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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


FORM 10-Q

(Mark one)



|  |                                                                                      
|- | -------------------------------------------------------------------------------------
|x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2005.

OR



|  |                                                                                               
|- | ----------------------------------------------------------------------------------------------
|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
     SECURITIES EXCHANGE ACT OF 1934

For the transition period from

to
 .

Commission file no. 33-13437

DEL TACO INCOME PROPERTIES IV

a California limited partnership


(Exact name of registrant as specified in its
charter)


|                                                                   |  |                                            
|------------------------------------------------------------------ |  | -------------------------------------------
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|California                                                         |  | 33-0241855                                 
|(State or other jurisdiction of
    incorporation or organization) |  | (I.R.S. Employer
    Identification Number)
|                                                                  
|25521 Commercentre Drive, Lake Forest,
    California              |  | 92630                                      
|(Address of principal executive
    offices)                       |  | (Zip Code)                                 

(949) 462-9300

(Registrants telephone number, including
area code)


Indicate by check mark whether
the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for
the past
90 days.  Yes x  No o

Indicate by check mark whether the registrant is an
accelerated filer (as defined in Rule 12b-2 of the Exchange
Act.)  Yes o  No x



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INDEX DEL TACO INCOME PROPERTIES IV PAGE NUMBERPART I. FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Balance Sheets at March 31, 2005 and December 31, 2004 (Unaudited)
    
    
    3Condensed Statements of Income for the three months ended March 31, 2005 and 2004 (Unaudited)
    
    
    4Condensed Statements of Cash Flows for the three months ended March 31, 2005 and 2004 (Unaudited)
    
    
    5Notes to Condensed Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    8Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    10Item 4. Controls and Procedures
    
    
    10PART II. OTHER INFORMATIONItem 6. Exhibits and Reports on Form 8-K
    
    
    11SIGNATURE
    
    
    12EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1
 -2-




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DEL TACO INCOME PROPERTIES IV 
 CONDENSED BALANCE SHEETS (Unaudited) March 31,
    
    
    December 31,2005
    
    
    2004ASSETSCURRENT ASSETS:Cash
    
    $
    147,091
    
    
    $
    140,285Receivable from Del Taco, Inc.
    
    
    39,654
    
    
    
    45,765Deposits
    
    
    534
    
    
    
    600Total current assets
    
    
    187,279
    
    
    
    186,650PROPERTY AND EQUIPMENT:Land and improvements
    
    
    1,236,700
    
    
    
    1,236,700Buildings and improvements
    
    
    1,289,860
    
    
    
    1,289,860Machinery and equipment
    
    
    484,789
    
    
    
    484,7893,011,349
    
    
    
    3,011,349Lessaccumulated depreciation
    
    
    1,319,049
    
    
    
    1,305,2321,692,300
    
    
    
    1,706,117$
    1,879,579
    
    
    $
    1,892,767LIABILITIES AND PARTNERS EQUITYCURRENT LIABILITIES:Payable to limited partners
    
    $
    36,789
    
    
    $
    36,913Accounts payable
    
    
    35,786
    
    
    
    10,567Total current liabilities
    
    
    72,575
    
    
    
    47,480OBLIGATION TO GENERAL PARTNER
    
    
    137,953
    
    
    
    137,953PARTNERS EQUITY:Limited partners; 165,375 units outstanding at March 31, 2005
and December 31, 2004
    
    
    1,683,494
    
    
    
    1,721,394General partner-Del Taco, Inc.
    
    
    (14,443
    )
    
    
    (14,060
    )1,669,051
    
    
    
    1,707,334$
    1,879,579
    
    
    $
    1,892,767
 See accompanying notes to condensed financial statements. -3-




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DEL TACO INCOME PROPERTIES IV 
 CONDENSED STATEMENTS OF INCOME (Unaudited) Three Months EndedMarch 31,2005
    
    
    2004RENTAL REVENUES
    
    $
    107,923
    
    
    $
    101,710EXPENSES:General and administrative
    
    
    34,705
    
    
    
    32,913Depreciation
    
    
    13,817
    
    
    
    13,81748,522
    
    
    
    46,730Operating income
    
    
    59,401
    
    
    
    54,980OTHER INCOME:Interest
    
    
    463
    
    
    
    364Other
    
    
    225
    
    
    
    225Net income
    
    $
    60,089
    
    
    $
    55,569Net income per limited
partnership unit
    
    $
    0.36
    
    
    $
    0.33Number of units used in computing
per unit amounts
    
    
    165,375
    
    
    
    165,375
 See accompanying notes to condensed financial statements. -4-




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DEL TACO INCOME PROPERTIES IV 
 CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) Three Months EndedMarch 31,2005
    
    
    2004CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    60,089
    
    
    $
    55,569Adjustments to reconcile net income to net
cash provided by operating activities:Depreciation
    
    
    13,817
    
    
    
    13,817Changes in operating assets and liabilities:Decrease in receivable from Del Taco, Inc.
    
