form10q.htm

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PART I
Item 1.	Financial Statements	3
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15
Item 4.	Controls and Procedures	15
PART II
Item 1.	Legal Proceedings	15
Item 1A.	Risk Factors	15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3.	Defaults Upon Senior Securities	15
Item 5.	Other Information	15
Item 6.	Exhibits	15

Commonwealth Income & Growth Fund VI
Condensed Balance Sheets


	June 30,				December 31,
	2011				2010
	(unaudited)

ASSETS
Cash and cash equivalents		$	2,659,777		$	2,114,823
Lease income receivable, net of reserve of approximately $319,000 and $299,000 at June 30, 2011 and December 31, 2010, respectively			528,634			483,763
Accounts receivable, Commonwealth Capital Corp.			280,901			727,961
Accounts receivable, General Partner			31,827			-
Other receivables			852			1,133
Prepaid expenses			9,232			7,703
			3,511,223			3,335,383

Net investment in finance leases			193,420			234,348

Technology equipment, at cost			25,966,264			26,954,695
Accumulated depreciation			(13,104,764	)		(10,904,949	)
			12,861,500			16,049,746

Equipment acquisition costs and deferred expenses, net of accumulated amortization of approximately $556,000 and $507,000 at June 30, 2011 and December 31, 2010, respectively			404,296			543,466
Prepaid acquisition fees			141,746			167,026
			546,042			710,492

Total Assets		$	17,112,185		$	20,329,969

LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
Accounts payable		$	92,371		$	97,520
Accounts payable, General Partner			-			30,407
Other accrued expenses			43,430			54,219
Unearned lease income			212,951			460,891
Notes payable			535,888			725,895
Total Liabilities			884,640			1,368,932

PARTNERS CAPITAL
General Partner			1,000			1,000
Limited Partners			16,226,545			18,960,037
Total Partners' Capital			16,227,545			18,961,037

Total Liabilities and Partners' Capital		$	17,112,185		$	20,329,969



see accompanying notes to condensed financial statements

Commonwealth Income & Growth Fund VI
Condensed Statements of Operations
(unaudited)


	Three Months Ended							Six Months Ended
	June 30,							June 30,
	2011				2010			2011			2010
Revenue
Lease		$	1,803,388		$	2,046,745		$	3,682,063		$	3,823,899
Interest and other			12,688			12,070			28,383			28,829
Gain on sale of computer equipment			89			-			60,371			177
Total revenue			1,816,165			2,058,815			3,770,817			3,852,905

Expenses
Operating, excluding depreciation			375,446			449,039			835,104			851,888
Equipment management fee, General Partner			90,723			102,434			185,210			191,390
Interest			9,961			7,484			19,701			11,594
Depreciation			1,725,046			1,498,772			3,469,930			2,850,163
Amortization of equipment acquisition costs and deferred expenses			80,063			77,609			164,451			148,002
Bad debt expense			-			64,575			20,000			64,575
Total expenses			2,281,239			2,199,913			4,694,396			4,117,612

Net (loss)		$	(465,074	)	$	(141,098	)	$	(923,579	)	$	(264,707	)

Net (loss) allocated to Limited Partners		$	(473,111	)	$	(150,148	)	$	(940,666	)	$	(282,806	)

Net (loss) per equivalent limited partnership unit		$	(0.26	)	$	(0.08	)	$	(0.52	)	$	(0.16	)

Weighted average number of equivalent limited partnership units outstanding during the period			1,809,911			1,809,911			1,809,911			1,809,911


see accompanying notes to condensed financial statements

Commonwealth Income & Growth Fund VI
Condensed Statement of Partners' Capital
For the six months ended June 30, 2011
(unaudited)


	General		Limited
	Partner		Partner		General			Limited
	Units		Units		Partner			Partners			Total
Balance, January 1, 2011		50		1,809,911	$	1,000		$	18,960,037		$	18,961,037
Net income (loss)		-		-		17,087			(940,666	)		(923,579	)
Distributions		-		-		(17,087	)		(1,792,826	)		(1,809,913	)
Balance, June 30, 2011		50		1,809,911	$	1,000		$	16,226,545		$	16,227,545



see accompanying notes to condensed financial statements

Commonwealth Income & Growth Fund VI
Condensed Statements of Cash Flow
(unaudited)

