UNITED STATES
                       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, 2000

                                       OR

    [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
                             EXCHANGE ACT OF 1934

                        For the transition period from to


                         Commission file number 0-17549

                            CNL INCOME FUND IV, LTD.
             (Exact name of registrant as specified in its charter)


           Florida                                        59-2854435
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
 incorporation or organization)

                             450 South Orange Avenue
                           Orlando, Florida 32801-3336
          (Address of principal executive offices, including zip code)

       Registrant's telephone number, including area code: (407) 540-2000

          Securities registered pursuant to Section 12 (b) of the Act:

    Title of each class:                Name of exchange on which registered:
           None                                    Not Applicable

           Securities registered pursuant to section 12(g) of the Act:

              Units of limited partnership interest ($500 per Unit)
                                (Title of class)

         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 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. No [x]

         Aggregate market value of the voting stock held by nonaffiliates of the
registrant:  The  registrant  registered  an offering of 60,000 units of limited
partnership  interest  (the  "Units") on Form S-11 under the  Securities  Act of
1933, as amended. Since no established market for such Units exists, there is no
market for such Units. Each Unit was originally sold at $500 per Unit.

                      DOCUMENTS INCORPORATED BY REFERENCE:
                                      None

<PAGE>

                                     PART I


Item 1.  Business

         CNL Income Fund IV, Ltd. (the  "Registrant" or the  "Partnership") is a
limited  partnership  which was  organized  pursuant to the laws of the State of
Florida on November 18, 1987. The general partners of the Partnership are Robert
A.  Bourne,  James  M.  Seneff,  Jr.  and  CNL  Realty  Corporation,  a  Florida
corporation (the "General Partners").  Beginning on May 6, 1988, the Partnership
offered  for  sale up to  $30,000,000  in  limited  partnership  interests  (the
"Units") (60,000 Units at $500 per Unit) pursuant to a registration statement on
Form S-11 under the Securities Act of 1933, as amended.  The offering terminated
on  December  30,  1988,  as of which  date the  maximum  offering  proceeds  of
$30,000,000   had  been  received  from  investors  who  were  admitted  to  the
Partnership as limited partners (the "Limited Partners").

         The  Partnership  was organized to acquire both newly  constructed  and
existing  restaurant  properties,  as well as properties upon which  restaurants
were to be  constructed  (the  "Properties"),  which  are  leased  primarily  to
operators  of  selected   national  and  regional   fast-food  and  family-style
restaurant  chains (the  "Restaurant  Chains").  Net proceeds to the Partnership
from its  offering of Units,  after  deduction  of  organizational  and offering
expenses,  totalled  $26,550,000,  and  were  used  to  acquire  40  Properties,
including  interests  in five  Properties  owned by joint  ventures in which the
Partnership  is a  co-venturer.  During the year ended  December 31,  1994,  the
Partnership sold its Property in York, Pennsylvania, and reinvested the majority
of the net sales proceeds in two Checkers  Properties,  consisting of only land,
located in Miami,  Florida,  and Douglasville,  Georgia. The remaining net sales
proceeds  were  used  to pay  Partnership  liabilities.  The  lessee  of the two
Properties  consisting of only land owns the buildings currently on the land and
has the right,  if not in default under the lease,  to remove the buildings from
the land at the end of the lease terms. During the year ended December 31, 1995,
the  Partnership  sold its  Property  in  Hastings,  Michigan,  and during  1996
reinvested  the net sales  proceeds  in a  Property  located in  Clinton,  North
Carolina,  with affiliates of the General Partners as  tenants-in-common.  Also,
during the year ended  December 31, 1996, the  Partnership  sold its Property in
Tampa,  Florida,  and  reinvested  the  majority of the net sales  proceeds in a
Boston Market in Richmond,  Virginia.  During the year ended  December 31, 1997,
the  Partnership  sold its Property in  Douglasville,  Georgia.  During the year
ended  December 31, 1998,  the  Partnership  sold its  Properties in Fort Myers,
Florida and Union  Township,  Ohio and distributed the majority of the net sales
proceeds to the limited partners as a special distribution.  In addition, during
the year ended December 31, 1998, the  Partnership  sold a Property in Leesburg,
Florida  and  reinvested  the  majority  of the net  sales  proceeds  in a joint
venture, Warren Joint Venture, to purchase and hold one restaurant Property, and
sold a Property in Naples,  Florida. During 1999, the Partnership reinvested the
net sales proceeds received from the sale of the Property in Naples,  Florida in
a Property in Zephryhills,  Florida,  with affiliates of the General Partners as
tenants-in-common. During the year ended December 31, 2000, the Partnership sold
its Properties in Temple Terrace and Punta Gorda, Florida and Detroit,  Michigan
and distributed  the majority of the net sales proceeds to the limited  partners
as a special distribution. In addition, during the year ended December 31, 2000,
the Partnership  sold a Property in Topeka,  Kansas and intends to distribute to
the investors the majority of the net sales  proceeds.  As a result of the above
transactions,  as of December 31, 2000, the Partnership owned 34 Properties. The
34 Properties  include  interests in six  Properties  owned by joint ventures in
which the Partnership is a co-venturer and two Properties  owned with affiliates
of the General  Partners as  tenants-in-common.  Generally,  the  Properties are
leased on a triple-net  basis with the lessees  responsible  for all repairs and
maintenance, property taxes, insurance and utilities.

         The  Partnership  will hold its Properties  until the General  Partners
determine that the sale or other  disposition of the Properties is  advantageous
in view of the Partnership's investment objectives.  In deciding whether to sell
Properties, the General Partners will consider factors such as potential capital
appreciation,  net cash flow and  federal  income  tax  considerations.  Certain
lessees also have been granted options to purchase Properties,  generally at the
Property's  then fair market  value after a specified  portion of the lease term
has elapsed.  The  Partnership has no obligation to sell all or any portion of a
Property  at any  particular  time,  except as may be  required  under  property
purchase options granted to certain lessees.

         On March 11, 1999, the  Partnership  entered into an Agreement and Plan
of Merger with CNL American Properties Fund, Inc. ("APF"), pursuant to which the
Partnership  would be merged with and into a subsidiary  of APF (the  "Merger").
APF is a real estate investment trust whose primary business is the ownership of
restaurant properties leased on a long-term,  "triple-net" basis to operators of
national and regional restaurant chains. Under the Agreement and Plan of Merger,
APF was to issue shares of its common stock as consideration  for the Merger. On
March 1, 2000,  the General  Partners and APF  announced  that they had mutually
agreed to terminate the Agreement and Plan of Merger. The agreement to terminate
the  Agreement  and Plan of Merger  was based,  in large  part,  on the  General
Partners'  concern  that,  in light of market  conditions  relating  to publicly
traded  real  estate  investment  trusts,  the  value  of  the  transaction  had
diminished.  As a result of such  diminishment,  the General Partners ability to
unequivocally  recommend  voting for the  transaction,  in the exercise of their
fiduciary duties, had become questionable.

Leases

         Although there are variations in the specific terms of the leases,  the
following  is  a  summarized   description  of  the  general  structure  of  the
Partnership's  leases. The leases of the Properties owned by the Partnership and
joint ventures in which the Partnership is a co-venturer and Properties owned as
tenants-in-common  with affiliates of the General  Partners  provide for initial
terms,  ranging from five to 20 years (the average  being 17 years),  and expire
between 2001 and 2021. Generally, the leases are on a triple-net basis, with the
lessees responsible for all repairs and maintenance,  property taxes,  insurance
and  utilities.  The leases of the  Properties  provide for minimum  base annual
rental payments  (payable in monthly  installments)  ranging from  approximately
$18,100 to $126,600. Generally, the leases provide for percentage rent, based on
sales in excess of a specified amount, to be paid annually. In addition, some of
the leases provide that  commencing in the sixth lease year the percentage  rent
will be an amount equal to the greater of the percentage rent  calculated  under
the lease  formula or a  specified  percentage  (ranging  from  one-half  to two
percent) of the purchase price.

         Generally,  the  leases  of the  Properties  provide  for  two or  four
five-year  renewal  options  subject  to the same  terms and  conditions  as the
initial lease.  Lessees of 27 of the  Partnership's 34 Properties also have been
granted options to purchase Properties at the Property's then fair market value,
after a specified portion of the lease term has elapsed.  Fair market value will
be determined  through an appraisal by an independent  appraisal firm. Under the
terms of certain leases,  the option purchase price may equal the  Partnership's
original cost to purchase the Property  (including  acquisition  costs),  plus a
specified percentage from the date of the lease or a specified percentage of the
Partnership's purchase price, if that amount is greater than the Property's fair
market value at the time the purchase option is exercised. Additionally, certain
leases  provide the lessee an option to purchase up to a 49 percent  interest in
the  Property,  after a specified  portion of the lease term has elapsed,  at an
option  purchase  price  similar to those  described  above,  multiplied  by the
percentage  interest in the  Property  with respect to which the option is being
exercised.

         The leases also  generally  provide that, in the event the  Partnership
wishes to sell the Property  subject to the lease,  the  Partnership  must first
offer the  lessee  the right to  purchase  the  Property  on the same  terms and
conditions,  and for the same  price,  as any offer  which the  Partnership  has
received for the sale of the Property.

         During  2000,  the  tenant  of  the  Property  in  Palm  Bay,   Florida
experienced  financial  difficulties  and vacated the Property.  The Partnership
will not recognize  rental and earned income from this vacant  Property  until a
new tenant for this  Property  is located or until the  Property is sold and the
proceeds  from such sale are  reinvested  in an  additional  Property.  The lost
revenue  resulting from the vacant  Property could have an adverse effect of the
results of  operations  of the  Partnership  if the  Partnership  is not able to
re-lease the Property in a timely  manner.  The General  Partners are  currently
seeking either a new tenant of purchaser for the Property.

         In  addition,  during  1998,  the tenant of the  Property in  Richmond,
Virginia,  filed for bankruptcy and in June 2000, rejected the lease relating to
this Property.  In December 2000, the  Partnership  entered into a new lease for
this Property. In connection  therewith,  the tenant agreed to pay for all costs
necessary to convert this Property into a different concept, conversion of which
is expected to be completed in March 2001, at which time rent will commence. The
lease terms for this Property are  substantially  the same as the  Partnership's
other leases, as described above.

         In May 2000, the tenant of the Property in Franklin, Indiana terminated
the lease and vacated the Property.  In the same month, the Partnership  entered
into a new lease for this Property  with a new tenant.  The lease terms for this
Property  are  substantially  the same as the  Partnership's  other  leases,  as
described above.

Major Tenants

         During 2000, one lessee of the Partnership, Shoney's, Inc., contributed
more than ten  percent of the  Partnership's  total  rental  and  earned  income
(including  the  Partnership's  share of the rental and earned  income  from six
Properties  owned by joint ventures and two Properties  owned with affiliates of
the General Partners as  tenants-in-common).  As of December 31, 2000, Shoney's,
Inc. was the lessee under leases relating to five restaurants. It is anticipated
that,  based on the minimum rental  payments  required by the leases,  Shoney's,
Inc.  will  continue to  contribute  more than ten percent of the  Partnership's
total rental and earned income in 2001. In addition,  three  Restaurant  Chains,
Shoney's,  Denny's, and Wendy's Old Fashioned Hamburger Restaurants ("Wendy's"),
each accounted for more than ten percent of the  Partnership's  total rental and
earned  income in 2000  (including  the  Partnership's  share of the  rental and
earned income from six  Properties  owned by joint  ventures and two  Properties
owned with affiliates of the General Partners as tenants-in-common). In 2001, it
is anticipated that these three Restaurant  Chains each will continue to account
for more than ten  percent of the total  rental  and earned  income to which the
Partnership  is  entitled  under the terms of the  leases.  Any  failure of this
lessee or these  Restaurant  Chains could  materially  affect the  Partnership's
income if the Partnership is unable to re-lease the Property in a timely manner.
No  single  tenant  or group of  affiliated  tenants  lease  Properties  with an
aggregate  carrying  value in excess of 20  percent  of the total  assets of the
Partnership.

Joint Venture and Tenancy in Common Arrangements

         The Partnership  has entered into the following  separate joint venture
arrangements, each to purchase and hold one Property: Holland Joint Venture with
CNL Income Fund II,  Ltd.,  Titusville  Joint  Venture with CNL Income Fund III,
Ltd.,  Cocoa Joint  Venture with CNL Income Fund V, Ltd.,  Auburn Joint  Venture
with CNL Income Fund VI, Ltd.,  Kingsville  Real Estate  Joint  Venture with CNL
Income Fund XII,  Ltd.,  and Warren Joint  Venture with CNL Income Fund VI, Ltd.
Each of the CNL Income Funds is an  affiliate  of the General  Partners and is a
limited partnership organized pursuant to the laws of the state of Florida.

         Each joint venture  arrangement  provides for the  Partnership  and its
joint venture  partners to share in all costs and benefits  associated  with the
joint venture in accordance  with their  respective  percentage  interest in the
joint  venture.  The  Partnership  has a 51 percent  interest  in Holland  Joint
Venture,  a 26.6% interest in Titusville Joint Venture, a 57 percent interest in
Cocoa Joint Venture, a 96.1% interest in Auburn Joint Venture, a 68.87% interest
in Kingsville  Real Estate Joint  Venture and a 35.71%  interest in Warren Joint
Venture.  The  Partnership  and its joint venture  partners are also jointly and
severally liable for all debts,  obligations and other  liabilities of the joint
venture.

         Each joint venture has an initial term of  approximately  5 to 20 years
and, after the expiration of the initial term,  continues in existence from year
to year unless  terminated at the option of either joint venturer or by an event
of  dissolution.  Events of dissolution  include the  bankruptcy,  insolvency or
termination  of any  joint  venturer,  sale of the  Property  owned by the joint
venture and mutual agreement of the Partnership and its joint venture partner to
dissolve the joint venture.

         The Partnership shares management control of each joint venture equally
with affiliates of the General Partners.  The joint venture agreements  restrict
each venturer's  ability to sell,  transfer or assign its joint venture interest
without  first  offering it for sale to its joint venture  partner,  either upon
such terms and  conditions  as to which the venturers may agree or, in the event
the venturers cannot agree, on the same terms and conditions as any offer from a
third party to purchase such joint venture interest.

         Net cash flow from  operations  of Holland  Joint  Venture,  Titusville
Joint Venture, Cocoa Joint Venture, Auburn Joint Venture, Kingsville Real Estate
Joint Venture,  and Warren Joint Venture is distributed  51 percent,  26.6%,  57
percent,  96.1%,  68.87%, and 35.71%,  respectively,  to the Partnership and the
balance  is  distributed  to each  of the  other  joint  venture  partners.  Any
liquidation  proceeds,  after paying joint  venture  debts and  liabilities  and
funding reserves for contingent  liabilities,  will be distributed  first to the
joint venture  partners with positive  capital account balances in proportion to
such  balances  equal zero,  and  thereafter  in  proportion  each joint venture
partner's percentage interest in the joint venture.

         In addition to the above joint venture  arrangements,  the  Partnership
entered  into an  agreement to hold a Property in Clinton,  North  Carolina,  as
tenants-in-common,  with CNL Income Fund VI, Ltd.,  CNL Income Fund X, Ltd., and
CNL Income Fund XV, Ltd.,  affiliates of the General Partners;  and an agreement
to hold a Property  in  Zephyrhills,  Florida,  as  tenants-in-common,  with CNL
Income Fund XVII,  Ltd., an affiliate of the General  Partners.  The  agreements
provide  for the  Partnership  and the  affiliates  to share in the  profits and
losses of the Properties in proportion to each party's percentage interest.  The
Partnership  owns a 53 percent  and 76 percent  interest  in the  Properties  in
Clinton,  Tennessee  and  Zephyrhills,   Florida,  respectively.   Each  of  the
affiliates is a limited partnership  organized pursuant to the laws of the state
of Florida.  The tenancy in common agreements  restrict each co-tenant's ability
to sell, transfer,  or assign its interest in the tenancy in common's Properties
without first offering it for sale to the remaining parties to the agreement.

         The use of joint venture and tenancy in common  arrangements allows the
Partnership  to fully invest its available  funds at times at which it would not
have  sufficient  funds to purchase an additional  property,  or at times when a
suitable  opportunity to purchase an additional  property is not available.  The
use of joint  venture  and  tenancy in common  arrangements  also  provides  the
Partnership  with  increased  diversification  of its portfolio  among a greater
number of properties. In addition,  tenancy in common arrangements may allow the
Partnership  to defer the gain for federal  income tax purposes upon the sale of
the property if the proceeds are reinvested in an additional property.

Certain Management Services

         CNL Fund Advisors, Inc., an affiliate of the General Partners, provides
certain  services  relating to management of the  Partnership and its Properties
pursuant to a management  agreement with the Partnership.  Under this agreement,
CNL  Fund  Advisors,   Inc.  is  responsible  for  collecting  rental  payments,
inspecting  the  Properties  and the tenants'  books and records,  assisting the
Partnership  in  responding  to  tenant  inquiries  and  notices  and  providing
information  to  the  Partnership  about  the  status  of  the  leases  and  the
Properties.  CNL Fund  Advisors,  Inc.  also  assists  the  General  Partners in
negotiating the leases.  For these  services,  the Partnership has agreed to pay
CNL Fund  Advisors,  Inc. an annual fee equal to one percent of the sum of gross
rental  revenues  from  Properties  wholly  owned  by the  Partnership  plus the
Partnership's  allocable  share of gross revenues of joint ventures in which the
Partnership  is a  co-venturer,  but  not in  excess  of  competitive  fees  for
comparable  services.  Under the  management  agreement,  the  management fee is
subordinated  to receipt by the Limited  Partners of an aggregate,  ten percent,
cumulative,  noncompounded annual return on their adjusted capital contributions
(the "10% Preferred  Return"),  calculated in accordance with the  Partnership's
limited partnership agreement (the "Partnership Agreement").

         The management agreement continues until the Partnership no longer owns
an interest in any Properties unless terminated at an earlier date upon 60 days'
prior notice by either party.

Competition

         The fast-food and family-style  restaurant business is characterized by
intense  competition.  The restaurants on the Partnership's  Properties  compete
with  independently  owned  restaurants,  restaurants which are part of local or
regional chains, and restaurants in other well-known national chains,  including
those offering different types of food and service.

