Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Sep. 21, 2023 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Entity Registrant Name | COMMONWEALTH INCOME & GROWTH FUND VII, LP | ||
Entity Central Index Key | 0001450335 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Dec. 31, 2022 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Entity Common Stock Shares Outstanding | 0 | ||
Entity Public Float | $ 0 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 333-156357 | ||
Entity Incorporation State Country Code | PA | ||
Entity Tax Identification Number | 26-3733264 | ||
Entity Interactive Data Current | Yes | ||
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 | ||
Auditor Firm Id | 536 | ||
Icfr Auditor Attestation Flag | true | ||
Auditor Name | Morison Cogen LLP | ||
Auditor Location | Blue Bell, Pennsylvania |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash and cash equivalents | $ 0 | $ 4,424 |
Lease income receivable, net of reserve of approximately $318,000 and $283,000 at December 31, 2022 and 2021, respectively | 396,829 | 188,540 |
Accounts receivable, Commonwealth Capital Corp, net of accounts payable of approximately $319,000 and $100,000 at December 31, 2022 and 2021, respectively | 1,145,764 | 1,167,860 |
Other receivables, net of reserve of approximately $305,000 at December 31, 2022 and December 31, 2021 | 8,144 | 3,245 |
Prepaid expenses | 5,550 | 4,337 |
Total Current Assets | 1,556,287 | 1,368,406 |
Net investment in Finance leases | 24,604 | 35,775 |
Investment in COF 2 | 366,539 | 502,939 |
Equipment, at cost | 12,796,472 | 12,891,552 |
Accumulated depreciation | (11,928,245) | (12,431,814) |
Equipment, Net | 868,227 | 459,738 |
Equipment acquisition costs and deferred expenses, net of accumulated amortization of approximately $20,000 and $12,000 at December 31, 2022 and December 31, 2021, respectively | 35,743 | 7,427 |
Total Assets | 2,851,401 | 2,374,285 |
LIABILITIES | ||
Accounts payable | 148,584 | 259,651 |
Accounts payable, CIGF, Inc. | 720,835 | 195,241 |
Unearned lease income | 48,796 | 28,891 |
Notes payable | 408,073 | 121,090 |
Total Liabilities | 1,326,287 | 604,873 |
PARTNERS' CAPITAL | ||
General Partner | 1,050 | 1,050 |
Limited Partners | 1,524,064 | 1,768,362 |
Total Partners' Capital | 1,525,114 | 1,769,412 |
Total Liabilities and Partners' Capital | $ 2,851,401 | $ 2,374,285 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Balance Sheets | ||
Lease income receivable, reserve | $ 318,000 | $ 283,000 |
Accounts payable | 319,000 | 100,000 |
Other receivables, reserve | 305,000 | 305,000 |
Equipment, accumulated amortization | $ 20,000 | $ 12,000 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue | ||
Lease | $ 788,112 | $ 1,233,407 |
Interest and other | 5,424 | 18,236 |
Sales and property taxes | 38,990 | 65,274 |
Gain on sale of equipment | 176,827 | 197,149 |
Total revenue and gain on sale of equipment | 1,009,353 | 1,514,066 |
Expenses | ||
Operating, excluding depreciation and amortization | 485,182 | 585,878 |
Equipment management fee, General Partner | 32,309 | 61,671 |
Interest | 8,069 | 11,932 |
Depreciation | 442,237 | 876,833 |
Amortization of equipment acquisition costs and deferred expenses | 12,080 | 21,680 |
Sales and property taxes | 38,990 | 65,274 |
Bad debt expense | 98,695 | 215,000 |
Total expenses | 1,117,563 | 1,838,268 |
Other Loss | ||
Loss on investment in COF 2 | (136,400) | (113,832) |
Total other loss | (136,400) | (113,832) |
Net loss | (244,610) | (438,034) |
Net loss allocated to Limited Partners | $ (244,610) | $ (438,034) |
Net loss per equivalent Limited Partnership unit | $ (0.16) | $ (0.29) |
Weighted average number of equivalent Limited Partnership units outstanding during the period | 1,530,159 | 1,533,852 |
Statements of Partners Capital
Statements of Partners Capital - USD ($) | Total | General Partner Units [Member] | Limited Partner Units [Member] |
Balance, shares at Dec. 31, 2020 | 50 | 1,537,535 | |
Balance, amount at Dec. 31, 2020 | $ 2,264,129 | $ 1,050 | $ 2,263,079 |
Net loss | (438,034) | 0 | $ (438,034) |
Redemptions, shares | (7,750) | ||
Redemptions, amount | (56,683) | 0 | $ (56,683) |
Balance, amount at Dec. 31, 2021 | 1,769,412 | $ 1,050 | $ 1,768,362 |
Balance, shares at Dec. 31, 2021 | 50 | 1,529,785 | |
Net loss | (244,610) | $ 0 | $ (244,610) |
Redemptions, shares | (1,750) | ||
Redemptions, amount | 0 | 0 | $ 0 |
Balance, amount at Dec. 31, 2022 | $ 1,525,114 | $ 1,050 | $ 1,524,064 |
Balance, shares at Dec. 31, 2022 | 50 | 1,528,035 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities | ||
Net loss | $ (244,610) | $ (438,034) |
Adjustments to reconcile net loss to net cash provided by operating activities | ||
Depreciation and amortization | 454,629 | 903,500 |
Amortization of initial direct costs - finance leases | 430 | 5,058 |
Gain on sale of equipment | (176,826) | (197,149) |
Bad debt expense | 98,695 | 215,000 |
Loss on equity in COF 2 investment | 136,400 | 113,833 |
Other noncash activities | ||
Lease revenue net of interest expense, on notes payable, realized as a result of direct payment of principal to the bank by lessee | (119,752) | (351,335) |
