<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                  FORM 10-KA

(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, 1999

[_]  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.

Capital Associates International, Inc. ("CAII"), an affiliate of the general
partner, is the Class B limited partner of the Partnership.  In exchange for its
Class B limited partner interest, CAII contributed cash of $10,000 for each
$1,000,000 of investors' capital contributions (i.e., cash investments in the
Partnership) to the Partnership. CAII's interest in Distributable Cash is
subordinated to the Class A limited partners' interest.  The contributions of
CAII were made simultaneously with the purchase of equipment by the Partnership.
CAII has contributed $500,000 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 1999, the Partnership acquired equipment of various types under lease to
third parties.  All of the equipment was purchased by CAII directly from
manufacturers or from other independent third parties and sold

                                      -2-
<PAGE>

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

to the Partnership.  The equipment 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, "Certain Relationships and Related Transactions" for the detail listing
of equipment purchased during 1999. The Partnership expects that a majority of
the equipment purchased during 2000 will be similar in nature to the equipment
acquired in 1999.

The Partnership may assign the rentals from leases to financial institutions, or
acquire leases subject to such assignments, at fixed interest rates on a non-
recourse 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 1999, the Partnership leased equipment to investment grade lessees in
diverse industries including the material handling, telecommunications and
manufacturing industries.  Approximately 69% of the Partnership's equipment
under lease was leased to investment grade lessees as of December 31, 1999.
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.

                                      -3-
<PAGE>

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

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.

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.  No lessee
accounted for more than 10% of total revenue of the Partnership during 1999.

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, 1999.

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, 1999, there were 2,341 Class A limited partners.

                                      -4-
<PAGE>

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

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

     During 1999, the Partnership made twelve (12) distributions (a portion of
     which constituted a return of capital) to Class A limited partners as
     follows:

<TABLE>
<CAPTION>
                                          Distributions Per
                                           $100 Investment
        For the               Payment        (computed on         Total
      Period Ended          Made During    weighted average)  Distributions
     --------------        --------------  -----------------  -------------
     <S>                   <C>             <C>                <C>

     December 31, 1998     January 1999              $0.875        $487,977
     January 31, 1999      February 1999              0.875         408,109
     February 28, 1999     March 1999                 0.875         408,109
     March 31, 1999        April 1999                 0.875         487,997
     April 30, 1999        May 1999                   0.875         408,109
     May 31, 1999          June 1999                  0.875         408,109
     June 30, 1999         July 1999                  0.875         487,429
     July 31, 1999         August 1999                0.875         407,540
     August 31, 1999       September 1999             0.875         407,540
     September 30, 1999    October 1999               0.875         486,939
     October 31, 1999      November 1999              0.875         407,540
     November 30, 1999     December 1999              0.875         407,078
                                                     ------      ----------
                                                     $10.50      $5,212,476
                                                     ======      ==========
</TABLE>

     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, 1999, totaling $484,936,
     was paid to the Class A limited partners on January 4, 2000.  Distributions
     to the general partner and Class B limited partner during 1999 are
     discussed in Item 13 of this Report, "Certain Relationships and Related
     Transactions."

                                      -5-
<PAGE>

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

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

     The general partner believes the Partnership will generate sufficient cash
     flows from operations during 2000, 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.

     During 1998, the Partnership made twelve (12) distributions (a portion of
     which constituted a return of capital) to Class A limited partners as
     follows:

<TABLE>
<CAPTION>
                                     Distributions Per
                                      $100 Investment
For the                  Payment        (computed on         Total
Period Ended           Made During    weighted average)  Distributions
--------------------  --------------  -----------------  -------------
<S>                   <C>             <C>                <C>

December 31, 1997     January 1998              $0.875        $425,478
January 31, 1998      February 1998              0.875         379,360
February 28, 1998     March 1998                 0.875         405,854
March 31, 1998        April 1998                 0.875         488,864
April 30, 1998        May 1998                   0.875         408,547
May 31, 1998          June 1998                  0.875         408,547
June 30, 1998         July 1998                  0.875         488,330
July 31, 1998         August 1998                0.875         408,424
August 31, 1998       September 1998             0.875         408,109
September 30, 1998    October 1998               0.875         487,997
October 31, 1998      November 1998              0.875         408,109
November 30, 1998     December 1998              0.875         408,109
                                                ------      ----------
                                                $10.50      $5,125,728
                                                ======      ==========
</TABLE>

                                      -6-
<PAGE>

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

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

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

<TABLE>
<CAPTION>
                               Distribution Amount       Distribution %
                                per $100 Class A        per $100 Class A
                              Limited Partner Unit    Limited Partner Unit
           Payment                 computed on            (computed on
         Made During            weighted average)    weighted average) (1)
         -----------          ---------------------  ----------------------
         <S>                      <C>                    <C>

                   1996                     $ 7.72                    11.0%
                   1997                      10.50                    10.5%
                   1998                      10.50                    10.5%
                   1999                      10.50                    10.5%
                                            ------

                                            $39.22
                                            ======
</TABLE>

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

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

The following selected financial data relates to the years ended December 31,
1999, 1998 and 1997.  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 appearing with Item 8
herein.