	Six Months ended
		June 30,			June 30,
		2011			2010

Net cash provided by operating activities		$	2,520,825		$	2,118,110

Investing activities:
Capital expenditures			(631,993	)		(4,132,405	)
Payments from finance leases			55,355			9,672
Equipment acquisition fees paid to General Partner			-			(20,568	)
Net proceeds from the sale of computer equipment			410,680			381
Net cash (used in) investing activities			(165,958	)		(4,142,920	)

Financing activities:
Distributions to partners			(1,809,913	)		(1,809,913	)
Debt placement fee paid to General Partner			-			(4,324	)
Net cash (used in) financing activities			(1,809,913	)		(1,814,237	)

Net increase (decrease) in cash and cash equivalents			544,954			(3,839,047	)

Cash and cash equivalents beginning of period			2,114,823			9,026,452

Cash and cash equivalents end of period		$	2,659,777		$	5,187,405



see accompanying notes to condensed financial statements

Commonwealth Income & Growth Fund VI (the “Partnership”) is a limited partnership organized in the Commonwealth of Pennsylvania on January 6, 2006. The Partnership offered for sale up to 2,500,000 units of the limited partnership at the purchase price of $20 per unit (the “offering”). The Partnership reached the minimum amount in escrow and commenced operations on May 10, 2007. The offering terminated on March 6, 2009 with 1,810,311 units sold for a total of approximately $36,000,000 in limited partner contributions.

The Partnership uses the proceeds of the offering to acquire, own and lease various types of information technology equipment and other similar capital equipment, which will be leased primarily to U.S. corporations and institutions. Commonwealth Capital Corp. (“CCC”), on behalf of the Partnership and other affiliated partnerships, acquires technology equipment subject to associated debt obligations and lease agreements and allocates a participation in the cost, debt and lease revenue to the various partnerships that it manages based on certain risk factors.

The Partnership’s General Partner is Commonwealth Income & Growth Fund, Inc. (the “General Partner”), a Pennsylvania corporation which is an indirect, wholly-owned subsidiary of CCC. CCC is a member of the Investment Program Association (IPA), 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 Partnership will continue until December 31, 2018.

The financial information presented as of any date other than December 31, 2010 has been prepared from the books and records without audit. Financial information as of December 31, 2010 has been derived from the audited financial statements of the Partnership, but does not include all disclosures required by generally accepted accounting principles to be included in audited financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial information for the periods indicated, have been included. For further information regarding the Partnership’s accounting policies, refer to the financial statements and related notes included in the Partnership’s annual report on Form 10-K for the year ended December 31, 2010. Operating results for the six months ended June 30, 2011 are not necessarily indicative of financial results that may be expected for the full year ended December 31, 2011.

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 June 30, 2011 and December 31, 2010.

The Partnership’s long-term debt consists of notes payable, which are secured by specific technology equipment and are nonrecourse liabilities of the Partnership. The estimated fair value of this debt at June 30, 2011 and December 31, 2010 approximates the carrying value of these instruments, due to the interest rates approximating current market values.

At June 30, 2011, cash was held in a total of seven accounts maintained at two separate financial institutions with an aggregate balance of approximately $2,657,000. Bank accounts are federally insured up to $250,000, while pursuant to the Dodd/Frank Act of 2010, some accounts are fully insured by the FDIC. At June 30, 2011, the total cash balance was as follows:

The Partnership mitigates the risk of holding uninsured deposits by depositing funds with more than one institution and by only depositing funds with major financial institutions. The Partnership deposits its funds with two institutions that are Moody's Aaa-and Aa3 Rated. The Partnership has not experienced any losses in such accounts, and believes it is not exposed to any significant credit risk. The amounts in such accounts will fluctuate throughout 2011 due to many factors, including the pace of additional cash receipts, equipment acquisitions and distributions to investors.

