SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

(Mark One)

[X]  Annual report  pursuant to Section 13 or 15(d) of the  Securities  Exchange
     Act of 1934 for the fiscal year ended December 31, 1996

[ ]  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 31

                               Page 1 of 32 Pages

                                       -1-

<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 an affiliate 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 sole Class B limited partner of the Partnership. In exchange for
the Class B limited partner interest, the Class B limited partner is required to
contribute  cash in the  amount of $10,000  for each  $1,000,000  of  investors'
capital  contribution  (i.e.,  cash  investments  in  the  Partnership)  to  the
Partnership.   In  addition,   the  Class  B  limited   partner's   interest  in
Distributable  Cash is subordinated to the Class A limited  partners'  interest.
The  contributions of the Class B limited partner are made  simultaneously  with
the  purchase of  equipment by the  Partnership.  As of December 31, 1996,  CAII
contributed $150,000 to the Partnership.

The Partnership commenced business operations on April 16, 1996. The Partnership
intends to continue  offering up to a maximum of 500,000 Class A limited partner
units for sale and admitting  additional  Class A limited partners through April
15, 1998. A summary of the Partnership's offering activities is presented below:

<TABLE>
<CAPTION>

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

<S>                                <C>               <C>         <C>            <C>              <C>        

Year ended December 31, 1996        154,553           867         $ 15,455,281   $  2,230,270     $13,225,011
                                    =======           ===         ============   ============     ===========
</TABLE>

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;  (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
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;  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 one to three years of
the end of the reinvestment period.

During 1996, the Partnership  acquired capital  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  to  the
Partnership.   The  equipment  was  generally   comprised  of,  (among  others),
transportation and industrial equipment,  and computer and peripheral equipment.
See Item 13 of this report, "Certain Relationships and Related Transactions" for
the detail listing of equipment  purchased during 1996. The Partnership  expects
that a majority of the equipment purchased during 1997 will be similar in nature
to the equipment  acquired in 1996. As of December 31, 1996, the general partner
has identified approximately $2.6 million of additional equipment that satisfied
the  Partnership's  acquisition  criteria that is expected to be acquired during
1997.

                                       -2-

<PAGE>



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

The Partnership may assign the rentals from leases to financial institutions, or
acquire  leases  subject  to such  assignments,  at  fixed  interest  rates on a
nonrecourse  basis. This non-recourse debt financing 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 1996, the  Partnership  leased  equipment to investment  grade lessees in
diverse  industries  including  the material  handling,  telecommunications  and
manufacturing industries. Approximately 88% of the Partnership's equipment under
lease was leased to investment  grade lessees as of December 31, 1996.  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 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 may limit 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 ultimate
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   profitability  of  the  Partnership's  leasing  transactions  is
dependent in part on the general level of interest  rates because  leasing is an
alternative to financing  equipment  purchases with debt.  Lease rates therefore
tend to rise  and  fall  with  interest  rates  although  lease  rate  movements
generally lag behind interest rate movements. The amount of future distributions
to the partners will depend, in part, on future interest rates.

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

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 will enable it to continue to compete  effectively in the equipment
leasing and remarketing markets.

                                       -3-

<PAGE>



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

The Partnership  leases equipment to a significant  number of lessees.  However,
rental  revenue from  General  Motors,  Lucent  Technologies  and Staples,  Inc.
accounted for  approximately  48% ($453,460) of total revenue of the Partnership
during 1996. This  concentration  is attributable to placement of equipment with
these  lessees  during the first nine  months of the  Partnership's  operations.
Rental  revenue  from  these  lessees  constituted  a larger  percentage  of the
Partnership's  total  revenue  than  it is  expected  to be in  the  future,  as
additional leases are acquired by the Partnership.

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


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, 1996.


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

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

(b)      As of December 31, 1996, the number of limited partners was 867.







                                       -4-

<PAGE>


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

(c)      Distributions

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

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

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

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

         A substantial 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 sale of equipment)  have been realized at the
         termination of the Partnership.

         The  distribution  for the month  ended  December  31,  1996,  totaling
         $126,682,  was paid to the Class A limited partners on January 3, 1997.
         Distributions to the general partner and Class B limited partner during
         1996 are  discussed in Item 13 of this Report,  "Certain  Relationships
         and Related Transactions."

         The  general  partner  believes  that  the  Partnership  will  generate
         sufficient cash flows from operations  during 1997, 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% (substantial portions of which are expected to constitute returns
         of  capital),  on their  capital  contributions,  and (3)  reinvest  in
         additional equipment under leases, provided that suitable equipment can
         be identified and acquired.



                                       -5-

<PAGE>



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

The following  selected  financial data relates to 1996. The data should be read
in conjunction with Item 7,  "Management's  Discussion and Analysis of Financial
Condition  and Results of  Operations"  and the financial  statements  and notes
thereto appearing elsewhere herein.
                                                                 Period Ended
                                                              December 31, 1996*
                                                              ------------------

Total revenue                                                  $   940,346

Net income                                                         102,627

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

Total assets                                                    16,652,457

Discounted lease rentals                                         2,765,239

Distributions declared to Class A limited partners                 439,720

Distributions declared per weighted average
  Class A limited partner unit outstanding                            7.72

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


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

Results of Operations
---------------------

The Partnership  commenced  operations on April 16, 1996 and reported net income
of $102,627 for the period from April 16, 1996 to December 31, 1996.  Net income
was derived  principally  from rentals  generated from  $13,991,309 of equipment
owned by the Partnership at December 31, 1996.