<TABLE>
<CAPTION>
                                                           1999          1998          1997         1996*
                                                       ------------  ------------  ------------  ------------
<S>                                                    <C>           <C>           <C>           <C>
Total revenue                                           $19,046,666   $19,560,413   $11,907,740  $   940,346
Net income                                                1,236,040     2,031,561       955,418      102,627
Net income per weighted average Class A
  limited partner unit outstanding                             2.36          3.95          2.82         1.33
Total assets                                             48,130,657    54,877,835    56,161,440   16,652,457
Discounted lease rentals                                 13,452,270    15,708,835    17,633,047    2,765,239
Distributions declared to partners                        5,315,888     5,293,514     3,310,427      448,237
Distributions declared per monthly weighted average
  Class A limited partner unit outstanding                    10.50         10.50         10.50         7.72
</TABLE>

  *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
-------------

I.   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:

<TABLE>
<CAPTION>
                                            Years Ended December 31,                         Years Ended December 31,
                                           --------------------------                ----------------------------------------
                                               1999          1998         Change         1998          1997         Change
                                           ------------  ------------  ------------  ------------  ------------  ------------
<S>                                        <C>           <C>           <C>           <C>           <C>           <C>
Leasing margin                             $ 3,398,704    $2,598,528   $   800,176    $2,598,528    $1,185,661    $1,412,867
Equipment sales margin                         245,626       196,434        49,192       196,434             -       196,434
Interest income                                 82,998       122,325       (39,327)      122,325       253,514      (131,189)
Management fees paid to general partner       (401,008)     (422,321)       21,313      (422,321)     (250,233)     (172,088)
Direct services from general partner          (208,672)     (167,569)      (41,103)     (167,569)      (78,767)      (88,802)
General and administrative                    (214,757)     (190,836)      (23,921)     (190,836)     (154,757)      (36,079)
Provision for losses                        (1,666,851)     (105,000)   (1,561,851)     (105,000)            -      (105,000)
                                           -----------    ----------   -----------    ----------    ----------    ----------

  Net income                               $ 1,236,040    $2,031,561   $  (795,521)   $2,031,561    $  955,418    $1,076,143
                                           ===========    ==========   ===========    ==========    ==========    ==========
</TABLE>

                                      -8-
<PAGE>

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


I.   Results of Operations, continued

Leasing Margin

Leasing margin consists of the following:

<TABLE>
<CAPTION>
                                                 Years Ended December 31,
                                        -------------------------------------------
                                            1999           1998           1997
                                            ----           ----           ----
<S>                                     <C>            <C>            <C>
Operating lease rentals                 $ 18,443,275   $ 18,926,287    $11,394,668
Direct finance lease income                  274,767        315,367        259,558
Depreciation                             (14,386,576)   (15,287,524)    (9,213,581)
Interest on discounted lease rentals        (932,762)    (1,355,602)    (1,254,984)
                                        ------------   ------------    -----------
  Leasing margin                        $  3,398,704   $  2,598,528    $ 1,185,661
                                        ============   ============    ===========

  Leasing margin ratio                            18%            14%            10%
                                        ============   ============    ===========
</TABLE>

All components of leasing margin have decreased for the year ended December 31,
1999 compared to the corresponding period in 1998 primarily due to a decrease in
the size of the Partnership's lease portfolio.  Leasing margin and the leasing
margin ratio have increased primarily due to the mix of equipment types within
the portfolio as well as the decrease in interest associated with discounted
lease rentals.  Interest on discounted lease rentals did not increase in 1998
compared to 1997 at the same rate as the other components of leasing margin. As
a result, leasing margin ratio increased for the year ended December 31, 1998
compared to the year ended December 31, 1997.

Leasing margin ratio fluctuates based upon (i) the mix of direct finance leases
and operating leases, (ii) remarketing activities, (iii) the method used to
finance leases added to the Partnership's lease portfolio, and (iv) the relative
age of lease types in the portfolio. 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 principle 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).

Equipment Sales Margin

Equipment sales margin from remarketing consists of the following:

<TABLE>
<CAPTION>
                               1999          1998
                               ----          ----
<S>                        <C>            <C>
Equipment sales revenue    $ 3,118,572    $1,095,706
Cost of equipment sales     (2,872,946)     (899,272)
                           -----------    ----------
Equipment sales margin     $   245,626    $  196,434
                           ===========    ==========
</TABLE>

                                      -9-
<PAGE>

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

I.   Results of Operations, continued
     ---------------------

Equipment Sales Margin, continued

Equipment sales margin is affected by the number and dollar amount of equipment
leases that mature in a particular period.  Currently, a portion of the
Partnership's initial leases have expired and the equipment is either being re-
leased or sold to the lessee or third parties.  Equipment sales margin has
increased in 1999 compared to 1998 primarily due to an increase in the volume of
equipment leases that are maturing.

Interest Income

Interest income decreased due to a decrease in the amount of invested cash
during 1999 and 1998.  Interest income varies due to (1) the amount of cash
available for investment (pending distribution or equipment purchases) and (2)
the interest rate on such invested cash. Throughout 1997, the Partnership was in
its offering period and as such, invested cash was generally higher pending
purchases of additional equipment.

Expenses

Management fees paid to the general partner decreased in 1999 compared to 1998
primarily due to a decrease in the size of the Partnership's lease portfolio.
Such fees increased in 1998 compared to 1997 primarily due to growth in the
Partnership's lease portfolio.

Direct services from the general partner and general and administrative expenses
increased in 1999 and 1998 compared to 1997 due to an increase in remarketing
activities associated with equipment returned to the Partnership at lease
maturity.

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.

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.

The provision for losses recorded during 1999 related to the following:

  .  $293,568 related to a decline in the residual value of on-lease computer
     equipment.

  .  $31,602 related to anticipated declines in realizable values of on-lease
     forklifts.

                                      -10-
<PAGE>

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

I. Results of Operations, continued
   ---------------------

Provision for Losses, continued

  .  $750,000 was recognized as losses on sales of certain computer equipment.
     The Partnership had previously expected to realize the carrying value of
     that equipment through lease renewals and proceeds from the sale of the
     equipment to the original lessees. The fair market value of the equipment
     re-leased or sold to third parties was less than anticipated.
  .  $103,000 was recognized as losses on the sale of various semiconductor,
     forklifts, tractors and office furniture.
  .  $300,000 was recorded to cover a portion of the Receivable from Affiliates
     balance, as discussed below.
  .  $188,681 was related primarily to equipment that has been returned to the
     Partnership with fair market values that are lower than the book values.