Employees

         The  Partnership   has  no  employees.   The  officers  of  CNL  Realty
Corporation  and the  officers and  employees of APF, the parent  company of CNL
Fund Advisors, Inc., perform certain services for the Partnership.  In addition,
the General  Partners have  available to them the resources and expertise of the
officers and employees of CNL Financial  Group,  Inc., a diversified real estate
company,  and its  affiliates,  who may also  perform  certain  services for the
Partnership.

<PAGE>

Item 2.  Properties

         As of December 31, 2000, the Partnership owned 34 Properties. Of the 34
Properties, 26 are owned by the Partnership in fee simple, six are owned through
joint  venture  arrangements  and two are  owned  through  a  tenancy  in common
arrangement.  See  Item 1.  Business  - Joint  Venture  and  Tenancy  in  Common
Arrangements.  The Partnership is not permitted to encumber its Properties under
the terms of its  partnership  agreement.  Reference  is made to the Schedule of
Real Estate and  Accumulated  Depreciation  for a listing of the  Properties and
their  respective  costs,  including  acquisition  fees and certain  acquisition
expenses.

Description of Properties

         Land. The Partnership's  Property sites range from approximately 14,100
to 98,800  square  feet  depending  upon  building  size and  local  demographic
factors.  Sites  purchased  by  the  Partnership  are  in  locations  zoned  for
commercial use which have been reviewed for traffic patterns and volume.

         The following table lists the Properties owned by the Partnership as of
December 31, 2000 by state. More detailed information  regarding the location of
the  Properties  is  contained  in the  Schedule of Real Estate and  Accumulated
Depreciation for the year ended December 31, 2000.

            State                          Number of Properties

            Alabama                                 3
            Florida                                 7
            Illinois                                2
            Indiana                                 3
            Maryland                                1
            Massachusetts                           1
            Michigan                                3
            Mississippi                             1
            North Carolina                          1
            Ohio                                    1
            Tennessee                               1
            Texas                                   7
            Virginia                                2
            Washington, D.C.                        1
                                             -----------------
            TOTAL PROPERTIES                        34
                                             =================

         Buildings.  Each of the Properties owned by the Partnership  includes a
building that is one of a Restaurant  Chain's  approved  designs.  However,  the
building located on one Checkers Property is owned by the tenant, while the land
parcel is owned by the Partnership.  The buildings generally are rectangular and
are constructed  from various  combinations of stucco,  steel,  wood,  brick and
tile. The sizes of buildings owned by the Partnership  range from  approximately
1,200 to 6,800 square feet.  All buildings on Properties  are  freestanding  and
surrounded by paved  parking  areas.  Buildings  are suitable for  conversion to
various uses, although modifications may be required prior to use for other than
restaurant operations. As of December 31, 2000, the Partnership had no plans for
renovation of the Properties. Depreciation expense is computed for buildings and
improvements  using the straight line method using depreciable lives of 31.5 and
39 years for federal income tax purposes.

         As of December 31, 2000, the aggregate cost of the Properties  owned by
the Partnership and joint ventures  (including  Properties owned through tenancy
in common  arrangements)  for federal  income tax purposes was  $16,858,382  and
$7,061,746, respectively.


<PAGE>


         The following table lists the Properties owned by the Partnership as of
December 31, 2000 by Restaurant Chain.

            Restaurant Chain               Number of Properties

            Arby's                                  3
            Boston Market                           1
            Captain D's                             2
            Checkers                                1
            Denny's                                 4
            Dunkin Donuts                           1
            Golden Corral                           3
            IHOP                                    1
            Jack in the Box                         1
            KFC                                     1
            Pizza Hut                               5
            Shoney's                                3
            Taco Bell                               1
            Waffle House                            1
            Wendy's                                 3
            Other                                   3
                                           ---------------------
            TOTAL PROPERTIES                        34
                                           =====================

         The General Partners consider the Properties to be well-maintained  and
sufficient for the Partnership's operations.

         The General Partners believe that the Properties are adequately covered
by  insurance.  In  addition,  the General  Partners  have  obtained  contingent
liability and property coverage for the Partnership.  This insurance is intended
to reduce the Partnership's  exposure in the unlikely event a tenant's insurance
policy lapses or is insufficient to cover a claim relating to the Property.

         Leases.  The Partnership leases the Properties to operators of selected
national and regional fast-food restaurant chains. The leases are generally on a
long-term  "triple  net"  basis,  meaning  that the  tenant is  responsible  for
repairs,  maintenance,  property taxes,  utilities and insurance.  Generally,  a
lessee is required, under the terms of its lease agreement, to make such capital
expenditures as may be reasonably  necessary to refurbish  buildings,  premises,
signs  and  equipment  so  as  to  comply  with  the  lessee's  obligations,  if
applicable,  under the  franchise  agreement  to reflect the current  commercial
image of its Restaurant  Chain.  These capital  expenditures  are required to be
paid by the lessee during the term of the lease.  The terms of the leases of the
Properties owned by the Partnership are described in Item 1. Business - Leases.

         At December 31, 2000,  1999,  1998, 1997, and 1996, the Properties were
94%, 97%, 97%, 93%, and 98% occupied,  respectively. The following is a schedule
of the average rent per party for the years ended December 31:

<TABLE>
<CAPTION>
<S> <C>
                                       2000              1999               1998             1997              1996
                                   --------------    --------------     -------------    -------------     -------------

Rental Revenues (1)                  $ 2,255,228        $2,640,100       $ 2,544,386      $ 2,596,455       $ 2,815,542
Properties (2)                                32                37                36               37                40
Average Rent per Property              $  70,476         $  71,354         $  70,677        $  70,174         $  70,389
</TABLE>

(1)      Rental income  includes the  Partnership's  share of rental income from
         the  Properties  owned  through  joint  venture  arrangements  and  the
         Properties  owned  through  tenancy  in  common  arrangements.   Rental
         revenues have been adjusted,  as applicable,  for any amounts for which
         the Partnership has established an allowance for doubtful accounts.

(2)      Excludes  Properties  that were vacant at December 31, and that did not
         generate rental revenues during the year ended December 31.

         The following is a schedule of lease expirations for leases in place as
of December 31, 2000 for the next ten years and thereafter.

<TABLE>
<CAPTION>
<S> <C>
                                                                                   Percentage of
             Expiration Year        Number             Annual Rental               Gross Annual
                                   of Leases              Revenues                 Rental Income
             ----------------   ----------------    ---------------------    ----------------------

              2001                            1                $  40,800                   1.78%
              2002                            2                  130,473                   5.71%
              2003                           --                       --                      --
              2004                            1                   48,000                   2.10%
              2005                           --                       --                      --
              2006                           --                       --                      --
              2007                            1                  118,968                   5.20%
              2008                           14                  863,616                  37.77%
              2009                            4                  327,369                  14.32%
              2010                            1                   71,336                   3.12%
              Thereafter                      7                  685,811                  30.00%
                                      ----------            -------------           -------------
              Total (1)                      31              $ 2,286,373                 100.00%
                                      ==========            =============           =============
</TABLE>

(1) Excludes three Properties which were vacant at December 31, 2000.

         Leases  with Major  Tenants.  The terms of each of the leases  with the
Partnership's major tenant as of December 31, 2000 (see Item 1. Business - Major
Tenants),  are  substantially  the same as those described in Item 1. Business -
Leases.

         Shoney's,  Inc.  leases three Shoney's  restaurants and two Captain D's
restaurants.  The initial term of each lease is 20 years  (expiring in 2008) and
average minimum base rent is approximately  $62,400 (ranging from  approximately
$41,000 to $81,300).


Item 3.  Legal Proceedings

         Neither the  Partnership,  nor its General Partners or any affiliate of
the General Partners,  nor any of their respective  Properties,  is party to, or
subject to, any material pending legal proceedings.


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

      Not applicable.



<PAGE>

                                     PART II


Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

(a) As of March 15, 2001, there were 2,912 holders of record of the Units. There
is no public  trading  market for the Units,  and it is not  anticipated  that a
public  market for the Units will  develop.  During 2000,  Limited  Partners who
wished to sell their Units may have  offered the Units for sale  pursuant to the
Partnership's  distribution reinvestment plan (the "Plan"), and Limited Partners
who wished to have their  distributions used to acquire additional Units (to the
extent Units were  available  for  purchase),  may have done so pursuant to such
Plan.  The General  Partners  had the right to prohibit  transfer of Units.  The
price paid for any Unit  transferred  pursuant to the Plan range from $405.10 to
$475 per Unit.  The price paid for any Unit  transferred  other than pursuant to
the Plan was subject to negotiation  by the  purchasers and the selling  Limited
Partner. The Partnership will not redeem or repurchase Units.

      The following table reflects, for each calendar quarter, the high, low and
average  sales  prices for  transfers  of Units  during 2000 and 1999 other than
pursuant to the Plan, net of commissions.

<TABLE>
<CAPTION>
<S> <C>
                                                     2000 (1)                              1999 (1)
                                        -----------------------------------    ----------------------------------
                                          High         Low        Average       High         Low        Average
                                        ----------   --------    ----------    --------    --------    ----------
      First Quarter                         $ 365       $365        $  365        $500        $500        $  500
      Second Quarter                          353        353           353         406         368           387
      Third Quarter                           328        185           317         413         295           366
      Fourth Quarter                          433        140           348         450         311           370
</TABLE>

(1)  A total of 262 and 374 Units were  transferred  other than  pursuant to the
     Plan for the years ended December 31, 2000 and 1999, respectively.

      The  capital  contribution  per Unit was  $500.  All  cash  available  for
distribution  will be distributed  to the partners  pursuant to the provision of
the Partnership Agreement.

      For the years ended December 31, 2000 and 1999, the  Partnership  declared
cash  distributions of $5,050,000 and $2,400,000,  respectively,  to the Limited
Partners. Distributions for the year ended December 31, 2000 included $2,800,000
and as a result of the  distribution  of the net sales proceeds from the sale of
the  Properties  in  Detroit,  Michigan,  and Temple  Terrace  and Punta  Gorda,
Florida,  to the Limited  Partners.  This amount was applied  toward the Limited
Partners'  cumulative 10% Preferred Return. The reduced number of Properties for
which  the  Partnership  receives  rental  payments  reduced  the  Partnership's
revenues.  The decrease in Partnership  revenues,  combined with the fact that a
significant portion of the Partnership's expenses are fixed in nature,  resulted
in a decrease in cash  distribution to the Limited Partners  commencing in 2000.
No amounts distributed to the partners for the years ended December 31, 2000 and
1999, are required to be or have been treated by the  Partnership as a return of
capital  for  purposes of  calculating  the  Limited  Partners'  return on their
adjusted capital  contributions.  No distributions have been made to the General
Partners to date.  As  indicated in the chart below,  these  distributions  were
declared  at the  close of each of the  Partnership's  calendar  quarters.  This
amount includes monthly  distributions  made in arrears for the Limited Partners
electing to receive such distributions on this basis.

               Quarter Ended                   2000             1999
               -------------------         -------------    -------------
               March 31                       $ 600,000        $ 600,000
               June 30                          600,000          600,000
               September 30                   3,325,000          600,000
               December 31                      525,000          600,000

      The  Partnership  intends  to  continue  to  make  distributions  of  cash
available  for  distribution  to the  Limited  Partners  on a  quarterly  basis,
although  the  General  Partners,  in their  sole  discretion,  may elect to pay
distributions monthly.

(b)   Not applicable


Item 6.  Selected Financial Data

<TABLE>
<CAPTION>
<S> <C>
                                         2000           1999            1998            1997            1996
                                     -------------- --------------  --------------  --------------  --------------
Year ended December 31:
   Revenues (1)                        $ 2,138,240    $ 2,602,057     $ 2,285,696     $ 2,531,385     $ 2,820,295
   Net income (2)                        2,078,310      1,827,359       1,821,449       1,720,668       2,347,167
   Cash distributions
      declared (3)                       5,050,000      2,400,000       3,633,748       2,760,000       2,760,000
   Net income per Unit (2)                   34.64          30.15           30.15           28.42           38.75
   Cash distributions declared
      per Unit                               84.17          40.00           60.56           46.00           46.00

At December 31:
   Total assets                        $17,616,159    $20,828,319     $21,189,833     $23,309,888     $23,730,892
   Partners' capital                    16,795,669     19,767,359      20,340,000      22,152,299      22,897,631
</TABLE>

(1)      Revenues  include  equity in earnings  (losses) of joint  ventures  and
         adjustments to accrued rental income.

(2)      Net income  for the years  ended  December  31,  2000 and 1997  include
         $92,397 and $6,652, respectively, from losses on the sale of assets and
         $387,612 and $70,337,  respectively, for provisions for loss on assets.
         Net  income for the years  ended  December  31,  2000,  1998,  and 1996
         includes $1,134,692,  $226,024, and $221,390,  respectively, from gains
         on the sale of assets.

(3)      Distributions  for the year ended  December 31, 2000 and 1998 include a
         special   distribution  to  the  Limited  Partners  of  $2,800,000  and
         $1,233,748,  respectively,  in net sales proceeds from the sale of four
         and two Properties in 2000 and 1998, respectively.

     The above selected  financial  data should be read in conjunction  with the
financial statements and related notes contained in Item 8. hereof.


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

         The  Partnership  was  organized on November  18, 1987,  to acquire for
cash,  either  directly  or  through  joint  venture  arrangements,  both  newly
constructed  and  existing  restaurant  Properties,  as well as land upon  which
restaurant  Properties  were to be  constructed,  which are leased  primarily to
operators  of  selected   national  and  regional   fast-food  and  family-style
Restaurant Chains.  Substantially all of the leases are triple-net leases,  with
the lessees  generally  responsible  for all repairs and  maintenance,  property
taxes,  insurance and utilities.  As of December 31, 2000, the Partnership owned
34 Properties, either directly or indirectly through joint venture or tenancy in
common arrangements.

Capital Resources

         During  the  years  ended  December  31,  2000,  1999,  and  1998,  the
Partnership  generated cash from  operations  (which includes cash received from
tenants, distributions from joint ventures and interest received, less cash paid
for expenses) of  $1,827,107,  $2,401,313,  and  $2,362,320,  respectively.  The
decrease in cash from operations during 2000, as compared to 1999, was primarily
a result of  changes  in income  and  expenses,  as  described  in  "Results  of
Operations" below. The increase in cash from operations for 1999, as compared to
1998,  was  primarily a result of changes in income and expenses as described in
"Results of Operations" below and changes in the Partnership's working capital.

         Other  sources and uses of capital  included the  following  during the
years ended December 31, 2000, 1999, and 1998.

         In June 1997, the Partnership  terminated the leases with the tenant of
the Properties in Portland and Winchester, Indiana. In connection therewith, the
Partnership  accepted a promissory  note from the former  tenant for $32,343 for
amounts  relating to past due real estate taxes the Partnership had accrued as a
result of the former tenant's financial difficulties. The promissory note, which
was uncollateralized,  bore interest at a rate of ten percent per annum, and was
being  collected  in 36 monthly  installments.  As of  December  31,  1998,  the
Partnership had collected the full amount of the promissory note.

         In  July  1997,  the  Partnership  entered  into  new  leases  for  the
Properties in Portland and Winchester, Indiana, with a new tenant to operate the
Properties as Arby's  restaurants.  In  connection  therewith,  the  Partnership
agreed to fund up to  $125,000  in  renovation  costs for each  Property.  As of
December 31, 1998, such renovations had been completed.

         In March 1998, the Partnership sold its Property in Fort Myers, Florida
to a third party for  $842,100  and  received  net sales  proceeds of  $794,690,
resulting in a gain of $225,902 for financial reporting purposes.  This Property
was  originally  acquired by the  Partnership in December 1988 and had a cost of
approximately $598,000, excluding acquisition fees and miscellaneous acquisition
expenses;  therefore,  the  Partnership  sold  the  Property  for  approximately
$196,700 in excess of its original  purchase price. In addition,  in March 1998,
the Partnership sold its Property in Union Township,  Ohio to an unrelated third
party for $680,000 and received net sales  proceeds of $674,135,  resulting in a
loss of $104,987 for financial reporting  purposes.  In connection with the sale
of these  Properties,  the Partnership  incurred  deferred,  subordinated,  real
estate disposition fees of $45,663.  In April 1998, the Partnership  distributed
$1,233,748  of the  net  sales  proceeds  from  these  Properties  as a  special
distribution to the Limited  Partners and used the remaining net proceeds to pay
Partnership liabilities.

         In  addition,  in July  1998,  the  Partnership  sold its  Property  in
Leesburg,  Florida for $565,000  and  received  net sales  proceeds of $523,931,
resulting in a total loss for financial  reporting purposes of $135,509.  Due to
the fact that at December 31, 1997,  the  Partnership  recorded a provision  for
loss on assets in the  amount of  $70,337  for this  Property,  the  Partnership
recognized  the remaining  loss of $65,172 for financial  reporting  purposes at
July 1998, relating to the sale. In September 1998, the Partnership  contributed
the  majority  of the net  sales  proceeds  from  the  sale of the  Property  in
Leesburg, Florida to a joint venture, Warren Joint Venture, to purchase and hold
one restaurant property.  The Partnership has an approximate 36 percent interest
in the profits and losses of Warren Joint Venture and the remaining  interest in
this joint venture is held by an affiliate of the General Partners.

         In September 1998, the Partnership sold its Property in Naples, Florida
to a third party for  $563,000  and  received  net sales  proceeds of  $533,598,
resulting in a gain of $170,281 for financial reporting purposes.  This Property
was  originally  acquired by the  Partnership in December 1988 and had a cost of
approximately $410,500 excluding acquisition fees and miscellaneous  acquisition
expenses;  therefore,  the  Partnership  sold  the  Property  for  approximately
$123,100 in excess of its original  purchase price. As of December 31, 1998, the
remaining net sales proceeds from the sale of this Property,  including  accrued
interest,  were  being  held  in an  interest  bearing  escrow  account  pending
reinvestment.  In January 1999, the Partnership  invested the net sales proceeds
in a Property in Zephyrhills, Florida, with an affiliate of the General Partners
as tenants-in-common for a 76 percent interest in the Property. A portion of the
transaction  relating  to the sale of the  Property  in Naples,  Florida and the
reinvestment  of the  net  sales  proceeds  qualified  as a  like-kind  exchange
transaction for federal income tax purposes.

