SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

(Mark One)

[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act
    of 1934 for the fiscal year ended December 31, 1997

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934

                         Commission file number 33-80849


                      CAPITAL PREFERRED YIELD FUND-IV, L.P.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


            DELAWARE                                  84-1331690
     (State of organization)             (I.R.S. Employer Identification Number)

7175 W. JEFFERSON AVENUE, LAKEWOOD, COLORADO                   80235
  (Address of principal executive offices)                   (Zip Code)

       Registrant's telephone number, including area code: (303) 980-1000

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:  None


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
                                       -----    -----.

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

State the aggregate market value of the voting stock held by  non-affiliates  of
the registrant. Not applicable.


                        Exhibit Index Appears on Page 38

                               Page 1 of 39 Pages



<PAGE>



Item 1.  Business
         --------

Capital  Preferred  Yield Fund-IV,  L.P., a Delaware  limited  partnership  (the
"Partnership"),  was  organized  on  December  18,  1995 and is  engaged  in the
business of owning and  leasing  equipment.  CAI  Equipment  Leasing V Corp.,  a
Colorado  corporation and a wholly owned subsidiary of Capital Associates,  Inc.
("CAI"), is the general partner of the Partnership.

The  Partnership  commenced  business  operations  on April  16,  1996.  Through
December  31, 1997,  the  Partnership  had sold  approximately  460,000  Class A
limited  partner  units and on February  9, 1998  achieved  the planned  maximum
placement of 500,000 Class A limited partner units. During 1998, the Partnership
will enter its reinvestment  period as defined in the Partnership  Agreement.  A
summary of the Partnership's offering activities is presented below:

<TABLE>
<CAPTION>
                               Class A                   Sales
                               Limited     Number        Gross       Commissions       Net
                               Partner       of        Offering     and Offering     Offering
                              Units Sold  Investors    Proceeds       Expenses       Proceeds
                              --------    ---------  ------------   ------------   ------------

<S>                           <C>         <C>       <C>             <C>           <C>
Year ended December 31, 1996   154,553       867     $ 15,455,281    $ 2,230,270   $ 13,225,011
Year ended December 31, 1997   302,080     1,371       30,207,960      4,316,105     25,891,855
                              --------    ------     ------------    -----------   ------------
                               456,633     2,238     $ 45,663,241    $ 6,546,375   $ 39,116,866
                              ========    ======     ============    ===========   ============

</TABLE>

Capital Associates  International,  Inc.  ("CAII"),  an affiliate of the general
partner, is the sole Class B limited partner of the Partnership. In exchange for
its Class B limited  partner  interest,  CAII is required to contribute  cash of
$10,000 for each  $1,000,000  of investors'  capital  contribution  (i.e.,  cash
investments in the Partnership) to the Partnership. In addition, CAII's interest
in Distributable Cash is subordinated to the Class A limited partners' interest.
The contributions of CAII are made simultaneously with the purchase of equipment
by the Partnership.  Through December 31, 1997, CAII had contributed $460,000 to
the Partnership.

The  Partnership's  overall  investment  objectives are to (i) raise the maximum
allowable   capital  from  investors  for  investment  in  accordance  with  the
Partnership's  investment  objectives  described  in the  Prospectus  (which was
reached on February 9, 1998); (ii) invest such capital and related  indebtedness
in a  diversified  portfolio of equipment  subject to leases with terms  ranging
from two to seven years;  (iii) if funds are  available for  distribution,  make
monthly cash  distributions  to the Class A and Class B limited  partners during
the reinvestment  period (a period that ends  approximately June 30, 2003); (iv)
re-invest all available  undistributed  cash from operations and cash from sales
in  additional   equipment  during  the  reinvestment  period  to  increase  the
Partnership's  portfolio  of  revenue-generating   equipment  provided  suitable
equipment can be identified and acquired;  and (v) sell or otherwise  dispose of
the  Partnership's  equipment and other assets in an orderly manner and promptly
distribute cash from sales thereof to the Partners within three years of the end
of the reinvestment period.

During 1997, the  Partnership  acquired  capital of various types under lease to
third  parties.  All  of  the  capital  was  purchased  by  CAII  directly  from
manufacturers  or  from  other   independent  third  parties  and  sold  to  the
Partnership.   The  capital  is  generally  comprised  of,   transportation  and
industrial equipment, office furniture and equipment and computer and peripheral
equipment, among others (the "equipment"). See Item 13 of this report,

                                       -2-

<PAGE>



Item 1.  Business, continued
         --------

"Certain  Relationships  and  Related  Transactions"  for the detail  listing of
equipment  purchased during 1997. The Partnership expects that a majority of the
equipment  purchased  during  1998 will be  similar  in nature to the  equipment
acquired in 1997. As of December 31, 1997,  the general  partner has  identified
approximately   $3.6  million  of  additional   equipment   that  satisfied  the
Partnership's  acquisition  criteria that is expected to be acquired  during the
first quarter 1998.

The Partnership may assign the rentals from leases to financial institutions, or
acquire  leases  subject  to such  assignments,  at  fixed  interest  rates on a
nonrecourse  basis.  This  non-recourse  debt  financing,  also  referred  to as
discounted lease rentals,  will be utilized to finance the purchase of equipment
under lease, or to invest the proceeds  therefrom in additional  equipment under
lease.  In the event of default by a lessee,  the  financial  institution  has a
first lien on the underlying  leased  equipment with no further recourse against
the Partnership.  Cash proceeds from such financings,  or the assumption of such
assignments  incurred in the  acquisition  of leases are recorded on the balance
sheet as  discounted  lease  rentals.  As lessees  make  payments  to  financial
institutions, leasing revenue and interest expense are recorded.

During 1997, the  Partnership  leased  equipment to investment  grade lessees in
diverse  industries  including  the material  handling,  telecommunications  and
manufacturing industries. Approximately 79% of the Partnership's equipment under
lease was leased to investment  grade lessees as of December 31, 1997.  Pursuant
to the Partnership Agreement, an investment grade lessee is a company (i) with a
net worth in excess of $100,000,000 (and no debt issues that are rated); or (ii)
with a credit  rating of not less than Baa as  determined  by  Moody's  Investor
Services,  Inc. or comparable credit rating, as determined by another recognized
credit rating service;  or (iii) a lessee, all of whose lease payments have been
unconditionally  guaranteed  or  supported  by a letter  of  credit  issued by a
company meeting one of the above requirements. The Partnership limits its credit
risk  through  selective  use of  non-recourse  debt  financing  of future lease
rentals, as described above.

The  Partnership  only  acquires  equipment  that  is on  lease  at the  time of
acquisition. After the initial term of its lease, each item of equipment will be
expected to provide additional investment income from its re-lease or sale. Upon
expiration of the initial lease,  the  Partnership  attempts to re-lease or sell
the equipment to the existing lessee. If a re-lease or sale to the lessee cannot
be negotiated,  the Partnership will attempt to lease or sell the equipment to a
third party.

The Partnership's business is not subject to seasonal variations.

The  ultimate  rate of  return  of the  Partnership's  leasing  transactions  is
dependent,  in part,  on the  general  level of  interest  rates at the time the
leases are originated,  as well as future  equipment  values and on-going lessee
creditworthiness.  Because  leasing is an  alternative  to  financing  equipment
purchases  with  debt,  lease  rates tend to rise and fall with  interest  rates
(although  lease rate  movements  generally  lag  interest  rate  changes in the
capital  markets).  The  amount of future  distributions  to the  partners  will
depend, in part, on future interest rates.

The Partnership has no employees.  The officers,  directors and employees of the
general  partner  and  its  affiliates   perform   services  on  behalf  of  the
Partnership. The general partner is entitled to receive certain fees and expense
reimbursements in connection with the performance of these services. See Item 10
of this Report,  "Directors and Executive  Officers of the Partnership" and Item
13 of this Report,  "Certain  Relationships and Related Transactions," which are
incorporated herein by reference.

                                       -3-

<PAGE>



Item 1.  Business, continued
         --------

The  Partnership  competes  in  the  leasing  marketplace  as a  lessor  with  a
significant  number  of  other  companies,  including  equipment  manufacturers,
leasing companies and financial institutions. The Partnership competes mainly on
the basis of the  expertise  of its general  partner in  remarketing  equipment,
terms offered in its transactions, pricing and service. Although the Partnership
does not account for a significant percentage of the leasing market, the general
partner  believes  that the  Partnership's  marketing  strategies  and financing
capabilities  enable it to compete  effectively  in the  equipment  leasing  and
remarketing markets.

The Partnership  leases equipment to a significant  number of lessees.  However,
rental revenue from one lessee accounted for  approximately  12% ($1,386,538) of
total revenue of the  Partnership  during 1997.  Rental revenue from this lessee
constituted a larger  percentage of the  Partnership's  total revenue than it is
expected  to be in  the  future,  as  additional  leases  are  acquired  by  the
Partnership.

The  Partnership  is required to dissolve  and  distribute  all of its assets no
later than December 31, 2007. However,  the general partner anticipates that all
equipment  will be sold and the  Partnership  will be  liquidated  prior to that
date.


Item 2.  Properties
         ----------

Per the  Partnership  Agreement,  the  Partnership  does  not own or  lease  any
physical  properties other than the equipment discussed in Item 1 "Business," of
this Report, which is incorporated herein by reference.


Item 3.  Legal Proceedings
         -----------------

Neither the Partnership nor any of the Partnership's equipment is the subject of
any material pending legal proceedings.


Item 4.  Submission of Matters to a Vote of Security Holders
         ---------------------------------------------------

No matters were submitted to a vote of the limited  partners of the Partnership,
through the  solicitation  of proxies or  otherwise,  during the fourth  quarter
ended December 31, 1997.


Item 5.  Market  for  the  Partnership's  Common  Equity and Related Stockholder
         -----------------------------------------------------------------------
         Matters
         -------

(a)      The Partnership's  Class A limited partner units,  Class B interest and
         general  partner  interest  are  not  publicly  traded.   There  is  no
         established public trading market for such units and interests and none
         is expected to develop.

(b)      At December 31, 1997, there were 2,226 Class A limited partners.