In May of 2011, the FASB issued ASU No. 2011-04 (“ASC Update 2011-04”), Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRS. This ASU is intended to update the fair value measurement and disclosure requirements in US GAAP for measuring fair value and for disclosing information about fair value measurements. Some of the amendments clarify the Board’s intent about application of existing fair value measurement requirements, while others change a particular principle or requirement for measuring or disclosing fair value measurement information. The amendments in this update are for interim and annual periods beginning after December 15, 2011. The Partnership is currently evaluating the effect this ASU will have on its financial statements.

In April of 2011, the FASB issued ASU No. 2011-03 (“ASC Update 2011-03”), Reconsideration of Effective Control for Repurchase Agreements. This ASU is intended to improve financial reporting of repurchase agreements (“repos”) and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. The amendments in this Update are effective for the fiscal quarters and years that start on or after December 15, 2011. Early adoption is not permitted. The Partnership is currently evaluating the effect this ASU will have on its financial statements.

In April 2011, the FASB issued ASU No. 2011-02 (“ASC Update 2011-02”) A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring. This ASU provides additional guidance on a creditor’s evaluation of whether it has granted a concession and whether a debtor is experiencing financial difficulties. The additional guidance is intended to create additional consistency in the application of generally accepted accounting principles (GAAP) for debt restructuring. The amendments in this Update are effective for the first interim or annual period beginning on or after June 15, 2011, and should be applied retrospectively to the beginning of the annual period of adoption. The Partnership is currently evaluating the effect this ASU will have on its financial statements.

In January 2011, the FASB issued ASU No. 2011-01 (“ASC Update 2011-01”), Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20. This ASU temporarily delays the effective date for public entities of the disclosures about troubled debt restructurings (TDRs) in ASU No. 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. This guidance was effective for interim and annual periods ending after June 15, 2011. The Partnership adopted this ASU during the second quarter of 2011 and it did not have a material effect on its financial statements.

Remarketing fees will be paid to the leasing companies from which the Partnership purchases leases. These are fees that are earned by the leasing companies when the initial terms of the lease have been met and the lessee extends or renews the lease, or the equipment is sold. The General Partner believes that this strategy adds value since it entices the leasing company to remain actively involved with the lessee and encourages potential extensions, remarketing or sale of equipment. This strategy is designed to minimize any conflicts the leasing company may have with a new lessee and may assist in maximizing overall portfolio performance. The remarketing fee is tied into lease performance thresholds and is a factor in the negotiation of the up-front fee paid to the leasing company. No such fees were paid for the six months ended June 30, 2011 and 2010.

The Partnership’s share of the equipment in which it participates with other partnerships at June 30, 2011 was approximately $12,708,000 and is included in the Partnership’s fixed assets on its balance sheet. The total cost of the equipment shared by the Partnership with other partnerships at June 30, 2011 was approximately $34,064,000. The Partnership’s share of the outstanding debt associated with this equipment at June 30, 2011 was approximately $523,000. The total outstanding debt related to the equipment shared by the Partnership at June 30, 2011 was approximately $1,399,000.

The Partnership’s share of the equipment in which it participates with other partnerships at December 31, 2010 was approximately $13,880,000 and is included in the Partnership’s fixed assets on its balance sheet. The total cost of the equipment shared by the Partnership with other partnerships at December 31, 2010 was approximately $34,067,000. The Partnership’s share of the outstanding debt associated with this equipment at December 31, 2010 was approximately $707,000. The total outstanding debt related to the equipment shared by the Partnership at December 31, 2010 was approximately $1,916,000.

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 for the remainder of 2011 as the Partnership builds its portfolio.