         In June 2000, the Partnership sold its Property in Detroit, Michigan to
the tenant  for  $1,095,000  and  received  net sales  proceeds  of  $1,089,325,
resulting in a gain of approximately  $552,600 for financial reporting purposes.
This Property was originally acquired by the Partnership in October 1988 and had
a cost of approximately  $614,500,  excluding acquisition fees and miscellaneous
acquisition  expenses;   therefore,   the  Partnership  sold  the  Property  for
approximately  $474,800 in excess of its original  purchase price. In connection
with the sale, the Partnership  incurred a deferred,  subordinated,  real estate
disposition fee of $32,850. In addition,  in July 2000, the Partnership sold its
Properties in Temple Terrace, Florida and Punta Gorda, Florida, to a third party
for  $2,353,583  resulting in a gain of  approximately  $582,100  for  financial
reporting purposes. These Properties were originally acquired by the Partnership
in  March  of  1989  and  had  a  cost  of  approximately  $2,081,700  excluding
acquisition  fees  and  miscellaneous   acquisition  expenses;   therefore,  the
Partnership  sold the Properties for  approximately  $271,900 in excess of their
original purchase prices. In connection with the sales, the Partnership incurred
deferred  subordinated real estate disposition fees of $70,068. In October 2000,
the Partnership  distributed $2,800,000 of the net sales proceeds from the sales
of these  Properties  as a special  distribution  to the  Limited  Partners,  as
described  below,  and  used  the  remaining  net  proceeds  to pay  Partnership
liabilities.  The  Partnership  distributed  amounts  sufficient  to enable  the
Limited  Partners  to pay  federal and state  income  taxes,  if any (at a level
reasonably assumed by the General Partners), resulting from the sales.

         In November 2000, the Partnership  sold its Property in Topeka,  Kansas
to a third party for $500,000 and received net sales  proceeds of  approximately
$496,400,  resulting in a loss of approximately  $92,400 for financial reporting
purposes.  In connection  with the sale,  the  Partnership  incurred a deferred,
subordinated, real estate disposition fee of $15,000. The Partnership intends to
use the majority of the net sales proceeds to pay liabilities of the Partnership
(including quarterly distributions to the Limited Partners).

         None of the Properties owned by the Partnership,  or the joint ventures
or tenancy in common arrangements in which the Partnership owns an interest,  is
or may be  encumbered.  Under its  partnership  agreement,  the  Partnership  is
prohibited from borrowing for any purpose;  provided,  however, that the General
Partners or their affiliates are entitled to reimbursement,  at cost, for actual
expenses  incurred by the General  Partners or their affiliates on behalf of the
Partnership.  Affiliates of the General Partners from time to time incur certain
operating  expenses  on behalf  of the  Partnership  for  which the  Partnership
reimburses the affiliates without interest.

         Currently,  rental  income from the  Partnership's  Properties  and net
sales proceeds from the sale of Properties are invested in money market accounts
or other short-term,  highly liquid  investments such as demand deposit accounts
at commercial banks, certificates of deposit and money market accounts with less
than a 30-day maturity date,  pending the Partnership's use of such funds to pay
Partnership  expenses or to make distributions to the partners.  At December 31,
2000, the Partnership had $1,366,871 invested in such short-term investments, as
compared to $725,493 at December 31, 1999.  The increase in the amount  invested
in  short-term  investments  at December 31,  2000,  as compared to December 31,
1999,  is  primarily  attributable  to the  Partnership  holding  the net  sales
proceeds it received  from the 2000 sale of the Property in Topeka,  Kansas,  as
described above,  pending  distribution to the Limited Partners.  As of December
31, 2000,  the average  interest rate earned on the rental  income  deposited in
demand  deposit  accounts at commercial  banks was 5.56%  annually.  The General
Partners  believe that the  Partnership  has sufficient cash on hand to meet its
current working capital needs.

Short-Term Liquidity

         The Partnership's  short-term liquidity  requirements consist primarily
of the operating expenses of the Partnership.

         The Partnership's  investment strategy of acquiring Properties for cash
and  leasing  them under  triple-net  leases to  operators  who  generally  meet
specified financial  standards  minimizes the Partnership's  operating expenses.
The General Partners believe that the leases will continue to generate cash flow
in excess of operating expenses.

         Due to low  operating  expenses  and  ongoing  cash flow,  the  General
Partners do not believe that  working  capital  reserves  are  necessary at this
time.  In  addition,  because the leases for the  Partnership's  Properties  are
generally on a triple-net  basis, it is not anticipated that a permanent reserve
for  maintenance  and repairs will be  established  at this time. To the extent,
however,  that the Partnership  has  insufficient  funds for such purposes,  the
General Partners will contribute to the Partnership an aggregate amount of up to
one percent of the offering proceeds for maintenance and repairs.

         The General  Partners have the right,  but not the obligation,  to make
additional capital  contributions if they deem it appropriate in connection with
the operations of the Partnership.

         The Partnership  generally  distributes cash from operations  remaining
after the payment of the operating  expenses of the  Partnership,  to the extent
that  the  General  Partners   determine  that  such  funds  are  available  for
distribution.  Based on current and anticipated  future cash from operations and
for the years ended December 31, 2000 and 1998, net sales proceeds from the sale
of Properties, the Partnership declared distributions to the Limited Partners of
$5,050,000,  $2,400,000,  and $3,633,748, for the years ended December 31, 2000,
1999, and 1998, respectively. This represents distributions of $84, $40, and $61
per Unit for the years ended December 31, 2000,  1999,  and 1998,  respectively.
Distributions for the years ended December 31, 2000 and 1998 included $2,800,000
and $1,233,748,  respectively,  as a result of the  distribution of a portion of
net  sales   proceeds  from  the  sale  of  several   Properties.   The  special
distributions  were  effectively a return of a portion of the Limited  Partners'
investment,  although, in accordance with the Partnership  agreement,  they were
applied to the Limited Partners' unpaid preferred return.  The reduced number of
Properties  for which the  Partnership  receives  rental  payments  reduced  the
Partnership's revenues. The decrease in Partnership revenues,  combined with the
fact that a  significant  portion  of the  Partnership's  expenses  are fixed in
nature,  resulted in a decrease in cash  distributions  to the Limited  Partners
commencing the quarter ended March 31, 1998 and the quarter ended  September 30,
2000.  No  amounts  distributed  to the  Limited  Partners  for the years  ended
December 31, 2000,  1999,  and 1998,  are required to be or have been treated by
the  Partnership as a return of capital for purposes of calculating  the Limited
Partners'  return  on their  adjusted  capital  contributions.  The  Partnership
intends to continue to make  distributions of cash available for distribution to
the Limited Partners on a quarterly basis.

         As of  December  31, 2000 and 1999,  the  Partnership  owed  affiliates
$8,556 and $195,846,  respectively,  for operating  expenses and  accounting and
administrative  services.  As of March 15, 2001, the  Partnership had reimbursed
the  affiliates all such amounts.  In addition,  during the years ended December
31, 2000 and 1998, the Partnership incurred $118,458 and $45,663,  respectively,
in real estate  disposition fees due to an affiliate as a result of its services
in connection with the sale of several  Properties.  The payment of such fees is
deferred until the Limited Partners have received the sum of their 10% Preferred
Return and their adjusted capital contributions.

         During 2000, the General  Partners waived their right to receive future
distributions  from the Partnership,  including both  distributions of operating
cash flow and  distributions  of  liquidation  proceeds,  to the extent that the
cumulative amount of such distributions  would exceed the balance in the General
Partners'  capital  account as of December  31, 1999.  Accordingly,  the General
Partners were not allocated any net income and did not receive any distributions
during the year ended December 31, 2000.

         Amounts  payable to other  parties,  including  distributions  payable,
decreased to $647,813 at December 31, 2000,  from $819,451 at December 31, 1999.
The  decrease in  liabilities  at December 31, 2000,  was  partially  due to the
amounts of transaction  costs relating to the proposed  Merger with CNL American
Properties  Fund, Inc.  ("APF"),  as described below in "Termination of Merger",
and  partially  the  result of the  Partnership  reducing  distributions  to the
Limited  Partners,  as discussed  above.  The General  Partners believe that the
Partnership  has  sufficient  cash on hand to meet its current  working  capital
needs.

Long-Term Liquidity

         The  Partnership  has no long-term  debt or other  long-term  liquidity
requirements.

Results of Operations

         During  1998,  the  Partnership   owned  and  leased  34  wholly  owned
Properties  (including four Properties  which were sold in 1998) and during 1999
and 2000, the Partnership owned and leased 30 wholly owned Properties (including
four Properties which were sold in 2000). In addition, during 1998 and 1999, the
Partnership was a co-venturer in six separate joint ventures that each owned and
leased one Property and owned one Property with affiliates as tenants-in-common.
In  addition,  during  1999 and  2000,  the  Partnership  owned and  leased  one
additional   Property,   with  an   affiliate  of  the  General   Partners,   as
tenants-in-common.  As of December  31,  2000,  the  Partnership  owned,  either
directly or through joint venture  arrangements,  34  Properties,  which are, in
general,  subject to long-term,  triple-net leases. The leases of the Properties
provide for minimum base annual rental amounts (payable in monthly installments)
ranging from $18,100 to $126,600.  Generally,  the leases provide for percentage
rent  based on sales in excess of a  specified  amount to be paid  annually.  In
addition,  some of the leases  provide that,  commencing in the sixth lease year
the  percentage  rent will be an amount  equal to the greater of the  percentage
rent calculated under the lease formula or a specified  percentage (ranging from
one-half to two percent) of the purchase price.  For further  description of the
Partnership's  leases and Properties,  see Item 1. Business - Leases and Item 2.
Properties, respectively.

         During  the  years  ended  December  31,  2000,  1999,  and  1998,  the
Partnership  earned $1,809,132,  $2,132,891,  and $2,231,513,  respectively,  in
rental  income from  operating  leases  (net of  adjustments  to accrued  rental
income) and earned  income from direct  financing  leases from its wholly  owned
Properties described above. The decrease in rental and earned income during 2000
and 1999, each as compared to the previous year, was partially attributable to a
decrease  in rental  and earned  income  due to the sales of various  Properties
during 2000 and 1998.  During 1998, the Partnership  used the net sales proceeds
from the sale of the Property in Douglasville,  Georgia to fund renovation costs
for two Properties and during 1999, used the net sales proceeds from the sale of
a Property in Naples,  Florida to acquire one Property in Zephryhills,  Florida,
held as tenants-in-common  with affiliates of the General Partners, as described
above in "Capital Resources." In addition, during 1998 and 2000, the Partnership
distributed  a  portion  of the net  sales  proceeds  from the  sale of  several
Properties  to the Limited  Partners,  as described in  "Short-Term  Liquidity."
Rental and earned  income are expected to remain at reduced  amounts as a result
of  distributing  the net  sales  proceeds  from  the  2000  and  1998  sales of
Properties to the Limited Partners.

         In October  1998,  the tenant of one Boston Market  Property  filed for
bankruptcy,  and in June 2000, rejected, the lease relating to this Property. As
a result, the tenant  discontinued making rental payments on the rejected lease.
In conjunction  with the rejected lease,  during 2000, the Partnership  reversed
approximately  $38,700 of accrued rental  income.  The accrued rental income was
the accumulated amount of non-cash accounting  adjustments primarily recorded in
order to recognize  future  scheduled  rent  increases as income evenly over the
term of the  lease.  No such  amounts  were  reversed  during  1999 or 1998.  In
December  2000, the  Partnership  entered into a new lease with a new tenant for
this Property with rental income expected to commence in March 2001.

         In addition,  rental and earned income decreased during 2000 due to the
fact that in May 2000, the tenant of the Property in Palm Bay,  Florida  vacated
the  Property  and  discontinued  making  rental  payments.  In  addition,   the
Partnership reversed approximately $12,830 of accrued rental income. The accrued
rental  income was the  accumulated  amount of non-cash  accounting  adjustments
previously  recorded in order to recognize  future  scheduled  rent increases as
income evenly over the term of the lease.  No such amounts were reversed  during
1999 or 1998.  The General  Partners will continue to pursue  collection of past
due rental amounts  relating to this Property and will recognize such amounts as
income if collected.  The  Partnership  will not recognize any rental and earned
income  relating to this Property until the  Partnership  finds a new tenant for
this Property or sells the Property and  reinvests the net sales  proceeds in an
additional  Property.  The Partnership is currently seeking either a replacement
tenant or purchaser for this Property.  The decrease in rental and earned income
during 2000, was partially  offset by the fact that during 2000, the Partnership
collected  and  recognized  as income  approximately  $39,000 in past due rental
amounts  from the  guarantor  of the former  tenant of the Property in Palm Bay,
Florida.  The lost  revenues  from this  vacant  Property  could have an adverse
effect on the results of operations of the  Partnership  if the  Partnership  is
unable to re-lease the  Property in a timely  manner.  The General  Partners are
currently seeking either a new tenant or purchaser for this Property.

         Rental and earned income also decreased by approximately $25,000 during
1999, as a result of the fact that,  effective  January 1, 1999, the Partnership
amended the lease for the Property located in Edgewood, Maryland, to provide for
reduced annual rental income.

         The  decrease in rental and earned  income  during  2000 was  partially
offset by an increase of approximately  $22,700 during 2000 due to the fact that
the  Partnership  collected and recognized as income past due rental amounts for
which the  Partnership  had  previously  established  an allowance  for doubtful
accounts relating to its Properties in Dundee, Michigan and Marion, Ohio.

         For the years ended December 31, 2000,  1999, and 1998, the Partnership
also earned $24,545, $126,521, and $83,377,  respectively,  in contingent rental
income from the  Partnership's  Properties.  The increase in  contingent  rental
income  during the year ended  December 31, 1999,  as compared to the year ended
December 31, 1998, was primarily  attributable  to an increase in gross sales of
certain  restaurant  Properties,  the  leases of which  require  the  payment of
contingent  rental  income.  The decrease  during 2000, as compared to 1999, was
partially  attributable to (i) the Partnership  adjusting  estimated  contingent
rental  amounts  during  1999 and (ii) a  decrease  in gross  sales for  certain
restaurant  Properties  whose leases  require the payment of  contingent  rental
income.

         For the years ended December 31, 1999,  1998, and 1997, the Partnership
also  recognized  income  of  $234,317  and  $303,223,  and a loss  of  $90,144,
respectively,  attributable  to net income earned or losses  recognized by joint
ventures in which the Partnership is a co-venturer. During 1997, the operator of
the Property owned by Titusville  Joint Venture  vacated the Property and ceased
operations.  For the years ended December 31, 2000,  1999, and 1998,  Titusville
Joint Venture (in which the Partnership owns a 26.6% interest in the profits and
losses of the joint venture) incurred expenses,  which are fixed in nature, such
as real estate taxes,  insurance and maintenance.  In addition,  during 2000 and
1998, the joint venture established  additional  allowances for loss on land and
building for its Property for approximately $227,100 and $125,300, respectively,
for financial  reporting  purposes.  The allowances  represented  the difference
between  the  Property's   carrying  values  at  December  31,  2000  and  1998,
respectively, and the estimated net realizable value of the Property. Titusville
Joint  Venture  has ceased  collection  efforts on past due  amounts.  The joint
venture will not  recognize  any rental  income from this  Property  until a new
tenant is located or until the  Property  is sold and the  proceeds  from such a
sale are  reinvested in an additional  Property.  The joint venture is currently
seeking a replacement tenant or purchaser for this Property.

         The  increase  in net  income  earned  by joint  ventures  in 1999,  as
compared to 1998, was partially  attributable  to the fact that  Kingsville Real
Estate  Joint  Venture  (in  which  the  Partnership  owns  a  68.87%  interest)
established  an allowance for loss on the land and net  investment in the direct
financing lease for its Property of approximately $316,000 during the year ended
December 31, 1998 in  accordance  with its policy.  The tenant of this  Property
experienced  financial  difficulties and ceased payment of rents under the terms
of its lease  agreement.  The allowance  represented the difference  between the
Property's  carrying value at December 31, 1998 and the estimated net realizable
value of the Property.  In addition,  the joint venture  increased its allowance
for doubtful  accounts by  approximately  $130,000  during 1998, for amounts due
from this tenant deemed  uncollectible in accordance with its collection policy.
No such allowances were recorded during 2000 and 1999 relating to this Property.
The  increase  in net income in 1999,  as compared  to 1998,  is also  partially
attributable  to the fact that in January  1999,  Kingsville  Real Estate  Joint
Venture  entered  into a new lease for this  Property  with a new tenant and the
General Partners ceased collection efforts on the past due amounts.

         In addition, the increase in net income earned by joint ventures during
1999, as compared to 1998, was partially  attributable to the fact that,  during
1998,  the  Partnership  reinvested net sales proceeds from the 1998 sale of its
Property  in  Leesburg,  Florida  in Warren  Joint  Venture,  and  during  1999,
reinvested  net sales  proceeds  from the 1998 sale of its  Property  in Naples,
Florida  in a  Property  in  Zephyrhills,  Florida,  as  tenants-in-common  with
affiliates of the General Partners, as described above in "Capital Resources."

         During the year  ended  December  31,  2000,  one of the  Partnership's
lessees,  Shoney's, Inc., contributed more than ten percent of the Partnership's
total rental and earned income (including the Partnership's  share of the rental
and earned income from six Properties owned by joint ventures and two Properties
owned with  affiliates  of the  General  Partners  as  tenant-in-common).  As of
December 31, 2000,  Shoney's,  Inc. was the lessee under leases relating to five
restaurants.  It is  anticipated  that,  based on the  minimum  rental  payments
required by the leases, Shoney's, Inc. will continue to contribute more than ten
percent of the  Partnership's  total rental  income  during  2001.  In addition,
during the year ended  December  31, 2000,  three  Restaurant  Chains,  Denny's,
Shoney's  and  Wendy's,  each  accounted  for  more  than  ten  percent  of  the
Partnership's  total rental and earned income (including the Partnership's share
of the rental and earned income from six Properties  owned by joint ventures and
two   Properties   owned   with   affiliates   of  the   General   Partners   as
tenants-in-common).  In 2001,  it is  anticipated  that these  three  Restaurant
Chains  each will  continue  to account  for more than ten  percent of the total
rental  income  to which  the  Partnership  is  entitled  under the terms of the
leases.  Any failure of this lessee or these Restaurant  Chains could materially
affect the  Partnership's  income if the Partnership is not able to re-lease the
Properties in a timely manner.