The provision for losses recorded during 1998 related to the following:

  .  $75,000 related primarily to equipment that has been returned to the
     Partnership. The Partnership had previously expected to realize the
     carrying value of that equipment through lease renewals and proceeds from
     the sale of the equipment to the original lessees. The fair market value of
     the equipment re-leased or sold to third parties was less than anticipated.
  .  $30,000 was recorded as a reserve for estimated uncollectible accounts
     receivable.

There was no provision for losses recorded during 1997.

II.  Liquidity and Capital Resources
     -------------------------------

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 1999, 1998 and 1997, the Partnership acquired equipment subject to leases
with a total purchase price of $15,019,045, $18,542,605, and $47,828,704
(including $7,386,009, $3,223,219, and $16,946,684 of equipment acquired subject
to existing non-recourse debt), respectively. 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.

During 1999, 1998 and 199, the Partnership declared distributions to the Class A
limited partners of $5,209,435, $5,188,246, and $3,246,338, respectively, of
which $484,938 was paid during January 2000. 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.

                                       11
<PAGE>

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

II.  Liquidity and Capital Resources, continued
     -------------------------------

The general partner believes that the Partnership will generate sufficient cash
flows from operations during 2000, 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.

As of March 31, 2000, CAII, an affiliate of the general partner, owes the
Partnership $865,570 for rents, remarketing proceeds and other amounts
(collectively, the "Prior Rents") collected by CAII on behalf of the Partnership
during periods prior to February 1, 2000 (the "Prior Periods").  According to
its own records, as of March 31, 2000, CAII owes approximately $3.9 million to
other investors and creditors (who, along with the Partnership, are referred to
herein as the "Payees"), for Prior Rents collected by CAII on their behalf
during the Prior Periods.  CAII, which presently does not have the funds to
repay all of the Prior Rents, is in negotiations with the Payees to develop a
plan for repayment of the Prior Rents owed to all Payees over time.  The
Partnership is withholding acquisition fees and managements fees otherwise
payable to the general partner and crediting such withheld fees (the "Fees")
against the Prior Rents owing from CAII.  The Partnership intends to continue to
withhold future Fees until such time as it recovers all Prior Rents.  Because
the Partnership is not the only Payee to whom Prior Rents are owed and because
recovery of such Prior Rents is  entirely  dependent on  CAII's  ability to
generate sufficient proceeds from operations after repayment of debt service,
there can be no assurance that CAII will, in fact, be able to repay all of the
Prior Rents owed to the Partnership.  A provision for loss of $300,000 was
recorded as of December 31, 1999 to cover a portion of the Receivable from
Affiliates balance.  The General Partner believes the remainder is recoverable.

The Partnership relies upon the services of CAII for origination of leases,
administrative and accounting services and remarketing of leases and equipment,
among other services. Should CAII be unable to develop a plan for repayment with
it's Payees, the Partnership may be required to contract with another party for
these services. In such event, there is no assurance that another provider of
these services can be identified.

III. New Accounting Pronouncements
     -----------------------------

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities ("Statement 133").
Statement 133 establishes accounting and reporting standards for derivative
instruments and for hedging activities. It requires that an entity recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. In June 1999, the
Financial Accounting Standards Board issued SFAS No. 137, Accounting for
Derivative Instruments and Hedging Activities - Deferral of the Effective Date
of FASB No. 133, an Amendment of FASB Statement 133. Statement 137 effectively
extends the required application of Statement 133 to fiscal years beginning
after June 15, 2000, with earlier application permitted. The Partnership adopted
Statement 133 in the first quarter of 1999. The General Partner does not expect
the adoption of Statement 133 or Statement 137 to have an impact on its
financial reporting.

                                       12
<PAGE>

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

IV.  "Safe Harbor" Statement Under the Private Securities Litigation Reform Act
     --------------------------------------------------------------------------
     of 1995
     -------

The statements contained in this report which are not historical facts may be
deemed to contain forward-looking statements with respect to events, the
occurrence of which involve risks and uncertainties, and are subject to factors
that could cause actual future results to differ both adversely and materially
from currently anticipated results, including, without limitation; the level of
lease acquisitions; realization of residual values; customer credit risk;
competition from other lessors, specialty finance lenders or banks; and the
availability and cost of financing sources.  Certain specific risks associated
with particular aspects of the Partnership's business are discussed in detail
throughout Parts I and II when and where applicable.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk
          ----------------------------------------------------------

The partnership's leases with equipment users are non-cancelable and have lease
rates which are fixed at lease inception.  The partnership finances its leases,
in part, with discounted lease rentals.  Discounted lease rentals are a fixed
rate debt.  The partnerships other assets and liabilities are also at fixed
rates.  Consequently the partnership has no significant interest rate risk or
other market risk exposure.

                                       13
<PAGE>

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

          Index to Financial Statements and Financial Statement Schedule
<TABLE>
<CAPTION>
                                                                                         Page
                                                                                        Number
                                                                                        ------
          <S>                                                                             <C>
          Financial Statements
          --------------------

             Independent Auditors' Report                                                 15

             Balance Sheets as of December 31, 1999 and 1998                              16

             Statements of Income for the years ended December 31, 1999,
             1998 and 1997                                                                17

             Statements of Partners' Capital for the years ended December 31, 1999,
             1998 and 1997                                                                18

             Statements of Cash Flows for the years ended December 31, 1999,
             1998 and 1997                                                             19-20

             Notes to Financial Statements                                             21-30

          Financial Statement Schedule
          ----------------------------

             Independent Auditors' Report                                                 31

             Schedule II - Valuation and Qualifying Accounts                              32
</TABLE>

                                       14
<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, 1999 and 1998, and the related statements of income,
partners' capital, and cash flows for the years ended December 31, 1999, 1998
and 1997.  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 provide 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, 1999 and 1998, and the results of its operations and
its cash flows for the years ended December 31, 1999, 1998 and 1997, in
conformity with generally accepted accounting principles.