A comparison of current  operating  results to the  corresponding  period of the
prior year  cannot be made since the  Partnership  did not  commence  operations
until April 16, 1996.

Revenue  generated  from  equipment on lease  comprised 95% of total revenue for
1996.  Interest income  comprised 5% of total revenue.  General  Motors,  Lucent
Technologies and Staples,  Inc.  accounted for  approximately  19%, 19% and 10%,
respectively,  of total revenue during 1996. This  concentration is attributable
to  placement  of  equipment  with the  lessees  during the early  stages of the
Partnership's  operations.  Rental  revenue from these  lessees was,  therefore,
relatively more significant in 1996 than it would be expected in the future,  as
additional leases are acquired by the Partnership.

                                       -6-

<PAGE>



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

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

The  ultimate   profitability  of  the  Partnership's  leasing  transactions  is
dependent in part on the general level of interest  rates because  leasing is an
alternative to financing  equipment  purchases with debt.  Lease rates therefore
tend to rise  and  fall  with  interest  rates  although  lease  rate  movements
generally lag behind interest rate movements. The amount of future distributions
to the partners will depend, in part, on future interest rates.

Depreciation expense comprised 79% of total expenses for 1996.


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

The  Partnership  was  formed on  December  18,  1995.  On April 16,  1996,  the
Partnership commenced offering 500,000 Class A limited partner units at $100 per
unit for sale to investors.  On June 3, 1996, the  Partnership  held its initial
closing, receiving gross offering proceeds of $1,200,000 from the sale of 12,000
Class A limited partner units. The Partnership  intends to continue  offering up
to 500,000 Class A limited partner units for sale and admitting additional Class
A limited partners through April 15, 1998.

A summary of the  Partnership's  offering  activities  from the  commencement of
operations to December 31, 1996 is presented below:

Class A limited partner units sold                                      154,553
                                                                   ============

Gross offering proceeds                                            $ 15,455,281
Sales commissions                                                    (1,545,528)
Organization and offering expenses                                     (618,112)
Due diligence expenses                                                  (66,630)
                                                                   ------------
  Net offering proceeds                                            $ 13,225,011
                                                                   ============

  Class B limited partner (CAII) cash contribution                 $    150,000
                                                                   ============

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 1996, the Partnership  acquired  equipment subject to leases with a total
purchase price of $13,991,309  (including $849,244 of discounted lease rentals).
Also during 1996, the Partnership discounted future rental payments from certain
leases to non-recourse lenders and received proceeds of $1,923,239. Non-recourse
borrowing against  unleveraged  leases in the Partnership's  lease portfolio may
occur in the  future  as well,  when the  general  partner,  in its  discretion,
determines  that such  non-recourse  financing  is in the best  interest  of the
Partnership.  As of December 31, 1996, the general  partner had identified  $2.6
million of additional  equipment  that satisfied the  Partnership's  acquisition
criteria that is expected to be acquired during 1997.

                                       -7-

<PAGE>



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

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

During  1996,  the  Partnership  declared  distributions  to the Class A limited
partners  of  $439,720  of  which  $126,682  was paid  during  January  1997.  A
substantial  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
will 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.  For 1996,  approximately 76% of the cash distributions paid
to the  partners  of  the  Partnership  constituted  a  return  of  capital  for
accounting purposes.  This percentage may not be reflective of the percentage of
distributions  that  constitutes a return of capital at any subsequent  point in
time.

The general partner believes that the Partnership will generate  sufficient cash
flows from operations during 1997, 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%  (substantial  portions  of which  are
expected to constitute returns of capital), of their capital contributions,  and
(3) reinvest in  additional  equipment  under  leases,  provided  that  suitable
equipment can be identified and acquired.


                                       -8-

<PAGE>





Item 8.   Financial Statements and Supplementary Data

          Index to Financial Statements

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

            Independent Auditors' Report                                    10

            Balance Sheet at December 31, 1996                              11

            Statement of Income for the period from April 16, 1996
            (commencement of operations) through December 31, 1996          12

            Statement of Partners' Capital for the period from
            April 16, 1996 (commencement of operations) through
            December 31, 1996                                               13

            Statement of Cash Flows for the period from April 16, 1996
            (commencement of operations) through December 31, 1996          14

            Notes to Financial Statements                                  15-24





                                       -9-

<PAGE>



                          Independent Auditors' Report




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

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

We conducted our audit 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 audit provides a reasonable basis for our opinion.

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




                                              /s/KPMG Peat Marwick LLP
                                              ------------------------
                                              KPMG Peat Marwick LLP

Denver, Colorado
January 31, 1997



                                      -10-

<PAGE>



                      Capital Preferred Yield Fund-IV, L.P.