                                       -4-

<PAGE>



Item 5.  Market  for  the  Partnership's  Common  Equity and Related Stockholder
         -----------------------------------------------------------------------
         Matters
         -------

(c)      Distributions
         -------------

         During 1997, the Partnership made twelve (12)  distributions (a portion
         of which  constituted a return of capital) to Class A limited  partners
         as follows:

                                                Distributions Per
                                                 $100 Investment
            For the                Payment         (computed on        Total
         Period Ended           Made During     weighted average)  Distributions
         ------------           -----------     -----------------  -------------

         December 31, 1996      January 1997         $ 0.875        $   126,682
         January 31, 1997       February 1997          0.875            148,000
         February 28, 1997      March 1997             0.875            165,833
         March 31, 1997         April 1997             0.875            209,988
         April 30, 1997         May 1997               0.875            206,805
         May 31, 1997           June 1997              0.875            225,213
         June 30, 1997          July 1997              0.875            282,582
         July 31, 1997          August 1997            0.875            267,496
         August 31, 1997        September 1997         0.875            290,656
         September 30, 1997     October 1997           0.875            355,921
         October 31, 1997       November 1997          0.875            326,231
         November 30, 1997      December 1997          0.875            342,134
                                                     -------        -----------
                                                     $ 10.50        $ 2,947,541
                                                     =======        ===========

         Distributions  may be  characterized  for tax,  accounting and economic
         purposes  as a return of  capital,  a return on capital or a portion of
         both.  The portion of each cash  distribution  by a  partnership  which
         exceeds its net income for the fiscal  period may be deemed a return of
         capital for accounting  purposes.  However,  the total  percentage of a
         partnership's  return on capital  over its life can only be  determined
         after  all  residual  cash  flows  (which  include  proceeds  from  the
         re-leasing and sale of equipment) have been realized at the termination
         of the Partnership.

         The  distribution  for the month  ended  December  31,  1997,  totaling
         $425,479,  was paid to the Class A limited partners on January 3, 1998.
         Distributions to the general partner and Class B limited partner during
         1997 are  discussed in Item 13 of this Report,  "Certain  Relationships
         and Related Transactions."

         The  general  partner  believes  that  the  Partnership  will  generate
         sufficient cash flows from operations  during 1998, to (1) meet current
         operating  requirements,  (2) enable it to fund cash  distributions  to
         both the Class A and Class B limited  partners at  annualized  rates of
         10.5% of their capital  contributions,  (portions of which are expected
         to  constitute  returns of  capital)  and (3)  reinvest  in  additional
         equipment  under  leases,  provided  that  suitable  equipment  can  be
         identified and acquired.

                                       -5-

<PAGE>


Item 5.  Market  for  the  Partnership's  Common  Equity and Related Stockholder
         -----------------------------------------------------------------------
         Matters, continued
         -------

(c)      Distributions, continued
         -------------

         During 1996, the Partnership made seven (7) distributions (a portion of
         which  constituted a return of capital) to Class A limited  partners as
         follows:

                                                Distributions Per
                                                 $100 Investment
           For the                Payment         (computed on        Total
         Period Ended           Made During     weighted average)  Distributions
         ------------           -----------     -----------------  -------------

         May 31, 1996           June 1996          $ 1.595*        $   5,265
         June 30, 1996          July 1996            0.875            17,017
         July 31, 1996          August 1996          0.875            26,767
         August 31, 1996        September 1996       0.875            38,295
         September 30, 1996     October 1996         0.875            60,032
         October 31, 1996       November 1996        0.875            71,221
         November 30, 1996      December 1996        0.875            94,441
                                                   -------         ---------
                                                   $ 6.845         $ 313,038
                                                   =======         =========

         *For the period April 16, 1996 (commencement of operations) through May
         31, 1996.

         The following represents annual cumulative distributions paid per Class
         A  limited  partner  unit,  as  described  in  Footnote  1 to  Notes to
         Consolidated Financial Statements.

                                               Distributions per
                                $ Per           Class A Limited
                               Class A           Partner Unit
           Payment          Limited Partner      (computed on
         Made During         Unit Invested     weighted average)        % (1)
         -----------        ---------------    -----------------        -----

            1996                $ 100               $  6.85             11.0%
            1997                                      10.50             10.5%
                                                    -------  
                                                    $ 17.35
                                                    =======

         (1) Cumulative  distributions,  as described in  Footnote 1 to Notes to
             Consolidated Financial Statements, began May 1996.


                                      -6-
<PAGE>

Item 6.  Selected Financial Data
         -----------------------

The following  selected  financial  data relates to the years ended December 31,
1997 and 1996. The data should be read in conjunction with Item 7, "Management's
Discussion and Analysis of Financial  Condition and Results of  Operations"  and
the financial statements and notes thereto with Item 8.

                                                           1997          1996*
                                                        ----------   -----------

Total revenue                                          $11,907,740   $   940,346
Net income                                                 955,418       102,627
Net income per weighted average Class A
  limited partner unit outstanding                            2.82          1.33
Total assets                                            56,161,440    16,652,457
Discounted lease rentals                                17,633,047     2,765,239
Distributions declared to Class A limited partners       3,246,338       439,720
Distributions declared per weighted average
  Class A limited partner unit outstanding                   10.50          7.72

*For the period from April 16, 1996 (commencement of operations) to December 31,
 1996


Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         -----------------------------------------------------------------------
         of Operations
         -------------

Presented below are schedules  (prepared  solely to facilitate the discussion of
results of  operations  that  follows)  showing  condensed  statements of income
categories and analyses of changes in those  condensed  categories  derived from
the Statements of Income:

                                                Condensed             The effect
                                           Statements of Income         on net
                                           for the years ended         income of
                                               December 31,             changes
                                         -----------------------        between
                                           1997         1996*            years
                                         ----------   ----------      ----------

Leasing margin                          $ 1,185,661   $ 203,467       $ 982,194
Interest income                             253,514      50,763         202,751
Management fees paid to general partner    (250,233)    (17,688)       (232,545)
Direct services from general partner        (78,767)    (41,376)        (37,391)
General and administrative                 (154,757)    (92,539)        (62,218)
                                        -----------   ---------       ----------
  Net income                            $   955,418   $ 102,627       $ 852,791
                                        ===========   =========       ==========

*For the period from April 16, 1996 (commencement of operations) to December 31,
 1996.

                                       -7-

<PAGE>

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         -----------------------------------------------------------------------
         of Operations, continued
         -------------

Results of Operations, continued
---------------------

LEASING MARGIN

Leasing margin consists of the following:
                                                      Years ended December 31,
                                                   -----------------------------
                                                       1997            1996*
                                                   -------------     -----------

Operating lease rentals                            $ 11,394,668      $  881,778
Direct finance lease income                             259,558           7,805
Depreciation                                         (9,213,581)       (659,574)
Interest on discounted lease rentals                 (1,254,984)        (26,542)
                                                   ------------      ----------
  Leasing margin                                   $  1,185,661      $  203,467
                                                   ============      ==========
  Leasing margin ratio                                      10%              23%
                                                            ==               ==

*For the period from April 16, 1996 (commencement of operations) to December 31,
 1996.

All  components of leasing margin  increased due to growth in the  Partnership's
lease portfolio.  Leasing margin ratio fluctuates  primarily due to non-recourse
interest   expense.   As  of  December  31,  1997,   approximately  40%  of  the
Partnership's portfolio consisted of operating leases financed with non-recourse
debt  while for the  comparable  period in 1996,  the  portfolio  was  minimally
financed with non-recourse debt and therefore, leasing margin was not materially
impacted by interest  expense.  Leasing  margin and the related  leasing  margin
ratio for an operating lease financed with  non-recourse  debt increases  during
the term of the lease since rents and  depreciation  are  typically  fixed while
interest expense declines as the related non-recourse debt is repaid.

The ultimate rate of return on leases depends, in part, on interest rates at the
time the leases are originated, as well as, future equipment values and on-going
lessee  creditworthiness.   Because  leasing  is  an  alternative  to  financing
equipment  purchases with debt,  lease rates tend to rise and fall with interest
rates (although lease rate movements  generally lag interest rate changes in the
capital markets).

INTEREST INCOME

Interest  income  increased  due to an increase  in invested  cash from sales of
Class A limited partner units pending the Partnership's  initial  acquisition of
equipment.

EXPENSES

Management   fees,   direct  services  from  general  partner  and  general  and
administrative  expenses  increased  due to  growth in the  Partnership's  lease
portfolio.

PROVISION FOR LOSSES

The  remarketing  of  equipment  for an amount  greater  than its book  value is
reported as equipment  sales margin (if the equipment is sold) or leasing margin
(if the equipment is re-leased). The realization of less than the carrying value
of equipment (which is typically not known until  remarketing  subsequent to the
initial lease termination has occurred) is recorded as provision for losses.


                                       -8-

<PAGE>

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         -----------------------------------------------------------------------
         of Operations, continued
         -------------

PROVISION FOR LOSSES, continued

Residual values are established equal to the estimated value to be received from
the equipment following termination of the lease. In estimating such values, the
Partnership considers all relevant facts regarding the equipment and the lessee,
including,  for  example,  the  likelihood  that the lessee  will  re-lease  the
equipment.  The nature of the  Partnership's  leasing  activities is that it has
credit and residual value exposure and,  accordingly,  in the ordinary course of
business,  it will incur losses from those exposures.  The Partnership  performs
on-going    quarterly    assessments    of   its   assets   to   identify    any
other-than-temporary losses in value.

There were no provision for losses recorded during 1997 or 1996.

Liquidity and Capital Resources
-------------------------------

The  Partnership  was  formed on  December  18,  1995.  On April 16,  1996,  the
Partnership commenced offering 500,000 Class A limited partner units at $100 per
unit for sale to investors.

A summary of the Partnership's offering activities for 1997 is presented below:

  Class A limited partner units sold                                    302,080
                                                                   ============

  Gross offering proceeds                                          $ 30,207,960
  Sales commissions                                                  (3,020,796)
  Organization and offering expenses                                 (1,208,318)
  Due diligence expenses                                                (86,991)
                                                                   ------------
      Net offering proceeds                                        $ 25,891,855
                                                                   ============
  Class B limited partner (CAII) cash contribution                 $    310,000
                                                                   ============

A summary of the  Partnership's  offering  activities  from the  commencement of
operations to December 31, 1997 is presented below:

  Class A limited partner units sold                                    456,632
                                                                   ============
  Gross offering proceeds                                          $ 45,663,241
  Sales commissions                                                  (4,566,324)
  Organization and offering expenses                                 (1,826,530)
  Due diligence expenses                                               (153,521)
                                                                   ------------
    Net offering proceeds                                          $ 39,116,866
                                                                   ============
    Class B limited partner (CAII) cash contribution               $    460,000
                                                                   ============

As of February  9, 1998,  all 500,000  Class A limited  partner  units have been
sold.

                                       -9-

<PAGE>

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         -----------------------------------------------------------------------
         of Operations, continued
         -------------

Liquidity and Capital Resources, continued
-------------------------------

The Partnership funds its operating activities principally with cash from rents,
discounted lease rentals  (non-recourse  debt),  interest  income,  and sales of
off-lease  equipment.  Available cash and cash reserves of the  Partnership  are
invested  in  short-term   government  securities  pending  the  acquisition  of
equipment or distribution to the partners.