                                    /s/KPMG LLP
                                    ----------------------
                                    KPMG LLP

Denver, Colorado
March 31, 2000

                                       15
<PAGE>

                     Capital Preferred Yield Fund-IV, L.P.

                                 BALANCE SHEETS
                           December 31, 1999 and 1998

                                     ASSETS
<TABLE>
<CAPTION>

                                                                        1999          1998
                                                                    ------------  ------------
<S>                                                                 <C>           <C>

Cash and cash equivalents                                            $ 1,133,758   $ 2,634,551
Accounts receivable, net                                                 382,407       465,374
Receivable from affiliates                                               413,249       216,074
Equipment held for sale or re-lease                                      355,193       410,599
Net investment in direct finance leases                                4,405,522     3,810,382
Leased equipment, net                                                 41,440,528    47,340,855
                                                                     -----------   -----------

  Total assets                                                       $48,130,657   $54,877,835
                                                                     ===========   ===========

                       LIABILITIES AND PARTNERS' CAPITAL

Liabilities:
  Accounts payable and accrued liabilities                           $ 1,047,204   $ 1,080,333
  Payables to affiliates                                                  84,045        46,652
  Rents received in advance                                              450,331       597,415
  Distributions payable to partners                                      494,255       497,346
  Discounted lease rentals                                            13,452,270    15,708,835
                                                                     -----------   -----------

  Total liabilities                                                   15,528,105    17,930,581
                                                                     -----------   -----------

Commitments and contingencies (Note 10)

Partners' capital:
  General partner                                                              -             -
  Limited partners:
     Class A 500,000 units authorized; 492,925 and 496,844 units
       issued and outstanding in 1999 and 1998, respectively          32,203,144    36,507,167
     Class B                                                             399,408       440,087
                                                                     -----------   -----------

       Total partners' capital                                        32,602,552    36,947,254
                                                                     -----------   -----------

       Total liabilities and partners' capital                       $48,130,657   $54,877,835
                                                                     ===========   ===========

</TABLE>


                See accompanying notes to financial statements.

                                       16
<PAGE>

                     Capital Preferred Yield Fund-IV, L.P.

                             STATEMENTS OF INCOME
                 Years Ended December 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>
                                                 1999          1998          1997
                                             ------------  ------------  ------------
<S>                                          <C>           <C>           <C>
Revenue:
  Operating lease rentals                     $18,443,275   $18,926,287   $11,394,668
  Direct finance lease income                     274,767       315,367       259,558
  Equipment sales margin                          245,626       196,434             -
  Interest income                                  82,998       122,325       253,514
                                              -----------   -----------   -----------

     Total revenue                             19,046,666    19,560,413    11,907,740
                                              -----------   -----------   -----------

Expenses:
  Depreciation                                 14,386,576    15,287,524     9,213,581
  Management fees paid to general partner         401,008       422,321       250,233
  Direct services from general partner            208,672       167,569        78,767
  General and administrative                      214,757       190,836       154,757
  Provision for losses                          1,666,851       105,000             -
  Interest on discounted lease rentals            932,762     1,355,602     1,254,984
                                              -----------   -----------   -----------

     Total expenses                            17,810,626    17,528,852    10,952,322
                                              -----------   -----------   -----------

Net income                                    $ 1,236,040   $ 2,031,561   $   955,418
                                              ===========   ===========   ===========

Net income allocated:
  To the general partner                      $    53,953   $    60,459   $    74,673
  To the Class A limited partners               1,170,266     1,951,241       871,799
  To the Class B limited partner                   11,821        19,861         8,946
                                              -----------   -----------   -----------
                                              $ 1,236,040   $ 2,031,561   $   955,418
                                              ===========   ===========   ===========

Net income per weighted average Class A
  limited partner unit outstanding            $      2.36   $      3.95   $      2.82
                                              ===========   ===========   ===========

Weighted average Class A limited partner
  units outstanding                               496,258       494,222       309,586
                                              ===========   ===========   ===========
</TABLE>

                See accompanying notes to financial statements.

                                      -17-
<PAGE>

                     Capital Preferred Yield Fund-IV, L.P.

                        STATEMENTS OF PARTNERS' CAPITAL
                 Years Ended December 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>
                                                         Class A
                                                         Limited     Class A      Class B
                                             General    Partners     Limited      Limited
                                             Partner     Units      Partners      Partner        Total
                                            ---------  ---------  -------------  ----------  -------------
<S>                                         <C>        <C>        <C>            <C>         <C>
Partners' capital, January 1, 1997          $      -    154,503    $12,878,374    $146,243    $13,024,617
Capital contributions                              -    302,080     30,207,960     310,000     30,517,960
Volume discount                                    -          -         (6,000)          -         (6,000)
Commissions and offering costs on
  sales of Class A limited partner units      (43,22)         -     (4,272,883)          -     (4,316,105)
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

Capital contributions                              -     43,367      4,336,754      40,000      4,376,754
Volume discount                                    -          -        (68,895)          -        (68,895)
Commissions and offering costs on
  sales of Class A limited partner units      (7,516)         -       (675,261)          -       (682,777)
Redemptions                                        -     (2,476)      (222,436)          -       (222,436)
Net income                                    60,459          -      1,951,241      19,861      2,031,561
Distributions declared to partners           (52,943)         -     (5,188,246)    (52,325)    (5,293,514)
                                            --------    -------    -----------    --------    -----------

Partners' capital, December 31, 1998               -    496,844     36,507,167     440,087     36,947,254

Redemptions                                        -     (3,919)      (264,854)          -       (264,854)
Net income                                    53,953          -      1,170,266      11,821      1,236,040
Distributions declared to partners           (53,953)         -     (5,209,435)    (52,500)    (5,315,888)
                                            --------    -------    -----------    --------    -----------

Partners' capital, December 31, 1999        $      -    492,925    $32,203,144    $399,408    $32,602,552
                                            ========    =======    ===========    ========    ===========
</TABLE>

                See accompanying notes to financial statements.