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 include 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. Additional considerations of high risk may include history of late payments, open lawsuits and liens or judgments. In an effort to mitigate risk, we typically require deposits from those in this category. The following table presents the credit risk profile, by creditworthiness category, of our finance lease receivables at June 30, 2011:

Six months ended June 30,	2011		2010

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. See “Summary of Significant Accounting Policies- Reimbursable Expenses,” above.	$	750,000	$	839,000

Equipment acquisition fee
The General Partner earns 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 June 30, 2011, the remaining balance of prepaid acquisition fees was approximately $142,000, which is expected to be earned in future periods.		$	25,000			$	183,000

Equipment management fee
The General Partner is entitled to be paid a monthly fee equal to the lesser of (i) the fees which would be charged by an independent third party for similar services for similar equipment or (ii) the sum of (a) two percent of (1) the gross lease revenues attributable to equipment which is subject to full payout net leases which contain net lease provisions plus (2) the purchase price paid on conditional sales contracts as received by the Partnership and (b) 5% of the gross lease revenues attributable to equipment which is subject to operating leases and 2% of the gross lease revenues attributable to equipment which is subject to finance leases.		$	185,000			$	191,000

	June 30, 2011		December 31, 2010

Installment note payable to bank; interest at 5.75% due in quarterly installments of $37,297 including interest, with final payment made in January 2011	$	-	$	38,000

Installment notes payable to bank; interest at 6.21% due in monthly installments of $585 including interest, with final payment in May 2012		12,000		19,000

Installment note payable to bank; interest at 7.50% due in quarterly installments of $8,843 including interest, with final payment made in October 2012		50,000		65,000

Installment notes payable to bank; interest at 5.89% due in monthly installments from $7,104 to $9,514 including interest, with final payments in October 2012		255,000		331,000

Installment notes payable to bank; interest at 7.50% due in monthly installments of $10,665 including interest, with final payments made in April 2013		219,000		273,000
	$	536,000	$	726,000

The notes are secured by specific technology equipment and are nonrecourse liabilities of the Partnership. As such, the notes do not contain any 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 June 30, 2011 are as follows:

On June 18, 2010, Commonwealth Capital Corp. (“Commonwealth”) (the parent of our general partner) filed suit on our behalf against Allied Health Care Services Inc. (“Allied”). Allied is a lessee of medical equipment, and has failed to make its monthly lease payments since March 2010. Our suit for breach of contract against Allied and its owner, Charles K. Schwartz, pursuant to a partial personal guaranty, was filed in the U.S. District Court for the District of New Jersey (Case No 2:10-cv-03135), seeking payment of all outstanding rents, the value of leased equipment, and all costs of collection, including attorney’s fees.

On August 19, 2010 our suit was automatically stayed when an involuntary petition for relief under Chapter 7 of the Bankruptcy Code was filed against Allied in the U.S. Bankruptcy Court for the District of New Jersey. On September 3, 2010, Charles Schwartz, the owner of Allied, was arrested by the FBI for alleged mail fraud in connection with his medical equipment leasing business, a charge to which he later pled guilty. Additionally, Commonwealth was one of the petitioning creditors in an involuntary Chapter 7 bankruptcy petition filed against Mr. Schwartz personally on September 17, 2010, in the same court.

Due to the bankruptcy proceedings, management can not determine, at this time, the status of the equipment leased to Allied or the amounts that may ultimately be paid to us from the bankruptcy estates. The timeline for identifying and recovering assets is uncertain, with resolution depending in large part upon the Trustee’s resolution of certain legal disputes and the cooperation of the various parties involved. Due to the complexity of the alleged fraud and the number of parties involved, we expect that completion of asset recovery by the trustee, and distribution to creditors will take in excess of twelve months from the bankruptcy petition date.

Our share of exposure related to the Allied default (if no rent is collected, the equipment is not paid for and/or we are unable to obtain performance under partial personal guaranty) is approximately $1,500,000 as of June 30, 2011 net of a reserve taken against substantially all the Allied receivables.