During 1997, the Partnership  acquired  equipment subject to leases with a total
purchase  price of  $47,828,703  (including  $16,946,684  of equipment  acquired
subject to existing  non-recourse  debt).  Also  during  1997,  the  Partnership
discounted  future rental payments from certain leases to  non-recourse  lenders
and received proceeds of $3,687,846.  Non-recourse borrowing against unleveraged
leases in the  Partnership's  lease  portfolio  may occur in the future as well,
when the general partner,  in its discretion,  determines that such non-recourse
financing is in the best interest of the  Partnership.  As of December 31, 1997,
the general  partner had  identified  $3.6 million of additional  equipment that
satisfied the Partnership's  acquisition criteria and is expected to be acquired
during 1998.

During 1997 and 1996,  the  Partnership  declared  distributions  to the Class A
limited partners of $2,947,541 and $439,720, respectively, of which $425,479 was
paid  during  January  1998.  A portion of such  distributions  is  expected  to
constitute  a return of capital.  Distributions  may be  characterized  for tax,
accounting and economic purposes as a return of capital,  a return on capital or
a portion of both. The portion of each cash  distribution by a partnership which
exceeds  its net income for the fiscal  period may be deemed a return of capital
for accounting purposes. However, the total percentage of a partnership's return
on capital over its life can only be  determined  after all residual  cash flows
(which include  proceeds from the  re-leasing and sales of equipment)  have been
realized at the termination of the Partnership.  For 1997,  approximately 73% of
the cash  distributions  paid to the partners of the  Partnership  constituted a
return of capital for accounting purposes. This percentage may not be reflective
of the percentage of  distributions  that constitutes a return of capital at any
subsequent point in time.

The general partner believes that the Partnership will generate  sufficient cash
flows from operations during 1998, to (1) meet current  operating  requirements,
(2) enable it to fund cash distributions to both the Class A and Class B limited
partners at annualized rates of 10.5% of their capital  contributions  (portions
of which are expected to  constitute  returns of  capital),  and (3) reinvest in
additional  equipment  under leases,  provided  that  suitable  equipment can be
identified and acquired.


                                      -10-

<PAGE>





Item 8.  Financial Statements and Supplementary Data
         -------------------------------------------
  
         Index to Financial Statements

                                                                           Page
                                                                          Number
         Financial Statements                                             ------
         --------------------

                Independent Auditors' Report                                12

                Balance Sheets as of December 31, 1997 and 1996             13

                Statements of Income for the year ended  December 31,
                1997 and the period from April 16, 1996 (commencement
                of operations) through December 31, 1996                    14

                Statements  of  Partners'  Capital for the year ended
                December  31, 1997 and the period from April 16, 1996
                (commencement of operations) through December 31, 1996      15

                Statements of Cash Flows for the year ended  December
                31,   1997  and  the  period   from  April  16,  1996
                (commencement of operations) through December 31, 1996      16

                Notes to Financial Statements                              17-27






                                      -11-

<PAGE>



                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------




THE PARTNERS
CAPITAL PREFERRED YIELD FUND-IV, L.P.

We have  audited the  accompanying  balance  sheets of Capital  Preferred  Yield
Fund-IV,  L.P. as of December 31, 1997 and 1996,  and the related  statements of
income,  partners' capital,  and cash flows for the year ended December 31, 1997
and the period from April 16, 1996  (commencement of operations) to December 31,
1996. These financial  statements are the  responsibility  of the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provides a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of Capital  Preferred  Yield
Fund-IV,  L.P.  as of  December  31,  1997  and  1996,  and the  results  of its
operations  and its cash  flows for the year  ended  December  31,  1997 and the
period from April 16, 1996 (commencement of operations) to December 31, 1996, in
conformity with generally accepted accounting principles.




                                     /s/KPMG Peat Marwick LLP
                                     ------------------------
                                     KPMG PEAT MARWICK LLP

Denver, Colorado
February 6, 1998



                                      -12-

<PAGE>



                      Capital Preferred Yield Fund-IV, L.P.

                                 BALANCE SHEETS
                           December 31, 1997 and 1996

                                     ASSETS

                                                          1997          1996
                                                       -----------   -----------

Cash and cash equivalents                             $  4,676,747  $  3,286,072
Accounts receivable                                        383,407        76,524
Receivable from related party                               10,000             -
Net investment in direct finance leases                  4,602,977       182,328
Leased equipment, net                                   46,488,309    13,107,533
                                                      ------------  ------------
    Total assets                                      $ 56,161,440  $ 16,652,457
                                                      ============  ============


                        LIABILITIES AND PARTNERS' CAPITAL

Liabilities:
  Accounts payable and accrued liabilities            $    411,814  $    288,834
  Payables to affiliates                                    58,722        43,483
  Rents received in advance                                817,900       401,386
  Distributions payable to partners                        433,396       128,898
  Discounted lease rentals                              17,633,047     2,765,239
                                                      ------------  ------------
  Total liabilities                                     19,354,879     3,627,840
                                                      ------------  ------------

Partners' capital:
  General partner                                                -             -
  Limited partners:
      Class A 500,000 units authorized; 455,953 and
        154,503 units issued and outstanding in 1997
        and 1996, respectively                          36,374,010    12,878,374
      Class B                                              432,551       146,243
                                                      ------------  ------------

      Total partners' capital                           36,806,561    13,024,617
                                                      ------------  ------------

      Total liabilities and partners' capital         $ 56,161,440  $ 16,652,457
                                                      ============  ============


                 See accompanying notes to financial statements.

                                      -13-

<PAGE>



                      Capital Preferred Yield Fund-IV, L.P.

                              STATEMENTS OF INCOME


                                                               For the period
                                                             from April 16, 1996
                                                Year Ended     (commencement of
                                               December 31,     operations) to
                                                  1997         December 31, 1996
                                              ------------   -------------------
Revenue:
  Operating lease rentals                     $ 11,394,668          $ 881,778
  Direct finance lease income                      259,558              7,805
  Interest income                                  253,514             50,763
                                              ------------          ---------
        Total revenue                           11,907,740            940,346
                                              ------------          ---------

Expenses:
  Depreciation                                   9,213,581            659,574
  Management fees paid to general partner          250,233             17,688
  Direct services from general partner              78,767             41,376
  General and administrative                       154,757             92,539
  Interest on discounted lease rentals           1,254,984             26,542
                                              ------------          ---------
        Total expenses                          10,952,322            837,719
                                              ------------          ---------
Net income                                    $    955,418          $ 102,627
                                              ============          =========

Net income allocated:
  To the general partner                      $     74,673          $  26,271
  To the Class A limited partners                  871,799             75,564
  To the Class B limited partner                     8,946                792
                                              ------------          ---------
                                              $    955,418          $ 102,627
                                              ============          =========

Net income per weighted average Class A
  limited partner unit outstanding            $       2.82          $    1.33
                                              ============          =========

Weighted average Class A limited partner
  units outstanding                                309,586             56,931
                                              ============          =========


                 See accompanying notes to financial statements.

                                      -14-

<PAGE>



                      Capital Preferred Yield Fund-IV, L.P.

                         STATEMENTS OF PARTNERS' CAPITAL
                  For the year ended December 31, 1997 and the
             period from April 16, 1996 (commencement of operations)
                              to December 31, 1996
<TABLE>
<CAPTION>


                                                            Class A
                                                            Limited        Class A         Class B
                                              General       Partners       Limited         Limited
                                              Partner         Units        Partners        Partner         Total
                                              -------       ---------    ------------     ----------    ------------

<S>                                          <C>           <C>          <C>               <C>          <C>         
Capital contributions                         $       -     154,553      $ 15,455,281      $ 150,000    $ 15,605,281
Commissions and offering costs on
  sales of Class A limited partner units        (22,303)          -        (2,207,967)             -      (2,230,270)
Redemptions                                           -         (50)           (4,784)             -          (4,784)
Net income                                       26,271           -            75,564            792         102,627
Distributions declared to partners               (3,968)          -          (439,720)        (4,549)       (448,237)
                                              ---------     --------     ------------      ---------    ------------

Partners' capital, December 31, 1996                  -     154,503        12,878,374        146,243      13,024,617

Capital contributions                                 -     302,080        30,207,960        310,000      30,517,960
Commissions and offering costs on
  sales of Class A limited partner units        (43,222)          -        (4,278,883)             -      (4,322,105)
Redemptions                                           -        (630)          (58,902)             -         (58,902)
Net income                                       74,673           -           871,799          8,946         955,418
Distributions declared to partners              (31,451)          -        (3,246,338)       (32,638)     (3,310,427)
                                              ---------     --------     ------------      ---------    ------------
Partners' capital, December 31, 1997          $       -     455,953      $ 36,374,010      $ 432,551    $ 36,806,561
                                              =========     ========     ============      ==========   ============

</TABLE>










                 See accompanying notes to financial statements.

                                      -15-

<PAGE>



                      Capital Preferred Yield Fund-IV, L.P.
                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                                                             For the period from
                                                                                   Year Ended                   April 16, 1996
                                                                                   December 31,         (commencement of operations)
                                                                                     1997                    to December 31, 1996

                                                                                -----------------       ----------------------------
<S>                                                                            <C>                            <C>          
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                                    $      955,418                 $     102,627
  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Depreciation                                                                   9,213,581                       659,574
      Recovery of investment in direct finance leases                                1,057,640                        20,040
    Changes in assets and liabilities:
      Increase in accounts receivable                                                 (319,755)                      (76,524)
      Increase in accounts payable and accrued liabilities                             122,980                       651,476
      Increase in payables to affiliates                                                15,239                        43,483
      Increase in rents received in advance                                            416,514                        31,991
                                                                                --------------                 -------------
Net cash provided by operating activities                                           11,461,617                     1,432,667
                                                                                --------------                 -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchases of equipment on operating leases from affiliates                     (28,986,004)                  (12,939,697)
    Investment in direct financing leases, acquired from affiliates                 (2,123,638)                     (202,368)
                                                                                --------------                 -------------
Net cash used in investing activities                                              (31,109,642)                  (13,142,065)
                                                                                --------------                 -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from Class A capital contributions                                     30,207,960                    15,455,281
    Proceeds from Class B capital contributions                                        300,000                       150,000
    Proceeds from discounted lease rentals                                           3,687,846                     1,923,239
    Principal payments on discounted lease rentals                                  (5,766,722)                       (7,244)
    Redemptions of Class A limited partner units                                       (58,902)                       (4,784)
    Commissions paid to affiliate in connection with the sale of
      Class A limited partner units                                                 (3,020,146)                   (1,545,528)
    Non-accountable organization and offering expense reimbursement
      paid to the general partner in connection with the sale of Class A
      limited partner units                                                         (1,301,960)                     (656,155)
    Distributions to partners                                                       (3,009,376)                     (319,339)
                                                                                --------------                 -------------
Net cash provided by financing activities                                           21,038,700                    14,995,470
                                                                                --------------                 -------------

NET INCREASE IN CASH AND CASH EQUIVALENTS                                            1,390,675                     3,286,072
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                     3,286,072                             -
                                                                                --------------                 -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                      $    4,676,747                 $   3,286,072
                                                                                ==============                 =============

Supplemental disclosure of cash flow information:
    Interest paid on discounted lease rentals                                   $    1,238,980                 $      26,542
Supplemental disclosure of noncash investing and financing activities:
    Reduction in Partners' capital accounts for commissions and offering
      costs payable to affiliates                                                       18,879                        28,587
    Discounted lease rentals assumed in equipment acquisitions                      16,946,684                       849,244

</TABLE>

                 See accompanying notes to financial statements.