                                      -18-
<PAGE>

                     Capital Preferred Yield Fund-IV, L.P.
                           STATEMENTS OF CASH FLOWS
                 Years Ended December 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>
                                                                        1999           1998           1997
                                                                    -------------  -------------  -------------
<S>                                                                 <C>            <C>            <C>
Cash flows from operating activities:
Net income                                                          $  1,236,040   $  2,031,561   $    955,418
 Adjustments to reconcile net income to net cash
 provided by operating activities:
   Depreciation                                                       14,386,576     15,287,524      9,213,581
   Provision for losses                                                1,666,851        105,000              -
   Cost of equipment sales                                             2,872,946        899,272              -
   Recovery of investment in direct finance leases                     1,632,852      1,745,557      1,057,640
 Changes in assets and liabilities:
   Decrease (increase) in accounts receivable                             72,465        (47,265)      (319,755)
   Increase in receivable from affiliates                               (497,175)      (206,074)             -
   Decrease (increase) in accounts payable
        and accrued liabilities                                          (33,129)       668,519        122,980
   (Decrease) increase in payables to affiliates                          37,393        (12,070)        15,239
   (Decrease) increase in rents received in advance                     (147,084)      (220,485)       416,514
                                                                    ------------   ------------   ------------
Net cash provided by operating activities                             21,227,735     20,251,539     11,461,617
                                                                    ------------   ------------   ------------

Cash flows from investing activities:
 Purchases of equipment on operating leases from affiliates           (6,439,871)   (14,699,101)   (28,986,004)
 Investment in direct financing leases, acquired from affiliates      (1,062,247)      (620,284)    (2,123,638)
                                                                    ------------   ------------   ------------
Net cash used in investing activities                                 (7,502,118)   (15,319,385)   (31,109,642)
                                                                    ------------   ------------   ------------

Cash flows from financing activities:
 Proceeds from Class A capital contributions                                   -      4,336,754     30,207,960
 Proceeds from Class B capital contributions                                   -         40,000        300,000
 Proceeds from discounted lease rentals                                        -      3,994,817      3,687,846
 Principal payments on discounted lease rentals                       (9,642,575)    (9,142,248)    (5,766,722)
 Redemptions of Class A limited partner units                           (264,854)      (222,436)       (58,902)
 Commissions paid to affiliate in connection with
   the sale of Class A limited partner units                                   -       (434,326)    (3,020,146)
 Non-accountable organization and offering expense
   reimbursement paid to the general partner in connection
   with the sale of Class A limited partner units                              -       (317,347)    (1,301,960)
 Distributions to partners                                            (5,318,981)    (5,229,564)    (3,009,376)
                                                                    ------------   ------------   ------------
Net cash (used in) provided by financing activities                  (15,226,410)    (6,974,350)    21,038,700
                                                                    ------------   ------------   ------------

Net increase (decrease) in cash and cash equivalents                  (1,500,793)    (2,042,196)     1,390,675
Cash and cash equivalents at beginning of period                       2,634,551      4,676,747      3,286,072
                                                                    ------------   ------------   ------------

Cash and cash equivalents at end of period                          $  1,133,758   $  2,634,551   $  4,676,747
                                                                    ============   ============   ============
</TABLE>

                                      -19-
<PAGE>

                     Capital Preferred Yield Fund-IV, L.P.
                           STATEMENTS OF CASH FLOWS
                 Years Ended December 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>
                                                                  1999        1998         1997
                                                               ----------  -----------  -----------
<S>                                                            <C>         <C>          <C>
Supplemental disclosure of cash flow information:
 Interest paid on discounted lease rentals                     $  923,893  $ 1,343,176  $ 1,238,980
Supplemental disclosure of noncash investing and
 financing activities:
 Reduction in Partners' capital accounts for
   commissions and offering costs payable to affiliates                 -            -       18,879
 Rents deducted from cash paid for equipment acquisitions         130,918            -            -
 Discounted lease rentals assumed in equipment acquisitions     7,386,009    3,223,219   16,946,684
</TABLE>

                See accompanying notes to financial statements.

                                      -20-
<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, 1998, 500,000 Class A limited partner
   units were sold to approximately 2,345 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,
   collectibility of account receivable and valuation of inventory, 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:

     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.

                                      -21-
<PAGE>

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



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

   Partnership Allocations, continued

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

     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.

   Federal Income Tax Basis 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:

     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.

                                      -22-
<PAGE>

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


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

   Partnership Allocations, continued

   Federal Income Tax Basis Profits and Losses, continued
   -------------------------------------------

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

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

  Recently Issued Financial Accounting Standards

  In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
  Accounting for Derivative Instruments and Hedging Activities ("Statement
  133"). Statement 133 establishes accounting and reporting standards for
  derivative instruments and for hedging activities. It requires that an entity
  recognize all derivatives as either assets or liabilities in the statement of
  financial position and measure those instruments at fair value. In June 1999,
  the Financial Accounting Standards Board issued SFAS No. 137, Accounting for
  Derivative Instruments and Hedging Activities - Deferral of the Effective Date
  of FASB No. 133, an Amendment of FASB Statement 133. Statement 137 effectively
  extends the required application of Statement 133 to fiscal years beginning
  after June 15, 2000, with earlier application permitted. The Partnership
  adopted Statement 133 in the first quarter of 1999. The General Partner does
  not expect the adoption of Statement 133 or Statement 137 to have an impact on
  its financial reporting.

