument. Measurement of expected credit losses are to be based on relevant forecasts that affect collectability. The scope of financial assets within the CECL methodology is broad and includes trade receivables from certain revenue transactions and certain off-balance sheet credit exposures. Different components of the guidance require modified retrospective or prospective adoption. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses. ASU 2018-19 clarifies that receivables arising from operating leases are not within the scope of the credit losses standard. Instead, entities would need to apply other U.S. GAAP, namely Topic 842 (Leases), to account for changes in the collectability assessment for operating leases. Other than operating lease receivables, Partnership trade receivables include receivables from finance leases and equipment sales. Under Topic 606 (Revenue from Contracts with Customers), revenue is recognized when, among other criteria, it is probable that the entity will collect the consideration to which it is entitled for goods or services transferred to a customer. At the point that finance lease receivables are recorded, they become subject to the CECL model and estimates of expected credit losses over their contractual life will be required to be recorded at inception based on historical information, current conditions, and reasonable and supportable forecasts. Trade receivables derived from equipment sales are of short duration and there is not a material difference between incurred losses and expected losses. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which amends and clarifies several provisions of Topic 326. In May 2019, the FASB issued ASU 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief, which amends Topic 326 to allow the fair value option to be elected for certain financial instruments upon adoption. ASU 2019-10 extended the effective date of ASU 2016-13 for the Partnership until December 15, 2022. While the Partnership continues to evaluate the new guidance, including the subsequent updates to Topic 326, it does not anticipate that adoption will have a material impact on the Partnership’s financial statements and related disclosures. For the three months ended March 31, 2022 and 2021, the Partnership’s finance lease revenue subject to CECL represented less than 1% of total lease revenue.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2022
Summary of Significant Accounting Policies (Tables)
Cash and cash equivalents	At March 31, 2022 Balance Total bank balance $ 3,000 FDIC insured (3,000 ) Uninsured amount $ -

Information Technology Medica_2

Information Technology Medical Technology Telecommunications Technology Inventory Management Equipment (Tables)	3 Months Ended
	Mar. 31, 2022
Information Technology Medical Technology Telecommunications Technology Inventory Management Equipment (Equipment)
Future minimum rentals on operating leases	Periods Ended December 31, Amount Nine months ended December 31, 2022 124,000 Year Ended December 31, 2023 77,000 Year Ended December 31, 2024 58,000 Year Ended December 31, 2025 18,000 $ 277,000
Net investment in direct financing leases	At March 31, March 31, 2022 December 31, 2021 Carrying value of lease receivable $ 32,000 $ 33,000 Estimated residual value of leased equipment (unguaranteed) - 2,000 Initial direct costs - finance leases - - Net investment in finance leases $ 32,000 $ 35,000
Finance lease risk level	Risk Level Percent of Total Low - % Moderate-Low - % Moderate - % Moderate-High 100 % High - % Net finance lease receivable 100 %
Future minimum rentals on non-cancelable direct financing leases	Periods Ended December 31, Amount Nine months ended December 31, 2022 9,000 Year ended December 31, 2023 12,000 Year ended December 31, 2024 11,000 $ 32,000

Investment in COF 2 (Tables)

Investment in COF 2 (Tables)	3 Months Ended
	Mar. 31, 2022
Investment in COF 2
COF 2 summarized financial information	March 31, December 31, COF 2 Summarized Financial Information 2022 2021 Assets $ 1,555,000 $ 1,847,000 Liabilities $ 132,000 $ 356,000 Partners’ capital $ 1,423,000 $ 1,492,000 Revenue $ 98,000 $ 401,000 Expenses $ 166,000 $ 606,000 Net loss $ (68,000 ) $ (205,000 )