                                  BALANCE SHEET


                                     ASSETS

                                                                    December 31,
                                                                        1996
                                                                    ------------


Cash and cash equivalents                                            $ 3,286,072
Accounts receivable                                                       76,524
Net investment in direct finance leases                                  182,328
Leased equipment, net                                                 13,107,533
                                                                     -----------

    Total assets                                                     $16,652,457
                                                                     ===========


                        LIABILITIES AND PARTNERS' CAPITAL

Liabilities:
    Accounts payable and accrued liabilities                         $   658,229
    Payable to affiliates                                                 43,483
    Rents received in advance                                             31,991
    Distributions payable to partners                                    128,898
    Discounted lease rentals                                           2,765,239
                                                                     -----------

    Total liabilities                                                  3,627,840
                                                                     -----------
Partners' capital:
    General partner                                                            -
    Limited partners:
      Class A
        500,000 units authorized; 154,503 units
        issued and outstanding                                        12,878,374
      Class B                                                            146,243
                                                                     -----------

            Total partners' capital                                   13,024,617
                                                                     -----------
            Total liabilities and partners' capital                  $16,652,457
                                                                     ===========



                 See accompanying notes to financial statements.

                                      -11-

<PAGE>



                     Capital Preferred Yield Fund-IV, L.P.

                              STATEMENT OF INCOME

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

Revenue:
    Operating lease rentals                                   $ 881,778
    Direct finance lease income                                   7,805
    Interest income                                              50,763
                                                              ---------

          Total revenue                                         940,346
                                                              ---------

Expenses:
    Depreciation and amortization                               659,574
    Management fees paid to general partner                      17,688
    Direct services from general partner                         41,376
    General and administrative                                   92,539
    Interest on discounted lease rentals                         26,542
                                                              ---------

             Total expenses                                     837,719
                                                              ---------

Net income                                                    $ 102,627
                                                              =========


Net income allocated:
    To the general partner                                    $  26,271
    To the Class A limited partners                              75,564
    To the Class B limited partner                                  792
                                                              ---------

                                                              $ 102,627
                                                              =========

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


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


                 See accompanying notes to financial statements.

                                      -12-

<PAGE>



                      Capital Preferred Yield Fund-IV, L.P.

                         STATEMENT OF PARTNERS' CAPITAL
                 For the period from commencement of operations
                                (April 16, 1996)
                              to December 31, 1996

<TABLE>
<CAPTION>


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

<S>                                             <C>                   <C>         <C>              <C>              <C>         
Capital contributions                            $          0          154,553     $ 15,455,281     $    150,000     $ 15,605,281
Commissions and offering costs on
  sale of Class A limited partner units               (22,303)               -       (2,207,967)               -       (2,230,270)
Redemptions                                                 -              (50)          (4,784)               -           (4,784)
Net income                                             26,271                -           75,564              792          102,627
Distributions declared to partners                     (3,968)               -         (439,720)          (4,549)        (448,237)
                                                 ------------     ------------     ------------     ------------     ------------

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

</TABLE>





















                 See accompanying notes to financial statements.

                                      -13-

<PAGE>



                      Capital Preferred Yield Fund-IV, L.P.
                             STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
                         
                                                                                    For the period from
                                                                                    the commencement of
                                                                                operations (April 16, 1996)
                                                                                    to December 31, 1996
                                                                                ---------------------------
<S>                                                                                <C>          

Cash flows from operating activities:
  Net income                                                                        $     102,627
  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Depreciation and amortization                                                       659,574
      Recovery of investment in direct finance leases                                      20,040
  Changes in assets and liabilities:
      Increase in accounts receivable                                                     (76,524)
      Increase in accounts payable and accrued liabilities                                651,476
      Increase in payable to affiliates                                                    43,483
      Increase in rents received in advance                                                31,991
                                                                                    -------------
Net cash provided by operating activities                                               1,432,667
                                                                                    -------------

Cash flows from investing activities:
  Purchases of equipment on operating leases from affiliates                          (12,939,697)
  Investment in direct financing leases, acquired from affiliates                        (202,368)
                                                                                    -------------
Net cash used in investing activities                                                 (13,142,065)
                                                                                    -------------

Cash flows from financing activities:
  Proceeds from Class A capital contributions                                          15,455,281
  Proceeds from Class B capital contributions                                             150,000
  Proceeds from discounted lease rentals                                                1,923,239
  Principal payments on discounted lease rentals                                           (7,244)
  Redemptions of Class A limited partner units                                             (4,784)
  Commissions paid to affiliate in connection with the sale of
    Class A limited partner units                                                      (1,545,528)
  Non-accountable organization and offering expenses reimbursement
    paid to the general partner in connection with the sale of Class A
    limited partner units                                                                (656,155)
  Distributions to partners                                                              (319,339)
                                                                                    -------------
Net cash provided by financing activities                                              14,995,470
                                                                                    -------------

Net increase in cash and cash equivalents                                               3,286,072
Cash and cash equivalents at beginning of period                                                -
                                                                                    -------------
Cash and cash equivalents at end of period                                          $   3,286,072
                                                                                    =============

Supplemental disclosure of cash flow information:
  Interest paid on discounted lease rentals                                         $      26,542
Supplemental disclosure of noncash investing and financing activities:
  Reduction in Partner's capital accounts for commissions and offering
    costs payable to affiliates                                                            28,587
  Discounted lease rentals assumed in equipment acquisitions                              849,244

</TABLE>


                See accompanying notes to financial statements.