    
    6,111
    
    
    
    49,794Decrease in deposits
    
    
    66
    
    
    
    54Increase in accounts payable and
payable to limited partners
    
    
    25,095
    
    
    
    30,681Net cash provided by operating activities
    
    
    105,178
    
    
    
    149,915CASH FLOWS FROM FINANCING ACTIVITIES:Cash distributions to partners
    
    
    (98,372
    )
    
    
    (90,757
    )Net increase in cash
    
    
    6,806
    
    
    
    59,158Beginning cash balance
    
    
    140,285
    
    
    
    127,447Ending cash balance
    
    $
    147,091
    
    
    $
    186,605
 See accompanying notes to condensed financial statements. -5-




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DEL TACO INCOME PROPERTIES IV 
 NOTES TO CONDENSED FINANCIAL STATEMENTS MARCH 31, 2005 NOTE 1  BASIS OF PRESENTATION The accompanying unaudited condensed financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by accounting principles
generally accepted in the United States of America for complete financial statements and should
therefore be read in conjunction with the financial statements and notes thereto contained in the
annual report on Form 10-K for the year ended December 31, 2004 for Del Taco Income Properties IV
(the Partnership or the Company). In the opinion of management, all adjustments (consisting of
normal recurring accruals) necessary to present fairly the Partnerships financial position at
March 31, 2005, the results of operations and cash flows for the three month periods ended March
31, 2005 and 2004 have been included. Operating results for the three months ended March 31, 2005
are not necessarily indicative of the results that may be expected for the year ending December 31,
2005. NOTE 2  NET INCOME PER LIMITED PARTNERSHIP UNIT Net income per limited partnership unit is based upon the limited partners 99 percent share of net
income divided by the weighted average number of units outstanding during the periods presented
which amounted to 165,375 in 2005 and 2004. Pursuant to the partnership agreement, annual partnership income or loss is allocated one percent
to Del Taco, Inc. (Del Taco or the General Partner) and 99 percent to the limited partners.
Partnership gains from any sale or refinancing will be allocated one percent to the General Partner
and 99 percent to the limited partners until allocated gains and profits equal losses,
distributions and syndication costs, and until each class of limited partners receive their
priority return as defined in the partnership agreement. Additional gains will be allocated 12
percent to the General Partner and 88 percent to the limited partners. -6-




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DEL TACO INCOME PROPERTIES IV NOTES TO CONDENSED FINANCIAL STATEMENTS  CONTINUED MARCH 31, 2005 NOTE 3  LEASING ACTIVITIES The Partnership leases certain properties for operation of restaurants to Del Taco on a triple net
basis. The leases are for terms of 32 years commencing with the completion of the restaurant
facility located on each property and require monthly rentals equal to 12 percent of the gross
sales of the restaurants. The leases expire in the years 2023 to 2024. There is no minimum rental
under any of the Leases. For the three months ended March 31, 2005, the two restaurants operated by Del Taco, for which the
Partnership is the lessor, had combined, unaudited sales of $539,459 and net income of $44,166 as
compared to $512,268 and $38,581, respectively, for the corresponding period in 2004. Net income
by restaurant includes charges for general and administrative expenses incurred in connection with
supervision of restaurant operations and interest expense. For the three months ended March 31,
2005, the one restaurant operated by a Del Taco franchisee, for which the Partnership is the
lessor, had unaudited sales of $359,901 as compared with $335,317 during the same period in 2004. NOTE 4  TRANSACTIONS WITH DEL TACO The receivable from Del Taco consists primarily of rent accrued for the month of March. The March
rent receivable was collected in April 2005. Del Taco serves in the capacity of general partner in other partnerships which are engaged in the
business of operating restaurants, and three other partnerships which were formed for the purpose
of acquiring real property in California for construction of Mexican-American restaurants for lease
under long-term agreements to Del Taco for operation under the Del Taco trade name. In addition, see Note 5 with respect to certain distributions to the General Partner. NOTE 5  DISTRIBUTIONS On April 20, 2005, a distribution to the limited partners of $104,249, or approximately $.63 per
limited partnership unit, was approved. Such distribution was paid April 29, 2005. The General
Partner also received a distribution of $1,053 with respect to its 1% partnership interest. Total
cash distributions paid in January 2005 were $98,372. -7-




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources Del Taco Income Properties IV (the Partnership or the Company) offered limited partnership units
for sale between June 1987 and June 1988. 14.5% of the $4.135 million raised through sale of
limited partnership units was used to pay commissions to brokers and to reimburse Del Taco, Inc.
(Del Taco or the General Partner) for offering costs incurred. Approximately $3 million of the
remaining funds were used to acquire sites and build three restaurants. In February of 1992,
approximately $442,000 raised during the offering but not required to acquire sites and build
restaurants was distributed to the limited partners. The three restaurants leased to Del Taco make up all of the income producing assets of the
Partnership. Therefore, the business of the Partnership is entirely dependent on the success of
the Del Taco trade name restaurants that lease the properties. The success of the restaurants is
dependent on a large variety of factors, including, but not limited to, competition, consumer
demand and preference for fast food, in general, and for Mexican-American food in particular. The increase in accounts payable from December 31, 2004 is a seasonal increase due to the timing of
certain accounting, audit and tax services. Results of Operations The Partnership owns three properties that are under long-term lease to Del Taco for restaurant
operations (Del Taco, in turn, has sub-leased one of the restaurants to a Del Taco franchisee). The following table sets forth rental revenue earned by restaurant: Three Months EndedMarch 31,2005
    
