Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 31, 2015 | Jun. 30, 2014 | |
Document and Entity Information: | |||
Entity Registrant Name | Commonwealth Income & Growth Fund VII, LP | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Entity Central Index Key | 1450335 | ||
Current Fiscal Year End Date | -19 | ||
Entity Common Stock, Shares Outstanding | 1,571,750 | ||
Entity Public Float | $0 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | No | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Entity Incorporation, State Country Name | Commonwealth of Pennsylvania |
Balance_Sheets
Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
Balance Sheets | ||||
Cash and cash equivalents | $3,177,323 | $5,287,349 | ||
Lease income receivable | 407,374 | 109,271 | ||
Accounts Receivable - Affiliate | 1,075,679 | [1] | 874,889 | [1] |
Other receivables | 1,867 | 110,922 | ||
Prepaid expenses | 6,152 | 1,364 | ||
Current Assets | 4,668,395 | 6,383,795 | ||
Net Investment in Finance Leases | 508,871 | 99,019 | ||
Equipment, at cost | 25,296,684 | 22,340,138 | ||
Accumulated depreciation | -14,102,115 | -8,906,007 | ||
Technology equipment, net | 11,194,569 | 13,434,131 | ||
Equipment acquisition costs and deferred expenses, net of accumulated amortization | 398,270 | [2] | 459,167 | [3] |
Prepaid acquisition fees | 162,085 | 223,867 | ||
Total Acquisition Fees | 560,355 | 683,034 | ||
Total Assets | 16,932,190 | 20,599,979 | ||
Accounts payable | 116,404 | 79,613 | ||
Accounts Payable - Affiliate | 30,504 | [4] | 93,576 | [4] |
Other accrued expenses | 3,477 | 1,331,813 | ||
Unearned lease income | 224,687 | 164,299 | ||
Notes payable | 3,606,341 | 1,542,920 | ||
Total Liabilities | 3,981,413 | 3,212,221 | ||
General Partner | 1,050 | 1,050 | ||
Limited Partners | 12,949,727 | 17,386,708 | ||
Total Partners' Capital | 12,950,777 | 17,387,758 | ||
Total Liabilities and Partners' Capital | $16,932,190 | $20,599,979 | ||
[1] | Accounts receivable, Commonwealth Capital Corp. | |||
[2] | Accumulated amortization of approximately $445,000. | |||
[3] | Accumulated amortization of approximately $391,000. | |||
[4] | Accounts payable, CIGF, Inc. |
Balance_Sheets_Parenthetical
Balance Sheets - Parenthetical (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Balance Sheets | ||
Land, Buildings, Equipment and Leasehold Improvements, accumulated depreciation and amortization | $445,000 | $391,000 |
Statements_of_Operations
Statements of Operations (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue | ||
Lease | $6,839,957 | $5,589,389 |
Interest and other | 34,067 | 29,787 |
Total revenue | 6,874,024 | 5,619,176 |
Expenses | ||
Operating, excluding depreciation | 1,353,873 | 1,143,470 |
Equipment management fee, General Partner | 343,718 | 283,119 |
Interest | 108,603 | 18,437 |
Depreciation | 6,453,003 | 4,762,109 |
Amortization of equipment acquisition costs and deferred expenses and initial direct costs | 282,399 | 240,313 |
Loss (Gain) on sale of investment in finance leases | 68,551 | |
Loss on sale of equipment | 197,233 | 55,992 |
Total expenses | 8,738,829 | 6,571,991 |
Other income (loss) | ||
Gain from insurance recovery | 115,030 | |
Total other income (loss) | 115,030 | |
Net Income (Loss) | -1,749,775 | -952,815 |
Net income allocated to Limited Partners | ($1,776,519) | ($979,565) |
Net income per equivalent Limited Partnership unit | ($1.13) | ($0.62) |
Weighted average number of equivalent limited partnership units outstanding during the period | 1,572,484 | 1,572,900 |
Statements_of_Partners_Capital
Statements of Partners' Capital (USD $) | General Partners | Limited Partners | Total |
Partners' Capital at Dec. 31, 2012 | $1,050 | $21,014,548 | $21,015,598 |
Partners' Capital Account, Units at Dec. 31, 2012 | 50 | 1,572,900 | |
Net Income (Loss) | 26,750 | -979,565 | -952,815 |
Partners' Capital Account, Redemptions | 0 | ||
Distributions to Partners | -26,750 | -2,648,275 | -2,675,025 |
Partners' Capital at Dec. 31, 2013 | 1,050 | 17,386,708 | 17,387,758 |
Partners' Capital Account, Units at Dec. 31, 2013 | 50 | 1,572,900 | |
Net Income (Loss) | 26,744 | -1,776,519 | -1,749,775 |
Partners' Capital Account, Redemptions | -12,799 | -12,799 | |
Partners' Capital Account, Units, Redeemed | -1,200 | 1,200 | |
Distributions to Partners | -26,744 | -2,647,663 | -2,674,407 |
Partners' Capital at Dec. 31, 2014 | $1,050 | $12,949,727 | $12,950,777 |
Partners' Capital Account, Units at Dec. 31, 2014 | 50 | 1,571,700 |
Statements_of_Cash_Flow
Statements of Cash Flow (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | |||
Statements of Cash Flows | ||||
Net Income (Loss) | ($1,749,775) | ($952,815) | ||
Adjustments to reconcile net loss to net cash provided by operating activities | ||||
Depreciation and amortization | 6,735,402 | 5,002,422 | ||
Amortization of initial direct costs | 5,435 | 2,230 | ||
Loss (Gain) on sale of investment in finance leases | 68,551 | |||
Loss on sale of equipment | 197,233 | 55,992 | ||
Lease revenue net of interest expense, on notes payable, realized as a result of direct payment of principal to bank by lessee | -1,707,343 | -392,975 | ||
Earned interest on finance leases | -20,286 | -10,591 | ||
Lease income receivable | -298,103 | -22,366 | ||
Accounts receivable, Commonwealth Capital Corp., net | -200,790 | -191,586 | ||
Other receivables | 109,055 | -104,922 | ||
Prepaid expenses | -4,788 | -903 | ||
Accounts payable | 36,791 | 15,328 | ||
Accounts payable, Other Affiliates, net | -63,072 | [1] | -54,973 | [1] |
Other accrued expenses | -369,448 | -19,559 | ||
Unearned lease income | 60,388 | -55,794 | ||
Net cash provided by operating activities | 2,730,699 | 3,338,039 | ||
Capital Expenditures | -1,782,948 | -4,849,617 | ||
Purchase of finance leases | -462,529 | -99,099 | ||
Payments from finance leases | 86,028 | 5,116 | ||
Equipment acquisition fees, General Partner | -140,512 | -121,035 | ||
Net proceeds from the sale of finance leases | 338,078 | |||
Net proceeds from the sale of computer equipment | 184,150 | 264,864 | ||
Net cash (used in) investing activities | -2,115,811 | -4,461,693 | ||
Net cash used in financing activities | ||||
Redemptions | -12,799 | |||
Distributions to Partners | -2,674,407 | -2,675,025 | ||
Debt placement fees paid to General Partner | -37,708 | -13,919 | ||
Net cash (used in) provided by financing activities | -2,724,914 | -2,688,944 | ||
Net (decrease) increase in cash and cash equivalents | -2,110,026 | -3,812,598 | ||
Cash and cash equivalents beginning of period | 5,287,349 | 9,099,947 | ||
Cash and cash equivalents end of period | $3,177,323 | $5,287,349 | ||
[1] | Payable to CIGF, Inc. |
Business
Business | 12 Months Ended |
Dec. 31, 2014 | |
Notes | |
Business | 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, 2014, limited partners redeemed 1,200 units of partnership interest for a total redemption price of approximately $13,000 in accordance with the terms of the Partnership’s Limited Partnership Agreement (the “Agreement”) respectively. For the year ended December 31, 2013, there were no limited partnership units redeemed. | |
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 Investment Program Association (IPA), REISA, Financial Planning Association (FPA), and the Equipment Leasing and Finance Association (ELFA). Approximately ten years after the commencement of operations, the Partnership intends to sell or otherwise dispose of all of its equipment, make final distributions to partners, and to dissolve. Unless sooner terminated or extended pursuant to the terms of its Limited Partnership Agreement (the “Agreement”), the Partnership will continue until December 31, 2021. | |
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, 2014 and 2013, cash distributions to limited partners for each quarter were made at a rate of approximately 8.5% of their original contributed capital. Distributions during each of the years ended December 31, 2014 and 2013 were made to limited partners in the amount of approximately $1.68 per unit based on each investor's number of limited partnership units outstanding during the year. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
Notes | |||||||||||||||
Summary of Significant Accounting Policies | 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, 2014 and 2013. Fair Value Measurements on a nonrecurring basis as of December 31, 2014 and 2013 are as follows: | |||||||||||||||
Fair Value as of December 31, 2014 | Fair Value Measurements Using Fair Value Hierarchy | ||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||
Assets | |||||||||||||||
Equipment | $ | 1,025,000 | $ | - | $ | 1,025,000 | $ | - | |||||||
Fair Value as of December 31, 2013 | Fair Value Measurements Using Fair Value Hierarchy | ||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||
Assets | |||||||||||||||
Equipment | $ | 137,000 | $ | - | $ | 137,000 | $ | - | |||||||
Equipment is measured at fair value on a non-recurring basis in conjunction with the Partnership's impairment analysis. An impairment charge of approximately $503,000 and $91,000 was recorded for equipment written down to fair value in 2014 and 2013, respectively, as a component of depreciation expense in the accompanying statements of operations. The fair value of equipment was calculated using a market approach for 2014 and 2013. The market approach utilized third party appraisals or comparable sales of similar assets which are inputs classified as level 2 within the fair value hierarchy. | |||||||||||||||
Fair Value disclosures of financial instruments not recorded at fair value on the balance sheet | |||||||||||||||
Estimated fair value was determined by management using available market information and appropriate valuation methodologies. However, judgment was necessary to interpret market data and develop estimated fair value. Cash, receivables, accounts payable and accrued expenses and other liabilities are carried at amounts which reasonably approximate their fair values as of December 31, 2013 and 2012 due to the immediate or short-term nature of these financial instruments. | |||||||||||||||