                                      -16-

<PAGE>


                      Capital Preferred Yield Fund-IV, L.P.
                          NOTES TO FINANCIAL STATEMENTS


1.  Organization and Summary of Significant Accounting Policies
    -----------------------------------------------------------

    Organization

      Capital Preferred Yield Fund-IV, L.P. (the "Partnership") was organized on
      December 18, 1995 as a limited  partnership under the laws of the State of
      Delaware pursuant to an Agreement of Limited Partnership (the "Partnership
      Agreement").  The  Partnership was formed for the purpose of acquiring and
      leasing  a  diversified  portfolio  of  equipment  to  unaffiliated  third
      parties.  The  Partnership  will continue  until  December 31, 2007 unless
      terminated  earlier  in  accordance  with  the  terms  of the  Partnership
      Agreement.  All  Partnership  equipment  is  expected  to be sold  and the
      Partnership  liquidated  between 2003 and 2007. The general partner of the
      Partnership is CAI Equipment Leasing V Corp., a wholly owned subsidiary of
      Capital Associates, Inc. ("CAI").

      The general  partner  manages the  Partnership,  including  investment  of
      funds,  purchase  and  sale of  equipment,  lease  negotiation  and  other
      administrative  duties. The Partnership  commenced business  operations on
      April 16,  1996,  and from that date through  December  31, 1997,  456,633
      Class A limited partner units were sold to  approximately  2,238 investors
      at a price of $100 per Class A limited partner unit.

      Capital Associates International, Inc. ("CAII"), a wholly owned subsidiary
      of CAI,  is the Class B limited  partner.  The Class B limited  partner is
      required to contribute cash, upon  acquisition of equipment,  in an amount
      equal to 1% of gross offering  proceeds  received from the sale of Class A
      limited partner units.

    Use of Estimates

      The  preparation  of financial  statements  in conformity  with  generally
      accepted  accounting  principles 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 revenue and  expenses
      during the  reporting  period.  For leasing  entities,  this  includes the
      estimate of residual  values,  as discussed  below.  Actual  results could
      differ from those estimates.

    Partnership Allocations

      Cash Distributions
      ------------------

        During  the   Reinvestment   Period  (as  defined  in  the   Partnership
        Agreement), available cash is distributed to the partners as follows:




                                      -17-

<PAGE>


                      Capital Preferred Yield Fund-IV, L.P.
                          NOTES TO FINANCIAL STATEMENTS

1.  Organization and Summary of Significant Accounting Policies, continued
    -----------------------------------------------------------

    Partnership Allocations, continued

      Cash Distributions, continued
      ------------------

        First,  1.0% to the  general  partner  and  99.0% to the Class A limited
        partners   until   the  class  A  limited   partners   receive   annual,
        non-compounded   cumulative   distributions  equal  to  10.5%  of  their
        contributed capital.

        Second,  1.0% to the  general  partner  and 99.0% to the Class B limited
        partner until the Class B limited partner receives annual non-compounded
        cumulative distributions equal to 10.5% of its contributed capital.

        Third, any remaining available cash will be reinvested or distributed to
        the partners as specified in the Partnership Agreement.

      After the Reinvestment  Period (as defined in the Partnership  Agreement),
      available cash will be distributed to the partners as follows:

        First,  in accordance with the first and second  allocations  during the
        Reinvestment Period as described above.

        Second,  99.0% to the Class A limited  partners  and 1.0% to the general
        partner,  until the Class A limited  partners achieve Payout (as defined
        in the Partnership Agreement).

        Third,  99.0%  to the  Class B  limited  partner,  1.0%  to the  general
        partner,  until the Class B limited partner  achieves Payout (as defined
        in the Partnership Agreement).

        Fourth,  99.0% to the Class A and Class B limited  partners (as a class)
        and 1.0% to the general  partner,  until the Class A and Class B limited
        partners  receive  cash  distributions  equal to 170% of  their  capital
        contributions.

      Thereafter,  90% to the Class A and Class B limited  partners (as a class)
      and 10% to the general partner.

      Profits and Losses
      ------------------

      There are several special allocations that precede the general allocations
      of  profits  and  losses to the  partners.  The most  significant  special
      allocations are as follows:



                                      -18-

<PAGE>


                      Capital Preferred Yield Fund-IV, L.P.
                          NOTES TO FINANCIAL STATEMENTS

1.  Organization and Summary of Significant Accounting Policies, continued
    -----------------------------------------------------------

    Partnership Allocations, continued

      Cash Distributions, continued
      ------------------

        First,  commissions  and expenses  paid in  connection  with the sale of
        Class A limited  partner units are allocated 1.0% to the general partner
        and 99.0% to the Class A limited partners.

        Second,  depreciation  relating to Partnership  equipment and any losses
        resulting from the sale of equipment are generally allocated 1.0% to the
        general partner and 99.0% to the limited partners (shared  99.0%/1.0% by
        the  Class A and  Class B  limited  partners,  respectively)  until  the
        cumulative amount of such depreciation and such losses allocated to each
        limited  partner  equals  such  limited  partner's  contributed  capital
        reduced by commissions  and other  expenses paid in connection  with the
        sale  of  Class A  limited  partner  units  allocated  to such  partner.
        Thereafter,  gain on sale of equipment, if any, will be allocated to the
        general partner in an amount equal to the sum of  depreciation  and loss
        on sale of equipment previously allocated to the general partner.

        Third,  notwithstanding  anything in the  Partnership  Agreement  to the
        contrary,  and before any other  allocation is made, items of income and
        gain for the current year (or period) shall be allocated,  as quickly as
        possible,  to the general  partner to the extent of any deficit  balance
        existing in the general partner's capital account as of the close of the
        immediately  preceding  year,  in order to  restore  the  balance in the
        general partner's capital account to zero.

      After  giving  effect to special  allocations,  profits (as defined in the
      Partnership  Agreement)  are first  allocated in proportion to, and to the
      extent  of,  any  previous  losses,  in  reverse  chronological  order and
      priority.  Any  remaining  profits  are  allocated  in the same  order and
      priority as cash distributions.

      After  giving  effect to special  allocations,  losses (as  defined in the
      Partnership  Agreement)  are allocated in proportion to, and to the extent
      of, any previous profits, in reverse chronological order and priority. Any
      remaining  losses are allocated  1.0% to the general  partner and 99.0% to
      the limited partners (shared 99.0%/1.0% by the Class A and Class B limited
      partners, respectively).


      Financial Reporting
      -------------------

      For financial reporting purposes,  net income is allocated to the partners
      in a manner consistent with the allocation of cash distributions.




                                      -19-

<PAGE>


                      Capital Preferred Yield Fund-IV, L.P.
                          NOTES TO FINANCIAL STATEMENTS

1.  Organization and Summary of Significant Accounting Policies, continued
    -----------------------------------------------------------

    Recently Issued Financial Accounting Standards

      During 1997, the Partnership adopted SFAS No. 125, Accounting for Transfer
      and  Servicing  of Financial  Assets and  Extinguishments  of  Liabilities
      ("SFAS  No.  125").  SFAS  No.  125  provides  consistent   standards  for
      distinguishing transfers of financial assets that are sales from transfers
      that are secured  borrowings.  The adoption of SFAS No. 125 did not have a
      material  impact on the  Partnership's  financial  position  or results of
      operations.

    Long-lived Assets

      The  Partnership  accounts for  long-lived  assets under the provisions of
      Statement of Financial  Accounting  Standards No. 121,  Accounting for the
      Impairment of Long-lived  Assets and for Long-lived  Assets to be Disposed
      Of ("SFAS  No.  121").  SFAS No.  121  requires  that  long-lived  assets,
      including  operating leases,  and certain  identifiable  intangibles to be
      held and used by an entity be reviewed for impairment  whenever  events or
      changes in circumstances indicate that the carrying amount of an asset may
      not be  recoverable.  In  performing  the review for  recoverability,  the
      entity should  estimate the future cash flows  expected to result from the
      use of the asset and its eventual disposition.  If the sum of the expected
      future cash flows (undiscounted and without interest charges) is less than
      the  carrying  amount of the  asset,  an  impairment  loss is  recognized.
      Measurement  of  an  impairment  loss  for  long-lived  assets,  including
      operating leases, and identifiable  intangibles held by the Partnership is
      based on the  fair  value  of the  asset  calculated  by  discounting  the
      expected future cash flows at an appropriate interest rate.

    Lease Accounting

      Statement of Financial Accounting Standards No. 13, Accounting for Leases,
      requires  that a lessor  account  for each  lease by the  direct  finance,
      sales-type or operating lease method.  The Partnership  currently utilizes
      the direct  financing and operating  methods for all of the  Partnership's
      equipment  under lease.  Direct finance leases are defined as those leases
      which transfer substantially all of the benefits and risks of ownership of
      the equipment to the lessee. For all types of leases, the determination of
      profit   considers  the   estimated   value  of  the  equipment  at  lease
      termination,  referred to as the residual value.  After the inception of a
      lease,  the Partnership may engage in financing of lease  receivables on a
      nonrecourse  basis  (i.e.,   "non-recourse   debt"  or  "discounted  lease
      rentals")  and/or  equipment  sale  transactions  to reduce or recover its
      investment in the equipment.

    The  Partnership's accounting  methods and their financial reporting effects
    are described below.





                                      -20-

<PAGE>


                      Capital Preferred Yield Fund-IV, L.P.
                          NOTES TO FINANCIAL STATEMENTS

1.  Organization and Summary of Significant Accounting Policies, continued
    -----------------------------------------------------------

    Net Investment in Direct Financing Leases ("DFLs")

      The cost of the equipment,  including acquisition fees paid to the general
      partner, is recorded as net investment in DFLs on the accompanying balance
      sheet.  Leasing  revenue,  which is recognized over the term of the lease,
      consists of the excess of lease payments plus the estimated residual value
      over the equipment's cost. Earned income is recognized  monthly to provide
      a constant  yield and is recorded as direct  finance  lease  income on the
      accompanying  income statements.  Residual values are established at lease
      inception  equal to the estimated  value to be received from the equipment
      following termination of the initial lease (which in certain circumstances
      includes  anticipated  re-lease  proceeds),  as  determined by the general
      partner.  In estimating  such values,  the general  partner  considers all
      relevant information regarding the equipment and the lessee.