    
    2004Orangethorpe Ave., Placentia, CA
    
    $
    41,737
    
    
    $
    40,425Lakeshore Drive, Lake Elsinore, CA
    
    
    43,188
    
    
    
    40,238Highland Ave., San Bernardino, CA
    
    
    22,998
    
    
    
    21,047Total
    
    $
    107,923
    
    
    $
    101,710
 The Partnership receives rental revenues equal to 12 percent of gross sales from the restaurants.
The Partnership earned rental revenue of $107,923 during the three month period ended March 31,
2005, which represents an increase of $6,213 from 2004. The change in rental revenues between 2004
and 2005 is directly attributable to increases in sales at the restaurants under lease. -8-




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations  continued The following table breaks down general and administrative expenses by type of expense: Percentage of TotalGeneral & Administrative ExpenseThree Months EndedMarch 31,2005
    
    
    2004Accounting fees
    
    
    76.15
    %
    
    
    79.76
    %Distribution of information
to limited partners
    
    
    23.85
    
    
    
    20.24100.00
    %
    
    
    100.00
    %
 General and administrative costs increased from 2004 to 2005 primarily due to increased costs for
software licensing fees which slightly increased the percentage of general and administrative
expense related to distribution of information to limited partners as shown in the table above. For the three months ended March 31, 2005, net income increased by $4,520 from 2004 to 2005 due to
the increases in revenues of $6,213 and interest income of $99 which was partially offset by the
$1,792 increase in expenses. Critical Accounting Policies and Estimates Managements discussion and analysis of financial condition and results of operations, as well as
disclosures included elsewhere in this report on Form 10-Q are based upon the Partnerships
financial statements, which have been prepared in accordance with accounting principles generally
accepted in the United States of America. The preparation of these financial statements requires
management to make estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses. The Partnership believes the critical accounting policies that most impact
the financial statements are described below. A summary of the significant accounting policies of
the Partnership can be found in Note 1 to the Financial Statements which is included in the
Partnerships December 31, 2004 Form
10-K. -9-




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations -
continued Property and Equipment: Property and equipment is stated at cost. Depreciation is
computed using the straight-line method over estimated useful lives which are 20 years for land
improvements, 35 years for buildings and improvements, and 10 years for machinery and equipment. The partnership accounts for property and equipment in accordance with Statement of Financial
Accounting Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of Long Lived
Assets. SFAS 144 requires that long-lived assets be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying value of the asset may not be recoverable. In
evaluating long-lived assets held for use, an impairment loss is recognized if the sum of the
expected future cash flows (undiscounted and without interest charges) is less than the carrying
value of the asset. Once a determination has been made that an impairment loss should be
recognized for long-lived assets, various assumptions and estimates are used to determine fair
value including, among others, estimated costs of construction and development, recent sales of
comparable properties and the opinions of fair value prepared by independent real estate
appraisers. Long-lived assets to be disposed of are reported at the lower of carrying amount or
fair value less cost to sell. 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk. None. 
 Item 4. Controls and Procedures  (a)
    Evaluation of disclosure controls and procedures:  As of the end of the period covered by this quarterly report, we carried out an
evaluation, under the supervision and with the participation of the Companys management,
including the Companys Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of the Companys disclosure controls and
procedures. Based upon that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the Companys disclosure controls and procedures
are effective in timely alerting them to material information relating to the Company
required to be included in the Companys periodic Securities and Exchange Commission
filings.  (b)
    Changes in internal controls:  There were no significant changes in the Companys internal controls over financial
reporting that occurred during our most recent fiscal quarter that materially affected,
or is reasonably likely to materially affect, our internal control over financial
reporting.  (c)
    Asset-Backed issuers:  Not applicable. -10-




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PART II. OTHER INFORMATION 
 Item 6. Exhibits and Reports on Form 8-K  (a)
    Exhibits  31.1
    Kevin K. Moriartys Certification Pursuant to Section 302 of the
Sarbanes-Oxley Act of 200231.2
    Robert J. Terranos Certification Pursuant to Section 302 of the
Sarbanes-Oxley Act of 200232.1
    Certification Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002  (b)
    Reports  None. -11-




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SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized. DEL TACO INCOME PROPERTIES IV(a California limited partnership)RegistrantDel Taco, Inc.General PartnerDate: May 13, 2005
    
    /s/ Robert J. TerranoRobert J. TerranoExecutive Vice President,Chief Financial Officer
 -12-




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EXHIBIT INDEX Exhibits
    

Description31.1
    
    Kevin K. Moriartys Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Robert J. Terranos Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 -13-