Changes in assets and liabilities | ||
Payment from finance leases | 10,741 | 10,094 |
Lease income receivable | (306,985) | (274,960) |
Accounts receivable, Commonwealth Capital Corp., net | 22,096 | (718,233) |
Other receivables | (4,900) | 15,193 |
Prepaid expenses | (1,213) | 5,944 |
Accounts payable | (111,068) | 136,561 |
Accounts payable, CIGF, Inc., net | 525,594 | 18,990 |
Other accrued expenses | 0 | (11) |
Unearned lease income | 19,905 | (50,172) |
Net cash provided by (used in) operating activities | 303,137 | (605,721) |
Cash flows from investing activities | ||
Capital expenditures | (449,153) | (149,840) |
Equipment acquisition fees paid to the General Partner | (36,328) | (622) |
Net proceeds from the sale of equipment | 181,987 | 321,796 |
Net cash provided by (used in) investing activities | (303,494) | 171,335 |
Cash flows from financing activities | ||
Redemptions | 0 | (56,683) |
Debt placement fee paid to the General Partner | (4,067) | 0 |
Net cash used in financing activities | (4,067) | (56,683) |
Net decrease in cash and cash equivalents | (4,424) | (491,070) |
Cash and cash equivalents beginning of year | 4,424 | 495,494 |
Cash and cash equivalents end of year | $ 0 | $ 4,424 |
Business
Business | 12 Months Ended |
Dec. 31, 2022 | |
Business | |
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. For the year ended December 31, 2022 and 2021, limited partners redeemed 1,750 and 7,750 units, respectively, of partnership interest for a total redemption price of approximately $0 and $56,683, respectively, in accordance with the terms of the Partnership’s Limited Partnership Agreement (the “Agreement”). 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 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 intends to acquire 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 Institute for Portfolio Alternatives (“IPA”) and the Equipment Leasing and Finance Association (“ELFA”). Unless sooner terminated or extended pursuant to the terms of its Limited Partnership Agreement (the “Agreement”), the Partnership will continue until December 31, 2026. 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 each of the years ended December 31, 2022 and 2021, cash distributions to limited partners for each quarter were made at a rate of approximately 0% and 0% of their original contributed capital, respectively. Distributions during each of the years ended December 31, 2022 and 2021 were made to limited partners in the amount of approximately $0 and $0 per unit, respectively, based on each investor's number of limited partnership units outstanding during that year. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies 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. Such estimates relate primarily to the determination of residual values at the end of the lease term, the expected future cash flows and fair value used for impairment analysis purposes and determination of the allowance for doubtful accounts. Disclosure of Fair Value of Financial Instruments 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, 2022 and 2021. There were no assets measured on a non-recurring basis at December 31, 2022 and 2021. Fair Value disclosures 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. Cash, other receivables, accounts payable and other accrued expenses are carried at amounts which reasonably approximate their fair values as of December 31, 2022 and 2021 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, 2022 and 2021 approximates the carrying value of these instruments, due to the interest rates on this debt approximating current market interest rates. Revenue Recognition The Partnership is principally engaged in business of leasing equipment. Ancillary to the Partnership’s principal equipment leasing business, the Partnership also sells certain equipment and may offer certain services to support its customers. The Partnership’s lease transactions are principally accounted for under Topic 842. Lease revenue includes revenue generated from leasing equipment to customers, including re-rent revenue, and is recognized as either on a straight line basis or using the effective interest method over the length of the lease contract, if such lease is either an operating lease or finance lease, respectively. The Partnership’s sale of equipment along with certain services provided to customers is recognized under ASC Topic 606, Revenue from Contracts with Customers. The Partnership recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. The amount of revenue recognized reflects the consideration the Partnership expects to be entitled to in exchange for such products or services. For the years ended December 31, 2022 and 2021, 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. 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. Our leases do not contain any step-rent provisions or escalation clauses nor are lease revenues adjusted based on any index. Partnership’s accounting policy for sales and property taxes collected from the lessees are recorded in the current period as gross revenues and expenses. 