    Equipment on Operating Leases ("OLs")

      The cost of  equipment,  including  acquisition  fees paid to the  general
      partner,  is  recorded as leased  equipment  in the  accompanying  balance
      sheets and is depreciated on a straight-line  basis over the lease term to
      an amount equal to the estimated  residual value at the lease  termination
      date.  Leasing  revenue  consists  principally  of  monthly  rents  and is
      recognized  as  operating  lease  rentals  in  the   accompanying   income
      statements.  Residual  values are  established at lease inception equal to
      the  estimated   value  to  be  received  from  the  equipment   following
      termination of the initial lease (which in certain circumstances  includes
      anticipated  re-lease proceeds),  as determined by the general partner. In
      estimating  such  values,  the  general  partner  considers  all  relevant
      information  and  circumstances  regarding  the  equipment and the lessee.
      Because  revenue,  depreciation  expense and the  resultant  profit margin
      before  interest  expense  are  recorded  on a  straight-line  basis,  and
      interest expense on discounted lease rentals (discussed below) is recorded
      on the interest  method,  lower returns are realized in the early years of
      the term of an OL and higher returns in later years.

    Non-recourse Discounting of Rentals

       The  Partnership  may assign the future  rentals from leases to financial
       institutions,  or acquire  leases subject to such  assignments,  at fixed
       interest  rates on a  non-recourse  basis.  In return  for such  assigned
       future  rentals,  the  Partnership  receives the discounted  value of the
       rentals  in cash.  In the event of  default  by a lessee,  the  financial
       institution has a first lien on the underlying leased equipment,  with no
       further  recourse  against  the  Partnership.  Cash  proceeds  from  such
       financings,  or the  assumption of such  financings,  are recorded on the
       balance sheet as discounted  lease  rentals.  As lessees make payments to
       financial   institutions,   leasing  revenue  and  interest  expense  are
       recorded.



                                      -21-

<PAGE>


                      Capital Preferred Yield Fund-IV, L.P.
                          NOTES TO FINANCIAL STATEMENTS

1.  Organization and Summary of Significant Accounting Policies, continued
    -----------------------------------------------------------

    Allowance for Losses

      An allowance for losses is maintained at levels  determined by the general
      partner to  adequately  provide for any  other-than-temporary  declines in
      asset values. In determining losses, economic conditions,  the activity in
      the  used   equipment   markets,   the  effect  of  actions  by  equipment
      manufacturers, the financial condition of lessees, the expected courses of
      action by lessees with regard to leased  equipment at  termination  of the
      initial lease term, and other factors which the general  partner  believes
      are  relevant,  are  considered.  Asset  chargeoffs  are recorded upon the
      termination or remarketing of the underlying  assets.  The lease portfolio
      is reviewed  quarterly to  determine  the  adequacy of the  allowance  for
      losses.

    Transactions Subsequent to Initial Lease Termination

      After the initial term of equipment under lease expires,  the equipment is
      either sold or re-leased to the  existing  lessee or another  third party.
      The remaining net book value of equipment sold is removed and gain or loss
      recorded when equipment is sold. The accounting for re-leased equipment is
      consistent  with the accounting  described under "Net Investment in Direct
      Financing Leases" and "Equipment on Operating Leases" above.

    Income Taxes

      No provision  for income taxes has been made in the  financial  statements
      since  taxable  income  or  loss is  recorded  in the  tax  return  of the
      individual partners.

    Cash Equivalents

      The Partnership considers  short-term,  highly liquid investments that are
      readily convertible to known amounts of cash to be cash equivalents.  Cash
      equivalents  of  approximately  $4,676,000  and $2,491,000 at December 31,
      1997 and 1996, respectively, are comprised of investments in a mutual fund
      which invests solely in U.S.  Government  treasury bills having maturities
      of 90 days or less.

    Net Income Per Class A Limited Partner Unit

      Net income per Class A limited  partner  unit is computed by dividing  the
      net  income  allocated  to the Class A limited  partners  by the  weighted
      average  number of Class A limited  partner units  outstanding  during the
      period.





                                      -22-

<PAGE>


                      Capital Preferred Yield Fund-IV, L.P.
                          NOTES TO FINANCIAL STATEMENTS

2.  Net Investment in Direct Finance Leases
    ---------------------------------------

    The components of the net investment in direct finance leases as of December
    31, 1997 and 1996 were:

                                                     1997          1996
                                                   --------      ---------

    Minimum lease payments receivable            $ 4,420,096    $   196,123
    Estimated residual values                        781,773         19,627
    Less unearned income                            (598,892)       (33,422)
                                                 -----------    -----------
           Total                                 $ 4,602,977    $   182,328
                                                 ===========    ===========

3.  Leased Equipment
    ----------------

    The  Partnership's  investment  in equipment  on  operating  leases by major
    classes as of December 31, 1997 and 1996 were:

                                                     1997          1996
                                                   --------      ---------

    Transportation and industrial equipment    $ 26,164,592    $ 10,188,595
    Computers and peripherals                    14,774,631       3,569,359
    Office furniture and equipment               13,168,649               -
    Other                                         2,228,605          30,988
                                               ------------    ------------
                                                 56,336,477      13,788,942
    Less accumulated depreciation                (9,848,168)       (681,409)
                                               ------------    ------------
                                               $ 46,488,309    $ 13,107,533
                                               ============    ============

    Depreciation  expense  for  1997  and  1996  was  $9,213,581  and  $659,574,
    respectively.

4.  Future Minimum Lease Payments
    -----------------------------

    Future minimum lease payments  receivable  from  noncancelable  leases as of
    December 31, 1997 are as follows:

          Years Ending December 31,                DFLs              OLs
          -------------------------               ------            -----

                  1998                         $ 1,827,864      $ 15,272,639
                  1999                           1,488,582        11,793,021
                  2000                             650,845         6,692,279
                  2001                             438,583         3,209,992
                  2002                              14,222         1,263,293
                  Thereafter                            -            451,269
                                               -----------      ------------
                           Total               $ 4,420,096      $ 38,682,493
                                               ===========      ============

                                      -23-

<PAGE>


                      Capital Preferred Yield Fund-IV, L.P.
                          NOTES TO FINANCIAL STATEMENTS

5.  Discounted Lease Rentals
    ------------------------

    Discounted  lease rentals  outstanding at December 31, 1997 bear interest at
    rates  primarily  ranging between 6% and 10%.  Aggregate  maturities of such
    non-recourse obligations are:

          Years Ending December 31,
          ------------------------- 
                  1998                                            $  7,843,011
                  1999                                               5,282,298
                  2000                                               2,557,064
                  2001                                               1,590,983
                  2002                                                 318,381
                  Thereafter                                            41,310
                                                                  ------------
                                                                  $ 17,633,047
                                                                  ============

6.  Transactions With the General Partner and Affiliates
    ----------------------------------------------------

      Sales Commissions and Offering Costs
      ------------------------------------

      Under the terms of the Partnership Agreement,  an affiliate of the general
      partner is entitled to receive  sales  commissions  and  wholesaling  fees
      equal to 10% of the Class A limited partners' capital contributions, up to
      9% of which is paid to participating broker-dealers. During 1997 and 1996,
      respectively,   the   Partnership   incurred   commissions   and  fees  of
      approximately   $3,021,000  and  $1,546,000,   including   $2,562,000  and
      $1,324,000 that were paid to participating broker-dealers.

      As provided in the  Partnership  Agreement,  the  general  partner  earned
      approximately  $1,208,000  and  $618,000  as  reimbursement  for  expenses
      incurred  during  1997 and  1996,  respectively,  in  connection  with the
      organization  of the  Partnership  and the  offering  of  Class A  limited
      partner units. The general partner also received approximately $87,000 and
      $67,000 as reimbursement  for due diligence  expenses incurred during 1997
      and 1996, respectively.

      Capital Contributions
      ---------------------
 
      Under terms of the Partnership Agreement, the Class B limited partner made
      capital  contributions  to the Partnership of $310,000 and $150,000 during
      1997 and 1996,  respectively,  of which $10,000 was included in receivable
      from related party at December 31, 1997.




                                      -24-

<PAGE>


                      Capital Preferred Yield Fund-IV, L.P.
                          NOTES TO FINANCIAL STATEMENTS

6.  Transactions With the General Partner and Affiliates, continued
    ----------------------------------------------------
 
      Origination Fee and Evaluation Fee
      ----------------------------------

      The  general  partner  earns a fee  equal  to 3.5% of the  sales  price of
      equipment sold to the  Partnership (up to a maximum  cumulative  amount as
      specified  in the  Partnership  Agreement),  1.5%,  of  which,  represents
      compensation  for selecting,  negotiating and consummating the acquisition
      of the equipment and 2%, of which,  represents  reimbursement for services
      rendered in connection  with  evaluating the  suitability of the equipment
      and the  creditworthiness of the lessees.  Origination and evaluation fees
      totaled   approximately   $1,586,000   and  $464,000  in  1997  and  1996,
      respectively,  all of which were capitalized by the Partnership as part of
      the cost of  equipment on operating  leases and net  investment  in direct
      financing leases.

      Management Fees
      ---------------

      The general  partner  earns  management  fees for  services  performed  in
      connection with managing the Partnership's  equipment equal to 2% of gross
      rentals  received as permitted under terms of the  Partnership  Agreement.
      The  general  partner  earned   approximately   $250,000  and  $18,000  of
      management fees during 1997 and 1996, respectively.

      Direct Services
      ---------------

      The  general  partner  and its  affiliates  provide  accounting,  investor
      relations, billing, collecting, asset management, and other administrative
      services  to the  Partnership.  The  Partnership  reimburses  the  general
      partner for these services  performed on its behalf as permitted under the
      terms of the Partnership Agreement. The partnership recorded approximately
      $79,000 and $41,000 of direct  services from general  partner  during 1997
      and 1996, respectively.

      Equipment Purchases
      -------------------

      The Partnership purchased equipment from CAII, with a total purchase price
      of  approximately  $47,800,000  (including  approximately  $16,900,000  of
      discounted  lease  rentals)  during 1997.  The  Partnership  purchased the
      equipment  at  CAII's  historical  cost  plus  reimbursement  of other net
      acquisition costs, as provided for in the Partnership Agreement.

      Payables to Affiliates
      ----------------------

      Payables to affiliates consists of direct services, management fees, sales
      commissions,  wholesaling  fees  and  organization  and  offering  expense
      reimbursements  with respect to Class A limited  partner  units payable to
      the general partner and its affiliates.


