AMERICAN INCOME 8 LIMITED PARTNERSHIP
                         FORM 10-K--DECEMBER 31, 1994
 
                       NOTES TO THE FINANCIAL STATEMENTS
 
NOTE 4--RELATED PARTY TRANSACTIONS
 
  All operating expenses incurred by the Partnership are paid by AFG on behalf
of the Partnership and AFG is reimbursed at its actual cost for such
expenditures. Fees and other costs incurred during each of the three years in
the period ended December 31, 1994, which were paid or accrued by the
Partnership to AFG or its Affiliates, are as follows:
 


                                                        1994     1993     1992
                                                      -------- -------- --------
                                                               
   Equipment management fees........................  $ 85,739 $ 82,493 $190,971
   Interest expense--affiliate......................     2,291      --       --
   Administrative charges...........................    12,000   14,955   12,000
   Reimbursable operating expenses due to third par-
    ties............................................   114,048   88,554  107,655
                                                      -------- -------- --------
       Total........................................  $214,078 $186,002 $310,626
                                                      -------- -------- --------

 
  As provided under the terms of the Management Agreement, AFG is compensated
for its services to the Partnership. Such services include all aspects of
acquisition, management and sale of equipment. For acquisition services, AFG
is compensated by an amount equal to 4.75% of Equipment Base Price paid by the
Partnership. For management services, AFG is compensated by an amount equal to
the lesser of (i) 5% of gross lease rental revenues earned by the Partnership
or (ii) fees which the General Partner reasonably believes to be competitive
for similar services for similar equipment. Both of these fees are subject to
certain limitations defined in the Management Agreement. Compensation to AFG
for services connected to the sale of equipment is calculated as the lesser of
(i) 3% of gross sale proceeds or (ii) one-half of reasonable brokerage fees
otherwise payable under arm's length circumstances. Payment of the remarketing
fee is subordinated to Payout and is subject to certain limitations defined in
the Management Agreement.
 
  Interest expense--affiliate represents interest incurred on legal costs in
connection with a state sales tax dispute involving certain equipment owned by
the Partnership and other affiliated investment programs sponsored by AFG.
Legal costs incurred by AFG to resolve this matter and the interest thereon
was allocated to the Partnership and other affected investment programs.
Administrative charges represent amounts owed to AFG, pursuant to Section 9.4
of the Restated Agreement, as amended, for persons employed by AFG who are
engaged in providing administrative services to the Partnership. Reimbursable
operating expenses due to third parties represent costs paid by AFG on behalf
of the Partnership which are reimbursed to AFG.
 
  All equipment was acquired from AFG, one of its affiliates, including other
equipment leasing programs sponsored by AFG, or from third-party sellers. The
Partnership's Purchase Price was determined by the method described in Note 2.
 
  All rents and proceeds from the sale of equipment are paid directly to
either AFG or to a lender. AFG temporarily deposits collected funds in a
separate interest-bearing escrow account prior to remittance to the
Partnership. At December 31, 1994, the Partnership was owed $113,192 by AFG
for such funds and the interest thereon. These funds were remitted to the
Partnership in January 1995.