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. In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments – Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures. The amendments in this Update eliminate the accounting guidance for (Troubled Debt Restructurings (TDRs) by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying the recognition and measurement guidance for TDRs, an entity must apply the loan refinancing and restructuring guidance in paragraphs 310-20-35-9 through 35-11 to determine whether a modification results in a new loan or a continuation of an existing loan. For public business entities, the amendments in this Update require that an entity disclose current-period gross writeoffs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost. For entities that have adopted the amendments in Update 2016-13, the amendments in this Update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. For entities that have not yet adopted the amendments in Update 2016-13, the effective dates for the amendments in this Update are the same as the effective dates in Update 2016-13. The Partnership does not anticipate this update having a material impact to its financial statement upon adoption. For the years ended December 31, 2022 and 2021, Partnership finance lease revenue subject to CECL represented less than 1% of total lease revenue. Equity Method Investment The Partnership accounts for its investment in COF2 under the equity method in accordance with Accounting Standards Codification (“ASC”) 321. Under the equity method, the Partnership records its proportionate share of the Fund’s net income (loss). Capital contributions, distributions and net income (loss) of such entities 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. 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 or comparable sales of similar assets, as applicable, based on asset type. 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. CCC is not reimbursed for salary and benefit costs of control persons. 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. Cash and cash equivalents The Partnership considers 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, 2022, cash was held in one bank maintained at one financial institution with an aggregate balance of approximately $2,000. Bank accounts are federally insured up to $250,000 by the FDIC. At December 31, 2022 and 2021, the total cash bank balance was approximately as follows: Balance at December 31 2022 2021 Total bank balance $ 2,000 $ 18,000 FDIC insured (2,000 ) (18,000 ) 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 amounts in such accounts will fluctuate throughout 2023 due to many factors, including the pace of cash receipts, equipment acquisitions, interest rates 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 or state 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 Loss Per Equivalent Limited Partnership Unit The net 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 year. |
Information Technology, Medical
Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment and Other Business-Essential Capital Equipment ("equipment") | 12 Months Ended |
Dec. 31, 2022 | |
Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment and Other Business-Essential Capital Equipment ("equipment") | |
Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment and Other Business-Essential Capital Equipment ("equipment") | 3. Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment and Other Business-Essential Capital Equipment (“equipment”) The Partnership is the lessor of equipment under leases with periods that generally 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’s share of the cost of the equipment in which it participates with other partnerships at December 31, 2022 was approximately $10,527,000 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, 2022 was approximately $129,000 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, 2022 was approximately $24,408,000. The total outstanding debt related to the equipment shared by the Partnership at December 31, 2022 was approximately $346,000. 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 for 2023, 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: Years Ended December 31, Amount 2023 $ 249,000 2024 182,000 2025 79,000 2026 59,000 2027 54,000 $ 623,000 Finance Leases: The following lists the approximate components of the net investment in finance leases: At December 31, 2022 2021 Carrying value of lease receivable $ 22,000 $ 33,000 Estimated residual value of leased equipment (unguaranteed) 2,000 2,000 Initial direct costs- finance leases - - Net investment in finance leases $ 24,000 $ 35,000 The Partnership assesses 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 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’s 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 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, 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 December 31, 2022: Percent of Total Risk Level 2022 2021 Low - % - % Moderate-Low - % - % Moderate - % - % Moderate-High 100 % 100 % High - % - % Net Finance lease receivable - % 100 % As of the year ended December 31, 2022 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, associated with these leases, has been positive. 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 following is a schedule of approximate future minimum rentals on non-cancelable finance leases: Years Ended December 31, Amount 2023 $ 12,000 2024 $ 11,000 $ 23,000 |