This section, as well as other portions of this document, includes certain forward-looking statements about our business and our prospects, tax treatment of certain transactions and accounting matters, sales of securities, expenses, cash flows, distributions, investments and operating and capital requirements. Such forward-looking statements include, but are not limited to: acquisition policies of our general partner; the nature of present and future leases; provisions for uncollectible accounts; the strength and sustainability of the U.S. economy; the continued difficulties in the credit markets and their impact on the economy in general; and the level of future cash flow, debt levels, revenues, operating expenses, amortization and depreciation expenses. You can identify those statements by the use of words such as “could,” “should,” “would,” “may,” “will,” “project,” “believe,” “anticipate,” “expect,” “plan,” “estimate,” “forecast,” “potential,” “intend,” “continue” and “contemplate,” as well as similar words and expressions.

Actual results may differ materially from those in any forward-looking statements because any such statements involve risks and uncertainties and are subject to change based upon various important factors, including, but not limited to, nationwide economic, financial, political and regulatory conditions; the health of debt and equity markets, including interest rates and credit quality; the level and nature of spending in the information, medical and telecommunications technologies markets; and the effect of competitive financing alternatives and lease pricing.

Readers are also directed to other risks and uncertainties discussed in other documents we file with the SEC, including, without limitation, those discussed in Item 1A. “Risk Factors.” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2010 filed with the SEC. We undertake no obligation to update or revise any forward-looking information, whether as a result of new information, future developments or otherwise.

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We base these estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

CCC, on our behalf and on behalf of other affiliated partnerships, acquires information technology equipment subject to associated debt obligations and lease revenue and allocates a participation in the cost, debt and lease revenue to the various partnerships based on certain risk factors. Depreciation on information technology equipment for financial statement purposes is based on the straight-line method estimated generally over useful lives of three to four years.

The Equipment Leasing and Finance Association (“ELFA”) Monthly Leasing and Finance Index which reports economic activity for the $521 billion equipment finance sector, showed overall new business volume for the 2nd Quarter of 2011 increasing 28.5% relative to the second quarter of 2010. Credit quality continues to improve as the rate of receivables aged in excess of 30 days has improved on average 24% from the 2nd quarter of 2010 through the 2nd quarter of 2011. Sixty-three percent of ELFA reporting members reported submitting more transactions for approval during the 2nd quarter 2011 compared to the same period the year prior. For 2011-2012 ELFA has forecast a 12% increase in finance volume year over year.

Through June 30, 2011, the Partnership’s leasing operations consisted of operating and direct finance leases. Operating lease revenue is recognized on a monthly basis in accordance with the terms of the lease agreement. 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. Interest income is earned on the finance lease receivable over the lease term using the interest method. As required, at each reporting period, management evaluates the finance lease for impairment and considers any need for an allowance for credit losses.

We evaluate our long-lived assets when events or circumstances indicate that the value of the asset may not be recoverable. We determine 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. The fair value is determined based on estimated discounted cash flows to be generated by the asset. We determined no impairment analysis was necessary at June 30, 2011 and 2010 as no impairment indicators were noted.

Our primary source of cash for the six months ended June 30, 2011 was cash provided by operating activities of approximately $2,521,000, and proceeds from the sale of equipment, in the amount of approximately $411,000, compared to the six months ended June 30, 2010 where our primary source of cash was provided by operating activities of approximately $2,118,000.

Our primary use of cash for the six months ended June 30, 2011 was for the purchase of new information technology equipment of approximately $632,000 and also for distributions to partners of approximately $1,810,000. For the six months ended June 30, 2010 capital expenditures for new information technology equipment were approximately $4,132,000 and distributions to partners were approximately $1,810,000.

Cash was provided by operating activities for the six months ended June 30, 2011 of approximately $2,521,000, which includes a net loss of approximately $924,000 and depreciation and amortization expenses of approximately $3,634,000. For the six months ended June 30, 2010 cash was also provided by operating activities of approximately $2,118,000, which includes a net loss of approximately $265,000 and depreciation and amortization expenses of approximately $2,998,000.

As we increase the size of our equipment portfolio, operating expenses will increase, which reflects the administrative costs of servicing the portfolio, but because of our investment strategy of leasing technology equipment primarily through triple-net leases, we avoid operating expenses related to equipment maintenance or taxes. Depreciation expenses will likely increase more rapidly than operating expenses as we add technology equipment to our portfolio.