                                      -25-

<PAGE>


                      Capital Preferred Yield Fund-IV, L.P.
                          NOTES TO FINANCIAL STATEMENTS

7.  Tax Information (Unaudited)
    ---------------------------

    The following  reconciles net income for financial reporting purposes to the
    income for federal  income tax purposes for the periods  ended  December 31,
    1997 and 1996:

                                                       1997            1996
                                                       ----            ----

    Net income per financial statements            $    955,418     $  102,627
    Direct financing leases                           1,057,640         20,040
    Depreciation                                     (4,245,112)      (567,815)
    Other                                               400,382         87,042
                                                   ------------     ----------
    Partnership income for federal income
      tax purposes                                 $ (1,831,672)    $ (358,106)
                                                   ============     ==========

    The following  reconciles partners' capital for financial reporting purposes
    to partners' capital for federal income tax purposes as of December 31, 1997
    and 1996:

                                                       1997            1996
                                                       ----            ----

    Partners' capital per financial statements     $ 36,806,561    $ 13,024,617
    Commissions and offering costs                    6,552,375       2,230,270
    Direct financing leases                           1,077,680          20,040
    Depreciation                                     (4,812,927)       (567,815)
    Other                                               476,622          81,277
                                                   ------------    ------------
    Partners' capital for federal income
      tax purposes                                 $ 40,100,311    $ 14,788,389
                                                   ============    ============

8.  Concentration of Credit Risk
    ----------------------------

    Approximately 79% of the  Partnership's  equipment under lease was leased to
    investment  grade  companies.  Pursuant  to the  Partnership  Agreement,  an
    investment  grade  lessee  is a  company  (i) with a net  worth in excess of
    $100,000,000  (and no debt  issues  that are  rated),  or (ii) with a credit
    rating of not less than Baa as determined by Moody's Investor Services, Inc.
    or  comparable  credit rating as  determined  by another  recognized  credit
    rating  service;  or (iii) a lessee,  all of whose lease  payments have been
    unconditionally  guaranteed  or supported by a letter of credit  issued by a
    company meeting one of the above requirements.

    One lessee accounted for  approximately 12% ($1,387,000) of total revenue of
    the Partnership  during 1997. Three lessees  accounted for approximately 48%
    ($453,000) of total revenue of the Partnership  during 1996.  Rental revenue
    from these  lessees  constituted a larger  percentage  of the  Partnership's
    total revenue than  expected in future  periods,  as  additional  leases are
    acquired by the Partnership.

    The  Partnership's  cash balance is  maintained  with a high credit  quality
    financial institution.  At times, such balances may be in excess of the FDIC
    insurance  limit due to the receipt of lockbox amounts that have not cleared
    the presentment bank (generally for less than two days). As the funds become
    available, they are invested in a money market mutual fund.

                                      -26-

<PAGE>


                      Capital Preferred Yield Fund-IV, L.P.
                          NOTES TO FINANCIAL STATEMENTS

9.  Disclosures about Fair Value of Financial Instruments
    -----------------------------------------------------

    Statement of Financial  Standards No. 107,  Disclosures  about Fair Value of
    Financial   Instruments   specifically   excludes  certain  items  from  its
    disclosure  requirements  such as the  Partnership's  investment  in  leased
    assets.  The  carrying  amounts  at  December  31,  1997  for  cash and cash
    equivalents,  accounts receivable, accounts payable and accrued liabilities,
    payable to  affiliates,  rents and sale  proceeds  received  in advance  and
    distributions  payable to partners  approximate their fair values due to the
    short maturity of these instruments.

    As of December 31, 1997,  the carrying  value of  discounted  lease  rentals
    approximates its fair value because the debt was recently acquired.


                                      -27-

<PAGE>



Item 9.  Changes  in  and  Disagreements  with  Accountants  on  Accounting  and
         -----------------------------------------------------------------------
         Financial Disclosure
         --------------------


None.

Item 10. Directors and Executive Officers of the Partnership
         ---------------------------------------------------

The Partnership  has no officers and directors.  The general partner manages and
controls  the  affairs of the  Partnership  and has general  responsibility  and
authority in all matters  affecting its  business.  Information  concerning  the
directors and executive officers of the general partner is as follows:

                          CAI Equipment Leasing V Corp.

            Name                             Positions Held
            ----                             --------------
 
       John F. Olmstead         President and Director

       Dennis J. Lacey          Senior Vice President and Director

       Anthony M. DiPaolo       Senior Vice President, Principle Financial and
                                Chief Administrative Officer and Director

       Richard H. Abernethy     Vice President and Director

       John A. Reed             Vice President, Assistant Secretary and Director

       Joseph F. Bukofski       Vice President, Assistant Secretary and Director

       Robert A. Golden         Director

       Mick Myers               Director

       Ann Danielson            Assistant Vice President

       David J. Anderson        Chief Accounting Officer and Secretary

JOHN F. OLMSTEAD,  age 53 joined CAII as Vice President in December,  1988, is a
Senior  Vice  President  of CAI and CAII  and is head of  CAII's  Public  Equity
division.  He has served as Chairman of the Board for Neo-kam Industries,  Inc.,
Matchless Metal Polish Company, Inc. and ACL, Inc. for more than 5 years. He has
over 20 years of experience  holding various  positions of responsibility in the
leasing  industry.  Mr. Olmstead holds a Bachelor of Science degree from Indiana
University and a Juris Doctorate degree from Indiana Law School.

DENNIS J. LACEY,  age 44, joined CAI as Vice President,  Operations,  in October
1989.  Mr. Lacey was  appointed  Treasurer on January 1, 1991,  Chief  Financial
Officer on April 11, 1991, a director on July 19, 1991,  and President and Chief
Executive  Officer on September 6, 1991.  Prior to joining CAI, Mr. Lacey was an
audit partner for the public accounting firm of Coopers & Lybrand.  Mr. Lacey is
also a director and senior officer of CAII, CAI Equipment  Leasing I Corp.,  CAI
Equipment  Leasing II Corp.,  CAI  Equipment  Leasing III Corp.,  CAI  Equipment
Leasing IV Corp., CAI Equipment  Leasing V Corp., CAI Leasing Canada,  Ltd., CAI
Partners   Management   Company,   CAI   Securities   Corporation,   CAI   Lease
Securitization I Corp. and Capital Equipment Corporation  (collectively referred
to  herein as the "CAI  Affiliates"),  all of which  are  first- or  second-tier
wholly-owned subsidiaries of CAI.

                                      -28-

<PAGE>



Item 10. Directors and Executive Officers of the Partnership, continued
         ---------------------------------------------------
       
ANTHONY M. DIPAOLO,  age 39, joined CAII in July 1990 as Assistant Treasurer and
is currently Senior Vice  President-Chief  Financial  Officer.  He also held the
positions   of   Senior   Vice    President-Controller    and   Assistant   Vice
President-Credit  Administration  for the Company.  Mr. DiPaolo has held similar
senior financial management positions with two public companies between 1986 and
June 1990, and prior to then was an audit manager for the public accounting firm
of  Coopers &  Lybrand.  Mr.  DiPaolo  holds a  Bachelor  of  Science  degree in
Accounting from the University of Denver.

RICHARD H. ABERNETHY,  age 43, joined CAII in April 1992 as Equipment  Valuation
Manager  and  currently  serves  as Vice  President  of  Asset  Management.  Mr.
Abernethy has thirteen years experience in the leasing industry, including prior
positions with Barclays  Leasing Inc.,  from November 1986 to February 1992, and
Budd Leasing  Corporation,  from January 1981 to November  1986.  Mr.  Abernethy
holds a Bachelor of Arts in Business Administration from the University of North
Carolina at Charlotte.

JOHN A. REED,  age 42,  joined  CAII in  January  1990 as the Tax  Director  and
Assistant Secretary.  Mr. Reed is currently the Vice President-Manager,  Capital
Markets Group and is  responsible  for  obtaining  off balance sheet  financing,
syndications and private  programs.  Prior to joining the Capital Markets Group,
Mr. Reed was Vice President of both Marketing Administration and Credit and Debt
Administration.  He spent seven and one half years with Coopers & Lybrand in the
Tax Department and served on CAII's tax consulting  engagement during that time.
Mr.  Reed holds a Bachelor  of Arts  degree in Social  Sciences  and  Masters of
Science in Accounting, from Colorado State University.

JOSEPH F. BUKOFSKI, age 42, joined CAII in June 1990 as a Financial Analyst. Mr.
Bukofski is currently the Vice President of Marketing and is responsible for all
lease  documentation  and management of transaction  structuring and processing.
Prior to joining the  Marketing  Department,  Mr.  Bukofski was  Assistant  Vice
President and Controller.  Prior to joining the Company, he was a geologist with
Barringer  Geoservices,  Inc. for eleven years. Mr. Bukofski holds a Bachelor of
Science degree in Secondary Education - Earth Science from Bloomsburg University
and a Masters of Science in Accounting from the University of Colorado.

ROBERT A. GOLDEN,  age 52, is Vice  President and the National  Sales Manager of
the Company.  Mr. Golden joined the Company in 1993 as a Branch Manager.  He was
promoted  to his  current  position  in  September  1994.  Prior to joining  the
Company, he was an Executive Vice President with the U.S. Funds Group, President
of BoCon Capital  Group and Vice  President  with  Ellco/GE  Capital for fifteen
years. Mr. Golden is an officer, but not a director, of CAII.

MICK MYERS, age 40, joined CAI in February 1992 as a Senior  Portfolio  Manager.
Currently he is Assistant Vice President of Asset Management. Mr. Myers has nine
years experience in the leasing industry.  Previously,  he has held the position
of Senior End of Lease  Negotiator  with  ELLCO/GE  Capital.  Mr.  Myers holds a
Bachelor of Science degree from the University of Wyoming.




                                      -29-

<PAGE>



Item 10. Directors and Executive Officers of the Partnership, continued
         ---------------------------------------------------

ANN DANIELSON,  age 34, joined CAII in February 1990 and is currently  Assistant
Vice  President,  Assistant  Treasurer and is responsible for the Company's cash
management and collections functions. Prior to joining the Company, she was with
U.S.  West  financial  Services  and Coopers & Lybrand.  Ms.  Danielson  holds a
Bachelor of Arts Degree from the University of Northern Iowa.

DAVID J.  ANDERSON,  age 45,  joined CAII in August 1990 as Manager of Billing &
Collections and currently  serves as Assistant  Vice-President/Chief  Accounting
Officer. Prior to joining CAII, Mr. Anderson was Vice-  President/Controller for
Systems  Marketing,  Inc.,  from 1985 to 1990,  and  previous  to that worked in
several senior staff  positions at the Los Alamos  National  Laboratory and with
Ernst & Whinney. Mr. Anderson holds a Bachelor of Business Administration degree
in Accounting from the University of Wisconsin.


Item 11. Executive Compensation
         ----------------------

No compensation was paid by the Partnership to the officers and directors of the
general partner. See Item 13 of this Report,  "Certain Relationships and Related
Transactions,"  which is incorporated herein by reference,  for a description of
the  compensation and fees paid to the general partner and its affiliates by the
Partnership during 1997.


Item 12. Security Ownership of Certain Beneficial Owners and Management
         --------------------------------------------------------------

     (a) As of the date hereof, no person is known by the Partnership to be the
         beneficial  owner of more than 5% of the Class A limited partner units
         of the Partnership.  The Partnership has no directors or officers, and
         neither  the general  partner  nor the Class B limited  partner of the
         Partnership own any Class A limited partner units.

         CAII, an affiliate of the general  partner is the sole Class B limited
         partner.