Significant Customers
Significant Customers | 12 Months Ended |
Dec. 31, 2022 | |
Significant Customers | |
Significant Customers | 4. Significant Customers Lessees equal to or exceeding 10% of lease revenue: Years Ended December 31, 2022 2021 Alliant Techsystems, Inc. 45 % 43 % Hofstra University 28 % 27 % Equipmentshare.com ** 11 % ** Lessees equal to or exceeding 10% of lease income receivable: At December 31, 2022 2021 Alliant Techsystems, Inc. 80 % 72 % Raytheon ** 12 % ** |
Investment in COF 2
Investment in COF 2 | 12 Months Ended |
Dec. 31, 2022 | |
Investment in COF 2 | |
Investment in COF 2 | 5. Investment in COF 2 On August 13, 2015, the Partnership purchased 1,648 units for $1,500,000, of Commonwealth Opportunity Fund 2 (“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 321. The Partnership’s net investment in COF 2 at December 31, 2022 and 2021 was approximately $367,000 and $503,000, respectively (see COF 2 Financial Summary below). For the year ended December 31, 2022, COF2 did not declare any distributions to the Partnership. COF 2 Summarized Financial Information At December 31, 2022 2021 Assets $ 1,693,000 $ 1,793,000 Liabilities $ 730,000 $ 430,000 Partners' capital $ 963,000 $ 1,363,000 Revenue $ 526,000 $ 401,000 Expenses $ 926,000 $ 735,000 Net income (loss) $ (400,000 ) $ (334,000 ) |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions | |
Related Party Transactions | 6. Related Party Transactions Receivables/Payables As of December 31, 2022 and 2021, the Partnership’s related party receivables and payables are short term, unsecured, non-interest bearing. ENTITY RECEIVING COMPENSATION TYPE OF COMPENSATION AMOUNT INCURRED DURING 2022 AMOUNT INCURRED DURING 2021 OPERATIONAL AND SALE OR LIQUIDATION STAGES The General Partner and its Affiliates Reimbursable Expenses $ 396,000 $ 563,000 The General Partner Equipment Acquisition Fee. $ 31,000 $ 6,000 The General Partner Debt Placement Fee $ 4,000 $ - The General Partner Equipment Management Fee $ 32,000 $ 62,000 The General Partner Equipment Liquidation Fee $ 6,000 $ 10,000 The General Partner Partnership Interest and Distribution. $ - $ - |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2022 | |
Notes Payable | |
Notes Payable | 6. Notes Payable Notes payable consisted of the following approximate amounts: December 31, 2022 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 16,000 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 30,000 45,000 Installment note payable to bank; interest at 4.65% due in monthly installments of $1,176, including interest, with final payment in March 2024 17,000 - Installment note payable to bank; interest at 4.75% due in monthly installments of $3,527, including interest, with final payment in May 2024 58,000 - Installment note payable to bank; interest at 6.21% due in monthly installments of $2,213, including interest, with final payment in June 2024 38,000 - Installment note payable to bank; interest at 7.10% due in monthly installments of $4,889, including interest, with final payment in November 2027 249,000 - $ 408,000 $ 121,000 The notes are secured by specific technology equipment with a carrying value of approximately $599,000 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 December 31, 2022 are as follows: Years Ended December 31, Amount 2023 155,000 2024 96,000 2025 51,000 2026 54,000 2027 52,000 $ 408,000 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Cash Flow Information | |
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: Years Ended December 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 $ 120,000 $ 351,000 Noncash investing and financing activities approximately include the following: Years Ended December 31, 2022 2021 Debt assumed in connection with purchase of technology equipment $ 407,000 $ - During the years ended December 31, 2022 and 2021, the Partnership wrote off fully amortized acquisition and finance fees of approximately $0 and $161,000, respectively. |
Reconciliation of Amounts Repor
Reconciliation of Amounts Reported for Financial Reporting Purposes to Amounts on the Federal Partnership Return (Unaudited) | 12 Months Ended |
Dec. 31, 2022 | |
Reconciliation of Amounts Reported for Financial Reporting Purposes to Amounts on the Federal Partnership Return (Unaudited) | |