Capital expenditures and distributions are expected to increase during the remainder of 2011, however, as management focuses on additional equipment acquisitions and funding limited partner distributions. We intend to invest approximately $3,800,000 in additional equipment during the remainder of 2011. The acquisition of this equipment will be funded by the remaining cash which was raised through limited partner contributions during the initial offering period, lease revenues and debt financing. Any debt service will be funded from cash flows from lease rental payments.

We mitigate the risk of holding uninsured deposits by depositing funds with more than one institution and by only depositing funds with major financial institutions. We have not experienced any losses in such accounts, and believe that we are not exposed to any significant credit risk. The amounts in such accounts will fluctuate throughout 2011 due to many factors, including the pace of additional cash receipts, equipment acquisitions and distributions to investors.

Our investment strategy of acquiring computer equipment and generally leasing it under triple-net leases to operators who generally meet specified financial standards minimizes our operating expenses. As of June 30, 2011, we had future minimum rentals on non-cancelable operating leases of approximately $3,466,000 for the balance of the year ending December 31, 2011 and approximately $4,969,000 thereafter. As of June 30, 2011, we had future minimum rentals on non-cancelable finance leases of approximately $55,000 for the balance of the year ending December 31, 2011 and approximately $139,000 thereafter.

For the three months ended June 30, 2011, we recognized revenue of approximately $1,816,000 and expenses of approximately $2,281,000, resulting in a net loss of approximately $465,000. This net loss is primarily due to an increase in depreciation expenses and a decrease in lease revenue. For the three months ended June 30, 2010, we recognized revenue of approximately $2,059,000 and expenses of approximately $2,200,000, resulting in a net loss of approximately $141,000.

Our lease revenue decreased to approximately $1,803,000 for the three months ended June 30, 2011, from approximately $2,047,000 for the three months ended June 30, 2010. This decrease is primarily due to the fund ceasing to record revenues (starting in July of 2010) associated with Allied Healthcare Services Inc, one of our lessees (See Legal Proceedings, below), and is partially offset by increases in new lease acquisitions.

Our operating expenses, excluding depreciation, primarily consist of accounting and legal fees, outside service fees and reimbursement of expenses to CCC for administration and operation of the Partnership. These expenses decreased to approximately $375,000 for the three months ended June 30, 2011, from approximately $449,000 for the three months ended June 30, 2010. This decrease is primarily attributable to decreases in administrative expenses charged by CCC to the fund, due to a reduction in personnel costs associated with management of the fund.

We pay an equipment management fee to our general partner for managing our equipment portfolio. The equipment management fee is approximately 5% of the gross lease revenue attributable to equipment that is subject to operating leases and 2% of the gross lease revenue attributable to equipment that is subject to finance leases. The total equipment management fee decreased to approximately $91,000 for the three months ended June 30, 2011 from approximately $102,000 for the three months ended June 30, 2010, which is consistent with the decrease in lease revenue.

Depreciation and amortization expenses consist of depreciation on technology equipment and amortization of equipment acquisition fees. These expenses increased to approximately $1,805,000 for the three months ended June 30, 2011, from $1,576,000 for the three months ended June 30, 2010. This increase was due to the acquisition of new equipment associated with the purchase of new leases during 2010.

For the six months ended June 30, 2011, we recognized revenue of approximately $3,770,000 and expenses of approximately $4,694,000, resulting in a net loss of approximately $924,000. This net loss is primarily due to an increase in depreciation expenses and a decrease in lease revenue compared to the six months ended June 30, 2010. For the six months ended June 30, 2010, we recognized revenue of approximately $3,853,000 and expenses of approximately $4,118,000, resulting in a net loss of approximately $265,000.

Our lease revenue decreased to approximately $3,682,000 for the six months ended June 30, 2011, from approximately $3,824,000 for the six months ended June 30, 2010. This decrease is primarily due to the fund ceasing to record revenues (starting in July of 2010), associated with Allied Healthcare Services Inc, one of our lessees, (See Legal Proceedings, below), and is partially offset by increases in new lease acquisitions.