         Operating expenses,  including  depreciation and amortization  expense,
were $714,613,  $774,698,  and $690,271,  for the years ended December 31, 2000,
1999, and 1998,  respectively.  The decrease in operating  expenses for 2000, as
compared to 1999,  and the increase in operating  expenses for 1999, as compared
to 1998, was partially  attributable to the amount of transaction costs that the
Partnership  incurred  related to the General Partners  retaining  financial and
legal  advisors to assist them in evaluating  and  negotiating  the proposed and
terminated  Merger with APF,  as  described  in  "Termination  of  Merger."  The
decrease  during 2000 was  partially  due to, and the  increase  during 1999 was
partially offset by, a decrease in depreciation  expense which resulted from the
sales of various Properties during 1998 and 2000.

         The decrease in operating  expenses during 2000 was partially offset by
the fact that during 2000, the Partnership  increased its allowance for doubtful
accounts for past due rental amounts  relating to the Big Boy's Property located
in Topeka, Kansas, due to financial difficulties the tenant was experiencing. No
such allowance was recorded during 1999 or 1998.

         The decrease in operating  expenses during 2000 was partially offset by
an increase  in real  estate  taxes and  insurance  expense  relating to certain
Properties.  The Partnership is responsible for the proportionate  share of real
estate taxes and insurance expense for one of the two leases for the Property in
Maywood,  Illinois.  In addition,  during 2000,  1999, and 1998, the Partnership
paid for a portion of the real estate taxes that are the  responsibility  of the
other  tenant of the Maywood  Property,  due to a shortage of amounts  collected
from the tenant for the payment of its proportionate share of real estate taxes.
In addition, as a result of the former tenants of the Properties in Palm Bay and
Leesburg,  Florida defaulting under the terms of their leases, and the tenant of
the Property in Richmond, Virginia rejecting its lease, the Partnership incurred
certain  expenses,  such  as  real  estate  taxes,  insurance,  legal  fees  and
maintenance  expense  relating to these  Properties.  The  Partnership  sold the
Property in Leesburg,  Florida in July 1998,  therefore the Partnership does not
anticipate  incurring such expenses in future periods relating to this Property.
In  addition,  in December  2000,  the  Partnership  re-leased  the  Property in
Richmond,  Virginia to a new  tenant.  The new tenant is  responsible  for these
expenses  commencing  March 2001,  therefore the Partnership  does not expect to
incur these expenses  relating to this Property after March 2001.  However,  the
Partnership will continue to incur certain expenses, relating to the Property in
Palm Bay, Florida,  until the Property is sold or re-leased to a new tenant. The
General  Partners  are  currently  seeking a new  tenant or  purchaser  for this
Property.

         The increase  during 1999, as compared to 1998, is partially  offset by
the fact that,  through a  settlement  agreement  during 1999,  the  Partnership
collected  a portion of the  amounts  due from the former  tenant  that had been
expensed by the Partnership for the Property in Palm Bay, Florida,  as described
above in "Capital Resources."

         As  a  result  of  the  sale  of  three  Properties  during  2000,  the
Partnership  recognized  a total  gain of  $1,134,692  for  financial  reporting
purposes  during the year ended  December 31, 2000. In addition,  as a result of
the sale of the Property in Topeka,  Kansas,  the Partnership  recognized a loss
for  financial  reporting  purposes of $92,397 for the year ended  December  31,
2000. As a result of the sales of four  Properties  during 1998, the Partnership
recognized a total gain of $226,024 for financial  reporting purposes during the
year ended December 31, 1998. No Properties were sold during 1999.

         During 2000,  the  Partnership  established  an  allowance  for loss on
assets in the  amount of  $387,612  for  financial  reporting  purposes  for the
Property in Palm Bay, Florida.  The tenant of this Property  defaulted under the
terms of its lease and vacated  the  Property.  The  allowance  represented  the
difference  between the Property's  carrying value at December 31, 2000, and the
estimated net realizable  value for this Property based on an anticipated  sales
price. No such allowance was established during 1998 and 1999.

         The  Partnership's  leases as of December  31,  2000,  are, in general,
triple-net  leases and  contain  provisions  that the General  Partners  believe
mitigate  the adverse  effect of  inflation.  Such  provisions  include  clauses
requiring the payment of percentage rent based on certain restaurant sales above
a specified  level and/or  automatic  increases in base rent at specified  times
during the term of the lease.  Management  expects that  increases in restaurant
sales  volumes  due to  inflation  and real  sales  growth  should  result in an
increase in rental income over time.  Continued inflation also may cause capital
appreciation of the  Partnership's  Properties.  Inflation and changing  prices,
however,  also may have an adverse impact on the sales of the restaurants and on
potential capital appreciation of the Properties.

         In December 1999, the Securities and Exchange  Commission  released SAB
101, which provides the staff's view in applying generally  accepted  accounting
principles  to  selected  revenue  recognition  issues.  SAB  101  requires  the
Partnership  to defer  recognition  of certain  percentage  rental  income until
certain defined  thresholds are met. The  Partnership  adopted SAB 101 beginning
January 1, 2000. Implementation of SAB 101 did not have a material impact on the
Partnership's results of operations.

         In June 1998, the Financial Accounting Standards Board issued Statement
of  Financial   Accounting   Standards  No.  133,   "Accounting  for  Derivative
Instruments and Hedging  Activities." The Statement  establishes  accounting and
reporting  standards for derivative  instruments,  including certain  derivative
instruments,   embedded  in  other  contracts   (collectively   referred  to  as
derivatives),  and for hedging activities. The Statement requires that an entity
recognize all  derivatives  as either assets or liabilities in the balance sheet
and  measure  those  instruments  at fair  value.  In June 1999,  the  Financial
Accounting  Standards Board issued Statement of Financial  Accounting  Standards
No.  137,  "Accounting  for  Derivative  Instruments  and Hedging  Activities  -
Deferral of the Effective  Date of FASB  Statement No. 133, an Amendment of FASB
Statement No. 133." FAS 137 deferred the effective date of FAS 133 for one year.
FAS 133,  as amended,  is now  effective  for all fiscal  quarters of all fiscal
years  beginning  after  June  15,  2000.  The  Partnership  has  reviewed  both
statements and has determined  that both FAS 133 and FAS 137 do not apply to the
Partnership as of December 31, 2000.

Termination of Merger

         On March 11, 1999, the  Partnership  entered into an Agreement and Plan
of Merger with APF,  pursuant to which the Partnership  would be merged with and
into a subsidiary of APF.  Under the  Agreement  and Plan of Merger,  APF was to
issue shares of its common stock as  consideration  for the Merger.  On March 1,
2000, the General  Partners and APF announced  that they had mutually  agreed to
terminate  the  Agreement  and Plan of Merger.  The  agreement to terminate  the
Agreement and Plan of Merger was based, in large part, on the General  Partners'
concern that,  in light of market  conditions  relating to publicly  traded real
estate  investment  trusts,  the value of the transaction  had diminished.  As a
result of such  diminishment,  the General  Partners'  ability to  unequivocally
recommend voting for the transaction, in the exercise of their fiduciary duties,
had become questionable.


Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

          Not applicable.


Item 8.  Financial Statements and Supplementary Data


<PAGE>


                            CNL INCOME FUND IV, LTD.

                         (A Florida Limited Partnership)



                                    CONTENTS





                                                                 Page

Report of Independent Certified Public Accountants                18

Financial Statements:

    Balance Sheets                                                19

    Statements of Income                                          20

    Statements of Partners' Capital                               21

    Statements of Cash Flows                                    22-23

    Notes to Financial Statements                               24-39



<PAGE>

               Report of Independent Certified Public Accountants





To the Partners
CNL Income Fund IV, Ltd.


In our opinion,  the financial  statements  listed in the index  appearing under
item 14(a)(1) present fairly, in all material  respects,  the financial position
of CNL Income Fund IV, Ltd. (a Florida limited partnership) at December 31, 2000
and 1999,  and the results of its  operations and its cash flows for each of the
three years in the period ended December 31, 2000 in conformity  with accounting
principles  generally accepted in the United States of America. In addition,  in
our opinion,  the financial  statement  schedules  listed in the index appearing
under item 14(a)(2) present fairly,  in all material  respects,  the information
set  forth  therein  when  read  in  conjunction  with  the  related   financial
statements. These financial statements and financial statement schedules are the
responsibility of the Partnership's management; our responsibility is to express
an opinion on these financial statements and financial statement schedules based
on our audits.  We conducted our audits of these  statements in accordance  with
auditing  standards  generally  accepted in the United States of America,  which
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,  assessing the  accounting  principles
used and  significant  estimates made by management,  and evaluating the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.



/s/ PricewaterhouseCoopers LLP

Orlando, Florida
February 2, 2001




<PAGE>

                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
<S> <C>
                                                                     December 31,
                                                              2000                   1999
                                                       ------------------     ------------------
                               ASSETS

Land and buildings on operating leases, less
   accumulated depreciation and allowance
   for loss on assets                                       $ 12,385,122           $ 15,080,971
Net investment in direct financing leases                        339,689              1,189,488
Investment in joint ventures                                   3,197,510              3,332,012
Cash and cash equivalents                                      1,366,871                725,493
Receivables, less allowance for doubtful
   accounts of $301,517 and $215,029, respectively                45,144                141,675
Due from related parties                                          15,226                     --
Prepaid expenses                                                  14,076                 15,383
Lease costs, less accumulated amortization
   of $22,913 and $26,113, respectively                            1,031                 29,031
Accrued rental income                                            250,635                314,266
Other assets                                                         855                     --
                                                          ------------------     ----------------

                                                            $ 17,616,159           $ 20,828,319
                                                          ==================     ================

                 LIABILITIES AND PARTNERS' CAPITAL

Accounts payable and accrued expenses                          $  45,070              $  91,074
Accrued and escrowed real estate taxes payable                    48,508                 63,585
Distributions payable                                            525,000                600,000
Due to related parties                                           172,677                241,509
Rents paid in advance and deposits                                29,235                 64,792
                                                         ------------------     -----------------
        Total liabilities                                        820,490              1,060,960


Partners' capital                                             16,795,669             19,767,359
                                                        ------------------     ------------------

                                                            $ 17,616,159           $ 20,828,319
                                                        ==================     ==================
</TABLE>
                 See accompanying notes to financial statements.

<PAGE>


                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

                              STATEMENTS OF INCOME

<TABLE>
<CAPTION>
<S> <C>
                                                                   Year Ended December 31,
                                                         2000               1999                1998
                                                    ---------------    ---------------     --------------
Revenues:
   Rental income from operating leases                  $ 1,781,392        $ 2,009,987         $2,104,520
   Adjustments to accrued rental income                     (51,520)                --                 --
   Earned income from direct financing leases                79,260            122,904            126,993
   Contingent rental income                                  24,545            126,521             83,377
   Interest and other income                                 70,246             39,422             60,950
                                                    ---------------    ---------------     --------------
                                                          1,903,923          2,298,834          2,375,840
                                                    ---------------    ---------------     --------------
Expenses:
   General operating and administrative                     168,539            146,650            151,775
   Professional services                                     46,673             36,759             43,609
   Bad debt expense                                          12,685                 --                 --
   Real estate taxes                                         30,731             21,468             31,879
   State and other taxes                                     15,479             17,426             15,747
   Depreciation and amortization                            404,013            410,151            428,975
   Transaction costs                                         36,493            142,244             18,286
                                                    ---------------    ---------------     --------------
                                                            714,613            774,698            690,271
                                                    ---------------    ---------------     --------------
Income Before Equity in Earnings (Losses)
   of Joint Ventures, Gain on Sale of Assets
   and Provision for Loss on Assets                       1,189,310          1,524,136          1,685,569

Equity in Earnings (Losses) of Joint Ventures               234,317            303,223            (90,144)

Gain on Sale of Assets                                    1,042,295                 --            226,024

Provision for Loss on Assets                               (387,612)                --                 --
                                                    ---------------    ---------------     --------------

Net Income                                              $ 2,078,310        $ 1,827,359         $1,821,449
                                                    ===============    ===============     ==============

Allocation of Net Income:
   General partners                                         $    --          $  18,273        $    12,724
   Limited partners                                       2,078,310          1,809,086          1,808,725
                                                    ---------------    ---------------     --------------
                                                        $ 2,078,310        $ 1,827,359         $1,821,449
                                                    ===============    ===============     ==============

Net Income per Limited Partner Unit                       $   34.64          $   30.15         $    30.15
                                                    ===============    ===============     ==============

Weighted Average Number of Limited
   Partner Units Outstanding                                 60,000             60,000             60,000
                                                    ===============    ===============     ==============
</TABLE>

                 See accompanying notes to financial statements.

<PAGE>

                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

                         STATEMENTS OF PARTNERS' CAPITAL

                  Years Ended December 31, 2000, 1999, and 1998

<TABLE>
<CAPTION>
<S> <C>
                                      General Partners                                        Limited Partners
                                ---------------------------  -----------------------------------------------------------------------
                                                Accumulated                                 Accumulated   Syndication
                                Contributions    Earnings    Contributions  Distributions    Earnings        Costs         Total
                                ------------- -------------  -------------  -------------  -------------- ------------ -------------

Balance, December 31, 1997         $  557,804    $  198,550   $ 30,000,000  $ (25,207,963)  $ 20,043,908  $ (3,440,000) $22,152,299

   Distributions to limited
      partners ($61 per limited            --            --             --     (3,633,748)            --            --   (3,633,748)
      partner unit)
   Net income                              --        12,724             --             --       1,808,725           --    1,821,449
                                ------------- -------------  -------------  -------------  -------------- ------------  -----------

Balance, December 31, 1998            557,804       211,274     30,000,000    (28,841,711)     21,852,633   (3,440,000)  20,340,000

   Distributions to limited
      partners ($40 per limited
      partner unit)                        --            --             --      (2,400,000)            --           --   (2,400,000)
   Net income                              --        18,273             --              --      1,809,086           --    1,827,359
                                ------------- -------------  -------------  -------------- -------------- ------------  ------------

Balance, December 31, 1999            557,804       229,547     30,000,000     (31,241,711)    23,661,719   (3,440,000)  19,767,359

   Distributions to limited
      partners ($84 per limited
      partner unit)                        --            --             --      (5,050,000)            --           --   (5,050,000)
   Net income                              --            --             --              --      2,078,310           --    2,078,310
                                ------------- -------------  -------------  -------------- -------------- ------------  ------------

Balance, December 31, 2000         $  557,804    $  229,547   $ 30,000,000   $ (36,291,711)  $ 25,740,029 $ (3,440,000) $16,795,669
                                ============= =============  =============  ============== ============== ============  ============
</TABLE>

                 See accompanying notes to financial statements.
<PAGE>

                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
<S> <C>
                                                                          Year Ended December 31,
                                                                 2000           1999           1998
                                                           --------------  -------------  -------------

Increase (Decrease) in Cash and Cash
   Equivalents:

      Cash Flows from Operating Activities:
        Cash received from tenants                            $ 1,972,961    $ 2,186,946    $ 2,351,732
        Distributions from joint ventures                         368,819        367,317        248,360
        Cash paid for expenses                                   (569,192)      (181,668)      (274,436)
        Interest received                                          54,519         28,718         36,664
                                                           --------------  -------------  -------------
           Net cash provided by operating
              activities                                        1,827,107      2,401,313      2,362,320
                                                           --------------  -------------  -------------

      Cash Flows from Investing Activities:
        Proceeds from sale of assets                            3,939,271             --      2,526,354
        Additions to land and buildings on
           operating leases                                            --             --       (275,000)
        Investment in joint ventures                                   --       (533,200)      (493,398)
        Decrease (increase) in restricted cash                         --        533,598       (533,598)
        Payment of lease costs                                         --        (15,600)          --
                                                           --------------  -------------  -------------
           Net cash provided by (used in) investing
              activities                                        3,939,271        (15,202)     1,224,358
                                                           --------------  -------------  -------------

      Cash Flows from Financing Activities:
        Distributions to limited partners                      (5,125,000)    (2,400,000)    (3,723,748)
                                                           --------------  -------------  -------------
           Net cash used in financing activities               (5,125,000)    (2,400,000)    (3,723,748)
                                                           --------------  -------------  -------------

Net Increase (Decrease) in Cash and Cash
   Equivalents                                                    641,378        (13,889)      (137,070)

Cash and Cash Equivalents at Beginning of Year                    725,493        739,382        876,452
                                                           --------------  -------------  -------------

Cash and Cash Equivalents at End of Year                      $ 1,366,871     $  725,493     $  739,382
                                                           ==============  =============  =============
</TABLE>

                See accompanying notes to financial statements.

<PAGE>


                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

                      STATEMENTS OF CASH FLOWS - CONTINUED

<TABLE>
<CAPTION>
<S> <C>
                                                                          Year Ended December 31,
                                                                2000                1999               1998
                                                           --------------    ----------------   ----------------

Reconciliation of Net Income to Net Cash
   Provided by Operating Activities:

      Net income                                              $ 2,078,310         $ 1,827,359        $ 1,821,449
                                                           --------------    ----------------   ----------------
      Adjustments  to  reconcile  net income to
        net cash  provided by  operating
        activities:
           Depreciation                                           376,013             405,488            425,481
           Amortization                                            28,000               4,663              3,494
           Bad debt expense                                        12,685                  --                 --
           Equity in earnings of joint ventures,
              net of distributions                                134,502              64,094            338,504
           Gain on sale of assets                              (1,042,295)                 --           (226,024)
           Provision for loss on assets                           387,612                  --                 --
           Decrease (increase) in receivables                      83,846            (113,323)             8,607
           Increase in due from related parties                   (15,226)               --                 --
           Decrease (increase) in prepaid expenses                  1,307              (5,547)             1,279
           Decrease in net investment in direct
              financing leases                                     31,769              41,994             37,907
           Decrease (increase) in accrued rental
              income                                               35,367             (34,542)           (40,515)
           Increase in other assets                                  (855)                 --                 --
           Increase (decrease) in accounts
              payable and accrued expenses                        (46,004)             86,571            (55,404)
           Increase (decrease) in accrued and
              escrowed real estate taxes                          (15,077)             26,853             28,444
           Increase (decrease) in due to related
              parties                                            (187,290)             92,531              9,461
           Increase (decrease) in rents paid in
              advance and deposits                                (35,557)              5,172              9,637
                                                           --------------    ----------------   ----------------
                Total adjustments                                (251,203)            573,954            540,871
                                                           --------------    ----------------   ----------------

Net Cash Provided by Operating Activities                     $ 1,827,107         $ 2,401,313        $ 2,362,320
                                                           ==============    ================   ================

Supplemental Schedule of Non-Cash Investing
   and Financing Activities:

      Deferred real estate disposition fees incurred
        and unpaid at December 31                              $  118,458             $    --          $  45,663
                                                           ==============    ================   ================

      Distributions declared and unpaid at
        December 31                                            $  525,000          $  600,000         $  600,000
                                                           ==============    ================   ================
</TABLE>

                See accompanying notes to financial statements.