                                      -14-

<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, 1996,  154,553
        Class A limited partner units were sold to  approximately  867 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. As of December 31, 1996, CAII has
        contributed $150,000 to the Partnership.

     Use of Estimates

        The  preparation  of financial  statements in conformity  with generally
        accepted accounting principles requires management to make estimates and
        assumptions  that affect the reported  amounts of assets and liabilities
        and disclosure of contingent  assets and  liabilities at the date of the
        financial  statements  and the reported  amounts of revenue and expenses
        during the reporting  period.  For leasing  entities,  this includes the
        estimate of residual values,  as discussed  below.  Actual results could
        differ from those estimates.

     Partnership Allocations

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

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

            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.

                                      -15-

<PAGE>


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

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

     Partnership Allocations, continued

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

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

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

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

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

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

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

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

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

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

            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.



                                      -16-

<PAGE>


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


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

     Partnership Allocations, continued
     -----------------------

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

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

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

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

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


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

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





                                      -17-

<PAGE>


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

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

     Recently Issued Financial Accounting Standards

        The Partnership adopted 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"),  effective January
        1,  1996.  SFAS No.  121  requires  that  long-lived  assets,  including
        operating leases,  and certain  identifiable  intangibles to be held and
        used by an entity be reviewed for impairment  whenever events or changes
        in  circumstances  indicate that the carrying amount of an asset may not
        be recoverable. In performing the review for recoverability,  the entity
        should estimate the future cash flows expected to result from the use of
        the  asset  and its  eventual  disposition.  If the sum of the  expected
        future cash flows  (undiscounted  and without interest  charges) is less
        than the carrying amount of the asset, an impairment loss is recognized.
        Otherwise,  an  impairment  loss is not  recognized.  Measurement  of an
        impairment loss for long-lived assets,  including  operating leases, and
        identifiable  intangibles  held by the  Partnership is based on the fair
        value of the asset  calculated by discounting  the expected  future cash
        flows at an  appropriate  interest  rate. The adoption of this statement
        did not have a material effect on the Partnership's  financial condition
        or results of operations.

      Lease Accounting

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

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

     Net Investment in Direct Financing Leases ("DFLs")

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

                                      -18-

<PAGE>


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

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.


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



                                      -19-

<PAGE>


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

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

     Transactions Subsequent to Initial Lease Termination

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

     Income Taxes

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

     Cash Equivalents

        The Partnership considers short-term, highly liquid investments that are
        readily convertible to known amounts of cash to be cash equivalents.

        Cash equivalents of $2,491,000 at December 31, 1996, are comprised of an
        investment  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, 1996 were:

     Minimum lease payments receivable                           $ 196,123
     Estimated residual values                                      19,627
     Less unearned income                                          (33,422)
                                                                 ---------

              Total                                              $ 182,328
                                                                 =========



                                      -20-

<PAGE>


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

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

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

     Transportation and industrial equipment                  $ 10,188,595
     Computers and peripherals                                   3,569,359
     Other                                                          30,988
                                                              ------------
                                                                13,788,942
     Less accumulated depreciation                                (681,409)
                                                              ------------
                                                              $ 13,107,533
                                                              ============

       Depreciation expense for 1996 was $681,409.

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

     Future minimum lease payments  receivable from  noncancelable  leases as of
     December 31, 1996 are as follows:

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

              1997                                $    67,260       $ 3,522,304
              1998                                     67,260         3,477,210
              1999                                     43,185         2,516,090
              2000                                     11,867         1,403,995
              2001                                      6,651           711,339
              Thereafter                                    -            68,455
                                                  -----------       -----------
                Total                             $   196,123       $11,699,393
                                                  ===========       ===========


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

     Discounted lease rentals  outstanding at December 31, 1996 bear interest at
     rates primarily ranging between 4.90% and 11.65%.  Aggregate  maturities of
     such non-recourse obligations are:

         Years Ending December 31
         ------------------------
                  1997                                              $   790,395
                  1998                                                  790,396
                  1999                                                  600,933
                  2000                                                  341,579
                  2001                                                  202,700
                  Thereafter                                             39,236
                                                                    -----------
                                                                    $ 2,765,239
                                                                    ===========

                                      -21-

<PAGE>


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

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

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

       Under the terms of the Partnership Agreement, CAI Securities Corporation,
       an  affiliate  of the  general  partner,  is  entitled  to receive  sales
       commissions  and  wholesaling  fees  equal to 10% of the  Class A limited
       partners'  capital   contributions,   up  to  9%  of  which  is  paid  to
       participating  broker-dealers.  During 1996, CAI  Securities  Corporation
       earned  commissions  and  fees in the  amount  of  $1,545,528,  including
       $1,324,225 that was paid to participating broker-dealers.

       As provided in the  Partnership  Agreement,  the general  partner  earned
       $618,112  as  reimbursement   for  expenses   incurred  during  1996,  in
       connection  with the  organization of the Partnership and the offering of
       Class A limited partner units.  The general partner also received $66,630
       (of which  $38,043  was paid in January  1997) as  reimbursement  for due
       diligence expenses incurred during 1996.


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

       Under terms of the  Partnership  Agreement,  the Class B limited  partner
       made capital contributions to the Partnership of $150,000 during 1996.