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, receivables, accounts payable and accrued expenses and other liabilities are carried at amounts which reasonably approximate their fair values as of December 31, 2014 and 2013 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, 2014 and 2013 approximates the carrying value of these instruments, due to the interest rates on this debt approximating current market values. The Partnership classifies the fair value of its notes payable within Level 2 of the valuation hierarchy based on the observable inputs used to estimate fair value. | |||||||||||||||
Revenue Recognition | |||||||||||||||
For the year ended December 31, 2014, the Partnership’s lease portfolio consisted of operating leases and finance leases. For operating leases, lease revenue is recognized on a straight-line basis in accordance with the terms of the lease agreement. | |||||||||||||||
Finance lease interest income is recorded over the term of the lease using the effective interest method. For finance leases, we record, at lease inception, unearned finance lease income which is calculated as follows: total lease payments, plus any residual value and initial direct costs, less the cost of the leased equipment. | |||||||||||||||
Upon the end of the lease term, if the lessee has not met the return conditions as set out in the lease, the Partnership is entitled in certain cases to additional compensation from the lessee. The Partnership’s accounting policy for recording such payments is to treat them as revenue. | |||||||||||||||
Gains or losses from sales of leased and off-lease equipment are recorded on a net basis in the Partnership’s Statement of Operations. | |||||||||||||||
Gains from the termination of leases are recognized when the lease is modified and terminated concurrently. Gains from lease termination included in lease revenue for the years ended December 31, 2014 and 2013 were approximately $228,000 and $130,000, respectively. | |||||||||||||||
Our leases do not contain any step-rent provisions or escalation clauses nor are lease revenues adjusted based on any index. | |||||||||||||||
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. An impairment charge of approximately $503,000 and $91,000 was recorded for equipment written down to fair value in 2014 and 2013, respectively, as a component of depreciation expense in the accompanying statements of operations. | |||||||||||||||
Residual values are determined by management and are calculated using information from both internal and external sources, as well as other economic indicators. | |||||||||||||||
Reimbursable Expenses | |||||||||||||||
Reimbursable expenses are comprised of both ongoing operational expenses and fees associated with the allocation of salaries and benefits, referred to as other LP expenses. Reimbursable expenses, which are charged to us by CCC in connection with our administration and operation, are allocated to us based upon several factors including, but not limited to, the number of investors, compliance issues, and the number of existing leases. For example, if one partnership has more investors than another program sponsored by CCC, then higher amounts of expenses related to investor services, 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 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 us or to other sponsored programs. Reimbursable expenses are expensed as they are incurred or monthly in relation to fees for other LP expenses. | |||||||||||||||
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 | |||||||||||||||
We consider cash and cash equivalents to be cash on hand and highly liquid investments with the original maturity dates of 90 days or less. | |||||||||||||||
At December 31, 2014, cash was held in two bank accounts maintained at one financial institution with an aggregate balance of approximately $3,188,000. Bank accounts are federally insured up to $250,000 by the FDIC. At December 31, 2014 and 2013, the total cash bank balance was as follows: | |||||||||||||||
Balance at December 31 | 2014 | 2013 | |||||||||||||
Total bank balance | $ | 3,188,000 | $ | 5,296,000 | |||||||||||
FDIC insured | -250,000 | -250,000 | |||||||||||||
Uninsured amount | $ | 2,938,000 | $ | 5,046,000 | |||||||||||
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 our accounts, and believes it is not exposed to any significant credit risk. The amounts in such accounts will fluctuate throughout 2015 due to many factors, including the pace of cash receipts, equipment acquisitions and distributions to limited partners. | |||||||||||||||
Income Taxes | |||||||||||||||
Pursuant to the provisions of Section 701 of the Internal Revenue Code, the Partnership is not subject to federal income taxes. All income and losses of the Partnership are the liability of the individual partners and are allocated to the partners for inclusion in their individual tax returns. The Partnership does not have any entity-level uncertain tax positions. In addition, the Partnership believes its tax status as a pass-through entity would be sustained under U.S. Federal, state or local tax examination. The Partnership files U.S. federal and various state income tax returns and is generally subject to examination by federal, state and local income tax authorities for three years from the filing of a tax return. | |||||||||||||||
Taxable income differs from financial statement net income as a result of reporting certain income and expense items for tax purposes in periods other than those used for financial statement purposes, principally relating to depreciation, amortization, and lease revenue. | |||||||||||||||
Net (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 period. | |||||||||||||||
Recent Accounting Pronouncements | |||||||||||||||
In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, requires management to determine whether substantial doubt exists regarding the entity’s going concern presumption. If substantial doubt exists but is not alleviated by management’s plans, the footnotes must specifically state that “there is substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued.” In addition, if substantial doubt exists, regardless of whether such doubt was alleviated, entities must disclose (a) principal conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern (before consideration of management’s plans, if any); (b) management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations; and (c) management’s plans that are intended to mitigate the conditions or events that raise substantial doubt, or that did alleviate substantial doubt, about the entity’s ability to continue as a going concern. If substantial doubt has not been alleviated, these disclosures should become more extensive in subsequent reporting periods as additional information becomes available. In the period that substantial doubt no longer exists (before or after considering management’s plans), management should disclose how the principal conditions and events that originally gave rise to substantial doubt have been resolved. The ASU applies prospectively to all entities for annual periods ending after December 15, 2016, and to annual and interim periods thereafter. Early adoption is permitted. The Partnership is currently evaluating the effect that this ASU will have on its financial statements. | |||||||||||||||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Partnership is currently evaluating the effect that this ASU will have on its financial statements. | |||||||||||||||
In April 2014, the FASB issued ASU No. 2014-08 (“ASU Updated 2014-08”), Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASU provides guidance on the change in criteria established to enhance the presentation of reporting discontinued operations. The guidance is effective for annual financial statements beginning on or after December 15, 2014 that report discontinued operations or disposals of components of an entity. The Partnership is currently evaluating the effect that this ASU will have on its financial statements. | |||||||||||||||
In March 2014, the FASB issued ASU No. 2014-06 (“ASU Updated 2014-06”), Technical Corrections and Improvements Related to Glossary Terms. This ASU provides updates to the FASB Accounting Standards Codification established in September 2009 as the source of authoritative U.S. GAAP recognized by the FASB. The update is effectively immediately upon issuance. The Partnership adopted this ASU during the first quarter of 2014 and there was no material impact on its financial statements. |
Capital_Equipment
Capital Equipment | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Notes | |||||
Capital Equipment | 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 recorded an impairment charge of approximately $503,000 and $91,000 at December 31, 2014 and 2013 respectively, as impairment indicators were noted, and is included in depreciation expense in the accompanying financial statements. | |||||
In December 2014, a significant lessee, ALSC, breached its Master Lease Agreement ("MLA") scheduled to terminate in December 2015 and defaulted on its lease payments for equipment shared by the Partnership and other affiliated Funds. On December 4, 2014, ALSC filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. On April 2, 2015, CCC, on behalf of the Funds, entered into a settlement agreement with the parent company of ALSC for $3,500,000. The Partnership's share of this settlement is approximately $1,051,000 of which $848,000 will be recorded as a gain on termination of leases in 2015. In addition, the Bankruptcy Court ordered the release of all equipment leased to ALSC under the MLA to the Partnerships. In January 2015, CCC, on behalf of the Funds, entered into a Purchase Agreement ("Purchase Agreement") for the sale of the equipment to Medshare Technologies for approximately $3,400,000. The Partnership's share of the sales proceeds is approximately $1,025,000. | |||||
Remarketing fees will be paid to the leasing companies from which the Partnership purchases leases. These are fees that are earned by the leasing companies when the initial terms of the lease have been met. The General Partner believes that this strategy adds value since it entices the leasing company to remain actively involved with the lessee and encourages extensions, remarketing or sale of equipment. This strategy is designed to minimize any conflicts the leasing company may have with a new lessee and may assist in maximizing overall portfolio performance. The remarketing fee is tied into lease performance thresholds and is a factor in the negotiation of the fee. Remarketing fees incurred in connection with lease extensions are accounted for as operating costs. Remarketing fees incurred in connection with the sale of equipment are included in the gain or loss calculations. For the year ended December 31, 2014, no remarketing fees were incurred or paid. For the year ended December 31, 2013, approximately $3,000 of remarketing fees was incurred and approximately $5,000 of remarketing fees were paid with cash or netted against receivables due from such parties. | |||||