Related Party Transactions (Tab

Related Party Transactions (Tables)	3 Months Ended
	Mar. 31, 2022
Related Party Transactions
Related party transactions	Three months ended March 31, 2022 2021 Reimbursable Expenses The General Partner and its affiliates are entitled to reimbursement by the Partnership for the cost of goods, supplies or services obtained and used by the General Partner in connection with the administration and operation of the Partnership from third parties unaffiliated with the General Partner. In addition, the General Partner and its affiliates are entitled to reimbursement of certain expenses incurred by the General Partner and its affiliates in connection with the administration and operation of the Partnership. For the three months ended March 31, 2022 and 2021, the Partnership was charged approximately $44,000 and $77,000 in other LP expense, respectively. $ 75,000 $ 156,000 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 contract. For the three months ended March 31, 2022 and 2021, the General Partner earned acquisition fees from operating and finance leases of approximately $0 and $0, respectively. $ - $ - Debt Placement Fee As compensation for arranging term debt to finance our acquisition of equipment, the Partnership 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 the Partnership incurs such fees to third parties unaffiliated with the General Partner or the lender with respect to such indebtedness. No such fee will be paid with respect to borrowings from the General Partner or its affiliates. The amount the Partnership borrows, and therefore the amount of the fee, will depend upon interest rates at the time of a loan, and the amount of leverage the Partnership determines is appropriate at the time. Fees will increase as the amount of leverage increases, and as turnover in the portfolio increases and additional equipment is purchased using leverage. $ - $ - Equipment Management Fee The Partnership pays our General Partner a monthly fee equal to the lesser of (a) the fees which would be charged by an independent third party in the same geographic market for similar services and equipment or (b) the sum of (i) two percent of gross lease revenues attributable to equipment subject to full payout net leases which contain net lease provisions and (ii) five percent of the gross lease revenues attributable to equipment subject to operating leases. The General Partner, based on its experience in the equipment leasing industry and current dealings with others in the industry, will use its business judgment to determine if a given fee is competitive, reasonable and customary. The amount of the fee will depend upon the amount of equipment managed. Reductions in market rates for similar services would also reduce the amount of this fee. $ 10,000 $ 18,000 Equipment Liquidation Fee Also referred to as a “resale fee.” With respect to each item of equipment sold by the General Partner, the Partnership will pay a fee equal to the lesser of (i) 50% of the competitive equipment sale commission or (ii) three percent of the sales price of the equipment. The payment of this fee is subordinated to the receipt by the limited partners of (i) a return of their capital contributions and a 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. The General Partner, based on its experience in the equipment leasing industry and current dealings with others in the industry, uses its business judgment to determine if a given sales commission is competitive, reasonable and customary. Such fee will be reduced to the extent any liquidation or resale fees are paid to unaffiliated parties. The amount of such fees will depend upon the sale price of equipment sold. Sale prices will vary depending upon the type, age and condition of equipment sold. The shorter the terms of the leases, the more often the Partnership may sell equipment, which will increase liquidation fees. $ 92 $ 287

Notes Payable (Tables)

Notes Payable (Tables)	3 Months Ended
	Mar. 31, 2022
Notes Payable
Notes payable	March 31, 2022 December 31, 2021 Installment note payable to bank; interest at 4.10% due in monthly installments of $5,229, including interest, with final payment in March 2023 61,500 76,000 Installment note payable to bank; interest at 5.00% due in monthly installments of $1,377, including interest, with final payment in November 2024 41,000 45,000 $ 102,500 $ 121,000
Future aggregate payments of notes payable	Amount Nine months ended December 31, 2022 56,500 Year ended December 31, 2023 31,000 Year ended December 31, 2024 15,000 $ 102,500

Supplemental Cash Flow Inform_2

Supplemental Cash Flow Information (Tables)	3 Months Ended
	Mar. 31, 2022
Supplemental Cash Flow Information (Tables)
Other noncash activities	Three months ended March 31, 2022 2021 Lease revenue net of interest expense on notes payable realized as a result of direct payment of principal by lessee to bank $ 19,000 $ 200,000

Business (Details Narrative)

Business (Details Narrative) - USD ($)	Nov. 14, 2008	Nov. 22, 2011	Mar. 31, 2022
Business (Details Narrative)
Offered sale, shares	2,500,000
Purchanse price	$ 20
Entity Incorporation Date Of Incorporation			Nov. 14, 2008
Unit sold		1,572,900
Total contributions amount		$ 31,432,000

Summary of Significant Accoun_4

Summary of Significant Accounting Policies (Details)	Mar. 31, 2021USD ($)
Summary of Significant Accounting Policies
Total bank balance	$ 3,000
FDIC insured	(3,000)
Uninsured amount	$ 0

Summary of Significant Accoun_5

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Summary of Significant Accounting Policies
Original Maturity terms	90 years
FDIC amount	$ 250,000
Cash and cash equivalents aggregate balance		$ 3,000

Information Technology Medica_3

Information Technology Medical Technology Telecommunications Technology Inventory Management Equipment (Details)	Dec. 31, 2021USD ($)
Information Technology Medical Technology Telecommunications Technology Inventory Management Equipment (Details)
Year ended December 31, 2022	$ 124,000
Year Ended December 31, 2023	77,000
Year Ended December 31, 2024	58,000
Year Ended December 31, 2025	18,000
Total	$ 277,000