<PAGE>



                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


1.       Significant Accounting Policies:

         Organization  and Nature of Business - CNL Income  Fund IV,  Ltd.  (the
         "Partnership") is a Florida limited  partnership that was organized for
         the purpose of acquiring both newly constructed and existing restaurant
         properties,  as well as properties  upon which  restaurants  were to be
         constructed,  which are leased  primarily  to operators of national and
         regional fast-food and family-style restaurant chains.

         The general partners of the Partnership are CNL Realty Corporation (the
         "Corporate  General  Partner"),  James M.  Seneff,  Jr.  and  Robert A.
         Bourne.  Mr. Seneff and Mr. Bourne are also 50 percent  shareholders of
         the Corporate General Partner. The general partners have responsibility
         for managing the day-to-day operations of the Partnership.

         Real  Estate  and  Lease  Accounting  -  The  Partnership  records  the
         acquisition of land and buildings at cost,  including  acquisition  and
         closing  costs.  Land and buildings  are generally  leased to unrelated
         third  parties on a triple-net  basis,  whereby the tenant is generally
         responsible  for  all  operating  expenses  relating  to the  property,
         including  property  taxes,  insurance,  maintenance  and repairs.  The
         leases are  accounted  for using  either the  direct  financing  or the
         operating methods. Such method are described below:

                Direct  financing  method - The leases  accounted  for using the
                direct  financing  method are  recorded at their net  investment
                (which at the inception of the lease  generally  represents  the
                cost of the asset)  (Note 4).  Unearned  income is deferred  and
                amortized  to  income  over the lease  terms so as to  produce a
                constant  periodic  rate  of  return  on the  Partnership's  net
                investment in the leases.

                Operating  method - Land and building leases accounted for using
                the operating method are recorded at cost, revenue is recognized
                as rentals are earned and  depreciation is charged to operations
                as incurred.  Buildings  are  depreciated  on the  straight-line
                method  over  their  estimated  useful  lives of 30 years.  When
                scheduled   rentals  vary  during  the  lease  term,  income  is
                recognized on a straight-line  basis so as to produce a constant
                periodic  rent over the lease  term  commencing  on the date the
                property is placed in service.


<PAGE>


                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                                   Years Ended December 31, 2000, 1999, and 1998


1.       Significant Accounting Policies - Continued:

                  Accrued  rental  income  represents  the  aggregate  amount of
                  income  recognized  on a  straight-line  basis  in  excess  of
                  scheduled rental payments to date.  Whenever a tenant defaults
                  under  the  terms  of its  lease,  or  events  or  changes  in
                  circumstance  indicate  that the  tenant  will not  lease  the
                  property  through the end of the lease term,  the  Partnership
                  either  reserves or reverses  the  cumulative  accrued  rental
                  income balance.

         When  the  properties  are  sold,  the  related  cost  and  accumulated
         depreciation  for operating  leases and the net  investment  for direct
         financing leases,  plus any accrued rental income, are removed from the
         accounts and gains or losses from sales are  reflected  in income.  The
         general  partners of the Partnership  review  properties for impairment
         whenever events or changes in circumstances  indicate that the carrying
         amount of the assets may not be  recoverable  through  operations.  The
         general partners  determine whether an impairment in value has occurred
         by comparing the estimated future  undiscounted  cash flows,  including
         the  residual  value of the  property,  with the  carrying  cost of the
         individual  property.  If an impairment  is  indicated,  the assets are
         adjusted to their fair value.  Although the general  partners have made
         their best estimate of these factors based on current conditions, it is
         reasonably  possible  that  changes  could occur in the near term which
         could adversely affect the general  partners' best estimate of net cash
         flows  expected to be generated  from its  properties  and the need for
         asset impairment write-downs.

         When the  collection  of amounts  recorded as rental or other income is
         considered  to be  doubtful,  an  adjustment  is made to  increase  the
         allowance for doubtful accounts,  which is netted against  receivables,
         and to decrease rental or other income or increase bad debt expense for
         the  current  period,  although  the  Partnership  continues  to pursue
         collection of such amounts.  If amounts are subsequently  determined to
         be  uncollectible,  the  corresponding  receivable  and  allowance  for
         doubtful accounts are decreased accordingly.

         Investment in Joint Ventures - The Partnership's investments in Holland
         Joint Venture,  Titusville Joint Venture,  Cocoa Joint Venture,  Auburn
         Joint  Venture,  Kingsville  Real Estate  Joint  Venture,  Warren Joint
         Venture,  and properties in Clinton,  North  Carolina and  Zephyrhills,
         Florida, held as tenants-in-common,  are accounted for using the equity
         method since the Partnership  shares control with affiliates which have
         the same general partners.



<PAGE>


                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


1.       Significant Accounting Policies - Continued:

         Cash and Cash Equivalents - The Partnership considers all highly liquid
         investments  with a maturity of three months or less when  purchased to
         be cash  equivalents.  Cash  and cash  equivalents  consist  of  demand
         deposits at commercial  banks and money market funds (some of which are
         backed by government  securities).  Cash equivalents are stated at cost
         plus accrued interest, which approximates market value.

         Cash  accounts  maintained  on  behalf  of the  Partnership  in  demand
         deposits  at  commercial  banks  and  money  market  funds  may  exceed
         federally insured levels;  however, the Partnership has not experienced
         any losses in such accounts.

         Lease Costs - Brokerage fees associated with negotiating new leases are
         amortized  over the terms of the new  leases  using  the  straight-line
         method.

         Income Taxes - Under  Section 701 of the  Internal  Revenue  Code,  all
         income,  expenses and tax credit items flow through to the partners for
         tax  purposes.  Therefore,  no  provision  for federal  income taxes is
         provided in the accompanying  financial statements.  The Partnership is
         subject to certain state taxes on its income and property.

         Additionally,  for tax  purposes,  syndication  costs are  included  in
         Partnership equity and in the basis of each partner's  investment.  For
         financial  reporting  purposes,  syndication  costs are netted  against
         partners' capital and represent a reduction of Partnership equity and a
         reduction in the basis of each partner's investment.

         Use of Estimates - The general  partners of the Partnership have made a
         number of estimates and assumptions relating to the reporting of assets
         and liabilities and the disclosure of contingent assets and liabilities
         to prepare these  financial  statements in  conformity  with  generally
         accepted  accounting  principles.  The more significant areas requiring
         the use of  management  estimates  relate to the allowance for doubtful
         accounts  and future  cash flows  associated  with  long-lived  assets.
         Actual results could differ from those estimates.


<PAGE>


                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


1.       Significant Accounting Policies - Continued:

         Reclassifications  -  Certain  items  in  the  prior  years'  financial
         statements  have been  reclassified  to conform  to 2000  presentation.
         These  reclassifications  had no effect  on  partners'  capital  or net
         income.

         Staff  Accounting  Bulletin No. 101 ("SAB 101") - In December 1999, the
         Securities and Exchange Commission released SAB 101, which provides the
         staff's view in applying  generally accepted  accounting  principles to
         selected revenue  recognition  issues. SAB 101 requires the Partnership
         to defer recognition of certain  percentage rental income until certain
         defined  thresholds are met. The Partnership  adopted SAB 101 beginning
         January  1,  2000.  Implementation  of SAB 101 did not have a  material
         impact on the Partnership's results of operations.

         Statement of  Financial  Accounting  Standards  No. 133 ("FAS 133") and
         Statement of Financial  Accounting  Standards  No. 137 ("FAS 137") - In
         June 1998, the Financial Accounting Standards Board issued Statement of
         Financial  Accounting  Standards No. 133,  "Accounting  for  Derivative
         Instruments  and  Hedging   Activities."   The  Statement   establishes
         accounting  and  reporting   standards  for   derivative   instruments,
         including certain derivative  instruments,  embedded in other contracts
         (collectively referred to as derivatives),  and for hedging activities.
         The Statement  requires that an entity  recognize  all  derivatives  as
         either  assets or  liabilities  in the balance  sheet and measure those
         instruments  at fair  value.  In June 1999,  the  Financial  Accounting
         Standards Board issued Statement of Financial  Accounting Standards No.
         137,  "Accounting for Derivative  Instruments and Hedging  Activities -
         Deferral of the Effective  Date of FASB Statement No. 133, an Amendment
         of FASB  Statement No. 133." FAS 137 deferred the effective date of FAS
         133 for one year. FAS 133, as amended,  is now effective for all fiscal
         quarters  of all  fiscal  years  beginning  after  June 15,  2000.  The
         Partnership  has reviewed both  statements and has determined that both
         FAS 133 and FAS 137 do not apply to the  Partnership as of December 31,
         2000.

2.       Leases:

         The  Partnership  leases its land or land and  buildings  primarily  to
         operators  of  national  and  regional   fast-food   and   family-style
         restaurants.  The  leases are  accounted  for under the  provisions  of
         Statement of Financial  Accounting  Standards No. 13,  "Accounting  for
         Leases." The leases  generally  are  classified  as  operating  leases;
         however,  some leases have been classified as direct financing  leases.
         For the leases classified as direct

<PAGE>



                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


2.       Leases - Continued:

         financing  leases,  the building  portions of the  property  leases are
         accounted  for as direct  financing  leases  while the land  portion of
         these leases are operating leases.  Substantially all leases are for 15
         to 20  years  and  provide  for  minimum  and  contingent  rentals.  In
         addition, the tenant generally pays all property taxes and assessments,
         fully  maintains  the interior and exterior of the building and carries
         insurance  coverage for public  liability,  property  damage,  fire and
         extended  coverage.  The lease options generally allow tenants to renew
         the leases for two or four successive  five-year periods subject to the
         same terms and conditions as the initial lease.  Most leases also allow
         the tenant to  purchase  the  property  at fair  market  value  after a
         specified portion of the lease has elapsed.

3.       Land and Buildings on Operating Leases:

         Land and  buildings on operating  leases  consisted of the following at
December 31:

                                             2000                 1999
                                       -----------------   ------------------

    Land                                       6,442,595          $ 7,244,512
    Buildings                                 10,163,786           11,986,556
                                       ------------------   -----------------
                                              16,606,381           19,231,068
    Less accumulated depreciation             (3,833,647)          (4,150,097)
                                       ------------------   -----------------
                                              12,772,734           15,080,971
    Less allowance for loss on assets           (387,612)                  --
                                       ------------------   -----------------

                                            $ 12,385,122         $ 15,080,971
                                       ==================   =================

         In June 2000, the Partnership sold its property in Detroit, Michigan to
         the  tenant  for   $1,095,000   and  received  net  sales  proceeds  of
         $1,089,325, resulting in a gain of approximately $552,600 for financial
         reporting  purposes.  This  property  was  originally  acquired  by the
         Partnership in October 1988 and had a cost of  approximately  $614,500,
         excluding  acquisition  fees and  miscellaneous  acquisition  expenses;
         therefore, the Partnership sold the property for approximately $474,800
         in excess of its original  purchase price. In connection with the sale,
         the  Partnership  incurred  a  deferred,   subordinated,   real  estate
         disposition fee of $32,850 (see Note 8).


<PAGE>


                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


3.       Land and Buildings on Operating Leases - Continued:

         In July 2000, the  Partnership  sold its properties in Temple  Terrace,
         Florida  and Punta  Gorda,  Florida,  to a third  party for  $2,353,583
         resulting in a gain of approximately  $582,100 for financial  reporting
         purposes.  These properties were originally acquired by the Partnership
         in  March of 1989 and had a cost of  $2,081,700  excluding  acquisition
         fees and miscellaneous acquisition expenses; therefore, the Partnership
         sold the  properties  for  approximately  $271,900  in  excess of their
         original purchase prices. In connection with the sales, the Partnership
         incurred  deferred,  subordinated,  real  estate  disposition  fees  of
         $70,608 (see Note 8).

         In November 2000, the Partnership  sold its property in Topeka,  Kansas
         to a third  party for  $500,000  and  received  net sales  proceeds  of
         approximately  $496,400,  resulting in a loss of approximately  $92,400
         for financial  reporting  purposes.  In connection  with the sale,  the
         Partnership incurred a deferred,  subordinated, real estate disposition
         fee of $15,000 (see Note 8).

         During 2000, the Partnership recorded a provision for loss on assets of
         $387,612 relating to the property in Palm Bay,  Florida.  The tenant of
         this  property  vacated the  property and  discontinued  the payment of
         rent. The allowance  represented  the  difference  between the carrying
         value of the  property at December  31,  2000,  and the  estimated  net
         realizable value of the property.

         Some leases provide for escalating  guaranteed minimum rents throughout
         the  lease  terms.  Income  from  these  scheduled  rent  increases  is
         recognized on a straight-line  basis over the terms of the leases.  For
         the years ended  December 31, 2000,  1999,  and 1998,  the  Partnership
         recognized  a loss of  $35,346  (including  $51,520 in  reversals)  and
         income of $34,542 and $40,515, respectively, of such rental income.


<PAGE>


                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


3.       Land and Buildings on Operating Leases - Continued:

         The following is a schedule of the future  minimum lease payments to be
         received on noncancellable operating leases at December 31, 2000:

                2001                               $ 1,519,388
                2002                                 1,512,739
                2003                                 1,391,174
                2004                                 1,407,263
                2005                                 1,412,921
                Thereafter                           6,617,214
                                             -----------------

                                                  $ 13,860,699
                                             =================

         Since  lease  renewal  periods  are  exercisable  at the  option of the
         tenant, the above table only presents future minimum lease payments due
         during  the  initial  lease  terms.  In  addition,  this table does not
         include any amounts for future contingent rentals which may be received
         on the leases based on a percentage of the tenant's gross sales.

4.       Net Investment in Direct Financing Leases:

         The  following  lists the  components  of the net  investment in direct
financing leases at December 31:

                                                2000               1999
                                          ----------------   ----------------

      Minimum lease payments receivable          $ 429,981        $ 1,495,893
      Estimated residual values                    114,886            527,829
      Less unearned income                        (205,178)          (834,234)
                                          ----------------   ----------------

      Net investment in direct
         financing leases                       $  339,689        $ 1,189,488
                                          ================   ================



<PAGE>


                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


4.       Net Investment in Direct Financing Leases - Continued:

         During 2000, the Partnership sold its property in Punta Gorda, Florida,
         for  which  the  building  portion  had  been  classified  as a  direct
         financing lease. In connection therewith, the gross investment (minimum
         lease  payments  receivable  and  the  estimated  residual  value)  and
         unearned income relating to the building were removed from the accounts
         and the gain from the sale of the property was reflected in income (see
         Note 3).

         The  following  is a schedule of future  minimum  lease  payments to be
         received on direct financing leases at December 31, 2000:

                   2001                                    $   53,568
                   2002                                        53,568
                   2003                                        53,568
                   2004                                        53,568
                   2005                                        53,568
                   Thereafter                                 162,141
                                                    ------------------

                                                           $  429,981
                                                    ==================

         The above table does not include  future  minimum  lease  payments  for
         renewal  periods or for contingent  rental payments that may become due
         in future periods (see Note 3).

5.       Investment in Joint Ventures:

         As of December 31, 2000, the  Partnership  had a 51 percent,  26.6%, 57
         percent,  96.1%,  68.87%, and 35.71% interest in the profits and losses
         of  Holland  Joint  Venture,  Titusville  Joint  Venture,  Cocoa  Joint
         Venture, Auburn Joint Venture, Kingsville Real Estate Joint Venture and
         Warren  Joint  Venture,  respectively,  and a 53 percent and 76 percent
         interest  in the  profits and losses of  properties  in Clinton,  North
         Carolina  and  Zephyrhills,  Florida,  held as  tenants-in-common  with
         affiliates of the general  partners.  The remaining  interests in these
         joint ventures are held by affiliates of the Partnership which have the
         same general partners. Holland Joint Venture, Titusville Joint Venture,
         Cocoa Joint Venture, Auburn Joint Venture, Kingsville Real Estate Joint
         Venture,  Warren Joint Venture and the Partnership  and affiliates,  as
         tenants-in-common,  each owns and leases one property to an operator of
         national fast-food or family-style restaurants.



<PAGE>


                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


5.       Investment in Joint Ventures- Continued:

         In January 1999,  the  Partnership  invested  $533,200 in a property in
         Zephyrhills,  Florida as  tenants-in-common  with CNL Income Fund XVII,
         Ltd.,  a Florida  limited  partnership  and  affiliate  of the  general
         partners.  As of December 31, 2000,  the  Partnership  had a 76 percent
         interest in the property.

         The  following  presents  the  joint  ventures'   combined,   condensed
         financial information at December 31:

                                                     2000            1999
                                                 -------------  --------------

             Land and buildings on operating
                leases, less accumulated
                depreciation and allowance for
                loss on assets                    $ 4,866,583     $ 5,223,253
             Net investment in direct financing
                lease                                 358,308         371,740
             Cash                                      32,143          29,223
             Receivables                               20,345          13,544
             Prepaid expenses                           1,850              --
             Accrued rental income, less
                allowance for doubtful accounts       165,097         168,836
             Other assets                               1,402           3,644
             Liabilities                               56,461          44,425
             Partners' capital                      5,389,267       5,765,815
             Revenues                                 606,228         619,788
             Provision for loss on assets            (227,093 )            --
             Net income                               222,879         458,146

         The Partnership recognized income totaling $234,317 and $303,223, and a
         loss totaling  $90,144 for the years ended December 31, 2000,  1999 and
         1998, respectively, from these joint ventures.