CCC, on behalf of the Partnership and on behalf of other affiliated partnerships, acquires equipment subject to associated debt obligations and lease agreements and allocates a participation in the cost, debt and lease revenue to the various partnerships based on certain risk factors. | |||||
The Partnership’s share of the cost of the equipment in which it participates with other partnerships at December 31, 2014 was approximately $8,928,000 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, 2014 was approximately $1,799,000 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, 2014 was approximately $21,421,000. The total outstanding debt related to the equipment shared by the Partnership at December 31, 2014 was approximately $3,928,000. | |||||
The Partnership’s share of the cost of the equipment in which it participates with other partnerships at December 31, 2013 was approximately $7,621,000 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, 2013 was approximately $805,000 and is included in the Partnership’s notes payable on its balance sheet. The total cost of the equipment shared by the Partnership with other partnerships at December 31, 2013 was approximately $18,806,000. The total outstanding debt related to the equipment shared by the Partnership at December 31, 2013 was approximately $1,844,000. | |||||
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. Thus, total shared equipment and related debt should continue to trend higher in fiscal 2015, as the Partnership builds its portfolio. | |||||
The following is a schedule of future minimum rentals on non-cancellable operating leases at December 31, 2014: | |||||
Amount | |||||
Year ending December 31, 2015 | $ | 5,424,000 | |||
Year ending December 31, 2016 | 2,309,000 | ||||
Year ending December 31, 2017 | 575,000 | ||||
Year ending December 31, 2018 | 3,000 | ||||
$ | 8,311,000 |
Finance_Leases
Finance Leases | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes | |||||||||
Finance Leases | Finance Leases: | ||||||||
The following lists the components of the net investment in finance leases at December 31, 2014 and 2013: | |||||||||
December 31, | 2014 | 2013 | |||||||
Total minimum lease payments to be received | $ | 484,000 | $ | 99,000 | |||||
Estimated residual value of leased equipment (unguaranteed) | 62,000 | 12,000 | |||||||
Initial direct costs finance leases | 17,000 | 4,000 | |||||||
Less: unearned income | -54,000 | -16,000 | |||||||
Net investment in finance leases | $ | 509,000 | $ | 99,000 | |||||
Our finance lease customers operate in various industries, and we have no significant customer concentration in any one industry. We assess credit risk for all of our customers, including those that lease under finance leases. This credit risk is assessed using an internally developed model which incorporates credits scores from third party providers and our own customer risk ratings and is periodically reviewed. Our internal ratings are weighted based on the industry that the customer operates in. Factors taken into consideration when assessing risk includes both general and industry specific qualitative and quantitative metrics. We separately take in to consideration payment history, open lawsuits, liens and judgments. Typically, we will not extend credit to a company that has been in business for less than 5 years or that has filed for bankruptcy within the same period. Our internally based model may classify a company as high risk based on our analysis of their audited financial statements and their payment history. Additional considerations of high risk may include history of late payments, open lawsuits and liens or judgments. In an effort to mitigate risk, we typically require deposits from those in this category. | |||||||||
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, 2014: | |||||||||
Risk Level | Percent of Total | ||||||||
Low | - | % | |||||||
Moderate-Low | 40 | % | |||||||
Moderate | 60 | % | |||||||
Moderate-High | - | % | |||||||
High | - | % | |||||||
Net finance lease receivable | 100 | % | |||||||
As of the year ended December 31, 2014 we determined that we did not have a need for an allowance for uncollectible accounts associated with any of our finance leases, as the customer payment histories with us, associated with these leases, has been positive, with no late payments. | |||||||||
The Partnership’s share of the net investment in finance leases in which it participates with other companies at year end December 31, 2014 was approximately $215,000 and is included on its balance sheet. The total net investment in finance leases shared by the Partnership with other companies at year end December 31, 2014 was approximately $430,000. | |||||||||
The following is a schedule of future minimum rentals on non-cancelable finance leases at December 31, 2014: | |||||||||
Amount | |||||||||
Year ending December 31, 2015 | $ | 144,000 | |||||||
Year ending December 31, 2016 | 144,000 | ||||||||
Year ending December 31, 2017 | 138,000 | ||||||||
Year ending December 31, 2018 | 58,000 | ||||||||
$ | 484,000 | ||||||||
During June 2013, CCC, on behalf of the Partnership, negotiated a settlement with a significant lessee related to the buy-out of several operating and finance leases. The Partnership received consideration of approximately $358,000 as a result of the settlement. Through the settlement, the Partnership reduced its lease income receivable by approximately $20,000 during the year ended December 31, 2013. There was no consideration for the buyout of the equipment under operating leases, which resulted in a net loss on the sale of equipment that was subject to operating leases of approximately $12,000 during the year ended December 31, 2013. As consideration for the buyout of its finance leases, the Partnership applied payments from the lessee of approximately $338,000 which resulted in a decrease in the net investment in finance receivables of approximately $407,000 and a loss of approximately $69,000 during the year ended December 31, 2013. |
Significant_Customers
Significant Customers | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes | |||||||||
Significant Customers | Significant Customers | ||||||||
Lessees equal to or exceeding 10% of lease revenue for the year ended December 31: | |||||||||
2014 | 2013 | ||||||||
Cummins, Inc. | 26% | 21% | |||||||
American Laser Skin Care | 16% | 19% | |||||||
Aetna Life Insurance | 14% | 16% | |||||||
Lessees equal to or exceeding 10% of lease income receivable at December 31: | |||||||||
2014 | 2013 | ||||||||
American Laser Skin Care | 50% | - | |||||||
Cargill, Inc. | 11% | - | |||||||
Alliant Techsystems | 13% | - | |||||||
Cummins, Inc. | - | 24% | |||||||
HealthCare Services Corp. | - | 21% | |||||||
Aircom International Inc. | - | 17% |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Notes | |||||||||||||||||
Related Party Transactions | Related Party Transactions | ||||||||||||||||
Receivables/Payables | |||||||||||||||||
As of December 31, 2014, the Partnership’s related party payables are short term, unsecured, and non-interest bearing. | |||||||||||||||||
For the year ended | For the year ended | ||||||||||||||||
31-Dec-14 | 31-Dec-13 | ||||||||||||||||
Reimbursable Expenses | |||||||||||||||||
Reimbursable expenses, which are charged to the Partnership by CCC in connection with the administration and operation of the Partnership, are allocated to the Partnership based upon several factors including, but not limited to, the number of investors, compliance issues, and the number of existing leases. For the years ended December 31, 2014 and 2013, the Partnership was charged approximately $717,000 and $629,000 in other LP expense, respectively. | $ | 1,201,000 | $ | 1,128,000 | |||||||||||||
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. At December 31, 2014, the remaining balance of prepaid acquisition fees was approximately $162,000, which is expected to be earned in future periods. As of December 31, 2014, equipment acquisition fees earned for operating and finance leases was approximately $184,000 and $18,000, respectively. | $ | 202,000 | $ | 302,000 | |||||||||||||
Debt placement fee | |||||||||||||||||
As compensation for arranging term debt to finance our acquisition of equipment, we will pay the general partner a fee equal to one percent of such indebtedness; provided, however, that such fee shall be reduced to the extent we incur such fees to third parties unaffiliated with the general partner 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. We intend to initially acquire leases on an all cash basis with the proceeds of this offering, but may borrow funds after the offering proceeds have been invested. The amount we borrow, and therefore the amount of the fee, will depend upon interest rates at the time of a loan, and the amount of leverage we determine is appropriate at the time. We do not intend to use more than 30% leverage overall in our portfolio. Fees will increase as the amount of leverage we use increases, and as turnover in the portfolio increases and additional equipment is purchased using leverage. | $ | 38,000 | $ | 14,000 | |||||||||||||
Equipment management fee | |||||||||||||||||
We pay 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. Our 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 we manage, which in turn will depend upon the amount we raise in this offering. Reductions in market rates for similar services would also reduce the amount of this fee we will receive. | $ | 344,000 | $ | 283,000 | |||||||||||||
Equipment liquidation fee | |||||||||||||||||
Also referred to as a "resale fee." With respect to each item of equipment sold by the general partner, we 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. Our 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 our leases, the more often we may sell equipment, which will increase liquidation fees we will potentially receive. | $ | 6,000 | $ | 8,000 | |||||||||||||