       Origination Fee and Evaluation Fee
       ----------------------------------

       The  general  partner  receives 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 credit worthiness of the lessees. Origination and evaluation fees
       totaled   $463,529  in  1996,  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
       performed in connection with managing the  Partnership's  equipment equal
       to 2%  of  gross  rentals  received  as  permitted  under  terms  of  the
       Partnership  Agreement.  Such fees  totaled  $17,688 (of which $8,510 was
       paid in January 1997) for 1996.


                                      -22-

<PAGE>


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

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

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

       The  general  partner and its  affiliates  provide  accounting,  investor
       relations,    billing,    collecting,   asset   management,   and   other
       administrative  services to the Partnership.  The Partnership  reimburses
       the  general  partner  for  these  services  performed  on its  behalf as
       permitted   under  the   terms  of  the   Partnership   Agreement.   Such
       reimbursements  totaled  $41,376  ($6,386  of which  were paid in January
       1997) during 1996.

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

       The  Partnership  purchased  equipment  from CAII,  with a total purchase
       price of  $13,991,309  (including  $849,244 of discounted  lease rentals)
       during 1996. The Partnership purchased the equipment at CAII's historical
       cost plus  reimbursement of other net acquisition  costs, as provided for
       in the Partnership Agreement.

       Payable to Affiliates
       ---------------------

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

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

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

     Net income per financial statements                         $ 102,627
     Direct financing leases                                        20,040
     Depreciation                                                 (567,815)
     Other                                                          87,042
                                                                 ---------
     Partnership income for federal income tax purposes          $(358,106)
                                                                 =========

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

     Partners' capital per financial statements               $ 13,024,617
     Commissions and offering costs                              2,230,270
     Direct financing leases                                        20,040
     Depreciation                                                 (567,815)
     Other                                                          81,277
                                                              ------------
     Partners' capital for federal income tax purposes        $ 14,788,389
                                                              ============

                                      -23-

<PAGE>


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

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

     Approximately 88% 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 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.

     General  Motors,  Lucent  Technologies  and  Staples,  Inc.  accounted  for
     approximately  48%  ($453,460) of total revenue of the  Partnership  during
     1996.  This  concentration  is  attributable to placement of equipment with
     these lessees during the first nine months of the Partnership's operations.
     Rental  revenue from these lessees  constituted a larger  percentage of the
     Partnership's total 1996 revenue than expected in future fiscal periods, as
     additional leases are acquired by the Partnership.

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

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

     Statement  of Financial  Standards  No. 107 ("SFAS 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, 1996 for cash and
     cash  equivalents,   accounts  receivable,  accounts  payable  and  accrued
     liabilities,  payable to  affiliates,  rents and sale proceeds  received in
     advance and distributions payable to partners approximate their fair values
     due to the short maturity of these instruments.

     As of December 31, 1996,  the carrying  value of  discounted  lease rentals
     approximates its fair value because the debt was recently acquired.

                                      -24-

<PAGE>



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

None.

Item 10.  Directors and Executive Officers of the Partnership
          ---------------------------------------------------
          
The Partnership  has no officers and directors.  The general partner manages and
controls  the  affairs of the  Partnership  and has general  responsibility  and
authority in all matters  affecting its  business.  Information  concerning  the
directors and executive officers of the general partner is as follows:

                          CAI Equipment Leasing V Corp.

      Name                             Positions Held
      ----                             --------------

  John F. Olmstead       President and Director

  Dennis J. Lacey        Senior Vice President and Director

  John E. Christensen    Senior Vice President, Principal Financial and Chief
                         Administrative Officer and Director

  Anthony M. DiPaolo     Senior Vice President, Assistant Secretary and Director

  Daniel J. Waller       Vice President and Director

  Richard H. Abernethy   Vice President and Director

  John A. Reed           Vice President, Assistant Secretary and Director

  Robert A. Golden       Vice President and Director

  David J. Anderson      Chief Accounting Officer and Secretary

John F. Olmstead, age 52, joined CAII as Vice President in December,  1988, is a
Senior  Vice  President  of CAI and CAII  and is head of  CAII's  Public  Equity
division.  He has served as Chairman of the Board for Neo-kam Industries,  Inc.,
Matchless Metal Polish Company, Inc. and ACL, Inc. for more than 5 years. He has
over 20 years of experience  holding various  positions of responsibility in the
leasing  industry.  Mr. Olmstead holds a Bachelor of Science degree from Indiana
University and a Juris Doctorate degree from Indiana Law School.

Dennis J. Lacey,  age 43, joined CAI as Vice President,  Operations,  in October
1989.  Mr. Lacey was  appointed  Treasurer on January 1, 1991,  Chief  Financial
Officer on April 11, 1991, a director on July 19, 1991,  and President and Chief
Executive  Officer on September 6, 1991.  Prior to joining CAI, Mr. Lacey was an
audit partner for the public accounting firm of Coopers & Lybrand.  Mr. Lacey is
also a director and senior officer of CAII, CAI Equipment  Leasing I Corp.,  CAI
Equipment  Leasing II Corp.,  CAI  Equipment  Leasing III Corp.,  CAI  Equipment
Leasing IV Corp., CAI Equipment  Leasing V Corp., CAI Leasing Canada,  Ltd., CAI
Partners   Management   Company,   CAI   Securities   Corporation,   CAI   Lease
Securitization I Corp. and Capital Equipment Corporation  (collectively referred
to  herein as the "CAI  Affiliates"),  all of which  are  first- or  second-tier
wholly-owned subsidiaries of CAI.