Information Technology Medica_4

Information Technology Medical Technology Telecommunications Technology Inventory Management Equipment (Details 1) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Information Technology Medical Technology Telecommunications Technology Inventory Management Equipment (Details)
Carrying value of lease receivable	$ 32,000	$ 33,000
Estimated residual value of leased equipment (unguaranteed)	0	2,000
Initial direct costs - finance leases	0	0
Net investment in finance leases	$ 32,000	$ 35,000

Information Technology Medica_5

Information Technology Medical Technology Telecommunications Technology Inventory Management Equipment (Details 2)	Mar. 31, 2022
Information Technology Medical Technology Telecommunications Technology Inventory Management Equipment (Details)
Low	0.00%
Moderate-Low	0.00%
Moderate	0.00%
Moderate-High	100.00%
High	0.00%
Net finance lease receivable	100.00%

Information Technology Medica_6

Information Technology Medical Technology Telecommunications Technology Inventory Management Equipment (Details 3)	Mar. 31, 2022USD ($)
Information Technology Medical Technology Telecommunications Technology Inventory Management Equipment (Details)
Year ended December 31, 2022	$ 9,000
Year ended December 31, 2023	12,000
Year ended December 31, 2024	11,000
Total	$ 32,000

Information Technology Medica_7

Information Technology Medical Technology Telecommunications Technology Inventory Management Equipment (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Information Technology Medical Technology Telecommunications Technology Inventory Management Equipment (Details)
Equipment shared	$ 6,216,000	$ 10,226,000
Debt shared	61,000	76,000
Total shared equipment	14,914,000	14,952,000
Total debt shared	$ 246,000	$ 305,000
Description of credit extend	a company that has been in business for less than 5 years or that has filed for bankruptcy within the same period

Investment in COF 2 (Details)

Investment in COF 2 (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Investment in COF 2 (Details)
Assets	$ 1,555,000	$ 1,847,000
Liabilities	296,000	356,000
Partners' capital	1,423,000	1,492,000
Revenue	98,000	401,000
Expenses	166,000	606,000
Net (loss) income	$ (68,000)	$ (205,000)

Investment in COF 2 (Details Na

Investment in COF 2 (Details Narrative) - USD ($)	Aug. 13, 2015	Mar. 31, 2022	Dec. 31, 2021
Net investment		$ 524,000	$ 547,000
Fund 2 [Member]
Commonwealth opportunity fund	$ 1,500,000
Distributions to the Partnership was paid recorded as a receivable from COF 2			0
Purchase price	$ 1,648
Distributions to the Partnership			0
Distributions to the Partnership was paid			$ 0

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Related Party Transactions
Reimbursable expenses	$ 75,000	$ 156,000
Equipment acquisition fee	0	0
Debt placement fee	0	0
Equipment management fee	10,000	18,000
Equipment liquidation fee	92	287
Partnership interest and distribution	$ 0	$ 0

Notes Payable (Details)

Notes Payable (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
General Partners [Member]
Notes payable	$ 102,500	$ 121,000
Note 2
Note payable description	Installment note payable to bank; interest at 4.10% due in monthly installments of $5,229, including interest, with final payment in March 2023
Notes payable	$ 61,500	76,000
Note 3
Note payable description	Installment note payable to bank; interest at 5.00% due in monthly installments of $1,377, including interest, with final payment in November 2024
Notes payable	$ 41,000	$ 45,000

Notes Payable (Details 1)

Notes Payable (Details 1)	Mar. 31, 2022USD ($)
Notes Payable (Details)
Nine months ended December 31, 2022	$ 56,500
Year ended December 31, 2023	31,000
Year ended December 31, 2024	15,000
Total	$ 102,500

Notes Payable (Details Narrativ

Notes Payable (Details Narrative)	3 Months Ended
	Mar. 31, 2022USD ($)
Notes Payable (Details)
equipment with a carrying value	$ 182,000

Supplemental Cash Flow Inform_3

Supplemental Cash Flow Information (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Supplemental Cash Flow Information (Tables)
Lease revenue net of interest expense on notes payable realized as a result of direct payment of principal by lessee to bank	$ 19,000	$ 200,000

Commitments and Contingencies (

Commitments and Contingencies (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended
	Jul. 21, 2017	Mar. 31, 2022
Expense		$ 208,000
Final claim	$ 36,226
Continuing education expenses	$ 30,000
Description of list of item	the list of 1,840 items totaling $208,000 to a remaining list of 87 items totaling $36,226
Questioned expense	$ 208,000
Reallocated back approximately		151,225
Misallocated expenses		$ 208,000
Maximum [Member]
Continuing education expenses	100,000
Minimum [Member]
Continuing education expenses	$ 50,000