Reconciliation of Amounts Reported for Financial Reporting Purposes to Amounts on the Federal Partnership Return (Unaudited) | 8. Reconciliation of Amounts Reported for Financial Reporting Purposes to Amounts on the Federal Partnership Return (Unaudited) The tax basis of the Company’s net assets and liabilities vary from the amounts presented in these financial statements at December 31, 2022 and 2021 as follows: Years Ended December 31, 2022 2021 Tax basis of net assets (unaudited) $ 2,923,138 $ 3,550,097 Financial statement basis of net assets 1,394,778 1,769,412 Difference (unaudited) $ 1,528,360 $ 1,780,685 The primary differences between the tax basis of net assets and the amounts recorded in the financial statements are the result of differences in accounting for impairment losses, syndication costs and differences between the depreciation methods used in the financial statements and the Partnership’s tax returns (unaudited). Years Ended December 31, 2022 2021 Net loss for financial reporting purposes to taxable gain $ (244,610 ) $ (438,034 ) Gain on sale of equipment (19,364 ) 153,620 Depreciation (386,149 ) 723,577 Amortization (14,425 ) (2,340 ) Unearned lease income 19,905 (46,375 ) Penalties 473 7,481 Bad debt expense 36,126 (23,362 ) *Other (17,509 ) 300,722 Taxable income on the Federal Partnership return (unaudited) $ (625,553 ) $ 675,289 *Other- includes financial statement adjustments that will be reflected on the tax return in the subsequent year. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
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. Such estimates relate primarily to the determination of residual values at the end of the lease term, the expected future cash flows and fair value used for impairment analysis purposes and determination of the allowance for doubtful accounts. |
Disclosure of Fair Value of Financial Instruments | 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, 2022 and 2021. There were no assets measured on a non-recurring basis at December 31, 2022 and 2021. Fair Value disclosures 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. Cash, other receivables, accounts payable and other accrued expenses are carried at amounts which reasonably approximate their fair values as of December 31, 2022 and 2021 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, 2022 and 2021 approximates the carrying value of these instruments, due to the interest rates on this debt approximating current market interest rates. |
Revenue Recognition | The Partnership is principally engaged in business of leasing equipment. Ancillary to the Partnership’s principal equipment leasing business, the Partnership also sells certain equipment and may offer certain services to support its customers. The Partnership’s lease transactions are principally accounted for under Topic 842. Lease revenue includes revenue generated from leasing equipment to customers, including re-rent revenue, and is recognized as either on a straight line basis or using the effective interest method over the length of the lease contract, if such lease is either an operating lease or finance lease, respectively. The Partnership’s sale of equipment along with certain services provided to customers is recognized under ASC Topic 606, Revenue from Contracts with Customers. The Partnership recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. The amount of revenue recognized reflects the consideration the Partnership expects to be entitled to in exchange for such products or services. For the years ended December 31, 2022 and 2021, 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. 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. Our leases do not contain any step-rent provisions or escalation clauses nor are lease revenues adjusted based on any index. Partnership’s accounting policy for sales and property taxes collected from the lessees are recorded in the current period as gross revenues and expenses. |
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. In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments – Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures. The amendments in this Update eliminate the accounting guidance for (Troubled Debt Restructurings (TDRs) by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying the recognition and measurement guidance for TDRs, an entity must apply the loan refinancing and restructuring guidance in paragraphs 310-20-35-9 through 35-11 to determine whether a modification results in a new loan or a continuation of an existing loan. For public business entities, the amendments in this Update require that an entity disclose current-period gross writeoffs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost. For entities that have adopted the amendments in Update 2016-13, the amendments in this Update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. For entities that have not yet adopted the amendments in Update 2016-13, the effective dates for the amendments in this Update are the same as the effective dates in Update 2016-13. The Partnership does not anticipate this update having a material impact to its financial statement upon adoption. For the years ended December 31, 2022 and 2021, Partnership finance lease revenue subject to CECL represented less than 1% of total lease revenue. |