Notes_Payable
Notes Payable | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes | |||||||||
Notes Payable | Notes Payable | ||||||||
Notes payable consisted of the following approximate amounts: | |||||||||
December 31, | 2014 | 2013 | |||||||
Installment note payable to bank; interest at 3.95% due in quarterly installments of $30,765, including interest, with final payment in January 2014 | $ | - | $ | 30,000 | |||||
Installment note payable to bank; interest at 3.95% due in quarterly installments of $29,481, including interest, with final payment in September 2014 | - | 87,000 | |||||||
Installment note payable to bank; interest at 3.95% due in quarterly installments of $8,998, including interest, with final payment in November 2014 | - | 35,000 | |||||||
Installment note payable to bank; interest at 4.23% due in quarterly installments of $10,311, including interest, with final payment in September 2015 | 30,000 | 69,000 | |||||||
Installment note payable to bank; interest at 3.68% due in monthly installments of $17,828, including interest, with final payment in November 2015 | 192,000 | - | |||||||
Installment note payable to bank; interest at 3.68% due in monthly installments of $16,526, including interest; with final payment in February 2016 | 226,000 | - | |||||||
Installment note payable to bank; interest at 4.23% due in quarterly installments of $24,780, including interest, with final payment in May 2016 | 143,000 | 234,000 | |||||||
Installment note payable to bank; interest at 4.23% due in quarterly installments of $11,329, including interest, with final payment in June 2016 | 65,000 | 107,000 | |||||||
Installment notes payable to bank; interest at 4.23% due in quarterly installments ranging from $14,427 to $19,170, including interest, with final payment in July 2016 | 226,000 | 383,000 | |||||||
Installment note payable to bank; interest at 4.23% due in quarterly installments of $25,798, including interest, with final payment in August 2016 | 173,000 | 294,000 | |||||||
Installment note payable to bank; interest at 4.85% due in quarterly installments of $47,859, including interest, with final payment in August 2016 | 319,000 | - | |||||||
Installment note payable to bank; interest at 4.23% due in quarterly installments of $26,817, including interest, with final payment in September 2016 | 180,000 | 304,000 | |||||||
Installment note payable to bank; interest at 4.23% due in quarterly installments of $22,434, including interest; with final payment due in December 2016 | 171,000 | - | |||||||
Installment note payable to bank; interest at 4.85% due in monthly installments of $6,284, including interest; with final payment due in December 2016 | 143,000 | - | |||||||
Installment note payable to bank; interest at 4.23% due in quarterly installments of $5,376, including interest; with final payment in February 2017 | 46,000 | - | |||||||
Installment notes payable to bank; interest at 4.23% due in quarterly installments ranging from $320 to $958, including interest, with final payment in May 2017 | 15,000 | - | |||||||
Installment note payable to bank; interest at 1.60% due in monthly installments of $8,154, including interest; with final payment in June 2017 | 240,000 | - | |||||||
Installment note payable to bank; interest at 1.60% due in monthly installments of $4,340, including interest, with final payment in July 2017 | 132,000 | - | |||||||
Installment notes payable to bank; interest at 4.85% due in quarterly installments ranging from $23,447 to $25,788, including interest, with final payment in July 2017 | 558,000 | - | |||||||
Installment notes payable to bank; interest at 4.23% due in quarterly installments ranging from $284 to $55,093, including interest, with final payment in July 2017 | 548,000 | - | |||||||
Installment note payable to bank; interest at 4.23% due in quarterly installments of $610, including interest, with final payment in August 2017 | 7,000 | - | |||||||
Installment note payable to bank; interest at 4.85% due in monthly installments of $3,790, including interest, with final payment in August 2017 | 114,000 | - | |||||||
Installment note payable to bank; interest at 4.85% due in monthly installments of $2,318, including interest; with final payment in December 2017 | 78,000 | - | |||||||
$ | 3,606,000 | $ | 1,543,000 | ||||||
The notes are secured by specific technology equipment with a carrying value of approximately $5,061,000 and are nonrecourse liabilities of the Partnership. As such, the notes do not contain any financial debt covenants with which we must comply on either an annual or quarterly basis. Aggregate maturities of notes payable for each of the periods subsequent to December 31, 2014 are as follows: | |||||||||
Amount | |||||||||
Year ending December 31, 2015 | $ | 1,893,000 | |||||||
Year ending December 31, 2016 | 1,308,000 | ||||||||
Year ending December 31, 2017 | 405,000 | ||||||||
$ | 3,606,000 |
Supplemental_Cash_Flow_Informa
Supplemental Cash Flow Information | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes | |||||||||
Supplemental Cash Flow Information | Supplemental Cash Flow Information | ||||||||
Noncash investing and financing activities include the following: | |||||||||
Year ended December 31, | 2014 | 2013 | |||||||
Debt assumed in connection with purchase of technology equipment | $ | 2,812,000 | $ | 1,392,000 | |||||
Debt assumed and satisfaction of accrued expenses in 2014 in connection with acquisition of equipment in 2013 | $ | 959,000 | $ | - | |||||
Equipment acquisition fees earned by General Partner upon purchase of equipment from prepaid acquisition fees | $ | 62,000 | $ | 185,000 | |||||
Accrued expenses incurred in connection with the purchase of technology | |||||||||
equipment | $ | - | $ | 1,315,000 | |||||
During the years ended December 31, 2014 and 2013, the Partnership wrote off fully amortized acquisition and finance fees of approximately $230,000 and $108,000, respectively. | |||||||||
During the year ended December 31, 2013, the Partnership wrote-off credit losses against the net investment in finance leases of approximately $32,000. During the year ended December 31, 2014, there were no credit loss write-offs. | |||||||||
During the years ended December 31, 2014 and 2013, the Partnership wrote off fully depreciated equipment of approximately $46,000 and $0, respectively. | |||||||||
During the years ended December 31, 2014 and 2013, the Partnership recorded impairment charges of approximately $503,000 and $91,000, respectively. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2014 | |
Notes | |
Commitments and Contingencies | Commitments and Contingencies |
SEC Settlement | |
In August 2012, the staff of the U.S. Securities and Exchange Commission raised a question with Commonwealth Capital Corp. (“Commonwealth”), the sponsor of our funds, regarding the interpretation and application of the term “control person.” The term affected the scope of the reimbursement to Commonwealth of certain expenses incurred for the funds. The staff was concerned that some investors may not have understood the meaning and methodology used by the funds. Commonwealth worked with the staff to assure that our disclosure was clarified. Commonwealth Income and Growth Fund, Inc., the General Partner of the funds, entered into a settlement with the SEC in September 2013. On October 17, 2014, Commonwealth Capital Corp. received a letter from the Miami Regional Office of the SEC confirming that Commonwealth Income & Growth Fund, Inc. and Kimberly Springsteen-Abbott had satisfied in full the monetary provisions of the Settlement Order entered on September 27, 2013. The settlement had no impact on the financial position or results of operations of the Partnership. | |
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. 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. That 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 $208,000 of expenses involving certain Funds over the course of three years. Ms. Springsteen-Abbott intends to vigorously challenge the Panel's decision on appeal. Decisions issued by FINRA's Office of Hearing Officers may be appealed to FINRA's National Adjudicatory Council (NAC) pursuant to FINRA Rule 931. Under NASD Rule 1015, an applicant may file a written request for review of the membership decision with the NAC within 25 days after service of the decision. While a panel decision is on appeal, the sanction is not enforced against the individual. No adjustments were made to the 2014 financial statements with respect to the Fund's share of the allegedly misallocated expenses, pending the appeal. Management believes that resolution of the charge will not result in any material adverse financial impact on the Funds, but no assurance can be provided until the FINRA matter is resolved. For the year ended December 31, 2014, the Partnership recorded a gain of approximately $115,000 for an insurance recovery under the Partnership's Officers' and Directors' insurance policy related to legal fees incurred in connection with the FINRA matter. |
Reconciliation_of_Amounts_Repo
Reconciliation of Amounts Reported For Financial Reporting Purposes To Amounts On The Federal Partnership Return (unaudited) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes | |||||||||
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) | ||||||||
The tax bases of the Company’s net assets and liabilities vary from the amounts presented in these financial statements at December 31, 2014 and 2013 as follows: | |||||||||
2014 | 2013 | ||||||||
Financial statement basis of net assets | $ | 12,950,777 | $ | 17,387,758 | |||||
Tax basis of net assets (unaudited) | 8,150,834 | 14,837,741 | |||||||
Difference (unaudited) | $ | 4,799,943 | $ | 2,550,017 | |||||
The primary differences between the tax bases of net assets and the amounts recorded in the financial statements are the result of differences in accounting for syndication costs and differences between the depreciation methods used in the financial statements and the Company’s tax returns (unaudited). | |||||||||
For the Year Ended | For the Year Ended | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Net loss for financial reporting purposes to taxable loss | $ | -1,749,775 | $ | -952,815 | |||||