         CAI Equipment Leasing V Corp. is the general partner.

         The names and addresses of the general partner and the Class B limited
         partner are as follows:

         General Partner
         ---------------

         CAI Equipment Leasing V Corp.
         7175 W. Jefferson Avenue
         Suite 4000
         Lakewood, Colorado 80235





                                      -30-

<PAGE>



Item 12. Security  Ownership  of  Certain  Beneficial  Owners  and   Management,
         -----------------------------------------------------------------------
         continued

         Class B Limited Partner
         -----------------------

         Capital Associates International, Inc.
         7175 W. Jefferson Avenue
         Suite 4000
         Lakewood, Colorado 80235

     (b) No directors or  officers of the general partner or the Class B limited
         partner owned any Class A limited partner units as of March 23, 1998.

     (c) The Partnership knows of no arrangements, the operation of which may at
         a subsequent date result in a change in control of the Partnership.


Item 13. Certain Relationships and Related Transactions
         ----------------------------------------------

The general partner and its affiliates  receive  certain types of  compensation,
fees  or  other   distributions   in  connection  with  the  operations  of  the
Partnership.

Following is a summary of the amounts paid or payable to the general partner and
its affiliates during 1997:


                         ORGANIZATION AND OFFERING STAGE

Sales Commissions
-----------------

CAI Securities Corporation (the  "Dealer-Manager"),  an affiliate of the general
partner, earned commissions of 10% of the sales price of Class A limited partner
units sold, up to 9% of which was paid to participating  broker-dealers.  During
1997, the Dealer-Manager  earned commissions totaling $3,020,796,  $2,561,871 of
which was paid to broker-dealers.

Due Diligence Expense Reimbursement
-----------------------------------

The  Dealer-Manager is reimbursed for bona fide due diligence  expenses which it
incurs up to a maximum of 1/2% of gross offering  proceeds.  The  Dealer-Manager
incurred $86,991 for due diligence expenses during 1997.

Organization and Offering Expense Reimbursement
-----------------------------------------------

The general partner is reimbursed for the organization and offering  expenses it
incurs in organizing the  Partnership and offering Class A limited partner units
for sale to the public.  The general partner earned  $1,208,318 for organization
and offering expenses during 1997.


                                      -31-

<PAGE>



Item 13. Certain Relationships and Related Transactions, continued
         ----------------------------------------------

                        ACQUISITION AND OPERATING STAGES

Acquisition Fee and Acquisition Cost Reimbursement
--------------------------------------------------

The general partner receives a fee equal to 3.5% of the sales price of equipment
sold to the Partnership,  1.5% of which  represents  compensation for selecting,
negotiating  and  consummating  the acquisition of the equipment and 2% of which
represents reimbursement for services rendered in connection with evaluating the
suitability  of  the  equipment  and  the  credit   worthiness  of  the  Lessee.
Origination  and evaluation  fees totaled  $1,585,554 in 1997, all of which were
capitalized  by the  Partnership  as part of the cost of  equipment on operating
leases and net investment in direct financing leases.

Management Fees
---------------

The general  partner  receives  management  fees as  compensation  for  services
rendered in connection with managing the Partnership's  equipment equal to 2% of
gross rentals received. Such fees totaled $250,233 for 1997.

Accountable General and Administrative Expenses
-----------------------------------------------

The general  partner is entitled to  reimbursement  of certain  expenses paid on
behalf  of  the   Partnership   which  are  incurred  in  connection   with  the
Partnership's operations.  Such reimbursable expenses amounted to $78,767 during
1997.

Additionally,   the  general  partner  is  allocated  1%  of  Partnership   cash
distributions  and net income  relating to its general  partner  interest in the
Partnership.  Distributions  and net income  allocated  to the  general  partner
totaled  $31,451 and  $74,673,  respectively,  for 1997.  Distributions  and net
income  allocated  to the Class B limited  partner  totaled  $32,638 and $8,946,
respectively, during 1997.

During 1997, the Partnership acquired the equipment described below from CAII:

<TABLE>
<CAPTION>


                                                                                    Cost to
                                                                                  Partnership
                                                                                   Including
                                                                                  Acquisition       Debt          Annual
Lessee                            Equipment Description          Cost to CAII        Fees*        Assumed         Rents
------                            ---------------------          ------------    ------------   ------------    ------------  

<S>                              <C>                            <C>             <C>            <C>             <C>         
Alliance Data Systems, Inc.       Computer equipment             $  1,466,561    $  1,512,962   $      3,870    $    357,660
Arqule, Inc.                      Furniture & fixtures                 39,996          41,382         37,939          15,188
Arqule, Inc.                      Research equipment                1,816,955       1,879,912      1,722,989         686,134
Christy's Market                  Computer equipment                  124,625         128,944        116,357          32,053
Christy's Market                  Food service equipment              121,684         125,901        113,596          31,315
Christy's Market                  Furnace                               7,628           7,892          7,121           1,963
Dewolfe Company                   Computer equipment                  133,891         138,531        125,186          56,562
Dewolfe Company                   Copiers                              69,006          71,397         64,773          27,894


                                      -32-

<PAGE>




Item 13. Certain Relationships and Related Transactions, continued
         ----------------------------------------------

                                                                                    Cost to
                                                                                  Partnership
                                                                                   Including
                                                                                  Acquisition       Debt          Annual
Lessee                            Equipment Description          Cost to CAII        Fees*        Assumed         Rents
------                            ---------------------          ------------    ------------   ------------    ------------  

General Motors Corporation        Burden carrier                 $      6,355    $      6,575   $          0    $      1,595
International Paper               Sweeper                              17,022          17,612              0           3,891
International Paper               Forklifts                            69,179          71,576              0          15,825
ITT Automotive                    Mailing machine                      12,411          12,841              0           4,721
Louisiana Workers                 Computer equipment                   60,890          63,000              0          21,822
Northwestern University           Test equipment                      137,343         142,102              0          24,000
Oklahoma Gas & Electric           Computer equipment                   64,373          66,603         60,657          16,072
Oklahoma Gas & Electric           Generator                           167,224         173,019        160,723          78,073
Oklahoma Gas & Electric           Manufacturing equipment             119,887         124,041        114,589          52,050
The Foxboro Company               Air handling                         31,683          32,781         30,292          12,422
The Foxboro Company               Carpeting                            59,497          61,558         57,174          22,627
The Foxboro Company               Computer equipment                   28,683          29,677         27,417          11,276
The Foxboro Company               Facility equipment                   84,986          87,931         81,197          31,982
The Foxboro Company               Furniture & fixtures                  6,600           6,829          6,343           2,452
The Foxboro Company               Manufacturing equipment             438,810         454,014        421,765         183,504
The Foxboro Company               Telecommunications equipment         26,407          27,322         25,351          10,736
Triconex Corporation              Computer equipment                   96,465          99,807         91,045          23,394
Triconex Corporation              Manufacturing equipment              53,608          55,465         50,882          13,228
Triconex Corporation              Trade show equipment                 37,323          38,616         35,385           8,960
                                                                  -----------    ------------  -------------    ------------

              Total direct finance leases sold to Partnership       5,299,092       5,478,290      3,354,651       1,747,399
                                                                  -----------    ------------  -------------    ------------

Alcoa                               Forklifts                       1,462,149       1,511,704              0         383,868
Alliance Data Systems Inc.          V-sat                           2,629,893       2,718,221              0         651,082
Alliant Techsystems Inc.            Lathes                            383,078         396,351              0          70,221
Aluminum Co. of America             Forklifts                         102,550         106,028              0          26,197
Analysis & Technology               Computer equipment                391,607         404,271              0         130,308
Applied Magnetics                   Teching system                  1,182,922       1,223,910              0         263,191
Arqule, Inc.                        Furniture & fixtures              141,073         145,961        132,360          54,761
Arqule, Inc.                        HVAC                               20,571          21,284         19,417           8,169
Arqule, Inc.                        Research equipment                310,100         320,845        284,817         224,990
Breckenridge-Remy Company           Forklifts                          26,832          27,762              0           5,490
Brown Strauss                       Forklifts                         738,843         764,444              0         188,787
Burlingame Industries               Forklifts                          63,433          65,631              0          17,760
Christy's Market                    Computer equipment                  6,488           6,713          5,977           1,483
Christy's Market                    Food service equipment            493,620         510,724        458,971         122,778
Christy's Market                    Furnace                             7,801           8,071          7,283           2,008
Chrysler Corp.                      Forklifts                       1,020,599       1,055,963              0         198,008
Consolidated Diesel Company         Burden carrier                     18,376          19,013              0           6,456
Consolidated Diesel Company         Copiers                             8,899           9,207              0           3,198
Consolidated Diesel Company         Floor scrubber                     30,000          31,040              0           9,662
Consolidated Diesel Company         Forklifts                          24,760          25,618              0           5,217


                                      -33-

<PAGE>



Item 13. Certain Relationships and Related Transactions, continued
         ----------------------------------------------

                                                                                    Cost to
                                                                                  Partnership
                                                                                   Including
                                                                                  Acquisition       Debt          Annual
Lessee                            Equipment Description          Cost to CAII        Fees*        Assumed         Rents
------                            ---------------------          ------------    ------------   -------------   ------------  

Consolidated Diesel Company       Stock chaser                   $      4,774    $      4,939   $          0    $      2,099
Consolidated Diesel Company       Electric pickup                       5,660           5,856              0           1,832
Consolidated Diesel Company       Fitness equipment                    26,215          27,123              0           8,284
Darigold, Inc.                    Forklifts                            81,230          84,044              0          18,711
Dewolfe Company                   Computer equipment                  243,311         251,742        225,872         116,601
Dewolfe Company                   Copiers                              92,841          96,057         85,166          54,426
Dewolfe Company                   Fax machine                           2,119           2,193          1,944           1,221
Dewolfe Company                   Software                             12,809          13,253         11,786           7,526
Diamond Shamrock                  POS system                        1,982,783       2,051,487              0         653,240
Enogex Inc.                       Computer equipment                  915,365         947,083        873,864         455,343
General Electric Company          HP Omnibooks                      2,287,891       2,367,167              0         729,792
General Motors Corporation        Digital camera                       44,155          45,685              0          14,604
General Motors Corporation        Forklifts                           956,616         989,762              0         186,507
General Motors Corporation        Machine tools                       259,891         268,896              0          40,217
General Motors Corporation        Material handling                   126,023         130,390              0          39,782
General Motors Corporation        Pallet truck                         27,593          28,549              0           9,237
General Motors Corporation        Sweeper/scrubber                    431,915         446,881              0         107,219
Genetics Institute                Computer equipment                  125,475         129,823        117,183          53,572
Genetics Institute                Lab equipment                       125,434         129,780        117,147          53,497
Genetics Institute                Research equipment                  757,498         783,745        707,434         323,416
Georgetown Steel                  Forklifts                            91,558          94,730              0          18,136
GM Powertrain Division            Sweeper/scrubber                     33,806          34,978              0           7,082
GS Technologies                   Truck scale                          57,821          59,824              0          12,734
Heluva Good Cheese                Material handling                    47,066          48,665              0          10,894
Home Depot, Inc.                  Forklifts                           491,977         508,683              0         118,076
Home Depot, Inc.                  Sweeper/scrubbers                    63,975          66,133              0          20,496
Honeywell Incorporated            Computer equipment                   29,824          30,858              0         356,112
Hughes Aircraft                   Device test system                  218,717         226,296              0          56,218
Hughes Network                    Image printer                        41,808          43,257              0          12,995
Hughes Space                      Forklifts                           119,742         123,891              0          32,782
ICI American Holdings, Inc.       Computer equipment                  164,787         170,497              0          69,934
In Home Health, Inc.              Furniture & fixtures                152,603         157,890              0          32,944
International Paper Company       Boom lift                            42,993          44,483              0           8,538
International Paper Company       Club car                             11,860          12,271              0           3,870
International Paper Company       Forklifts                            84,291          87,212              0          17,403
International Paper Company       Sweeper/scrubber                     37,944          39,259              0          10,537
International Paper Company       Utility carts                        65,747          68,025              0          21,321
International Paper Company       Bobcat loaders                       37,478          38,777              0           8,718
International Paper Company       Tire loader                         178,984         185,185              0          45,064
International Paper Company       Forklift                             17,025          17,614              0           3,725
Lear Corp.                        Computer equipment                   70,730          73,078              0          33,444
Lexmark International Inc.        Dispenser                            45,845          47,434              0          16,086