<PAGE>


                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


6.       Allocations and Distributions:

         From inception through December 31, 1999, generally, all net income and
         net losses of the Partnership, excluding gains and losses from the sale
         of property,  were allocated 99 percent to the limited partners and one
         percent to the general  partners.  From inception  through December 31,
         1999,  distributions  of net cash  flow  were  made 99  percent  to the
         limited  partners  and one percent to the general  partners;  provided,
         however, that the one percent of net cash flow to be distributed to the
         general partners was subordinated to receipt by the limited partners of
         an aggregate, ten percent,  cumulative,  noncompounded annual return on
         their adjusted capital contributions (the "10% Preferred Return").

         From inception through December 31, 1999, generally, net sales proceeds
         from the sale of properties not in liquidation of the  Partnership,  to
         the extent distributed,  were distributed first to the limited partners
         in an  amount  sufficient  to  provide  them with  their 10%  Preferred
         Return,  plus the return of their adjusted capital  contributions.  The
         general partners then received,  to the extent previously  subordinated
         and unpaid,  a one percent  interest in all prior  distributions of net
         cash flow and a return of their  capital  contributions.  Any remaining
         sales proceeds were  distributed 95 percent to the limited partners and
         five percent to the general partners.

         Any  gain  from  the  sale  of a  property  not in  liquidation  of the
         Partnership was, in general,  allocated in the same manner as net sales
         proceeds are distributable. Any loss from the sale of a property not in
         liquidation of the Partnership  was, in general,  allocated first, on a
         pro rata basis,  to partners  with  positive  balances in their capital
         accounts;  and thereafter,  95 percent to the limited partners and five
         percent to the general partners.

         Generally,  net sales  proceeds from a liquidating  sale of properties,
         will be used in the following order: (i) first to pay and discharge all
         of  the  Partnership's   liabilities  to  creditors,  (ii)  second,  to
         establish  reserves that may be deemed necessary for any anticipated or
         unforeseen liabilities or obligations of the Partnership,  (iii) third,
         to pay all of the Partnership's liabilities, if any, to the general and
         limited partners,  (iv) fourth,  after allocations of net income, gains
         and/or  losses,  to distribute  to the partners  with positive  capital
         accounts  balances,  in  proportion  to such  balances,  up to  amounts
         sufficient  to  reduce  such  positive   balances  to  zero,   and  (v)
         thereafter, any funds remaining shall then be distributed 95 percent to
         the limited partners and five percent to the general partners.


<PAGE>


                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


6.       Allocations and Distributions - Continued:

         Effective  January 1, 2000, the general  partners waived their right to
         receive  future  distributions  from the  Partnership,  including  both
         distributions  of operating cash flow and  distributions of liquidation
         proceeds,   to  the  extent   that  the   cumulative   amount  of  such
         distributions would exceed the balance in the general partners' capital
         account as of December  31,  1999.  Accordingly,  for years  commencing
         January  1,  2000 and  after,  the  Partnership's  net  income  will be
         allocated entirely among the limited partners.  However,  if losses are
         allocated to the general  partners in a year, an amount of income equal
         to the sum of such losses may be allocated  to the general  partners in
         succeeding years. Accordingly,  the general partners were not allocated
         any net income and did not  receive any  distributions  during the year
         ended December 31, 2000.

         During each of the years ended  December 31, 2000,  1999, and 1998, the
         Partnership   declared   distributions   to  the  limited  partners  of
         $5,050,000, $2,400,000, and $3,633,748, respectively. Distributions for
         the year ended December 31, 1998 included $1,233,748 as a result of the
         distribution  of net sales  proceeds from the sale of the properties in
         Fort Myers,  Florida and Union Township,  Ohio. This amount was applied
         toward the limited  partners' 10% Preferred  Return.  Distributions for
         the year ended  December 31,  2000,  included  $2,800,000  in a special
         distribution,  as a result of the  distribution  of net sales  proceeds
         from the sale of the  properties  in Temple  Terrace  and Punta  Gorda,
         Florida and  Detroit,  Michigan.  This  amount was  applied  toward the
         limited partners' 10% Preferred Return. No distributions have been made
         to the general partners to date.


<PAGE>


                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


7.       Income Taxes:

         The following is a reconciliation of net income for financial reporting
         purposes to net income for federal  income tax  purposes  for the years
         ended December 31:

<TABLE>
<CAPTION>
<S> <C>

                                                                  2000             1999            1998
                                                              -------------   -------------   -------------

              Net income for financial reporting
                 purposes                                      $ 2,078,310      $ 1,827,359     $ 1,821,449

              Depreciation for tax reporting purposes in
                 excess of depreciation for financial
                 reporting purposes                                 (3,055)          (8,171)         (8,014)

              Allowance for loss on assets                         387,612               --              --

              Direct financing leases recorded as
                 operating leases for tax reporting
                 purposes                                           31,769           41,995          37,907

              Gain on sale of assets for financial
                 reporting purposes less than (in excess)
                 gain for tax reporting purposes                    89,247               --        (231,919)

              Capitalization (deduction) of transaction
                 costs for tax reporting purposes                 (160,530)         142,244          18,286

              Equity in  earnings  of joint  ventures
                 for  financial  reporting purposes less
                 than (in excess of) equity in earnings
                 of joint ventures for tax reporting
                 purposes                                           73,569          (76,060)        319,186

              Allowance for doubtful accounts                       86,488          (43,612)        (36,939)

              Accrued rental income                                 35,367          (34,542)        (40,515)

              Rents paid in advance                                (11,518)         (14,327)          9,137

              Other                                                     --               --             501
                                                              ------------    -------------   -------------

              Net income for federal income tax
                 purposes                                      $ 2,607,259      $ 1,834,886     $ 1,889,079
                                                              ============    =============   =============
</TABLE>

<PAGE>


                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


8.       Related Party Transactions:

         One of the individual general partners, James M. Seneff, Jr., is one of
         the principal  shareholders of CNL Holdings,  Inc. The other individual
         general partner, Robert A. Bourne, serves as President and Treasurer of
         CNL Financial  Group,  Inc., a wholly owned subsidiary of CNL Holdings,
         Inc. CNL Fund  Advisors,  Inc.  (the  "Advisor")  was a majority  owned
         subsidiary  of CNL  Financial  Group,  Inc.  until it  merged  with CNL
         American  Properties Fund, Inc. ("APF"),  effective  September 1, 1999.
         The individual general partners are stockholders and directors of APF.

         The Advisor  provides  certain  services  relating to management of the
         Partnership and its properties pursuant to a management  agreement with
         the Partnership. In connection therewith, the Partnership agreed to pay
         the Advisor an annual,  noncumulative,  subordinated  management fee of
         one percent of the sum of gross revenues from  properties  wholly owned
         by the  Partnership  and the  Partnership's  allocable  share  of gross
         revenues from joint ventures, but not in excess of competitive fees for
         comparable  services.  These fees are  incurred  payable only after the
         limited  partners receive their 10% Preferred  Return.  Due to the fact
         that these fees are  noncumulative,  if the limited  partners  have not
         received  their  10%  Preferred  Return  in  any  particular  year,  no
         management  fees will be due or payable  for such year.  As a result of
         such threshold, no management fees were incurred during the years ended
         December 31, 2000, 1999 and 1998.

         The Advisor is also entitled to receive a deferred,  subordinated, real
         estate disposition fee, payable upon the sale of one or more properties
         based on the lesser of one-half of a competitive real estate commission
         or  three  percent  of the  sales  price  if  the  Advisor  provides  a
         substantial amount of services in connection with the sale. However, if
         the net sales  proceeds are  reinvested in a replacement  property,  no
         such  real  estate   disposition  fees  will  be  incurred  until  such
         replacement   property  is  sold  and  the  net  sales   proceeds   are
         distributed.  The  payment  of  the  real  estate  disposition  fee  is
         subordinated to the receipt by the limited  partners of their aggregate
         10% Preferred Return,  plus their adjusted capital  contributions.  For
         the years ended  December 31, 2000 and 1998, the  Partnership  incurred
         $118,458 and $45,663,  respectively,  in deferred,  subordinated,  real
         estate  disposition  fees as a result  of the sales of  properties.  No
         deferred,  subordinated, real estate disposition fees were incurred for
         the year ended December 31, 1999.


<PAGE>


                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


8.       Related Party Transactions - Continued:

         During the years ended  December 31, 2000,  1999 and 1998,  the Advisor
         and its affiliates provided  accounting and administrative  services to
         the Partnership on a day-to-day  basis including  services  relating to
         the proposed and terminated merger.  The Partnership  incurred $88,356,
         $107,553,  and $94,365 for the years ended December 31, 2000,  1999 and
         1998, respectively, for such services.

         The due to related parties consisted of the following at December 31:

                                                2000              1999
                                          --------------    --------------

 Due to the Advisor:
    Expenditures incurred on
       behalf of the Partnership                  $   --         $ 122,830
    Accounting and administrative
       services                                    3,556            70,716
     Deferred, subordinated real
       estate disposition fee                    164,121            45,663
     Other                                         5,000             2,300
                                          --------------    --------------

                                               $ 172,677         $ 241,509
                                          ==============    ==============

9.       Concentration of Credit Risk:

         For the years ended December 31, 2000,  1999,  and 1998,  rental income
         from Shoney's, Inc. was $313,115, $347,088, and $413,755, respectively,
         representing  more than ten percent of the  Partnership's  total rental
         and earned  income  (including  the  Partnership's  share of rental and
         earned  income  from  joint  ventures  and  the   properties   held  as
         tenants-in-common with affiliates of the general partners).


<PAGE>


                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


9.       Concentration of Credit Risk - Continued:

         In addition,  the following  schedule  presents total rental and earned
         income from individual  restaurant chains,  each representing more than
         ten  percent  of the  Partnership's  total  rental  and  earned  income
         (including  the  Partnership's  share of total rental and earned income
         from joint ventures and the properties held as  tenants-in-common  with
         affiliates  of the  general  partners)  for  each  of the  years  ended
         December 31:

                                    2000              1999             1998
                               --------------    --------------   -------------

   Wendy's Old Fashioned
      Hamburger Restaurants        $ 386,618           442,195         437,896
   Shoney's                          327,448         $ 466,964        $541,175
   Denny's                           236,184               N/A             N/A


         The  information   denoted  by  N/A  indicates  that  for  each  period
         presented,  the chain did not  represent  more than ten  percent of the
         Partnership's total rental and earned income.

         Although  the  Partnership's   properties  are  geographically  diverse
         throughout the United States and the  Partnership's  lessees  operate a
         variety of  restaurant  concepts,  default  by any of these  lessees or
         restaurant chains could significantly  impact the results of operations
         of the Partnership.


<PAGE>


                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


10.      Selected Quarterly Financial Data:

         The following table presents  selected  unaudited  quarterly  financial
         data for each full quarter during the years ended December 31, 2000 and
         1999:

<TABLE>
<CAPTION>
<S> <C>
              2000 Quarter               First            Second            Third            Fourth             Year
         ------------------------    --------------    -------------     -------------    --------------    --------------

         Revenue (1)                      $661,494         $558,977          $484,190          $433,579       $ 2,138,240
         Net income                        430,730          487,937           890,412           269,231         2,078,310
         Net income per
             limited partner
             unit                             7.11             8.27             14.73              4.53             34.64

              1999 Quarter               First            Second            Third            Fourth             Year
         ------------------------    --------------    -------------     -------------    --------------    --------------

         Revenue (1)                      $619,494         $633,848          $654,319          $694,396       $ 2,602,057
         Net income                        412,833          409,135           452,989           552,402         1,827,359
         Net income per
             limited partner
             unit                             6.81             6.75              7.47              9.11             30.15
</TABLE>

         (1)  Revenues   include  equity  in  earnings  of  joint  ventures  and
         adjustments to accrued rental income.

<PAGE>

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

   None.


                                    PART III

Item 10.   Directors and Executive Officers of the Registrant

         The General Partners of the Registrant are James M. Seneff, Jr., Robert
A.  Bourne  and CNL  Realty  Corporation,  a Florida  corporation.  The  General
Partners  manage  and  control  the  Partnership's   affairs  and  have  general
responsibility   and  the  ultimate  authority  in  all  matters  affecting  the
Partnership's  business.  The  Partnership  has  available  to it the  services,
personnel and experience of CNL Fund Advisors,  Inc., CNL Financial Group,  Inc.
and their affiliates, all of which are affiliates of the General Partners.

         James M. Seneff, Jr., age 54. Since 1971, Mr. Seneff has been active in
the  acquisition,  development,  and  management  of real estate  projects  and,
directly or through an  affiliated  entity,  has served as a general  partner or
co-venturer in over 100 real estate  ventures.  These ventures have involved the
financing,  acquisition,   construction,  and  leasing  of  restaurants,  office
buildings,  apartment  complexes,  hotels, and other real estate. Mr. Seneff has
served as Director and Chairman of the Board of CNL  American  Properties  Fund,
Inc. ("APF"),  a public,  unlisted real estate investment trust, since 1994. Mr.
Seneff served as Chief  Executive  Officer of APF from 1994 through  August 1999
and has served as Co-Chief  Executive  Officer of APF since  December  2000. Mr.
Seneff served as Chairman of the Board and Chief  Executive  Officer of CNL Fund
Advisors (the "Advisor") until it merged with APF in September 1999, and in June
2000,  was  re-elected  to those  positions  of the  Advisor.  Mr.  Seneff  is a
principal stockholder of CNL Holdings, Inc., the parent company of CNL Financial
Group, Inc. (formerly CNL Group,  Inc.), a diversified real estate company,  and
has served as a director,  Chairman of the Board and Chief Executive  Officer of
CNL Financial Group, Inc. since its formation in 1980. CNL Financial Group, Inc.
is the parent company,  either directly or indirectly through  subsidiaries,  of
CNL Real Estate  Services,  Inc.,  CNL Capital  Markets,  Inc.,  CNL  Investment
Company and CNL Securities Corp. Mr. Seneff also serves as a Director,  Chairman
of the Board and Chief Executive Officer of CNL Hospitality Properties,  Inc., a
public,  unlisted  real estate  investment  trust,  as well as, CNL  Hospitality
Corp., its advisor. In addition, he serves as a Director,  Chairman of the Board
and Chief  Executive  Officer  of CNL  Retirement  Properties,  Inc.,  a public,
unlisted real estate  investment  trust and its advisor,  CNL  Retirement  Corp.
Since 1992, Mr. Seneff has also served as a Director,  Chairman of the Board and
Chief  Executive  Officer of Commercial  Net Lease  Realty,  Inc., a public real
estate  investment  trust  that is listed on the New York  Stock  Exchange.  Mr.
Seneff has also served as a Director,  Chairman of the Board and Chief Executive
Officer of CNL Securities Corp.  since 1979; CNL Investment  Company since 1990;
and CNL  Institutional  Advisors,  Inc.,  a  registered  investment  advisor for
pension  plans,  since 1990. Mr. Seneff  formerly  served as a Director of First
Union National Bank of Florida,  N.A.,  and currently  serves as the Chairman of
the  Board of CNL Bank.  Mr.  Seneff  previously  served  on the  Florida  State
Commission  on Ethics and is a former  member and past  Chairman of the State of
Florida  Investment  Advisory Council,  which recommends to the Florida Board of
Administration  investments for various Florida employee  retirement  funds. The
Florida Board of Administration,  Florida's  principal  investment  advisory and
money  management  agency,  oversees the  investment of more than $60 billion of
retirement funds. Mr. Seneff received his degree in Business Administration from
Florida State University in 1968.

         Robert A.  Bourne,  age 53. Mr.  Bourne has  participated  as a general
partner  or  co-venturer  in over  100  real  estate  ventures  involved  in the
financing,  acquisition,   construction,  and  leasing  of  restaurants,  office
buildings,  apartment  complexes,  hotels,  and other real estate. Mr. Bourne is
Director and Vice  Chairman of the Board of Directors of APF. Mr.  Bourne served
as President of APF from 1994 through February 1999. He also served as Treasurer
from February 1999 through August 1999 and from May 1994 through  December 1994.
He also served in various  executive  positions  with the  Advisor  prior to its
merger with APF  including,  President  from 1994 through  September  1997,  and
Director  from 1994 through  August 1999.  Mr.  Bourne  serves as President  and
Treasurer of CNL Financial Group,  Inc.  (formerly CNL Group,  Inc.);  Director,
Vice Chairman of the Board and President of CNL Hospitality Properties,  Inc., a
public,  unlisted  real  estate  investment  trust;  as well  as,  Director  and
President of CNL Hospitality Corp., its advisor. In addition,  Mr. Bourne serves
as Director and President of CNL Retirement Properties, Inc., a public, unlisted
real  estate  investment  trust;  as well as, a Director  and  President  of its
advisor,  CNL Retirement Corp. Mr. Bourne also serves as a Director of CNL Bank.
He has  served as a  Director  since  1992,  Vice  Chairman  of the Board  since
February  1996,  Secretary  and Treasurer  from February 1996 through 1997,  and
President from July 1992 through  February 1996, of Commercial Net Lease Realty,
Inc.,  a public  real  estate  investment  trust  listed  on the New York  Stock
Exchange.  Mr.  Bourne also serves as  Director,  President  and  Treasurer  for
various  affiliates of CNL  Financial  Group,  Inc.  including,  CNL  Investment
Company, CNL Securities Corp. and CNL Institutional Advisors, Inc., a registered
investment advisor for pension plans. Mr. Bourne began his career as a certified
public accountant  employed by Coopers & Lybrand,  Certified Public Accountants,
from 1971 through  1978,  where he attained the position of Tax Manager in 1975.
Mr. Bourne  graduated from Florida State  University in 1970 where he received a
B.A. in Accounting, with honors.