                                      -23-
<PAGE>

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


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

  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
  equipment subject to 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 net cash flows expected to result from the use of the
  asset and its eventual disposition. If the sum of the expected future net 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 equipment subject to
  operating leases and identifiable intangibles held by the Partnership, is
  based on the fair value of the asset. The fair value of the asset may be
  calculated by discounting the expected future net 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 Partner ship 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.



  Net Investment in Direct Finance 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.

                                      -24-
<PAGE>

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


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

 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.

 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.  The Partnership considers, 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 in determining losses.
 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.

                                      -25-
<PAGE>

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


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

  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 $1,111,000 and $2,634,000 at December 31, 1999
  and 1998, 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.

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

     The components of the net investment in direct finance leases as of
     December 31, 1999 and 1998 were:

<TABLE>
<CAPTION>
                                                         1999           1998
                                                    ------------   ------------
<S>                                                <C>           <C>

     Minimum lease payments receivable             $  4,391,512   $  3,428,760
     Estimated residual values                          831,411        805,340
     Less unearned income                              (817,401)      (423,718)
                                                   ------------   ------------
        Total                                      $  4,405,522   $  3,810,382
                                                   ============   ============
</TABLE>

3.   Leased Equipment, net
     ---------------------

     The Partnership's investment in equipment on operating leases by major
     classes as of December 31, 1999 and 1998 were:

<TABLE>
<CAPTION>
                                                       1999           1998
                                                   ------------   ------------
<S>                                                <C>            <C>

     Transportation and industrial equipment       $ 38,818,396   $ 32,877,921
     Computers and peripherals                       15,856,195     18,389,166
     Office furniture and equipment                  13,867,144     17,214,503
     Other                                            3,499,545      2,278,628
                                                   ------------   ------------
                                                     72,041,280     70,760,218
     Less:
     Accumulated depreciation                       (30,228,522)   (23,344,363)
     Allowance for losses                              (372,230)       (75,000)
                                                   ------------   ------------
                                                   $ 41,440,528   $ 47,340,855
                                                   ============   ============
</TABLE>

     Depreciation expense for 1999, 1998 and 1997 was $14,386,576, $15,287,524
     and $9,213,581, respectively.

                                      -26-
<PAGE>

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


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

     Future minimum lease payments receivable from noncancelable leases as of
     December 31, 1999 are as follows:

<TABLE>
<CAPTION>

      Years Ending December 31,                          DFLs          OLs
      -------------------------                       -----------  ------------
      <S>                                             <C>          <C>

                2000                                   $1,370,512   $12,765,016
                2001                                    1,011,293     9,052,076
                2002                                      844,652     6,462,118
                2003                                      683,302     3,283,087
                Thereafter                                481,754       906,764
                                                       ----------   -----------
                     Total                             $4,391,513   $32,469,061
                                                       ==========   ===========
</TABLE>

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

     Discounted lease rentals outstanding at December 31, 1999 bear interest at
     rates primarily ranging between 6% and 10%. Aggregate maturities of such
     non-recourse obligations are:

<TABLE>
<CAPTION>

      Years Ending December 31,
      -------------------------
      <S>                                          <C>

               2000                                $ 6,016,436
               2001                                  4,247,432
               2002                                  1,853,895
               2003                                  1,022,594
               Thereafter                              311,913
                                                   -----------
                                                   $13,452,270
                                                   ===========
</TABLE>

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. No sales commissions were
     incurred during 1999. During 1998, the Partnership incurred sales
     commissions of approximately $434,000, including $363,000 that were paid to
     participating broker-dealers.

     No offering costs were incurred during 1999. As provided in the Partnership
     Agreement, the general partner earned approximately $174,000 as
     reimbursement for offering costs incurred during 1998, in connection with
     the organization of the Partnership and the offering of Class A limited
     partner units. The general partner also received approximately $75,000 as
     reimbursement for due diligence expenses incurred during 1998.

                                      -27-
<PAGE>

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


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

     Capital Contributions
     ---------------------

     No capital contributions were made to the Partnership during 1999. Under
     terms of the Partnership Agreement, the Class B limited partner made
     capital contributions to the Partnership of $40,000 during 1998.

     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 $449,000, $606,000, and $1,586,000 in 1999, 1998, and
     1997, 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 Paid to General Partner
     ---------------------------------------

     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 $401,000, $422,000 and $250,000 of
     management fees during 1999, 1998, and 1997, respectively.

     Direct Services from General Partner
     ------------------------------------

     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 $209,000,
     $168,000 and $79,000 of direct services from general partner during 1999,
     1998 and 1997, respectively.

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

     The Partnership purchased equipment from CAII, with a total purchase price
     of approximately $15,019,045, $18,542,605, and $47,828,704 (including
     approximately $7,386,009, $3,223,219, and $16,946,684 of discounted lease
     rentals) during 1999, 1998, and 1997, respectively. The Partnership
     purchased the equipment at CAII's historical cost plus reimbursement of
     other net acquisition costs, as provided for in the Partnership Agreement.

                                      -28-
<PAGE>

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

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

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

     Payables to affiliates of approximately $84,000 and $47,000 in 1999 and
     1998, respectively, consists of $48,000 for direct services from general
     partner, $31,000 for management fees paid to general partner, and $5,000
     for reimbursable general and administrative expenses in 1999, and $8,000
     for direct services from general partner, $35,000 for management fees paid
     to general partner, and $4,000 for due diligence expenses in 1998.