Adjustments | |||||||||
Gain on sale of equipment | 225,378 | 243,221 | |||||||
Depreciation | 1,157,621 | -2,743,214 | |||||||
Amortization | 227,273 | 201,334 | |||||||
Unearned lease income | 86,816 | -53,979 | |||||||
Penalties | 3,208 | 403 | |||||||
Other | -25,081 | -43,237 | |||||||
Taxable loss on the Federal Partnership return (unaudited) | $ | -74,560 | $ | -3,348,297 | |||||
The “Adjustments – Other” includes financial statement adjustments that will be reflected on the tax return in the subsequent year. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies: Use of Estimates (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Use of Estimates | 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. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies: Disclosure of Fair Value of Financial Instruments (Policies) | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
Policies | |||||||||||||||
Disclosure of Fair Value of Financial Instruments | 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, 2014 and 2013. Fair Value Measurements on a nonrecurring basis as of December 31, 2014 and 2013 are as follows: | |||||||||||||||
Fair Value as of December 31, 2014 | Fair Value Measurements Using Fair Value Hierarchy | ||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||
Assets | |||||||||||||||
Equipment | $ | 1,025,000 | $ | - | $ | 1,025,000 | $ | - | |||||||
Fair Value as of December 31, 2013 | Fair Value Measurements Using Fair Value Hierarchy | ||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||
Assets | |||||||||||||||
Equipment | $ | 137,000 | $ | - | $ | 137,000 | $ | - | |||||||
Equipment is measured at fair value on a non-recurring basis in conjunction with the Partnership's impairment analysis. An impairment charge of approximately $503,000 and $91,000 was recorded for equipment written down to fair value in 2014 and 2013, respectively, as a component of depreciation expense in the accompanying statements of operations. The fair value of equipment was calculated using a market approach for 2014 and 2013. The market approach utilized third party appraisals or comparable sales of similar assets which are inputs classified as level 2 within the fair value hierarchy. | |||||||||||||||
Fair Value disclosures of financial instruments not recorded at fair value on the balance sheet | |||||||||||||||
Estimated fair value was determined by management using available market information and appropriate valuation methodologies. However, judgment was necessary to interpret market data and develop estimated fair value. Cash, receivables, accounts payable and accrued expenses and other liabilities are carried at amounts which reasonably approximate their fair values as of December 31, 2013 and 2012 due to the immediate or short-term nature of these financial instruments. | |||||||||||||||
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, receivables, accounts payable and accrued expenses and other liabilities are carried at amounts which reasonably approximate their fair values as of December 31, 2014 and 2013 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, 2014 and 2013 approximates the carrying value of these instruments, due to the interest rates on this debt approximating current market values. The Partnership classifies the fair value of its notes payable within Level 2 of the valuation hierarchy based on the observable inputs used to estimate fair value. |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies: Revenue Recognition (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Revenue Recognition | Revenue Recognition |
For the year ended December 31, 2014, the Partnership’s lease portfolio consisted of operating leases and finance leases. For operating leases, lease revenue is recognized on a straight-line basis in accordance with the terms of the lease agreement. | |
Finance lease interest income is recorded over the term of the lease using the effective interest method. For finance leases, we record, at lease inception, unearned finance lease income which is calculated as follows: total lease payments, plus any residual value and initial direct costs, less the cost of the leased equipment. | |
Upon the end of the lease term, if the lessee has not met the return conditions as set out in the lease, the Partnership is entitled in certain cases to additional compensation from the lessee. The Partnership’s accounting policy for recording such payments is to treat them as revenue. | |
Gains or losses from sales of leased and off-lease equipment are recorded on a net basis in the Partnership’s Statement of Operations. | |
Gains from the termination of leases are recognized when the lease is modified and terminated concurrently. Gains from lease termination included in lease revenue for the years ended December 31, 2014 and 2013 were approximately $228,000 and $130,000, respectively. | |
Our leases do not contain any step-rent provisions or escalation clauses nor are lease revenues adjusted based on any index. |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies: Other Assets (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Other Assets | 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. |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies: Long-lived Assets (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Long-lived Assets | 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. An impairment charge of approximately $503,000 and $91,000 was recorded for equipment written down to fair value in 2014 and 2013, respectively, as a component of depreciation expense in the accompanying statements of operations. | |
Residual values are determined by management and are calculated using information from both internal and external sources, as well as other economic indicators. |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies: Reimbursable Expenses (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Reimbursable Expenses | 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 us by CCC in connection with our administration and operation, are allocated to us based upon several factors including, but not limited to, the number of investors, compliance issues, and the number of existing leases. For example, if one partnership has more investors than another program sponsored by CCC, then higher amounts of expenses related to investor services, 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 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 us or to other sponsored programs. Reimbursable expenses are expensed as they are incurred or monthly in relation to fees for other LP expenses. |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies: Lease Income Receivable (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Lease Income Receivable | 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. |
Summary_of_Significant_Account8
Summary of Significant Accounting Policies: Cash and Cash Equivalents (Policies) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Policies | |||||||||
Cash and Cash Equivalents | Cash and cash equivalents | ||||||||
We consider cash and cash equivalents to be cash on hand and highly liquid investments with the original maturity dates of 90 days or less. | |||||||||
At December 31, 2014, cash was held in two bank accounts maintained at one financial institution with an aggregate balance of approximately $3,188,000. Bank accounts are federally insured up to $250,000 by the FDIC. At December 31, 2014 and 2013, the total cash bank balance was as follows: | |||||||||
Balance at December 31 | 2014 | 2013 | |||||||
Total bank balance | $ | 3,188,000 | $ | 5,296,000 | |||||
FDIC insured | -250,000 | -250,000 | |||||||
Uninsured amount | $ | 2,938,000 | $ | 5,046,000 | |||||
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 our accounts, and believes it is not exposed to any significant credit risk. The amounts in such accounts will fluctuate throughout 2015 due to many factors, including the pace of cash receipts, equipment acquisitions and distributions to limited partners. |
Summary_of_Significant_Account9
Summary of Significant Accounting Policies: Income Taxes (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Income Taxes | Income Taxes |
Pursuant to the provisions of Section 701 of the Internal Revenue Code, the Partnership is not subject to federal income taxes. All income and losses of the Partnership are the liability of the individual partners and are allocated to the partners for inclusion in their individual tax returns. The Partnership does not have any entity-level uncertain tax positions. In addition, the Partnership believes its tax status as a pass-through entity would be sustained under U.S. Federal, state or local tax examination. The Partnership files U.S. federal and various state income tax returns and is generally subject to examination by federal, state and local income tax authorities for three years from the filing of a tax return. | |
Taxable income differs from financial statement net income as a result of reporting certain income and expense items for tax purposes in periods other than those used for financial statement purposes, principally relating to depreciation, amortization, and lease revenue. |
Recovered_Sheet1
Summary of Significant Accounting Policies: Net Loss Per Equivalent Limited Partnership Unit (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Net Loss Per Equivalent Limited Partnership Unit | 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 period. |
Recovered_Sheet2