         Curtis B.  McWilliams,  age 45. Mr.  McWilliams  has served as Co-Chief
Executive  Officer of APF since  December  2000 and  previously  served as Chief
Executive  Officer from  September  1999  through  December  2000.  Prior to the
acquisition  of the  Advisor,  Mr.  McWilliams  served as  President of APF from
February 1999 until  September 1999. From April 1997 to February 1999, he served
as Executive Vice President of APF. Mr.  McWilliams  joined CNL Financial Group,
Inc.  (formerly CNL Group,  Inc.) in April 1997 and served as an Executive  Vice
President until September 1999. In addition,  Mr. McWilliams served as President
of the  Advisor  and CNL  Financial  Services,  Inc.  from  April 1997 until the
acquisition  of such  entities by APF in September  1999.  From  September  1983
through  March 1997,  Mr.  McWilliams  was  employed by Merrill  Lynch & Co. The
majority  of his career at Merrill  Lynch & Co.  was in the  Investment  Banking
division  where he served as a  Managing  Director.  Mr.  McWilliams  received a
B.S.E. in Chemical Engineering from Princeton University in 1977 and a Master of
Business  Administration  degree  with  a  concentration  in  finance  from  the
University of Chicago in 1983.

         John T. Walker, age 42. Mr. Walker has served as President of APF since
September 1999 and as Chief Operating  Officer since March 1995. Mr. Walker also
served as a board member of CNL Restaurant Property Services, Inc., a subsidiary
of APF from  December  1999  until  December  2000.  Previously,  he  served  as
Executive Vice President of APF from January 1996 to September  1999. Mr. Walker
joined the Advisor in September  1994, as Senior Vice President  responsible for
Research  and  Development.  He  served as the Chief  Operating  Officer  of the
Advisor from April 1995 until  September  1999 and as Executive  Vice  President
from January 1996 until  September  1999,  at which time it merged with APF. Mr.
Walker also served as Executive  Vice President of CNL  Hospitality  Properties,
Inc. and CNL Hospitality Corp.  (formerly CNL Hospitality  Advisors,  Inc.) from
1997 to October 1998. From May 1992 to May 1994, he was Executive Vice President
for Finance and  Administration  and Chief Financial Officer of Z Music, Inc., a
cable   television   network   which  was   subsequently   acquired  by  Gaylord
Entertainment, where he was responsible for overall financial and administrative
management  and planning.  From January 1990 through April 1992,  Mr. Walker was
Chief Financial  Officer of the First Baptist Church in Orlando,  Florida.  From
April 1984 through  December  1989, he was a partner in the  accounting  firm of
Chastang,  Ferrell & Walker,  P.A.,  where he was the partner in charge of audit
and  consulting  services,  and  from  1981 to  1984,  Mr.  Walker  was a Senior
Consultant/Audit Senior at Price Waterhouse.  Mr. Walker is a cum laude graduate
of Wake Forest  University  with a Bachelor of Science degree in Accountancy and
is a certified public accountant.

         Steven  D.  Shackelford,  age  37.  Mr.  Shackelford  was  promoted  to
Executive  Vice  President and Chief  Financial  Officer of APF in July 2000. He
served as Senior Vice President and Chief Financial Officer of APF since January
1997.  Mr.  Shackelford  also served as  Secretary  and  Treasurer  of APF since
September  1999. He also served as Chief  Financial  Officer of the Advisor from
September 1996 to September 1999. From March 1995 to July 1996, Mr.  Shackelford
was a senior manager in the national office of Price Waterhouse LLP where he was
responsible  for advising  foreign clients seeking to raise capital and a public
listing in the United  States.  From August 1992 to March 1995, he was a manager
in the Paris, France office of Price Waterhouse,  serving several multi-national
clients.  Mr. Shackelford was an audit staff and senior from 1986 to 1992 in the
Orlando, Florida office of Price Waterhouse. Mr. Shackelford received a Bachelor
of  Arts  degree  in  Accounting,   with  honors,   and  a  Master  of  Business
Administration  degree from Florida State  University and is a certified  public
accountant.


Item 11.  Executive Compensation

         Other than as  described in Item 13, the  Partnership  has not paid and
does not intend to pay any executive compensation to the General Partners or any
of their affiliates.  There are no compensatory plans or arrangements  regarding
termination of employment or change of control.
Item 12.  Security Ownership of Certain Beneficial Owners and Management

         As of March 15,  2001,  no person was known to the  Registrant  to be a
beneficial owner of more than five percent of the Units.

         The following  table sets forth,  as of March 15, 2001,  the beneficial
ownership interests of the General Partners in the Registrant.

           Title of Class              Name of Partner          Percent of Class
           --------------              ---------------          ----------------

  General Partnership Interests       James M. Seneff, Jr.               45%
                                      Robert A. Bourne                   45%
                                      CNL Realty Corporation             10%
                                                                     --------
                                                                        100%
                                                                     ========

         Neither the General  Partners,  nor any of their  affiliates,  owns any
interest in the Registrant, except as noted above.




<PAGE>


Item 13.    Certain Relationships and Related Transactions

      The table below summarizes the types,  recipients,  methods of computation
and  amounts  of  compensation,  fees and  distributions  paid or payable by the
Partnership  to the General  Partners  and their  affiliates  for the year ended
December 31, 2000,  exclusive of any distributions to which the General Partners
or their affiliates may be entitled by reason of their purchase and ownership of
Units.
<TABLE>
<CAPTION>
<S> <C>
                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         and Recipient                         Method of Computation                  Ended December 31, 2000
---------------------------------      --------------------------------------      ------------------------------

Reimbursement  to affiliates for       Operating  expenses are reimbursed at       Accounting and administrative
operating expenses                     the  lower of cost or 90  percent  of       services:  $88,356
                                       the   prevailing    rate   at   which
                                       comparable  services  could have been
                                       obtained   in  the  same   geographic
                                       area.   Affiliates   of  the  General
                                       Partners  from  time  to  time  incur
                                       certain operating  expenses on behalf
                                       of  the  Partnership  for  which  the
                                       Partnership       reimburses      the
                                       affiliates without interest.

Annual, subordinated                   One  percent  of  the  sum  of  gross       $-0-
management fee to affiliates           operating  revenues  from  Properties
                                       wholly owned by the Partnership plus
                                       the Partnership's allocable share of
                                       gross revenues of joint ventures in
                                       which    the    Partnership  is  a
                                       co-venturer, subordinated to certain
                                       minimum returns to the Limited
                                       Partners. The management fee will
                                       not exceed competitive fees for
                                       comparable   services.   Due  to  the
                                       fact    that     these    fees    are
                                       non-cumulative, if the Limited
                                       Partners have not received  their 10%
                                       Preferred Return in any particular
                                       year, no management  fees will be due
                                       or payable for such year.
<PAGE>

                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         and Recipient                         Method of Computation                  Ended December 31, 2000
---------------------------------      --------------------------------------      ------------------------------

Deferred,    subordinated   real       A deferred,  subordinated real estate       $118,458
estate  disposition  fee payable       disposition  fee,  payable  upon sale
to affiliates.                         of  one  or  more  Properties,  in an
                                       amount  equal  to the  lesser  of (i)
                                       one-half of a competitive real
                                       estate commission, or (ii) three
                                       percent of the sales price of such
                                       Property or Properties. Payment of
                                       such  fee   shall  be  made  only  if
                                       affiliates of the General Partners
                                       provide a substantial amount of
                                       services in connection with the sale
                                       of a Property or Properties and
                                       shall be subordinated to certain
                                       minimum returns to the Limited
                                       Partners.  However,  if the net sales
                                       proceeds   are    reinvested   in   a
                                       replacement Property, no such real
                                       estate disposition fee will be
                                       incurred until such replacement
                                       Property   is  sold  and  the  net sales
                                       proceeds are distributed.

General   Partners'    deferred,       A deferred,  subordinated share equal       $-0-
subordinated       share      of       to   one   percent   of   Partnership
Partnership net cash flow              distributions   of  net  cash   flow,
                                       subordinated to certain minimum
                                       returns to the Limited Partners.

General   Partners'    deferred,       A deferred,  subordinated share equal       $-0-
subordinated       share      of       to  five   percent   of   Partnership
Partnership  net sales  proceeds       distributions   of  such  net   sales
from  a  sale  or  sales  not in       proceeds,   subordinated  to  certain
liquidation of the Partnership         minimum   returns   to  the   Limited
                                       Partners

<PAGE>
                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         and Recipient                         Method of Computation                  Ended December 31, 2000
---------------------------------      --------------------------------------      ------------------------------

General   Partners'   share   of       Distributions  of net sales  proceeds       $-0-
Partnership  net sales  proceeds       from   a    sale    or    sales    of
from  a   sale   or   sales   in       substantially      all     of     the
liquidation of the Partnership         Partnership's    assets    will    be
                                       distributed in the following order
                                       or priority: (i) first, to pay all
                                       debts   and    liabilities   of   the
                                       Partnership    and    to    establish
                                       reserves; (ii) second, to Partners
                                       with positive capital account
                                       balances, determined after the
                                       allocation  of net income,  net loss,
                                       gain and loss, in proportion to such
                                       balances, up to amounts sufficient
                                       to reduce such balances to zero; and
                                       (iii) thereafter, 95% to the Limited
                                       Partners and 5% to the General Partners.
</TABLE>

<PAGE>


                                     PART IV

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

(a)   The following documents are filed as part of this report.

1. Financial Statements

                  Report of Independent Certified Public Accountants

                  Balance Sheets at December 31, 2000 and 1999

                  Statements  of Income for the years ended  December  31, 2000,
                  1999 and 1998

                  Statements of Partners'  Capital for the years ended  December
                  31, 2000, 1999 and 1998

                  Statements  of Cash  Flows for the years  ended  December  31,
                  2000, 1999 and 1998

                  Notes to Financial Statements

2. Financial Statement Schedules

                  Schedule II - Valuation and Qualifying  Accounts for the years
                  ended December 31, 2000, 1999 and 1998

                  Schedule  III - Real Estate and  Accumulated  Depreciation  at
                  December 31, 2000

                  Notes  to  Schedule   III  -  Real   Estate  and   Accumulated
                  Depreciation at December 31, 2000

                  All other Schedules are omitted as the required information is
                  inapplicable  or is presented in the  financial  statements or
                  notes thereto.

3. Exhibits

                  3.1      Certificate of Limited Partnership of CNL Income Fund
                           IV, Ltd.  (Included as Exhibit 3.1 in Amendment No. 1
                           to  Registration  Statement No. 33-20249 on Form S-11
                           and incorporated herein by reference.)

                  3.2      Amended and Restated  Agreement  and  Certificate  of
                           Limited  Partnership  of CNL  Income  Fund  IV,  Ltd.
                           (Included  as Exhibit 3.2 to Form 10-K filed with the
                           Securities and Exchange Commission on March 31, 1994,
                           and incorporated herein by reference.)

                  4.1      Certificate of Limited Partnership of CNL Income Fund
                           IV, Ltd.  (Included as Exhibit 3.1 in Amendment No. 1
                           to  Registration  Statement No. 33-20249 on Form S-11
                           and incorporated herein by reference.)

                  4.2      Amended and Restated  Agreement  and  Certificate  of
                           Limited  Partnership  of CNL  Income  Fund  IV,  Ltd.
                           (Included  as Exhibit 3.2 to Form 10-K filed with the
                           Securities and Exchange Commission on March 31, 1994,
                           and incorporated herein by reference.)

                  10.1     Property  Management  Agreement  (Included as Exhibit
                           10.1 to Form  10-K  filed  with  the  Securities  and
                           Exchange   Commission   on  March   31,   1994,   and
                           incorporated herein by reference.)

                  10.2     Assignment of Property Management  Agreement from CNL
                           Investment Company to CNL Income Fund Advisors,  Inc.
                           (Included as Exhibit 10.2 to Form 10-K filed with the
                           Securities and Exchange Commission on March 30, 1995,
                           and incorporated herein by reference.)

                  10.3     Assignment of Property Management  Agreement from CNL
                           Income Fund Advisors, Inc. to CNL Fund Advisors, Inc.
                           (Included as Exhibit 10.3 to Form 10-K filed with the
                           Securities and Exchange  Commission on April 1, 1996,
                           and incorporated herein by reference.)

         (b)      The Registrant  filed no reports on Form 8-K during the period
                  from October 1, 2000 through December 31, 2000.

<PAGE>

                                   SIGNATURES

      Pursuant  to the  requirements  of Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the  undersigned,  thereunto duly  authorized,  on the 28th day of
March, 2001.


                              CNL INCOME FUND IV, LTD.

                              By:        CNL REALTY CORPORATION
                                         General Partner

                                         /s/ Robert A. Bourne
                                         --------------------------------------
                                         ROBERT A. BOURNE, President



                              By:        ROBERT A. BOURNE
                                         General Partner


                                         /s/ Robert A. Bourne
                                         --------------------------------------
                                         ROBERT A. BOURNE



                              By:        JAMES M. SENEFF, JR.
                                         General Partner


                                         /s/ James M. Seneff, Jr.
                                         --------------------------------------
                                         JAMES M. SENEFF, JR.


<PAGE>





      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
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
<S> <C>
             Signature                                    Title                                    Date

     /s/ Robert A. Bourne                 President, Treasurer and Director                March 28, 2001
     ---------------------------
     Robert A. Bourne                     (Principal Financial and Accounting
                                          Officer)

     /s/ James M. Seneff, Jr.             Chief Executive Officer and Director             March 28, 2001
     ---------------------------
     James M. Seneff, Jr.                 (Principal Executive Officer)

</TABLE>


<PAGE>



                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                  Years Ended December 31, 2000, 1999, and 1998

<TABLE>
<CAPTION>
<S> <C>
                                                     Additions                           Deductions
                                          ---------------------------------    -------------------------------
                                                                                                          Collected
                                                                                                          or Deter-
                                   Balance at       Charged to       Charged to           Deemed          mined to       Balance
                                    Beginning       Costs and           Other           Uncollec-          be Col-       at End
  Year          Description          of Year         Expenses         Accounts            tible           lectible       of Year
----------    -----------------   --------------  ---------------  ----------------    -------------     ------------  ------------

  1998         Allowance for
                  doubtful
                  accounts (a)        $ 295,580          $    --        $   26,370 (b)    $   3,303 (c)     $ 60,006     $ 258,641
                                  ==============  ===============  ================    =============     ============  ============
  1999        Allowance for
                  doubtful
                  accounts (a)        $ 258,641          $    --        $   18,765 (b)    $   7,167 (c)     $ 55,210     $ 215,029
                                  ==============  ===============  ================    =============     ============  ============

  2000        Allowance for
                  doubtful
                  accounts (a)        $ 215,029       $   28,953        $  153,383 (b)       $   --         $ 95,848     $ 301,517
                                  ==============  ===============  ================    =============     ============  ============
</TABLE>


         (a) Deducted from receivables on the balance sheet.

         (b) Reduction of rental and other income.

         (c) Amounts written off as uncollectible.


<PAGE>

<TABLE>
<CAPTION>
<S><C>

                                                                                       Costs Capitalized
                                                                                       Subsequent to
                                                         Initial Cost                  Acquisition
                                            ----------------------------    ---------- ----------
                              Encum-                        Buildings and    Improve-     Carrying
                             brances           Land          Improvements     ments       Costs
                            -----------     ------------    ------------    -----------   -------
Properties the Partnership
  has Invested in Under
  Operating Leases:

    Arby's Restaurants:
      Winchester, Indiana       -              $287,769               -       $567,785         -
      Portland, Indiana         -               187,928               -        657,931         -

    Boston Market Restaurant:
      Richmond, Virginia                        504,169         522,025              -         -

    Captain D's Restaurants:
      Alexander City, Alabama   -               120,210         279,689              -         -
      Oak Ridge, Tennessee      -               169,951         281,686              -         -

    Checkers Drive-In Restaurant:
      Miami, Florida            -               174,336               -              -         -

    Denny's Restaurants:
      Marion, Ohio              -               135,407         334,665              -         -
      Dundee, Michigan          -               251,650               -        372,278         -

    Golden Corral Family
      Steakhouse Restaurants:
          Franklin, Indiana     -               107,560         586,375              -         -
          Streator, Illinois    -               161,616         650,934              -         -

    Jack in the Box Restaurant:
      San Antonio, Texas        -               352,957               -        368,702         -

    Pizza Hut Restaurants:
      Memphis, Texas            -                26,510         231,874              -         -
      Carthage, Texas           -                40,444         232,823              -         -
      Crystal City, Texas       -                 8,826         178,570              -         -
      Sequin, Texas             -                63,708         184,279              -         -
      Washington, D.C.          -               191,737               -              -         -

    Shoney's Restaurants:
      Alexander City, Alabama   -               202,438         428,406              -         -
      Brookhaven, Mississippi   -               312,574         452,601              -         -
      Auburn, Alabama           -               363,432         426,123              -         -

    Taco Bell Restaurant:
      Edgewood, Maryland        -               440,355               -        523,478         -


    Wendy's Old Fashioned
           Hamburger Restaurants:
                Mechanicsville, -irginia        346,627         502,117              -         -
                Tampa, Florida  -               530,456         432,958              -         -
                Tampa, Florida  -               476,755         368,405              -         -

    Other Restaurants:
             Corpus Christi, Tex-s              204,287               -        460,804         -
                Maywood, Illinoi- (i)           310,966               -        443,473         -
                Palm Bay, Florid- (m)           469,927         365,128        310,677         -
                                            ------------    ------------    -----------   -------

                                             $6,442,595      $6,458,658     $3,705,128         -
                                            ============    ============    ===========   =======

Property of Joint  Venture in Which
    the   Partnership   has  a  51%
    Interest  and has  Invested  in
    Under an Operating Lease:

      Denny's Restaurant:
           Holland, Michigan    -              $295,987               -       $780,451         -
                                            ============    ============    ===========   =======

Property of Joint  Venture in Which
    the  Partnership  has  a  26.6%
    Interest  and has  Invested  in
    Under an Operating Lease:

      Po Folks Restaurant:
           Titusville, Florida (-)             $271,350               -       $750,985         -
                                            ============    ============    ===========   =======

Property of Joint  Venture in Which
    the   Partnership   has  a  57%
    Interest  and has  Invested  in
    Under an Operating Lease:

      Waffle House Restaurant:
           Cocoa, Florida                      $183,229        $192,857              -         -
                                            ============    ============    ===========   =======

Property of Joint  Venture in Which
    the  Partnership  has  a  96.1%
    Interest  and has  Invested  in
    Under an Operating Lease:

      KFC Restaurant:
           Auburn, Massachusetts-              $484,362               -              -         -
                                            ============    ============    ===========   =======