     Receivable from Affiliates
     --------------------------

     The General Partner collects and applies rental payments to the lessee's
     account with the Partnership, for those lessees who remit directly to the
     General Partner. The rental payments are then transferred to the
     Partnership, eliminating the receivable from related party balance.

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:

<TABLE>
<CAPTION>

                                                             1999          1998           1997
                                                         ------------  -------------  -------------
<S>                                                      <C>           <C>            <C>

     Net income per financial statements                 $ 1,236,040    $ 2,031,561    $   955,418
     Direct finance leases                                 1,632,855      1,745,558      1,057,640
     Depreciation                                         (2,641,615)    (4,962,903)    (4,245,112)
     Provision for losses                                  1,666,851        105,000              -
     Loss on sale of equipment                            (1,481,692)      (494,248)             -
     Other                                                    19,032        245,990        400,382
                                                         -----------    -----------    -----------
     Partnership income for federal income tax purposes  $   431,471    $(1,329,042)   $(1,831,672)
                                                         ===========    ===========    ===========
</TABLE>

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

<TABLE>
<CAPTION>
                                                            1999           1998           1997
                                                        -------------  -------------  -------------
<S>                                                     <C>            <C>            <C>

     Partners' capital per financial statements         $ 32,602,552    $36,947,254    $36,806,561
     Commissions and offering costs                        7,304,048      7,304,048      6,552,375
     Direct finance leases                                 4,456,093      2,823,238      1,077,680
     Depreciation                                        (12,417,445)    (9,775,830)    (4,812,927)
     Provision for losses                                  1,771,849        105,000              -
     Loss on sale of equipment                            (1,975,940)      (494,248)             -
     Other                                                   787,943        751,712        476,622
                                                        ------------    -----------    -----------
     Partners' capital for federal income tax purposes  $ 32,529,100    $37,661,174    $40,100,311
                                                        ============    ===========    ===========
</TABLE>

                                      -29-
<PAGE>

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

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

     Approximately 69% 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.

     No single lessee accounted for more than 10% of total revenue of the
     Partnership during 1999.

     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.

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, 1999 for cash and cash
     equivalents, accounts receivable, receivable from affiliates, 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, 1999, discounted lease rentals of approximately
     $13,455,000 had fair values of approximately $12,242,000. The fair values
     were estimated utilizing market rates of comparable debt having similar
     maturities and credit quality as of December 31, 1999.

10.  General Partner Matters (unaudited)

     As of March 31, 2000, CAII, an affiliate of the general partner, owes the
     Partnership $865,570 for rents, remarketing proceeds and other amounts
     (collectively, the "Prior Rents") collected by CAII on behalf of the
     Partnership during periods prior to February 1, 2000 (the "Prior Periods").
     According to its own records, as of March 31, 2000, CAII owes approximately
     $3.9 million to other investors and creditors (who, along with the
     Partnership, are referred to herein as the "Payees"), for Prior Rents
     collected by CAII on their behalf during the Prior Periods. CAII, which
     presently does not have the funds to repay all of the Prior Rents, is in
     negotiations with the Payees to develop a plan for repayment of the Prior
     Rents owed to all Payees over time. The Partnership is withholding
     acquisition fees and managements fees otherwise payable to the general
     partner and crediting such withheld fees (the "Fees") against the Prior
     Rents owing from CAII. The Partnership intends to continue to withhold
     future Fees until such time as it recovers all Prior Rents. A provision for
     loss of $300,000 was recorded as of December 31, 1999 to cover a portion of
     the Receivable from Affiliates balance. The General Partner believes the
     remainder is recoverable.

     The Partnership relies upon the services of CAII for origination of leases,
     administrative and accounting services and remarketing of leases and
     equipment, among other services. Should CAII be unable to develop a plan
     for repayment with it's Payees, the Partnership may be required to contract
     with another party for these services. In such event, there is no assurance
     that another provider of these services can be identified.

                                      -30-
<PAGE>

                         Independent Auditors' Report
                         ----------------------------



The Partners
Capital Preferred Yield Fund-IV, L.P.:

Under date of March 31, 2000, we reported on the balance sheets of Capital
Preferred Yield Fund-IV,  L.P. as of December 31, 1999 and 1998, and the related
statements of income, partners' capital, and cash flows for  the years ended
December 31, 1999, 1998 and 1997, as contained in the Partnership's annual
report on Form 10-K for the year 1999.  In connection with our audits of the
aforementioned financial statements, we also audited the related financial
statement Schedule II, as listed in the accompanying index.  This financial
statement schedule is the responsibility of the Partnership's management.  Our
responsibility is to express an opinion on this financial statement schedule
based on our audits.

In our opinion, such financial statement schedule, when considered in relation
to the basic financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.

                                     /s/ KPMG LLP
                                     ------------------------------
                                     KPMG LLP

Denver, Colorado
March 31, 2000

                                      -31-
<PAGE>

                     CAPITAL PREFERRED YIELD FUND-IV, L.P.

                SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                     for the year ended December 31, 1999

<TABLE>
<CAPTION>


           COLUMN A               COLUMN B    COLUMN C     COLUMN D    COLUMN E
-------------------------------- ----------  ----------  ------------  ---------
                                 Balance at   Additions                 Balance
                                  Beginning  Charged to                 at End
Classification                     of Year    Expenses    Deductions    of Year
--------------                   ----------  ----------  ------------  ---------
<S>                               <C>        <C>         <C>           <C>

           1999
--------------------------

Allowance for losses:
 Accounts receivable               $ 30,000  $        -  $         -    $ 30,000
 Receivable from affiliates               -     300,000            -     300,000
 Equipment on operating leases       75,000   1,366,851   (1,069,621)    372,230
                                  ---------  ----------  -----------    --------

                                   $105,000  $1,666,851  $(1,069,621)   $702,230
                                  =========  ==========  ===========    ========
           1998
--------------------------

Allowance for losses:
 Accounts receivable               $      -  $   30,000  $         -    $ 30,000
 Equipment on operating leases            -      75,000            -      75,000
                                  ---------  ----------  -----------    --------

                                   $      -  $  105,000  $         -    $105,000
                                  =========  ==========  ===========    ========
</TABLE>







                 See accompanying independent auditors' report

                                      -32-
<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

  Richard H. Abernethy    Vice President and Director

  Joseph F. Bukofski      Chief Accounting Officer, Vice President and Director

  Mick Myers              Director

John F. Olmstead, age 56, 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.

Richard H. Abernethy, age 46, joined CAII in April 1992 as Equipment Valuation
Manager and currently serves as Vice President of Portfolio Management.  Mr.
Abernethy has fourteen 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.

Joseph F. Bukofski, age 44, joined CAII in June 1990 as a Financial Analyst.
Mr. Bukofski is currently the Vice President and Treasurer.  Prior to becoming
Treasurer, 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.

Mick Myers, age 42, joined CAII in February 1992 as a Senior Portfolio Manager.
Currently he is 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.

                                      -33-
<PAGE>

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 1999.

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 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

      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   May 22, 2000.

  (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 1999:

                                      -34-
<PAGE>

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

                        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.

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.

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.


                       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 $448,815 in 1999, 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 $401,008 for 1999.

                                      -35-
<PAGE>

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

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 $208,672
during 1999.

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 $53,953 and $53,953, respectively, for 1999.  Distributions and net
income allocated to the Class B limited partner totaled $52,500 and $18,074,
respectively, during 1999.

During 1999, 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>
ACT Manufacturing            Conveyors              $  257,932        $  266,466    $  205,943     $   69,832
ACT Manufacturing            Genrad Tester             350,593           362,465       280,868         95,238
ACT Manufacturing            Semiconductor             933,105           964,032       749,209        243,334
ACT Manufacturing            Tape Feeder               650,078           671,604       530,529        173,101
Alliance Data                VSAT's                    626,468           648,176             -         68,755
Allied Signal                Copier                     50,858            52,620             -         16,758
Allied Signal                Projector                  71,101            73,565             -         26,565
API Universal Foils          Manufacturing           2,274,668         2,353,485     2,111,125        648,062
Atmel                        SDI Analyzer              497,357           514,590             -         78,353
Becton Dickinson             Forklift                  124,232           128,536             -         24,979
Conair                       Stockpicker                20,145            20,843             -          4,215
Consolidated Diesel          Forklift                   44,895            46,451             -          8,428
Electronic Payment Service   VSAT's                     72,797            75,319             -         14,788
E-Trade                      Office Furniture        3,349,606         3,414,162     2,974,236        808,672
Geico                        Servers                    68,723            71,104             -         25,579
General Motors Corp.         Forklift                  402,034           415,964             -         79,609
General Motors Corp.         Material Handling         106,735           110,433             -         22,101
General Motors Corp.         Scrubber                  452,247           467,918             -        102,441
General Motors Corp.         Sweeper                   114,477           118,444             -         57,752
General Motors Corp.         Tow Tractor                 5,726             5,926             -          1,917
Hughes Aircraft              Device Test System         16,562            17,136             -          4,257
ICI American Holdings        Computers                  17,303            17,903             -         10,063
Inco Alloys                  Computer Equipment        102,733           106,292             -         35,504
Mailboxes, Etc.              VSAT's                    171,108           177,037             -         37,370
McGraw Hill                  Computer Equipment         17,317            17,917             -          5,553
McGraw Hill                  Copier                     94,964            98,255             -         30,142
McGraw Hill                  Fax Machine                 4,193             4,339             -          1,333
McGraw Hill                  Scrubber                   33,917            35,092             -          7,105
National Discount Brokers    Computers                 480,181           496,819       386,009         77,652
Parke-Davis                  Spectrometer              443,618           458,989             -        159,366
Rohr Industries              Computer Equipment         48,253            49,925             -         15,344
</TABLE>

                                      -36-
<PAGE>

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

Accountable General and Administrative Expenses, continued
-----------------------------------------------

<TABLE>
 <CAPTION>
                                                                      Cost to
                                                                    Partnership
                                                                     Including
                                                                    Acquisition       Debt           Annual
Lessee                  Equipment Description     Cost to CAII         Fees*         Assumed          Rents
------                  ---------------------     ------------        ---------     ---------       ---------
<S>                      <C>                      <C>                <C>           <C>            <C>
Samoff Corp              HP Equipment                  184,565          190,960             -         43,432
Schratter Foods          Forklift                      206,775          213,940             -         60,874
Thomson                  Machine Tools                 424,404          439,110             -         65,164
Thomson                  Manufacturing                  51,210           52,984             -          9,979
TRW                      Computers                     172,680          178,663       148,090         58,961
TRW                      Semiconductor               1,626,670        1,681,581             -        503,233
                                                   -----------      -----------    ----------     ----------
                                                   $14,570,230      $15,019,045    $7,386,009     $3,695,811
                                                   ===========      ===========    ==========     ==========
</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.

                                      -37-
<PAGE>

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").

           2. Financial Statement Schedule: (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, 1999.

      (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.

                                      -38-
<PAGE>

                                  SIGNATURES

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:   ________, 2000                 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 ______________,
2000.

Signature                          Title
---------                          -----

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


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


/s/Joseph F. Bukofski
-----------------------
Joseph F. Bukofski        Chief Accounting Officer, Vice President, and Director

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

                                      -39-