Equity Method Investment | The Partnership accounts for its investment in COF2 under the equity method in accordance with Accounting Standards Codification (“ASC”) 321. Under the equity method, the Partnership records its proportionate share of the Fund’s net income (loss). Capital contributions, distributions and net income (loss) of such entities 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. |
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 or comparable sales of similar assets, as applicable, based on asset type. 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. CCC is not reimbursed for salary and benefit costs of control persons. 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. |
Cash and Cash Equivalents | The Partnership considers 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, 2022, cash was held in one bank maintained at one financial institution with an aggregate balance of approximately $2,000. Bank accounts are federally insured up to $250,000 by the FDIC. At December 31, 2022 and 2021, the total cash bank balance was approximately as follows: Balance at December 31 2022 2021 Total bank balance $ 2,000 $ 18,000 FDIC insured (2,000 ) (18,000 ) 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 amounts in such accounts will fluctuate throughout 2023 due to many factors, including the pace of cash receipts, equipment acquisitions, interest rates 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 or state 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 Loss Per Equivalent Limited Partnership Unit | The net 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 year. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Schedule of cash and cash equivalents | Balance at December 31 2022 2021 Total bank balance $ 2,000 $ 18,000 FDIC insured (2,000 ) (18,000 ) Uninsured amount $ - $ - |
Information Technology, Medic_2
Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment and Other Business-Essential Capital Equipment ("equipment") (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment and Other Business-Essential Capital Equipment ("equipment") | |
Schedule of future minimum rentals on non-cancellable operating leases | Years Ended December 31, Amount 2023 $ 249,000 2024 182,000 2025 79,000 2026 59,000 2027 54,000 $ 623,000 |
Net investment in direct financing leases | At December 31, 2022 2021 Carrying value of lease receivable $ 22,000 $ 33,000 Estimated residual value of leased equipment (unguaranteed) 2,000 2,000 Initial direct costs- finance leases - - Net investment in finance leases $ 24,000 $ 35,000 |
Finance lease risk level | Percent of Total Risk Level 2022 2021 Low - % - % Moderate-Low - % - % Moderate - % - % Moderate-High 100 % 100 % High - % - % Net Finance lease receivable - % 100 % |
Schedule of future minimum rentals on non-cancelable direct financing leases | Years Ended December 31, Amount 2023 $ 12,000 2024 $ 11,000 $ 23,000 |
Significant Customers (Tables)
Significant Customers (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Significant Customers | |
Schedule of significant customers lease income receivable | At December 31, 2022 2021 Alliant Techsystems, Inc. 80 % 72 % Raytheon ** 12 % |
Schedule of significant customers lease revenue | Years Ended December 31, 2022 2021 Alliant Techsystems, Inc. 45 % 43 % Hofstra University 28 % 27 % Equipmentshare.com ** 11 % |
Investment in COF 2 (Tables)
Investment in COF 2 (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investment in COF 2 | |
Schedule of financial summary of investment in COF 2 | COF 2 Summarized Financial Information At December 31, 2022 2021 Assets $ 1,693,000 $ 1,793,000 Liabilities $ 730,000 $ 430,000 Partners' capital $ 963,000 $ 1,363,000 Revenue $ 526,000 $ 401,000 Expenses $ 926,000 $ 735,000 Net income (loss) $ (400,000 ) $ (334,000 ) |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions | |
Schedule of related party transactions | ENTITY RECEIVING COMPENSATION TYPE OF COMPENSATION AMOUNT INCURRED DURING 2022 AMOUNT INCURRED DURING 2021 OPERATIONAL AND SALE OR LIQUIDATION STAGES The General Partner and its Affiliates Reimbursable Expenses $ 396,000 $ 563,000 The General Partner Equipment Acquisition Fee. $ 31,000 $ 6,000 The General Partner Debt Placement Fee $ 4,000 $ - The General Partner Equipment Management Fee $ 32,000 $ 62,000 The General Partner Equipment Liquidation Fee $ 6,000 $ 10,000 The General Partner Partnership Interest and Distribution. $ - $ - |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Payable | |
Schedule of notes payable | December 31, 2022 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 16,000 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 30,000 45,000 Installment note payable to bank; interest at 4.65% due in monthly installments of $1,176, including interest, with final payment in March 2024 17,000 - Installment note payable to bank; interest at 4.75% due in monthly installments of $3,527, including interest, with final payment in May 2024 58,000 - Installment note payable to bank; interest at 6.21% due in monthly installments of $2,213, including interest, with final payment in June 2024 38,000 - Installment note payable to bank; interest at 7.10% due in monthly installments of $4,889, including interest, with final payment in November 2027 249,000 - $ 408,000 $ 121,000 |