Summary of Significant Accounting Policies: Recent Accounting Pronouncements (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, requires management to determine whether substantial doubt exists regarding the entity’s going concern presumption. If substantial doubt exists but is not alleviated by management’s plans, the footnotes must specifically state that “there is substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued.” In addition, if substantial doubt exists, regardless of whether such doubt was alleviated, entities must disclose (a) principal conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern (before consideration of management’s plans, if any); (b) management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations; and (c) management’s plans that are intended to mitigate the conditions or events that raise substantial doubt, or that did alleviate substantial doubt, about the entity’s ability to continue as a going concern. If substantial doubt has not been alleviated, these disclosures should become more extensive in subsequent reporting periods as additional information becomes available. In the period that substantial doubt no longer exists (before or after considering management’s plans), management should disclose how the principal conditions and events that originally gave rise to substantial doubt have been resolved. The ASU applies prospectively to all entities for annual periods ending after December 15, 2016, and to annual and interim periods thereafter. Early adoption is permitted. The Partnership is currently evaluating the effect that this ASU will have on its financial statements. | |
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Partnership is currently evaluating the effect that this ASU will have on its financial statements. | |
In April 2014, the FASB issued ASU No. 2014-08 (“ASU Updated 2014-08”), Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASU provides guidance on the change in criteria established to enhance the presentation of reporting discontinued operations. The guidance is effective for annual financial statements beginning on or after December 15, 2014 that report discontinued operations or disposals of components of an entity. The Partnership is currently evaluating the effect that this ASU will have on its financial statements. | |
In March 2014, the FASB issued ASU No. 2014-06 (“ASU Updated 2014-06”), Technical Corrections and Improvements Related to Glossary Terms. This ASU provides updates to the FASB Accounting Standards Codification established in September 2009 as the source of authoritative U.S. GAAP recognized by the FASB. The update is effectively immediately upon issuance. The Partnership adopted this ASU during the first quarter of 2014 and there was no material impact on its financial statements. |
Recovered_Sheet3
Summary of Significant Accounting Policies: Disclosure of Fair Value of Financial Instruments: Fair Value Measurements, Recurring and Nonrecurring (Tables) | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
Tables/Schedules | |||||||||||||||
Fair Value Measurements, Recurring and Nonrecurring | There were no assets or liabilities measured at fair value on a recurring basis at December 31, 2014 and 2013. Fair Value Measurements on a nonrecurring basis as of December 31, 2014 and 2013 are as follows: | ||||||||||||||
Fair Value as of December 31, 2014 | Fair Value Measurements Using Fair Value Hierarchy | ||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||
Assets | |||||||||||||||
Equipment | $ | 1,025,000 | $ | - | $ | 1,025,000 | $ | - | |||||||
Fair Value as of December 31, 2013 | Fair Value Measurements Using Fair Value Hierarchy | ||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||
Assets | |||||||||||||||
Equipment | $ | 137,000 | $ | - | $ | 137,000 | $ | - | |||||||
Recovered_Sheet4
Summary of Significant Accounting Policies: Cash and Cash Equivalents: Schedule of Cash and Cash Equivalents (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Tables/Schedules | |||||||||
Schedule of Cash and Cash Equivalents | |||||||||
Balance at December 31 | 2014 | 2013 | |||||||
Total bank balance | $ | 3,188,000 | $ | 5,296,000 | |||||
FDIC insured | -250,000 | -250,000 | |||||||
Uninsured amount | $ | 2,938,000 | $ | 5,046,000 |
Capital_Equipment_Schedule_of_
Capital Equipment: Schedule of future minimum rentals on non-cancelable leases (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Tables/Schedules | |||||
Schedule of future minimum rentals on non-cancelable leases | |||||
Amount | |||||
Year ending December 31, 2015 | $ | 5,424,000 | |||
Year ending December 31, 2016 | 2,309,000 | ||||
Year ending December 31, 2017 | 575,000 | ||||
Year ending December 31, 2018 | 3,000 | ||||
$ | 8,311,000 |
Finance_Leases_Schedule_of_net
Finance Leases: Schedule of net investment in direct financing leases (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Tables/Schedules | |||||||||
Schedule of net investment in direct financing leases | |||||||||
December 31, | 2014 | 2013 | |||||||
Total minimum lease payments to be received | $ | 484,000 | $ | 99,000 | |||||
Estimated residual value of leased equipment (unguaranteed) | 62,000 | 12,000 | |||||||
Initial direct costs finance leases | 17,000 | 4,000 | |||||||
Less: unearned income | -54,000 | -16,000 | |||||||
Net investment in finance leases | $ | 509,000 | $ | 99,000 |
Finance_Leases_Schedule_of_Fin
Finance Leases: Schedule of Finance Lease Risk Level (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Tables/Schedules | |||||
Schedule of Finance Lease Risk Level | |||||
Risk Level | Percent of Total | ||||
Low | - | % | |||
Moderate-Low | 40 | % | |||
Moderate | 60 | % | |||
Moderate-High | - | % | |||
High | - | % | |||
Net finance lease receivable | 100 | % |
Finance_Leases_Schedule_of_fut
Finance Leases: Schedule of future minimum rentals on non-cancellable finance leases (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Tables/Schedules | |||||
Schedule of future minimum rentals on non-cancellable finance leases | |||||
Amount | |||||
Year ending December 31, 2015 | $ | 144,000 | |||
Year ending December 31, 2016 | 144,000 | ||||
Year ending December 31, 2017 | 138,000 | ||||
Year ending December 31, 2018 | 58,000 | ||||
$ | 484,000 |
Significant_Customers_Schedule
Significant Customers: Schedule of Lessees equal to or exceeding 10% of lease revenue (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Tables/Schedules | |||||||||
Schedule of Lessees equal to or exceeding 10% of lease revenue | |||||||||
2014 | 2013 | ||||||||
Cummins, Inc. | 26% | 21% | |||||||
American Laser Skin Care | 16% | 19% | |||||||
Aetna Life Insurance | 14% | 16% |
Significant_Customers_Schedule1
Significant Customers: Schedule of Lessees equal to or exceeding 10% of lease income receivable (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Tables/Schedules | |||||||||
Schedule of Lessees equal to or exceeding 10% of lease income receivable | |||||||||
2014 | 2013 | ||||||||
American Laser Skin Care | 50% | - | |||||||
Cargill, Inc. | 11% | - | |||||||
Alliant Techsystems | 13% | - | |||||||
Cummins, Inc. | - | 24% | |||||||
HealthCare Services Corp. | - | 21% | |||||||
Aircom International Inc. | - | 17% |
Related_Party_Transactions_Sch
Related Party Transactions: Schedule of Related Party Transactions (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Tables/Schedules | |||||||||||||||||
Schedule of Related Party Transactions | |||||||||||||||||
For the year ended | For the year ended | ||||||||||||||||
31-Dec-14 | 31-Dec-13 | ||||||||||||||||
Reimbursable Expenses | |||||||||||||||||
Reimbursable expenses, which are charged to the Partnership by CCC in connection with the administration and operation of the Partnership, are allocated to the Partnership based upon several factors including, but not limited to, the number of investors, compliance issues, and the number of existing leases. For the years ended December 31, 2014 and 2013, the Partnership was charged approximately $717,000 and $629,000 in other LP expense, respectively. | $ | 1,201,000 | $ | 1,128,000 | |||||||||||||
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. At December 31, 2014, the remaining balance of prepaid acquisition fees was approximately $162,000, which is expected to be earned in future periods. As of December 31, 2014, equipment acquisition fees earned for operating and finance leases was approximately $184,000 and $18,000, respectively. | $ | 202,000 | $ | 302,000 | |||||||||||||
Debt placement fee | |||||||||||||||||
As compensation for arranging term debt to finance our acquisition of equipment, we will pay the general partner a fee equal to one percent of such indebtedness; provided, however, that such fee shall be reduced to the extent we incur such fees to third parties unaffiliated with the general partner 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. We intend to initially acquire leases on an all cash basis with the proceeds of this offering, but may borrow funds after the offering proceeds have been invested. The amount we borrow, and therefore the amount of the fee, will depend upon interest rates at the time of a loan, and the amount of leverage we determine is appropriate at the time. We do not intend to use more than 30% leverage overall in our portfolio. Fees will increase as the amount of leverage we use increases, and as turnover in the portfolio increases and additional equipment is purchased using leverage. | $ | 38,000 | $ | 14,000 | |||||||||||||
Equipment management fee | |||||||||||||||||
We pay 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. Our 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 we manage, which in turn will depend upon the amount we raise in this offering. Reductions in market rates for similar services would also reduce the amount of this fee we will receive. | $ | 344,000 | $ | 283,000 | |||||||||||||
Equipment liquidation fee | |||||||||||||||||
Also referred to as a "resale fee." With respect to each item of equipment sold by the general partner, we 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. Our 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 our leases, the more often we may sell equipment, which will increase liquidation fees we will potentially receive. | $ | 6,000 | $ | 8,000 | |||||||||||||
Notes_Payable_Schedule_of_Note
Notes Payable: Schedule of Notes Payable (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Tables/Schedules | |||||||||
Schedule of Notes Payable | |||||||||
December 31, | 2014 | 2013 | |||||||
Installment note payable to bank; interest at 3.95% due in quarterly installments of $30,765, including interest, with final payment in January 2014 | $ | - | $ | 30,000 | |||||
Installment note payable to bank; interest at 3.95% due in quarterly installments of $29,481, including interest, with final payment in September 2014 | - | 87,000 | |||||||
Installment note payable to bank; interest at 3.95% due in quarterly installments of $8,998, including interest, with final payment in November 2014 | - | 35,000 | |||||||