Property of Joint  Venture in Which
    the  Partnership  has a  68.87%
    Interest  and has  Invested  in
    Under an Operating Lease:

      Denny's Restaurant:
           Kingsville, Texas (k)-              $270,189               -       $243,326         -
                                            ============    ============    ===========   =======

Property in Which the Partner- ship
    has   a   53%    Interest    as
    Tenants-in-Common    and    has
    Invested in Under an  Operating
    Lease:

      Golden Corral Family
           Steakhouse Restaurant:
               Clinton, North Ca-olina         $138,382        $676,588              -         -
                                            ============    ============    ===========   =======

Property of Joint  Venture in Which
    the  Partnership  has a  35.71%
    Interest  and has  Invested  in
    Under an Operating Lease:

      IHOP Restaurant:
           Warren, Michigan     -              $507,965        $889,080              -         -
                                            ============    ============    ===========   =======

Property in Which  the  Partnership
    has a 76%  Interest as Tenants-
    in-Common  and has  Invested in
    Under an Operating Lease:

      Arby's Restaurant:
          Zephyrhills, Florida  -              $260,146        $441,434              -         -
                                            ============    ============    ===========   =======

Properties the Partnership has
    Invested in Under Direct
    Financing Leases:

      Pizza Hut Restaurant:
           Washington, D. C.    -                     -        $459,543              -         -
                                            ============    ============    ===========   =======

Property of Joint Venture in
    Which the Partnership has a
    96.1% Interest and has Invested
    in Under a Direct Financing
    Lease:

      KFC Restaurant:
           Auburn, Massachusetts-                     -               -       $434,947         -
                                            ============    ============    ===========   =======




                      Gross Amount at Which                                              Life on Which
                 Carried at Close of Period (c)                                          Depreciation in
     -------------------------------------------                 Date                    Latest Income
                     Buildings and                 Accumulated   of Con-     Date        Statement is
        Land         Improvements      Total       Depreciation  struction  Acquired       Computed
     ------------    -----------    ------------   ----------    -------    --------     ------------





        $287,769       $567,785        $855,554     $198,190      1988       07/88           (b)
         187,928        657,931         845,859      218,379      1989       11/88           (b)


         504,169        522,025       1,026,194       69,651      1996       12/96           (b)


         120,210        279,689         399,899      112,106      1988       12/88           (b)
         169,951        281,686         451,637      112,932      1988       12/88           (b)


         174,336              -         174,336           (g)      -         06/94           (g)


         135,407        334,665         470,072       93,395      1989       10/88           (h)
         251,650        372,278         623,928      150,980      1988       10/88           (b)



         107,560        586,375         693,935      244,323      1988       06/88           (b)
         161,616        650,934         812,550      267,606      1988       08/88           (b)


         352,957        368,702         721,659      145,433      1989       11/88           (b)


          26,510        231,874         258,384       95,004      1985       09/88           (b)
          40,444        232,823         273,267       95,393      1981       09/88           (b)
           8,826        178,570         187,396       73,164      1981       09/88           (b)
          63,708        184,279         247,987       75,503      1974       09/88           (b)
         191,737             (f)        191,737            -      1986       01/89           (d)


         202,438        428,406         630,844      171,714      1988       12/88           (b)
         312,574        452,601         765,175      181,453      1988       12/88           (b)
         363,432        426,123         789,555      170,838      1988       12/88           (b)


         440,355        523,478         963,833      207,210      1989       10/88           (b)




         346,627        502,117         848,744      202,241      1988       12/88           (b)
         530,456        432,958         963,414      173,270      1984       12/88           (b)
         476,755        368,405         845,160      147,437      1987       12/88           (b)


         204,287        460,804         665,091      186,592      1988       10/88           (b)
         310,966        443,473         754,439      176,168      1988       09/88           (b)
         469,927        675,805       1,145,732      264,665      1989       12/88           (b)
     ------------    -----------    ------------   ----------

      $6,442,595     $10,163,786    $16,606,381    $3,833,647
     ============    ===========    ============   ==========








        $295,987       $780,451      $1,076,438     $316,516      1988       11/88           (b)
     ============    ===========    ============   ==========








        $271,350       $750,985      $1,022,335     $279,866      1988       12/88           (b)
     ============    ===========    ============   ==========








        $183,229       $192,857        $376,086      $70,779      1986       12/89           (b)
     ============    ===========    ============   ==========








        $484,362             (f)       $484,362            -      1989       05/89           (d)
     ============                   ============   ==========








        $270,189       $243,326        $513,515      $25,614      1988       10/88           (d)
     ============    ===========    ============   ==========









        $138,382       $676,588        $814,970     $111,379      1996       01/96           (b)
     ============    ===========    ============   ==========








        $507,965       $889,080      $1,397,045      $68,041      1998       09/98           (b)
     ============    ===========    ============   ==========







        $260,146       $441,434        $701,580      $28,734      1990       01/99           (b)
     ============    ===========    ============   ==========






               -             (f)             (f)          (d)     1986       01/89           (d)
     ============








               -             (f)             (f)          (d)     1989       05/89           (d)

</TABLE>



                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

        NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 2000


     (a)  Transactions in real estate and accumulated  depreciation during 2000,
          1999, and 1998 are summarized as follows:

<TABLE>
<CAPTION>
<S> <C>
                                                                                           Accumulated
                                                                           Cost            Depreciation
                                                                      ----------------   -----------------
         Properties the Partnership has Invested
           in Under Operating Leases:

              Balance, December 31, 1997                                 $ 22,012,766        $  3,844,432
              Dispositions                                                 (2,781,698 )          (525,304 )
              Depreciation expense                                                 --             425,481
                                                                      ----------------   -----------------

              Balance, December 31, 1998                                   19,231,068           3,744,609
              Depreciation expense                                                 --             405,488
                                                                      ----------------   -----------------

              Balance, December 31, 1999                                   19,231,068           4,150,097
              Dispositions                                                 (2,624,687 )          (692,463 )
              Depreciation expense                                                 --             376,013
                                                                      ----------------   -----------------

              Balance, December 31, 2000                                 $ 16,606,381        $  3,833,647
                                                                      ================   =================

         Property of Joint Venture in Which the Partnership has
           a 51% Interest and has Invested in Under an
           Operating Lease:

              Balance, December 31, 1997                                 $  1,076,438         $   238,471
              Depreciation expense                                                 --              26,015
                                                                      ----------------   -----------------

              Balance, December 31, 1998                                    1,076,438             264,486
              Depreciation expense                                                 --              26,015
                                                                      ----------------   -----------------

              Balance, December 31, 1999                                    1,076,438             290,501
              Depreciation expense                                                 --              26,015
                                                                      ----------------   -----------------

              Balance, December 31, 2000                                 $  1,076,438         $   316,516
                                                                      ================   =================
</TABLE>


<PAGE>


                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

   NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION CONTINUED

                                December 31, 2000

<TABLE>
<CAPTION>
<S> <C>
                                                                                            Accumulated
                                                                            Cost            Depreciation
                                                                       ----------------   -----------------
          Property of Joint Venture in Which the Partnership has
            a 26.6% Interest and has Invested in Under an
            Operating Lease:

               Balance, December 31, 1997                                 $  1,022,335         $   225,296
               Depreciation expense                                                 --              20,010
                                                                       ----------------   -----------------

               Balance, December 31, 1998                                    1,022,335             245,306
               Depreciation expense                                                 --              17,624
                                                                       ----------------   -----------------

               Balance, December 31, 1999 (j)                                1,022,335             262,930
               Depreciation expense                                                 --              16,936
                                                                       ----------------   -----------------

               Balance, December 31, 2000 (j)                             $  1,022,335         $   279,866
                                                                       ================   =================

          Property of Joint Venture in Which the  Partnership has
            a 57% Interest and has Invested in Under an
            Operating Lease:

               Balance, December 31, 1997                                  $   376,086         $    51,482
               Depreciation expense                                                 --               6,429
                                                                       ----------------   -----------------

               Balance, December 31, 1998                                      376,086              57,911
               Depreciation expense                                                 --               6,429
                                                                       ----------------   -----------------

               Balance, December 31, 1999                                      376,086              64,340
               Depreciation expense                                                 --               6,429
                                                                       ----------------   -----------------

               Balance, December 31, 2000                                  $   376,086         $    70,769
                                                                       ================   =================
</TABLE>


<PAGE>


                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

  NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED

                                December 31, 2000

<TABLE>
<CAPTION>
<S> <C>
                                                                                            Accumulated
                                                                            Cost            Depreciation
                                                                       ----------------   -----------------
          Property of Joint Venture in Which the Partnership has
            a 35.71% Interest and has Invested in Under an
            Operating Lease:

               Balance, December 31, 1997                                     $     --            $     --
               Acquisition                                                   1,397,045                  --
               Depreciation                                                         --               8,769
                                                                       ----------------   -----------------

               Balance, December 31, 1998                                    1,397,045               8,769
               Depreciation expense                                                 --              29,636
                                                                       ----------------   -----------------

               Balance, December 31, 1999                                    1,397,045              38,405
               Depreciation expense                                                 --              29,636
                                                                       ----------------   -----------------

               Balance, December 31, 2000                                 $  1,397,045         $    68,041
                                                                       ================   =================

          Property of Joint Venture in Which the Partnership has
            a 96.1% Interest and has Invested in Under an
            Operating Lease:

               Balance, December 31, 1997                                  $   484,362            $     --
               Depreciation expense (d)                                             --                  --
                                                                       ----------------   -----------------

               Balance, December 31, 1998                                      484,362                  --
               Depreciation expense (d)                                             --                  --
                                                                       ----------------   -----------------

               Balance, December 31, 1999                                      484,362                  --
               Depreciation expense (d)                                             --                  --
                                                                       ----------------   -----------------

               Balance, December 31, 2000                                  $   484,362            $     --
                                                                       ================   =================
</TABLE>


<PAGE>


                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

  NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED

                                December 31, 2000

<TABLE>
<CAPTION>
<S> <C>
                                                                                         Accumulated
                                                                         Cost            Depreciation
                                                                   -----------------   -----------------
       Property of Joint Venture in Which the Partnership has
         a 68.87% Interest and has Invested in Under an
         Operating Lease:

            Balance, December 31, 1997                                  $   270,189            $     --
            Depreciation expense (d)                                             --                  --
                                                                   -----------------   -----------------

            Balance, December 31, 1998 (k)                                  270,189                  --
            Reclassified from net investment in direct
                financing lease                                             243,326                  --
            Depreciation expense                                                 --              12,807
                                                                   -----------------   -----------------

            Balance, December 31, 1999 (h)                                  513,515              12,807
            Depreciation expense                                                 --              12,807
                                                                   -----------------   -----------------

            Balance, December 31, 2000                                  $   513,515         $    25,614
                                                                   =================   =================

       Property in Which the Partnership has a 53% Interest
         as Tenants-in-Common and has Invested in Under an
         Operating Lease:

            Balance, December 31, 1997                                  $   814,970         $    43,720
            Depreciation expense                                                 --              22,553
                                                                   -----------------   -----------------

            Balance, December 31, 1998                                      814,970              66,273
            Depreciation expense                                                 --              22,553
                                                                   -----------------   -----------------

            Balance, December 31, 1999                                      814,970              88,826
            Depreciation expense                                                 --              22,553
                                                                   -----------------   -----------------

            Balance, December 31, 2000                                  $   814,970         $   111,379
                                                                   =================   =================
</TABLE>


<PAGE>


                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

  NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED

                                December 31, 2000

<TABLE>
<CAPTION>
<S> <C>
                                                                                         Accumulated
                                                                         Cost            Depreciation
                                                                   -----------------   -----------------

       Property in Which the Partnership has a 76% Interest
         as Tenants-in-Common and has Invested in Under
         an Operating Lease:

            Balance, December 31, 1998                                     $     --            $     --
            Acquisition                                                     701,580                  --
            Depreciation expense                                                 --              13,532
                                                                   -----------------   -----------------

            Balance, December 31, 1999                                      701,580              13,532
            Depreciation                                                         --              15,202
                                                                   -----------------   -----------------

            Balance, December 31, 2000                                  $   701,580         $    28,734
                                                                   =================   =================
</TABLE>


(b) Depreciation  expense is computed for buildings and improvements  based upon
estimated lives of 30 years.

(c)   As of December 31, 2000, the aggregate cost of the Properties owned by the
      Partnership  and joint  ventures  for  federal  income  tax  purposes  was
      $16,858,382 and $7,061,746, respectively. All of the leases are treated as
      operating leases for federal income tax purposes.

(d)   For financial reporting purposes, the portion of the lease relating to the
      building has been recorded as a direct  financing  lease.  The cost of the
      building  has been  included  in the net  investment  in direct  financing
      leases, therefore, depreciation is not applicable.

(e)   For financial reporting purposes,  the lease for the land and building has
      been  recorded  as a  direct  financing  lease.  The  cost of the land and
      building  has been  included  in the net  investment  in direct  financing
      leases, therefore, depreciation is not applicable.

(f)   For financial reporting purposes, certain components of the lease relating
      to land and  building  have been  recorded  as a direct  financing  lease.
      Accordingly, costs relating to these components are not shown.

(g)   The building  portion of this Property is owned by the tenant;  therefore,
      depreciation is not applicable.

(h)   Effective  January  1,  1994,  the lease for this  Property  was  amended,
      resulting in the  reclassification of the building portion of the lease as
      an  operating  lease.  The  building  was recorded at net book value as of
      January  1,  1994,  and  depreciated  over  remaining  estimated  life  of
      approximately 25 years.

(i)   The  restaurant on the Property in Maywood,  Illinois,  was converted to a
      Dunkin Donuts restaurant and a Holsum Bread bakery in 1993.


<PAGE>


                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)

  NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED

                                December 31, 2000


(j)   For financial reporting  purposes,  the undepreciated cost of the Property
      in Titusville, Florida, was written down to net realizable value due to an
      anticipated impairment in value. The Partnership recognized the impairment
      by recording  allowances  for loss on assets in the amount of $125,251 and
      $147,039 at December 31, 1998 and December 31, 1997, respectively.  During
      1997,  the  operator  of this  Property  vacated the  Property  and ceased
      operations.   The  impairment  at  December  31,  1998,   represented  the
      difference  between the  Property's  carrying  value and the estimated net
      realizable  value of the Property.  No additional  impairment was recorded
      during  1999.  During  2000,  the  Partnership  recognized  an  additional
      impairment  by  recording  allowances  for loss on assets in the amount of
      $227,093. The cost of the Property presented on this schedule is the gross
      amount at which the Property  was carried at December 31, 2000,  excluding
      the allowances for loss on assets.

(k)   For financial reporting  purposes,  the undepreciated cost of the Property
      in Kingsville,  Texas,  was written down to net realizable value due to an
      anticipated impairment in value. The Partnership recognized the impairment
      by recording an allowance  for loss on assets in the amount of $316,113 at
      December  31,  1998.  The tenant of this  Property  experienced  financial
      difficulties  and ceased  payment of rents  under the terms of their lease
      agreement. The impairment at December 31, 1998, represented the difference
      between the  Property's  carrying  value at  December  31,  1998,  and the
      estimated net  realizable  value of the Property.  During 1999,  the joint
      venture  re-leased  the  Property  to  a  new  tenant,  resulting  in  the
      reclassification  of the  building  portion  of the lease as an  operating
      lease. The building was recorded at net book value as of January 15, 1999,
      and depreciated  over the remaining life of  approximately  19 years.  The
      cost of land for this the Property presented on this schedule is the gross
      amount at which the Property  was carried at December 31, 2000,  excluding
      the allowance for loss on assets.

(l)   For financial reporting  purposes,  the undepreciated cost of the Property
      in Palm Bay,  Florida,  was written down to net realizable value due to an
      impairment  in  value.  The  Partnership   recognized  the  impairment  by
      recording  an  allowance  for loss on the assets in the amount of $387,612
      for the year ended December 31, 2000. The impairment at December 31, 2000,
      represented the difference  between the Property's  carrying value and the
      estimated of the net  realizable  value of the  Property.  The cost of the
      Property  presented  on this  schedule  is the  gross  amount at which the
      Property was carried at December 31, 2000,  excluding  the  allowance  for
      loss on assets.


<PAGE>



                                    EXHIBITS





<PAGE>



                                  EXHIBIT INDEX


Exhibit Number

      3.1         Certificate of Limited Partnership of CNL Income Fund IV, Ltd.
                  (Included  as Exhibit 3.1 in Amendment  No. 1 to  Registration
                  Statement No. 33-20249 on Form S-11 and incorporated herein by
                  reference.)

      3.2         Amended and  Restated  Agreement  and  Certificate  of Limited
                  Partnership  of CNL Income Fund IV, Ltd.  (Included as Exhibit
                  3.2 to Form  10-K  filed  with  the  Securities  and  Exchange
                  Commission  on March  31,  1994,  and  incorporated  herein by
                  reference.)

      4.1         Certificate of Limited Partnership of CNL Income Fund IV, Ltd.
                  (Included  as Exhibit 3.1 in Amendment  No. 1 to  Registration
                  Statement No. 33-20249 on Form S-11 and incorporated herein by
                  reference.)

      4.2         Amended and  Restated  Agreement  and  Certificate  of Limited
                  Partnership  of CNL Income Fund IV, Ltd.  (Included as Exhibit
                  3.2 to Form  10-K  filed  with  the  Securities  and  Exchange
                  Commission  on March  31,  1994,  and  incorporated  herein by
                  reference.)

      10.1        Property  Management  Agreement  (Included  as Exhibit 10.1 to
                  Form 10-K filed with the Securities and Exchange Commission on
                  March 31, 1994, and incorporated herein by reference.)

      10.2        Assignment   of  Property   Management   Agreement   from  CNL
                  Investment Company to CNL Income Fund Advisors, Inc. (Included
                  as Exhibit  10.2 to Form 10-K filed  with the  Securities  and
                  Exchange Commission on March 30, 1995, and incorporated herein
                  by reference.)

      10.3        Assignment of Property  Management  Agreement  from CNL Income
                  Fund Advisors,  Inc. to CNL Fund Advisors,  Inc.  (Included as
                  Exhibit  10.3 to Form  10-K  filed  with  the  Securities  and
                  Exchange  Commission on April 1, 1996, and incorporated herein
                  by reference.)