Schedule of future aggregate payments of notes payable | Years Ended December 31, Amount 2023 155,000 2024 96,000 2025 51,000 2026 54,000 2027 52,000 $ 408,000 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Cash Flow Information | |
Schedule of other noncash activities | Years Ended December 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 $ 120,000 $ 351,000 |
Schedule of non-cash investing and financing activities | Years Ended December 31, 2022 2021 Debt assumed in connection with purchase of technology equipment $ 407,000 $ - |
Reconciliation of Amounts Rep_2
Reconciliation of Amounts Reported For Financial Reporting Purposes To Amounts On The Federal Partnership Return (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Reconciliation of Amounts Reported for Financial Reporting Purposes to Amounts on the Federal Partnership Return (Unaudited) | |
Schedule of net assets and liabilities tax basis | Years Ended December 31, 2022 2021 Tax basis of net assets (unaudited) $ 2,923,138 $ 3,550,097 Financial statement basis of net assets 1,394,778 1,769,412 Difference (unaudited) $ 1,528,360 $ 1,780,685 |
Taxable income on the Federal Partnership return | Years Ended December 31, 2022 2021 Net loss for financial reporting purposes to taxable gain $ (244,610 ) $ (438,034 ) Gain on sale of equipment (19,364 ) 153,620 Depreciation (386,149 ) 723,577 Amortization (14,425 ) (2,340 ) Unearned lease income 19,905 (46,375 ) Penalties 473 7,481 Bad debt expense 36,126 (23,362 ) *Other (17,509 ) 300,722 Taxable income on the Federal Partnership return (unaudited) $ (625,553 ) $ 675,289 |
Business (Details Narrative)
Business (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Nov. 14, 2008 | Nov. 22, 2011 | Dec. 31, 2022 | Dec. 31, 2021 | |
Business | ||||
Offered sale, shares | 2,500,000 | |||
Purchanse price | $ 20 | |||
Unit sold | 1,572,900 | |||
Total contributions amount | $ 31,432,000 | |||
Partners' capital redemptions, units | (1,750) | (7,750) | ||
Partners' capital redemptions | $ 0 | $ 56,683 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Summary of Significant Accounting Policies | ||
Total bank balance | $ 2,000 | $ 18,000 |
FDIC insured | (2,000) | (18,000) |
Uninsured amount | $ 0 | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Narrative) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Summary of Significant Accounting Policies | |
Original Maturity terms | 90 days |
Total lease revenue | 1% |
FDIC amount | $ 250,000 |
Cash and cash equivalents aggregate balance | $ 2,000 |
Information Technology, Medic_3
Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment and Other Business-Essential Capital Equipment ("equipment") (Details) | Dec. 31, 2022 USD ($) |
Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment and Other Business-Essential Capital Equipment ("equipment") | |
Year ended December 31, 2023 | $ 249,000 |
Year Ended December 31, 2024 | 182,000 |
Year Ended December 31, 2025 | 79,000 |
Year Ended December 31, 2027 | 54,000 |
Year Ended December 31, 2026 | 59,000 |
Total | $ 623,000 |
Information Technology, Medic_4
Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment and Other Business-Essential Capital Equipment ("equipment") (Details 1) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment and Other Business-Essential Capital Equipment ("equipment") | ||
Carrying value of lease receivable | $ 22,000 | $ 33,000 |
Estimated residual value of leased equipment (unguaranteed) | 2,000 | 2,000 |
Initial direct costs - finance leases | 0 | 0 |
Net investment in finance leases | $ 24,000 | $ 35,000 |
Information Technology, Medic_5
Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment and Other Business-Essential Capital Equipment ("equipment") (Details 2) | Dec. 31, 2022 | Dec. 31, 2021 |
Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment and Other Business-Essential Capital Equipment ("equipment") | ||
Moderate-High | 100% | 100% |
Net finance lease receivable | 0% | 100% |
Information Technology, Medic_6
Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment and Other Business-Essential Capital Equipment ("equipment") (Details 3) | Dec. 31, 2022 USD ($) |
Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment and Other Business-Essential Capital Equipment ("equipment") | |
Year ended December 31, 2023 | $ 12,000 |
Year ended December 31, 2024 | 11,000 |
Total | $ 23,000 |
Information Technology, Medic_7
Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment and Other Business-Essential Capital Equipment ("equipment") (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment and Other Business-Essential Capital Equipment ("equipment") | ||
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 | |
Equipment shared | $ 10,527,000 | $ 6,229,000 |
Debt shared | 129,000 | 76,000 |
Total shared equipment | 24,408,000 | 14,952,000 |
Total debt shared | $ 346,000 | $ 305,000 |
Significant Customers (Details)
Significant Customers (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Concentration risk | 10% | |