                                      -25-

<PAGE>



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

John E.  Christensen,  age 49,  joined CAII as Vice  President  and Treasurer in
November  1988.  He now  serves  as Senior  Vice  President,  Finance  and Chief
Financial  Officer  of CAI and CAII.  Mr.  Christensen  previously  held  senior
management  positions at Maxicare Health Plans,  Inc.,  Global Marine,  Inc. and
Santa Fe International,  Inc. Mr.  Christensen  obtained his MBA in Finance from
the  University of Michigan and his Bachelor of Arts degree from Michigan  State
University.

Anthony M. DiPaolo,  age 37, joined CAII in July 1990 as an Assistant  Treasurer
and is currently Senior Vice  President-Business  Development.  He has also held
the  positions  of  Senior  Vice   President-Controller   and   Assistant   Vice
President-Credit  Administration for the Company. Mr. DiPaolo has held financial
management  positions as Chief Financial Officer for Mile High Kennel Club, Inc.
from 1988 to 1990 and was Vice President/Controller for VICORP Restaurants, Inc.
from 1986  through  1988.  Mr.  DiPaolo  holds a Bachelor  of Science  degree in
Accounting from the University of Denver.

Daniel J.  Waller,  age 38,  joined CAII in July 1990,  as a manager of Investor
Relations.  Mr.  Waller  assumed  the  responsibility  for the asset  management
department a short time later, and is currently Vice President,  Capital Markets
Group.  Prior to joining  CAII,  Mr.  Waller was an audit manager with Coopers &
Lybrand for over three years and gained  considerable  experience in the leasing
industry.  While at  Coopers &  Lybrand,  Mr.  Waller  held  positions  with the
International Accounting and Auditing Committee as well as the national Auditing
Directorate.  Mr. Waller holds a Bachelor of Arts degree in accounting  from the
University of Northern Iowa.

Richard H. Abernethy,  age 42, joined CAII in April 1992 as Equipment  Valuation
Manager  and  currently  serves  as Vice  President  of  Asset  Management.  Mr.
Abernethy has thirteen years experience in the leasing industry, including prior
positions with Barclays  Leasing Inc.,  from November 1986 to February 1992, and
Budd Leasing  Corporation,  from January 1981 to November  1986.  Mr.  Abernethy
holds a Bachelor of Arts in Business Administration from the University of North
Carolina at Charlotte.

John A. Reed,  age 41,  joined  CAII in  January  1990 as the Tax  Director  and
Assistant  Secretary.  Mr. Reed is currently the Vice President of Marketing and
is  responsible  for all  lease  documentation  and  management  of  transaction
structuring and processing.  Prior to joining the Marketing Department, Mr. Reed
was Vice  President  of Credit and Debt  Administration.  He spent seven and one
half years with Coopers & Lybrand in the Tax Department and served on CAII's tax
consulting engagement during that time. Mr. Reed holds a Bachelor of Arts degree
in Social  Sciences and Masters of Science in  Accounting,  from Colorado  State
University.

Robert A. Golden,  age 51, is Vice  President and the National  Sales Manager of
the Company.  Mr. Golden joined the Company in 1993 as a Branch Manager.  He was
promoted  to his  current  position  in  September  1994.  Prior to joining  the
Company, he was an Executive Vice President with the U.S. Funds Group, President
of BoCon Capital  Group and Vice  President  with  Ellco/GE  Capital for fifteen
years. Mr. Golden is an officer, but not a director, of CAII.



                                      -26-

<PAGE>


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

David J.  Anderson,  age 43,  joined CAII in August 1990 as Manager of Billing &
Collections and currently  serves as Assistant  Vice-President/Chief  Accounting
Officer. Prior to joining CAII, Mr. Anderson was Vice-  President/Controller for
Systems  Marketing,  Inc.,  from 1985 to 1990,  and  previous to that working in
several senior staff  positions at the Los Alamos  National  Laboratory and with
Ernst & Whinney. Mr. Anderson holds a Bachelor of Business Administration degree
in Accounting from the University of Wisconsin


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

No compensation was paid by the Partnership to the officers and directors of the
general partner. See Item 13 of this Report,  "Certain Relationships and Related
Transactions,"  which is incorporated herein by reference,  for a description of
the  compensation and fees paid to the general partner and its affiliates by the
Partnership during 1996.


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,   owns  100%  of  the
          Partnership's Class B units.

          CAI Partners Management Company owns 100% of the Partnership's general
          partner units.

          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

                                      -27-

<PAGE>




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

   (b)    No directors or officers of the general partner or the Class B limited
          partner  owned any Class A limited  partner  units as of  February  1,
          1996.