Installment note payable to bank; interest at 4.23% due in quarterly installments of $10,311, including interest, with final payment in September 2015 | 30,000 | 69,000 | |||||||
Installment note payable to bank; interest at 3.68% due in monthly installments of $17,828, including interest, with final payment in November 2015 | 192,000 | - | |||||||
Installment note payable to bank; interest at 3.68% due in monthly installments of $16,526, including interest; with final payment in February 2016 | 226,000 | - | |||||||
Installment note payable to bank; interest at 4.23% due in quarterly installments of $24,780, including interest, with final payment in May 2016 | 143,000 | 234,000 | |||||||
Installment note payable to bank; interest at 4.23% due in quarterly installments of $11,329, including interest, with final payment in June 2016 | 65,000 | 107,000 | |||||||
Installment notes payable to bank; interest at 4.23% due in quarterly installments ranging from $14,427 to $19,170, including interest, with final payment in July 2016 | 226,000 | 383,000 | |||||||
Installment note payable to bank; interest at 4.23% due in quarterly installments of $25,798, including interest, with final payment in August 2016 | 173,000 | 294,000 | |||||||
Installment note payable to bank; interest at 4.85% due in quarterly installments of $47,859, including interest, with final payment in August 2016 | 319,000 | - | |||||||
Installment note payable to bank; interest at 4.23% due in quarterly installments of $26,817, including interest, with final payment in September 2016 | 180,000 | 304,000 | |||||||
Installment note payable to bank; interest at 4.23% due in quarterly installments of $22,434, including interest; with final payment due in December 2016 | 171,000 | - | |||||||
Installment note payable to bank; interest at 4.85% due in monthly installments of $6,284, including interest; with final payment due in December 2016 | 143,000 | - | |||||||
Installment note payable to bank; interest at 4.23% due in quarterly installments of $5,376, including interest; with final payment in February 2017 | 46,000 | - | |||||||
Installment notes payable to bank; interest at 4.23% due in quarterly installments ranging from $320 to $958, including interest, with final payment in May 2017 | 15,000 | - | |||||||
Installment note payable to bank; interest at 1.60% due in monthly installments of $8,154, including interest; with final payment in June 2017 | 240,000 | - | |||||||
Installment note payable to bank; interest at 1.60% due in monthly installments of $4,340, including interest, with final payment in July 2017 | 132,000 | - | |||||||
Installment notes payable to bank; interest at 4.85% due in quarterly installments ranging from $23,447 to $25,788, including interest, with final payment in July 2017 | 558,000 | - | |||||||
Installment notes payable to bank; interest at 4.23% due in quarterly installments ranging from $284 to $55,093, including interest, with final payment in July 2017 | 548,000 | - | |||||||
Installment note payable to bank; interest at 4.23% due in quarterly installments of $610, including interest, with final payment in August 2017 | 7,000 | - | |||||||
Installment note payable to bank; interest at 4.85% due in monthly installments of $3,790, including interest, with final payment in August 2017 | 114,000 | - | |||||||
Installment note payable to bank; interest at 4.85% due in monthly installments of $2,318, including interest; with final payment in December 2017 | 78,000 | - | |||||||
$ | 3,606,000 | $ | 1,543,000 |
Notes_Payable_Schedule_of_futu
Notes Payable: Schedule of future aggregate payments of notes payable (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Tables/Schedules | |||||
Schedule of future aggregate payments of notes payable | |||||
Amount | |||||
Year ending December 31, 2015 | $ | 1,893,000 | |||
Year ending December 31, 2016 | 1,308,000 | ||||
Year ending December 31, 2017 | 405,000 | ||||
$ | 3,606,000 |
Supplemental_Cash_Flow_Informa1
Supplemental Cash Flow Information: Schedule of non-cash investing and financing activities (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Tables/Schedules | |||||||||
Schedule of non-cash investing and financing activities | |||||||||
Year ended December 31, | 2014 | 2013 | |||||||
Debt assumed in connection with purchase of technology equipment | $ | 2,812,000 | $ | 1,392,000 | |||||
Debt assumed and satisfaction of accrued expenses in 2014 in connection with acquisition of equipment in 2013 | $ | 959,000 | $ | - | |||||
Equipment acquisition fees earned by General Partner upon purchase of equipment from prepaid acquisition fees | $ | 62,000 | $ | 185,000 | |||||
Accrued expenses incurred in connection with the purchase of technology | |||||||||
equipment | $ | - | $ | 1,315,000 |
Reconciliation_of_Amounts_Repo1
Reconciliation of Amounts Reported For Financial Reporting Purposes To Amounts On The Federal Partnership Return (unaudited): Schedule of The tax bases of the Partnership's net assets and liabilities (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Tables/Schedules | |||||||||
Schedule of The tax bases of the Partnership's net assets and liabilities | |||||||||
2014 | 2013 | ||||||||
Financial statement basis of net assets | $ | 12,950,777 | $ | 17,387,758 | |||||
Tax basis of net assets (unaudited) | 8,150,834 | 14,837,741 | |||||||
Difference (unaudited) | $ | 4,799,943 | $ | 2,550,017 |
Reconciliation_of_Amounts_Repo2
Reconciliation of Amounts Reported For Financial Reporting Purposes To Amounts On The Federal Partnership Return (unaudited): Schedule of Effective Income Tax Reconciliation (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Tables/Schedules | |||||||||
Schedule of Effective Income Tax Reconciliation | |||||||||
For the Year Ended | For the Year Ended | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Net loss for financial reporting purposes to taxable loss | $ | -1,749,775 | $ | -952,815 | |||||
Adjustments | |||||||||
Gain on sale of equipment | 225,378 | 243,221 | |||||||
Depreciation | 1,157,621 | -2,743,214 | |||||||
Amortization | 227,273 | 201,334 | |||||||
Unearned lease income | 86,816 | -53,979 | |||||||
Penalties | 3,208 | 403 | |||||||
Other | -25,081 | -43,237 | |||||||
Taxable loss on the Federal Partnership return (unaudited) | $ | -74,560 | $ | -3,348,297 |
Business_Details
Business (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Details | ||
Entity Incorporation, State Country Name | Commonwealth of Pennsylvania | |
Partners' Capital Account, Units, Redeemed | 1,200 | |
Partners' Capital Account, Redemptions | ($12,799) | $0 |
Recovered_Sheet5
Summary of Significant Accounting Policies: Disclosure of Fair Value of Financial Instruments: Fair Value Measurements, Recurring and Nonrecurring (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Property, Plant, and Equipment, Fair Value Disclosure | $1,025,000 | $137,000 |
Fair Value, Inputs, Level 2 | ||
Property, Plant, and Equipment, Fair Value Disclosure | $1,025,000 | $137,000 |
Recovered_Sheet6
Summary of Significant Accounting Policies: Cash and Cash Equivalents (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Details | |
Cash, Uninsured Amount, Commentary | Bank accounts are federally insured up to $250,000 by the FDIC. |
Recovered_Sheet7
Summary of Significant Accounting Policies: Cash and Cash Equivalents: Schedule of Cash and Cash Equivalents (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Details | ||
Cash | $3,188,000 | $5,296,000 |
Cash, FDIC Insured Amount | -250,000 | -250,000 |
Cash, Uninsured Amount | $2,938,000 | $5,046,000 |
Capital_Equipment_Details
Capital Equipment (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Details | ||
Asset Impairment Charges | $503,000 | $91,000 |
Remarketing Fees Incurred | 0 | 3,000 |
RemarketingFeesPaid | 5,000 | |
Equipment Shared | 8,928,000 | 7,621,000 |
Debt Shared | 1,799,000 | 805,000 |
Total Shared Equipment | 21,421,000 | 18,806,000 |
Outstanding Debt Total | $3,928,000 | $1,844,000 |
Capital_Equipment_Schedule_of_1
Capital Equipment: Schedule of future minimum rentals on non-cancelable leases (Details) (USD $) | Dec. 31, 2014 |
Details | |
Capital Leases, Future Minimum Payments Receivable, Next Twelve Months | $5,424,000 |
Capital Leases, Future Minimum Payments Receivable, Rolling Year Two | 2,309,000 |
Capital Leases, Future Minimum Payments, Receivable in Three Years | 575,000 |
Capital Leases, Future Minimum Payments Receivable | $3,000 |
Finance_Leases_Schedule_of_net1
Finance Leases: Schedule of net investment in direct financing leases (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Details | ||
MinimumLeasePaymentsFinanceLeases | $484,000 | $99,000 |
ResidualValueFinanceLeases | 62,000 | 12,000 |
Investment in direct financing leases, unearned income | -54,000 | -16,000 |
NetInvestmentInFinanceLeases | $509,000 | $99,000 |
Finance_Leases_Schedule_of_Fin1
Finance Leases: Schedule of Finance Lease Risk Level (Details) | Dec. 31, 2014 |
Details | |
RiskLevelModerateLow | 40.00% |
RiskLevelModerate | 60.00% |
TotalRiskLevel | 100.00% |
Finance_Leases_Schedule_of_fut1
Finance Leases: Schedule of future minimum rentals on non-cancellable finance leases (Details) (USD $) | Dec. 31, 2014 |
Details | |
Capital Leases, Future Minimum Payments Due, Next Twelve Months | $144,000 |
Capital Leases, Future Minimum Payments Due in Two Years | 144,000 |
Capital Leases, Future Minimum Payments Due in Three Years | 138,000 |
Capital Leases, Future Minimum Payments Due in Four Years | 58,000 |
Capital Leases, Future Minimum Payments Due | $484,000 |
Significant_Customers_Schedule2
Significant Customers: Schedule of Lessees equal to or exceeding 10% of lease revenue (Details) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Cummins, Inc. | ||
Percent Lease Revenue | 26.00% | 21.00% |
American Laser Skin Care | ||
Percent Lease Revenue | 16.00% | 19.00% |
Aetna Life Insurance | ||
Percent Lease Revenue | 14.00% | 16.00% |
Significant_Customers_Schedule3
Significant Customers: Schedule of Lessees equal to or exceeding 10% of lease income receivable (Details) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
American Laser Skin Care | ||
Percent Lease Income Receivable | 50.00% | |
Cargill, Inc. | ||
Percent Lease Income Receivable | 11.00% | |
Alliant Techsystems | ||
Percent Lease Income Receivable | 13.00% | |