Our operating expenses, excluding depreciation, primarily consist of accounting and legal fees, outside service fees and reimbursement of expenses to CCC for administration and operation of the Partnership. These expenses decreased to approximately $835,000 for the six months ended June 30, 2011, from approximately $852,000 for the six months ended June 30, 2010. This decrease is primarily attributable to decreases in administrative expenses charged by CCC to the fund, due to a reduction in personnel costs associated with management of the fund.

We pay an equipment management fee to our general partner for managing our equipment portfolio. The equipment management fee is approximately 5% of the gross lease revenue attributable to equipment that is subject to operating leases and 2% of the gross lease revenue attributable to equipment that is subject to finance leases. The total equipment management fee decreased to approximately $185,000 for the six months ended June 30, 2011 from approximately $191,000 for the six months ended June 30, 2010, which is consistent with the decrease in lease revenue.

Depreciation and amortization expenses consist of depreciation on technology equipment and amortization of equipment acquisition fees. These expenses increased to approximately $3,634,000 for the six months ended June 30, 2011, from $2,998,000 for the six months ended June 30, 2010. This increase was due to the acquisition of new equipment associated with the purchase of new leases.

Our management, under the supervision and with the participation of the Chief Executive Officer and Principal Financial Officer, have evaluated the effectiveness of our controls and procedures related to our reporting and disclosure obligations as of June 30, 2011 which is the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Chief Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures are effective to provide that (a) material information relating to us, including our consolidated affiliates is made known to these officers by us and our consolidated affiliates’ other employees, particularly material information related to the period for which this periodic report is being prepared; and (b) this information is recorded, processed, summarized, evaluated and reported, as applicable, within the time periods specified in the rules and forms promulgated by the Securities and Exchange Commission. There were no changes in the Partnership’s internal control over financial reporting during the second quarter of 2011 that have materially affected or are reasonably likely to materially affect its internal control over financial reporting.

Our business is directly impacted by factors such as economic, political, and market conditions, broad trends in industry and finance, legislative and regulatory changes, changes in government monetary and fiscal policies, and inflation, all of which are beyond our control. Although we are experiencing a modest improvement in the global economy in 2011, the economic recovery continues to remain somewhat weak, and a prolonged period of economic weakness could result in the following consequences, any of which could materially affect our business: lease delinquencies may increase; problem leases and defaults could increase; and demand for information technology products generally may decrease as businesses attempt to reduce expenses.

Pennsylvania	20-4115433
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company T
(Do not check if a smaller reporting company.)

At June 30, 2011	Balance
Total bank balance	$	2,657,000
FDIC insured		(893,000)
Uninsured amount	$	1,764,000

	Amount
Six Months ended December 31, 2011	$	3,466,000
Year ended December 31, 2012		3,772,000
Year ended December 31, 2013		1,179,000
Year ended December 31, 2014		18,000
	$	8,435,000

	Amount
Total minimum lease payments to be received	$	194,000
Estimated residual value of leased equipment (unguaranteed)		25,000
Less: unearned income		(26,000	)
Net investment in direct finance leases	$	193,000

Risk Level	Percent of Total
Low		5	%
Moderate-Low		-	%
Moderate		38	%
Moderate-High		57	%
High		-	%
Net finance lease receivable		100	%

	Amount
Six Months ended December 31, 2011	$	55,000
Year ended December 31, 2012		103,000
Year ended December 31, 2013		36,000
	$	194,000

	Amount
Six months ending December 31, 2011	$	189,000
Year ended December 31, 2012		305,000
Year ended December 31, 2013		42,000
	$	536,000

	COMMONWEALTH INCOME & GROWTH FUND VI
	BY: COMMONWEALTH INCOME & GROWTH FUND, INC., General Partner

August 15, 2011	By: /s/ Kimberly A. Springsteen-Abbott
Date	Kimberly A. Springsteen-Abbott
	Chief Executive Officer


August 15, 2011	By: /s/ Lynn A. Franceschina
Date	Lynn A. Franceschina
	Executive Vice President, Chief Operating Officer