   (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 1996:


                         ORGANIZATION AND OFFERING STAGE

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

CAI Securities Corporation (the  "Dealer-Manager"),  an affiliate of the general
partner, earned commissions of 10% of the sales price of Class A limited partner
units sold, up to 9% of which was paid to participating  broker-dealers.  During
1996, the Dealer-Manager  earned commissions  totaling  $1,545,528 (all of which
was paid in 1996,) $1,324,225 of which was paid to broker-dealers.


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

The  Dealer-Manager is reimbursed for bona fide due diligence  expenses which it
incurs up to a maximum of 1/2% of gross offering  proceeds.  The  Dealer-Manager
incurred  $66,630 for due diligence  expenses and was reimbursed  $38,043 during
1996 ($28,587 was reimbursed in January 1997).


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

The general partner is reimbursed for the organization and offering  expenses it
incurs in organizing the  Partnership and offering Class A limited partner units
for sale to the public. The general partner earned $618,112 for organization and
offering expenses during 1996, all of which was paid during 1996.





                                      -28-

<PAGE>



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

                        ACQUISITION AND OPERATING STAGES

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

The general partner receives a fee equal to 3.5% of the sales price of equipment
sold to the Partnership,  1.5% of which  represents  compensation for selecting,
negotiating  and  consummating  the acquisition of the equipment and 2% of which
represents reimbursement for services rendered in connection with evaluating the
suitability  of  the  equipment  and  the  credit   worthiness  of  the  Lessee.
Origination  and  evaluation  fees totaled  $463,529 in 1996,  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 $17,688 for 1996 of which $8,510 will
be paid during January 1997.

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

The general  partner is entitled to  reimbursement  of certain  expenses paid on
behalf  of  the   Partnership   which  are  incurred  in  connection   with  the
Partnership's operations.  Such reimbursable expenses amounted to $41,376 during
1996, of which $6,386 were reimbursed in January 1997.

Additionally,   the  general  partner  is  allocated  1%  of  Partnership   cash
distributions  and net income  relating to its general  partner  interest in the
Partnership.  Distributions  and net income  allocated  to the  general  partner
totaled $3,968 and $26,271, respectively, for 1996. Distributions and net income
allocated to the Class B limited partner totaled $4,549 and $792,  respectively,
during 1996.

During 1996, the Partnership acquired the equipment described below from CAII:

<TABLE>
<CAPTION>

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

<C>        <C>                           <C>     <C>                     <C>            <C>              <C>           <C> 
04/16/96    General Motors Corporation    60      Forklift                $      4,549   $      4,706     $       0     $       878
04/16/96    General Motors Corporation    60      Forklift                      80,638         83,432             0          15,806
04/16/96    General Motors Corporation    60      Forklift                     144,568        149,577             0          28,194
04/16/96    General Motors Corporation    60      Forklift                      49,904         51,633             0           9,732
04/16/96    General Motors Corporation    60      Forklift                     205,011        212,115             0          39,563
04/16/96    General Motors Corporation    60      Forklift                      27,795         28,758             0           5,421
04/16/96    General Motors Corporation    60      Forklift                      28,764         29,761             0           5,637
04/16/96    General Motors Corporation    60      Forklift                     170,982        176,906             0          33,345
04/25/96    General Motors Corporation    60      Loader                        80,897         83,700             0          15,880
05/07/96    USS/Kobe Steel                36      Forklift                      35,334         36,558             0           9,207