Cummins, Inc. | ||
Percent Lease Income Receivable | 24.00% | |
HealthCare Services Corp. | ||
Percent Lease Income Receivable | 21.00% | |
Aircom International Inc. | ||
Percent Lease Income Receivable | 17.00% |
Related_Party_Transactions_Sch1
Related Party Transactions: Schedule of Related Party Transactions (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Details | ||
Other LP Expense | $717,000 | $629,000 |
Reimbursable Expenses | 1,201,000 | 1,128,000 |
Remaining balance of prepaid acquisition fees | 162,000 | |
Equipment Acquisition fees earned by General Partner | 184,000 | 1,800 |
Equipment Acquisition Fees | 202,000 | 302,000 |
Debt placement fees | 38,000 | 14,000 |
Equipment Management Fee | 344,000 | 283,000 |
Equipment liquidation fee | $6,000 | $8,000 |
Notes_Payable_Schedule_of_Note1
Notes Payable: Schedule of Notes Payable (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Long-term Debt, Gross | $3,606,000 | $1,543,000 |
Note 1 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 3.95% | |
Debt Instrument, Payment Terms | due in quarterly installments of $30,765, including interest | |
Debt Instrument, Maturity Date, Description | final payment in January 2014 | |
Long-term Debt, Gross | 30,000 | |
Note 2 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 3.95% | |
Debt Instrument, Payment Terms | due in quarterly installments of $29,481, including interest | |
Debt Instrument, Maturity Date, Description | final payment in September 2014 | |
Long-term Debt, Gross | 87,000 | |
Note 3 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 3.95% | |
Debt Instrument, Maturity Date, Description | final payment in November 2014 | |
Long-term Debt, Gross | 35,000 | |
Note 4 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 4.23% | |
Debt Instrument, Maturity Date, Description | final payment in September 2015 | |
Long-term Debt, Gross | 30,000 | 69,000 |
Note 5 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 3.68% | |
Debt Instrument, Maturity Date, Description | final payment in November 2015 | |
Long-term Debt, Gross | 192,000 | |
Note 6 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 3.68% | |
Debt Instrument, Payment Terms | due in monthly installments of $16,526, including interest | |
Debt Instrument, Maturity Date, Description | final payment in February 2016 | |
Long-term Debt, Gross | 226,000 | |
Note 7 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 4.23% | |
Debt Instrument, Payment Terms | due in quarterly installments of $24,780, including interest, | |
Debt Instrument, Maturity Date, Description | final payment in May 2016 | |
Long-term Debt, Gross | 143,000 | 234,000 |
Note 8 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 4.23% | |
Debt Instrument, Payment Terms | due in quarterly installments of $11,329, including interest | |
Debt Instrument, Maturity Date, Description | final payment in June 2016 | |
Long-term Debt, Gross | 65,000 | 107,000 |
Note 9 | ||
Debt Instrument, Description | Installment notes payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 4.23% | |
Debt Instrument, Payment Terms | due in quarterly installments ranging from $14,427 to $19,170, including interest | |
Debt Instrument, Maturity Date, Description | final payment in July 2016 | |
Long-term Debt, Gross | 226,000 | 383,000 |
Note 10 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 4.23% | |
Debt Instrument, Payment Terms | due in quarterly installments of $25,798, including interest | |
Debt Instrument, Maturity Date, Description | final payment in August 2016 | |
Long-term Debt, Gross | 173,000 | 294,000 |
Note 11 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 4.85% | |
Debt Instrument, Payment Terms | due in quarterly installments of $47,859, including interest | |
Debt Instrument, Maturity Date, Description | final payment in August 2016 | |
Long-term Debt, Gross | 319,000 | |
Note 12 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 4.23% | |
Debt Instrument, Payment Terms | due in quarterly installments of $26,817, including interest | |
Debt Instrument, Maturity Date, Description | final payment in September 2016 | |
Long-term Debt, Gross | 180,000 | 304,000 |
Note 13 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 4.23% | |
Debt Instrument, Payment Terms | due in quarterly installments of $22,434, including interest | |
Debt Instrument, Maturity Date, Description | final payment due in December 2016 | |
Long-term Debt, Gross | 171,000 | |
Note 14 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 4.85% | |
Debt Instrument, Payment Terms | due in monthly installments of $6,284, including interest | |
Debt Instrument, Maturity Date, Description | final payment due in December 2016 | |
Long-term Debt, Gross | 143,000 | |
Note 15 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 4.23% | |
Debt Instrument, Payment Terms | due in quarterly installments of $5,376, including interest | |
Debt Instrument, Maturity Date, Description | final payment in February 2017 | |
Long-term Debt, Gross | 46,000 | |
Note 16 | ||
Debt Instrument, Description | Installment notes payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 4.23% | |
Debt Instrument, Payment Terms | due in quarterly installments ranging from $320 to $958, including interest | |
Debt Instrument, Maturity Date, Description | final payment in May 2017 | |
Long-term Debt, Gross | 15,000 | |
Note 17 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 1.60% | |
Debt Instrument, Payment Terms | due in monthly installments of $8,154, including interest | |
Debt Instrument, Maturity Date, Description | final payment in June 2017 | |
Long-term Debt, Gross | 240,000 | |
Note 18 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 1.60% | |
Debt Instrument, Payment Terms | due in monthly installments of $4,340, including interest | |
Debt Instrument, Maturity Date, Description | final payment in July 2017 | |
Note 19 | ||
Debt Instrument, Description | Installment notes payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 4.85% | |
Debt Instrument, Payment Terms | due in quarterly installments ranging from $23,447 to $25,788, including interest | |
Debt Instrument, Maturity Date, Description | final payment in July 2017 | |
Long-term Debt, Gross | 558,000 | |
Note 20 | ||
Debt Instrument, Description | Installment notes payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 4.23% | |
Debt Instrument, Payment Terms | due in quarterly installments ranging from $284 to $55,093, including interest | |
Long-term Debt, Gross | 548,000 | |
Note 21 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 4.23% | |
Debt Instrument, Payment Terms | due in quarterly installments of $610, including interest | |
Debt Instrument, Maturity Date, Description | final payment in August 2017 | |
Long-term Debt, Gross | 7,000 | |
Note 22 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 4.85% | |
Debt Instrument, Payment Terms | due in monthly installments of $3,790, including interest | |
Debt Instrument, Maturity Date, Description | final payment in August 2017 | |
Long-term Debt, Gross | 114,000 | |
Note 23 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 4.85% | |
Debt Instrument, Payment Terms | due in monthly installments of $2,318, including interest | |
Debt Instrument, Maturity Date, Description | final payment in December 2017 | |
Long-term Debt, Gross | $78,000 |
Notes_Payable_Details
Notes Payable (Details) (USD $) | Dec. 31, 2014 |
Details | |
Carrying Value - Equipment - Notes Payable | $5,061,000 |
Notes_Payable_Schedule_of_futu1
Notes Payable: Schedule of future aggregate payments of notes payable (Details) (USD $) | Dec. 31, 2014 |
Details | |
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months | $1,893,000 |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 1,308,000 |
Long-term Debt, Maturities, Repayments of Principal in Year Three | 405,000 |
Long-term Debt | $3,606,000 |
Supplemental_Cash_Flow_Informa2
Supplemental Cash Flow Information: Schedule of non-cash investing and financing activities (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Details | ||
Debt assumed in connection with purchase of computer equipment | $2,812,000 | $1,392,000 |
Debt assumed and satisfaction of accrued expenses in connection with acquisition of equipment in prior year | 959,000 | |
Equipment acquisition fees earned by General Partner upon purchase of equipment from prepaid acquisition fees | 62,000 | 185,000 |
Accrued expenses incurred in connection with the purchase of technology equipment | $1,315,000 |
Supplemental_Cash_Flow_Informa3
Supplemental Cash Flow Information (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Details | ||
Fully Amortized Fees Written Off | 230,000 | 108,000 |
Allowance for Loan and Lease Losses, Write-offs | $0 | $32,000 |
Fully Depreciated Equipment Wrote-Off | 46,000 | 0 |
Asset Impairment Charges | $503,000 | $91,000 |
Reconciliation_of_Amounts_Repo3
Reconciliation of Amounts Reported For Financial Reporting Purposes To Amounts On The Federal Partnership Return (unaudited): Schedule of The tax bases of the Partnership's net assets and liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Details | ||
Net assets, financial statement basis | $12,950,777 | $17,387,758 |
Net assets, tax basis | 8,150,834 | 14,837,741 |
Net assets, difference between financial statement basis and tax basis | $4,799,943 | $2,550,017 |
Reconciliation_of_Amounts_Repo4
Reconciliation of Amounts Reported For Financial Reporting Purposes To Amounts On The Federal Partnership Return (unaudited): Schedule of Effective Income Tax Reconciliation (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | |||
Details | ||||
Net loss for financial reporting purposes to taxable loss | ($1,749,775) | ($952,815) | ||
Gain (loss) on sale of equipment, basis reconciliation | 225,378 | 243,221 | ||
Depreciation, basis reconciliation | 1,157,621 | -2,743,214 | ||
Amortization | 227,273 | 201,334 | ||
Unearned Lease Income, basis reconciliation | 86,816 | -53,979 | ||
Penalties | 3,208 | 403 | ||
Other Reconciliation differences | -25,081 | [1] | -43,237 | [1] |
Taxable income (loss) on the Federal Partnership return (unaudited) | ($74,560) | ($3,348,297) | ||
[1] | The BAdjustments B OtherB includes financial statement adjustments that will be reflected on the tax return in the subsequent year. |