Alliant Techsystems | Lease Revenue | ||
Concentration risk | 45% | 43% |
Hofstra University | Lease Revenue | ||
Concentration risk | 28% | 27% |
Equipment Share Com [Member] | ||
Concentration risk | 0% | 11% |
Significant Customers (Details
Significant Customers (Details 1) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Concentration risk | 10% | |
Alliant Techsystems | Lease Income Receivable | ||
Concentration risk | 80% | 72% |
Raytheon Member | Lease Income Receivable | ||
Concentration risk | 0% | 12% |
Significant Customers (Detail_2
Significant Customers (Details Narrative) | 12 Months Ended |
Dec. 31, 2022 | |
Significant Customers | |
Concentration risk | 10% |
Investment in COF 2 (Details)
Investment in COF 2 (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Investment in COF 2 | ||
Assets | $ 1,693,000 | $ 1,793,000 |
Liabilities | 730,000 | 430,000 |
Partners' capital | 963,000 | 1,363,000 |
Revenue | 526,000 | 401,000 |
Expenses | 926,000 | 735,000 |
Net income (loss) | $ (400,000) | $ (334,000) |
Investment in COF 2 (Details Na
Investment in COF 2 (Details Narrative) - USD ($) | 12 Months Ended | ||
Aug. 13, 2015 | Dec. 31, 2022 | Dec. 31, 2021 | |
Net investment | $ 367,000 | $ 503,000 | |
Fund 2 [Member] | |||
Commonwealth opportunity fund | $ 1,500,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transactions | ||
Reimbursable expenses | $ 396,000 | $ 563,000 |
Equipment acquisition fee | 31,000 | 6,000 |
Debt placement fee | 4,000 | 0 |
Equipment management fee | 32,000 | 62,000 |
Equipment liquidation fee | 6,000 | 10,000 |
Partnership Interest and Distribution | $ 0 | $ 0 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Note 1 | ||
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 | $ 16,000 | $ 76,000 |
Note 2 | ||
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 | $ 30,000 | 45,000 |
Note 3 | ||
Note payable description | Installment note payable to bank; interest at 4.65% due in monthly installments of $1,176, including interest, with final payment in March 2024 | |
Notes payable | $ 17,000 | 0 |
Note 4 | ||
Note payable description | Installment note payable to bank; interest at 4.75% due in monthly installments of $3,527, including interest, with final payment in May 2024 | |
Notes payable | $ 58,000 | 0 |
Note 5 | ||
Note payable description | Installment note payable to bank; interest at 6.21% due in monthly installments of $2,213, including interest, with final payment in June 2024 | |
Notes payable | $ 38,000 | 0 |
Notes payable | ||
Notes payable | $ 408,000 | 121,000 |
Note 6 | ||
Note payable description | Installment note payable to bank; interest at 7.10% due in monthly installments of $4,889, including interest, with final payment in November 2027 | |
Notes payable | $ 249,000 | $ 0 |
Notes Payable (Details 1)
Notes Payable (Details 1) | Dec. 31, 2022 USD ($) |
Notes Payable | |
2023 | $ 155,000 |
2024 | 96,000 |
2025 | 51,000 |
2026 | 54,000 |
2027 | 52,000 |
Total | $ 408,000 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Notes Payable | |
Equipment with a carrying value | $ 599,000 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Supplemental Cash Flow Information | ||
Lease revenue net of interest expense on notes payable realized as a result of direct payment of principal by lessee to bank | $ 120,000 | $ 351,000 |
Supplemental Cash Flow Inform_4
Supplemental Cash Flow Information (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Supplemental Cash Flow Information | ||
Debt assumed in connection with purchase of technology equipment | $ 407,000 | $ 0 |
Supplemental Cash Flow Inform_5
Supplemental Cash Flow Information (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Supplemental Cash Flow Information | ||
Amortized acquisition and finance fees | $ 0 | $ 161,000 |
Reconciliation of Amounts Rep_3
Reconciliation of Amounts Reported for Financial Reporting Purposes to Amounts on the Federal Partnership Return (Unaudited) (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Reconciliation of Amounts Reported for Financial Reporting Purposes to Amounts on the Federal Partnership Return (Unaudited) | ||
Tax basis of net assets (unaudited) | $ 2,923,138 | $ 3,550,097 |
Financial statement basis of net assets | 1,394,778 | 1,769,412 |
Difference (unaudited) | $ 1,528,360 | $ 1,780,685 |
Reconciliation of Amounts Rep_4
Reconciliation of Amounts Reported for Financial Reporting Purposes to Amounts on the Federal Partnership Return (Unaudited) (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of Amounts Reported for Financial Reporting Purposes to Amounts on the Federal Partnership Return (Unaudited) | ||
Net loss for financial reporting purposes to taxable gain | $ (244,610) | $ (438,034) |
Gain on sale of equipment | (19,364) | 153,620 |
Depreciation | (386,149) | 723,577 |
Amortization | 14,425 | 2,340 |
Unearned lease income | 19,905 | (46,375) |
Penalties | 473 | 7,481 |
Bad debt expense | 36,126 | (23,362) |
Other | (17,509) | 300,722 |
Taxable income on the Federal Partnership return (unaudited) | $ (625,553) | $ 675,289 |