                                                              -29-

<PAGE>



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

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

05/10/96     International Paper Company  38      Networking equipment    $    122,043   $    126,272     $       0     $    40,980
06/04/96     Universal Forest Products    36      Forklift                      34,323         35,512             0           9,438
06/07/96     General Motors Corporation   60      Forklift                      37,349         38,644             0           7,332
07/01/96     Universal Forest Products    36      Forklift                      34,323         35,512             0           9,459
07/01/96     Universal Forest Products    36      Forklift                      21,246         21,982             0           5,734
07/03/96     Addison Wesley Longman       36      IBM notebooks                496,392        513,592             0         162,235
07/05/96     General Motors Corporation   36      Material handling            108,935        112,710             0          36,465
07/08/96     Staples, Inc                 28      Copiers                      246,081        254,608             0         102,492
07/08/96     General Motors Corporation   36      Material handling            113,319        117,246             0          37,933
07/08/96     Staples, Inc                 29      Copiers                      229,777        237,739             0          93,276
07/24/96     Xerox                        44      Forklift                      14,015         14,501             0           3,384
08/09/96     GM Powertrain                36      Scrubber                       6,208          6,423             0           2,078
08/15/96     General Motors Corporation   36      Material handling            108,164        111,912             0          31,397
08/20/96     General Motors Corporation   36      Material handling             21,327         22,066             0           6,191
08/22/96     General Motors Corporation   36      Material handling             12,986         13,437             0           3,770
08/29/96     International Paper          58      Forklift                     862,897        892,796             0         168,888
08/30/96     USS/Kobe Steel               84      Forklifts                     83,000         85,876             0          41,332
09/05/96     Home Depot                   46      Forklifts                    647,037        669,457       460,286         169,022
09/09/96     Ball Foster Glass            60      Wrapper                      230,958        238,961             0          47,702
09/18/96     Ball Foster Glass            36      Lift Trucks                   58,072         61,354             0          15,229
09/20/96     General Motors               60      Trailer                       37,182         38,470             0           7,299
09/26/96     Ball Foster Glass            60      Wrapping equipment            99,023        102,454             0          20,477
09/30/96     Alliant Techsystems          24      Phone System                  11,943         12,356             0           4,934
10/01/96     ITT Automotive Electric      60      Material handling            120,720        124,903             0          23,975
10/10/96     Georgetown Steel Corporation 36      Material handling             72,722         75,242             0          21,221
10/10/96     Consolidated Diesel          60      Material handling              6,368          6,589             0           1,418
10/11/96     General Motors Corporation   36      Material handling             77,148         79,821             0          22,394
10/15/96     Xerox                        36      Video imaging                 21,695         22,447             0           6,840
10/16/96     Xerox                        36      Video imaging                 73,002         75,531             0          23,004
10/17/96     Thomson Industries           60      Machine tool                 139,226        144,050             0          26,487
10/23/96     USS/Kobe Steel               84      Material handling             71,400         73,874             0          35,333
10/23/96     Ball Foster Glass            60      Stretch wrapper              118,551        122,517             0          24,485
10/23/96     Ball Foster Glass            36      Material handling             49,056         50,538             0          12,589
10/24/96     Ball Foster Glass            36      Forklifts                    178,928        184,995             0          45,919
10/25/96     Ball Foster Glass            60      Material handling             28,583         29,522             0           5,903
11/04/96     Basic Vegetable              60      Material handling            146,306        151,375             0          27,827
11/05/96     Ball Foster Glass            60      Loader                       109,226        112,952             0          20,422
11/05/96     Xerox                        44      Material handling             34,248         35,435             0           8,328
11/05/96     Ball Foster Glass            60      Loader                        83,471         86,318             0          15,606
11/07/96     Consolidated Diesel          36      Copier                         7,948          8,223             0           2,827
11/20/96     Lucent Technologies          36      Modular building           2,250,000      2,323,805             0         719,940
11/25/96     Ball Foster Glass            36      Forklifts                     60,655         62,397             0          15,566
11/26/96     Consolidated Diesel          60      Burden carriers                5,679          5,876             0           1,261
11/27/96     General Motors               36      Material handling             39,932         41,315             0          11,557
11/27/96     Harsco Corporation           25      Manufacturing equipment      893,000        923,942             0         264,688
11/27/96     Harsco Corporation            6      Manufacturing equipment       95,000         98,292             0          44,904
12/09/96     Xerox                        24      Emulator                       4,590          4,749             0           1,776
12/13/96     Total System Service         46      Mailing system             1,885,160      1,950,481             0         466,109
12/13/96     Thomson Industries, Inc.     60      Grinders                      44,130         45,659             0           8,592
12/13/96     GM Powertrain                36      Material handling             42,664         44,143             0          12,384

                                      -30-

<PAGE>

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

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

12/18/96     Precision Castparts          60      Forklifts               $    360,034   $    372,509     $       0     $    76,765
12/20/96     Owens-corning Fiberglass     30      PC's                         450,478        466,087       388,958         169,742
12/20/96     Thomson Industries, Inc.     56      Grinders                   1,336,722      1,383,039             0         273,554
12/20/96     General Motors Corporation   60      Material handling             19,217         19,883             0           3,772
12/27/96     Xerox                        36      Logic analyzer                10,069         10,418             0           2,880
12/27/96     Xerox                        36      Analysis system               29,950         30,988             0           9,612
                                                                          ------------   ------------     ---------     -----------
             Total equipment on operating leases sold to Partnership        13,330,920     13,788,941       849,244       3,598,390
                                                                          ------------   ------------     ---------     -----------

07/01/96     Louisiana Workers Comp.      36       Computer equipment          116,055        120,076             0          43,926
08/22/96     Medtronic                    36       Copier                       14,140         14,630             0           5,072
10/03/96     Consolidated Diesel          60       Material handling            36,506         37,771             0           8,690
10/18/96     Consolidated Diesel          42       Copier                       28,890         29,891             0           9,579
                                                                          ------------   ------------     ---------     -----------
             Total direct finance leases sold to Partnership                   195,591        202,368             0          67,267
                                                                          ------------   ------------     ---------     -----------
                   Total sold to Partnership                              $ 13,526,511   $ 13,991,309     $ 849,244     $ 3,665,657
                                                                          ============   ============     =========     ===========

</TABLE>

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

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

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

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

     (b)  The  Partnership  did not file any  reports  on Form  8-K  during  the
          quarter ended December 31, 1996.

     (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.

                                      -31-

<PAGE>


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

Dated:  March 4, 1997                  Capital Preferred Yield Fund-IV, L.P.
                                       By:  CAI Equipment Leasing IV Corporation

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

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the general partner
of the Partnership and in the capacities indicated on March 3, 1997.

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


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


/s/John E. Christensen
----------------------
John E. Christensen             Senior  Vice  President, Principal Financial and
                                Chief Administrative Officer and Director

/s/Anthony M. DiPaolo
---------------------
Anthony M. DiPaolo              Senior  Vice  President, Assistant Secretary and
                                Director

/s/Daniel J. Waller
-------------------
Daniel J. Waller                Vice President and Director


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


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


/s/Robert A. Golden
-------------------
Robert A. Golden                Vice President and Director


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

                                      -32-