                                      -34-

<PAGE>


Item 13. Certain Relationships and Related Transactions, continued
         ----------------------------------------------

                                                                                    Cost to
                                                                                  Partnership
                                                                                   Including
                                                                                  Acquisition       Debt          Annual
Lessee                            Equipment Description          Cost to CAII        Fees*        Assumed         Rents
------                            ---------------------          ------------     ------------  -------------   ------------  

Lexmark International Inc.        Reflow oven                    $    145,860    $    150,914   $          0    $     50,444
Lexmark International Inc.        Stencil printers                    939,428         971,979              0         315,113
Lexmark International Inc.        Wave soldering system               144,350         149,352              0          47,331
Louisiana Workers                 Computer equipment                   19,179          19,843              0           6,889
Lucas Industries                  Computer equipment                   40,300          41,697         37,473          17,907
Lucas Industries                  Manufacturing equipment             644,396         666,724        596,556         182,908
Lucas Industries                  Software                            139,191         144,014        122,854          49,263
Lucent Technology                 Fuji placement                      494,768         510,988              0         124,607
Lucent Technology                 Wafer fabrication                    46,279          47,883              0          13,584
Matsushita                        Phone system                        110,432         114,258              0          36,624
Mitchell International            Computer equipment                  239,661         247,965              0         108,948
Morgan Construction               Computer equipment                  658,699         681,523        628,766         276,567
Morgan Construction               Manufacturing equipment             619,503         640,969        577,008         155,321
Nabisco                           Sweeper                              17,248          17,846              0           4,234
National Broadcasting Co.         Broadcast video equipment           319,785         329,665              0         138,666
New York Hospital                 Imaging system                      393,051         406,670              0          96,067
Oklahoma Gas & Electric           Computer equipment                1,186,170       1,227,271      1,128,383         482,047
Oklahoma Gas & Electric           Manufacturing equipment           1,324,789       1,370,693      1,254,199         787,205
Owens Corning                     Computer equipment                  938,320         970,827              0         349,124
PMX Industries                    Forklifts                           627,323         648,323              0         170,130
Precision Cast Parts              Forklifts                           157,036         162,477              0          34,156
Robertshaw Controls               Computer equipment                  107,323         111,042         98,404          35,756
Robertshaw Controls               Manufacturing equipment           1,242,878       1,285,943      1,163,169         249,154
Sealed Air Corp                   Forklifts                           144,250         149,160              0          30,698
Smc Mcever Inc.                   Computer equipment                  171,243         177,177              0          57,301
Source, Inc.                      Computer equipment                  150,966         156,197              0          37,700
Texas Eastern Transmission        Computer equipment                1,024,897       1,057,551        273,622         548,451
Texas Instruments                 Placement machine                   494,411         511,543              0         119,246
Texas Instruments                 Soldering system                    125,926         130,290              0          34,584
The Foxboro Company               Air conditioner                     113,942         117,890        107,503          27,730
The Foxboro Company               Air handler                          22,133          22,900         20,876           5,307
The Foxboro Company               Computer equipment                1,504,158       1,556,277      1,448,575         533,617
The Foxboro Company               Facility equipment                  195,445         202,217        187,803          87,041
The Foxboro Company               Furniture & fixtures                654,508         677,187        636,611         244,502
The Foxboro Company               Manufacturing equipment           1,209,702       1,251,618      1,176,720         430,364
The Foxboro Company               Telecommunications equipment        178,468         184,652        172,728          73,792
The Foxboro Company               Wastewater treatment                 29,205          30,217         27,589           7,428
Thomson Industries Inc.           Lathe                               134,640         139,305              0          25,240
Thomson Industries Inc.           Machine tool                        306,339         316,954              0          57,427
Thomson Industries Inc.           Stretch machine                     263,763         272,902              0          51,402
Thomson Industries Inc.           Thread grinder                      222,405         230,112              0          43,340
Thomson Industries Inc.           Torque tester                       169,321         175,188              0          34,328


                                      -35-

<PAGE>



Item 13. Certain Relationships and Related Transactions, continued
         ----------------------------------------------

                                                                                    Cost to
                                                                                  Partnership
                                                                                   Including
                                                                                  Acquisition       Debt          Annual
Lessee                            Equipment Description          Cost to CAII        Fees*        Assumed         Rents
------                            ---------------------          ------------    ------------   ------------    ------------  

Tifton Aluminum Inc.              Forklifts                      $    491,983    $    508,674   $          0    $    123,247
Total System Services             Mail sorter                       1,043,330       1,078,718              0         264,530
Triconex Corporation              Computer equipment                   61,440          63,569         58,203          15,299
Triconex Corporation              Furniture & fixtures                 19,125          19,787         18,371           5,015
Triconex Corporation              Manufacturing equipment              98,007         101,403         93,590          24,901
Triconex Corporation              Oven                                 96,239          99,573         93,830          24,329
Unicco Service Co.                Sweeper/scrubber                     30,648          31,710              0           9,805
United Artists                    Projection equipment                663,318         686,302        619,979         165,529
Universal Forest Products         Forklifts                           216,608         224,113              0          60,638
US Sugar                          Excavator                           327,528         338,877              0          90,390
USS/Kobe Steel                    Forklifts                           276,157         285,726              0          74,816
Versar Inc.                       HP chromatograph                    170,710         176,625              0          57,122
Xerox                             Analyzer                             16,985          17,574              0           6,528
Xerox                             Nohau emulator                        4,995           5,168              0           4,224
Xerox                             Signal processor                      7,700           7,967              0           2,364
Xerox                             Test equipment                       44,200          45,732              0          13,608
Xerox                             Video projector                      23,620          24,436              0           7,594
                                                                 ------------    ------------   ------------    ------------
              Total operating leases sold to Partnership           40,944,057      42,350,413     13,592,033      13,299,351
                                                                 ------------    ------------   ------------    ------------
              Total sold to Partnership                          $ 46,243,149    $ 47,828,704   $ 16,946,684    $ 15,046,750
                                                                 ============    ============   ============    ============

</TABLE>

*      The lower of (a) the price for the equipment  plus all costs  incurred in
       maintaining the equipment (including, without limitation, the reasonable,
       necessary and actual expenses, as determined in accordance with generally
       accepted  accounting  principles,  of  storage,  carrying,   warehousing,
       repair,  marketing,  financing  and taxes)  from the date of  acquisition
       thereof,  provided  that any  proceeds  accrued from the first basic rent
       date thereof and retained by the general partner or an affiliate  thereof
       from leasing the equipment or any other  arrangement  with respect to the
       equipment shall be deemed a credit towards the purchase price paid by the
       Partnership,  or  (b)  the  fair  market  value  of  such  equipment,  as
       determined by an independent  nationally recognized appraiser selected by
       the general partner.


Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
         ---------------------------------------------------------------

       (a)
       and
       (d)   The following documents are filed as part of this Report:

             1.  Financial Statements:  (Incorporated  by reference  to Item 8
                 of this Report, "Financial Statements and Supplementary Data").

       (b)   The  Partnership  did not file any  reports on Form 8-K during
             the quarter ended December 31, 1997.




                                      -36-

<PAGE>



Item 14. Exhibits,  Financial Statement  Schedules  and  Reports  on  Form  8-K,
         -----------------------------------------------------------------------
         continued

       (c)   Exhibits required to be filed.

             Exhibit
             Number                         Exhibit Name
             -------                        ------------
        
               4.1*   Capital  Preferred  Yield   Fund-IV  Limited   Partnership
                      Agreement
               4.2*   First  Amendment to  Limited  Partnership  Agreement dated
                      November 23, 1996
               4.3*   Amended and  Restated  Agreement of Limited Partnership of
                      Capital Preferred Yield Fund-IV, L.P.

                *     Not filed herewith.  In accordance with Rule 12b-32 of the
                      General  Rules  and  Regulations   under  the   Securities
                      Exchange Act of 1934, reference is  made  to the  document
                      previously filed with the Commission.

                                      -37-


<PAGE>


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Partnership  has duly  caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.

Dated:   March 27, 1998           Capital Preferred Yield Fund-IV, L.P.

                                  By:  CAI Equipment Leasing V Corporation

                                  By:  /s/John F. Olmstead
                                       -----------------------------------
                                       John F. Olmstead
                                       President and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the general partner
of the Partnership and in the capacities indicated on March 27, 1998.

Signature                            Title

/s/John F. Olmstead
-------------------------
John F. Olmstead            President and Director

/s/Dennis J. Lacey
-------------------------
Dennis J. Lacey             Senior Vice President and Director

/s/Anthony M. DiPaolo    
-------------------------   Senior Vice President, Principle Financial and Chief
Anthony M. DiPaolo          Administrative Officer and Director

/s/Richard H. Abernethy
-------------------------
Richard H. Abernethy        Vice President and Director

/s/John A. Reed
-------------------------
John A. Reed                Vice President, Assistant Secretary and Director

/s/Joseph F. Bukofski
-------------------------
Joseph F. Bukofski          Vice President, Assistant Secretary and Director

/s/Robert A. Golden
-------------------------
Robert A. Golden            Director

/s/Mick Myers
-------------------------
Mick Myers                  Director

/s/Ann Danielson
-------------------------
Ann Danielson               Assistant Vice President

/s/David J. Anderson
-------------------------
David J. Anderson           Chief Accounting Officer and Secretary

                                      -38-