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, 2003

                                       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]

         Indicate by check mark whether the registrant is an  accelerated  filer
(as defined in Exchange Act Rule 12b-2): Yes___ 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 value 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.

         As of December 31, 2000, the  Partnership  owned 34 Properties,  either
directly or indirectly through joint venture or tenancy in common  arrangements.
During the year ended December 31, 2001, the Partnership  sold its Properties in
Palm Bay, Florida and Corpus Christi,  Texas and distributed the majority of the
net sales  proceeds to the Limited  Partners as a special  distribution.  During
2002, the  Partnership  and the joint venture  partner in the  Titusville  Joint
Venture sold its Property and liquidated the joint venture; the Partnership used
the majority of the liquidation  proceeds to pay liabilities of the Partnership.
In 2003, the  Partnership  sold its properties in Portland,  Indiana;  Richmond,
Virginia;  and Maywood,  Illinois.  The Partnership used the majority of the net
sales  proceeds from the sales in Portland,  Indiana and  Richmond,  Virginia to
make a special distribution to the Limited Partners. The remaining proceeds will
be used to make  distributions to the limited partners and to pay liabilities of
the Partnership.

         As of December 31, 2003, the  Partnership  owned 28 Properties.  The 28
Properties include interests in five 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  holds  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  consider  factors such as potential  capital
appreciation,  net cash flow and federal income taxes. 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.

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 21 years (the average  being 18 years),  and expire
between 2004 and 2019. 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
$20,300 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 to  four
five-year  renewal  options  subject  to the same  terms and  conditions  as the
initial lease.  Lessees of 23 of the  Partnership's 28 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 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.

         The tenant of the Property in  Kingsville,  Texas,  owned by Kingsville
Real Estate Joint Venture,  in which the Partnership has a 68.87% interest,  did
not exercise its option to renew its lease. The lease expired in January 2004.

Major Tenants

         During 2003, two lessees of the Partnership,  Shoney's,  Inc. and Tampa
Foods,  L.P.,  each  contributed  more than ten percent of total rental revenues
(including  the  Partnership's  share of total rental  revenues from  Properties
owned by joint  ventures and  Properties  owned with  affiliates  of the General
Partners as tenants-in-common).  As of December 31, 2003, Shoney's, Inc. was the
lessee under leases relating to three restaurants, and Tampa Foods, L.P. was the
lessee relating to two restaurants. It is anticipated that, based on the minimum
rental payments required by the leases,  Shoney's,  Inc. and Tampa Foods,  L.P.,
each will continue to contribute  more than ten percent of total rental revenues
in 2004. In addition,  three Restaurant Chains,  Pizza Hut, Denny's, and Wendy's
Old Fashioned Hamburger  Restaurants  ("Wendy's"),  each accounted for more than
ten percent of total rental revenues in 2003 (including the Partnership's  share
of total rental revenues from Properties  owned by joint ventures and Properties
owned with affiliates of the General Partners as tenants-in-common). In 2004, it
is anticipated that these three Restaurant  Chains each will continue to account
for more than ten percent of the total rental  revenues to which the Partnership
is entitled under the terms of the leases. Any failure of these lessees 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.  As of
December  31,  2003,  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  joint  venture and
tenancy in common arrangements as of December 31, 2003:
<TABLE>
<CAPTION>

 <c>
               Entity Name             Year      Ownership               Partners                   Property

      Holland Joint Venture            1988       51.00 %     CNL Income Fund II, Ltd.         Holland, MI

      Cocoa Joint Venture              1988       57.00%      CNL Income Fund V, Ltd.          Cocoa Beach, FL

      Auburn Joint Venture             1989       96.10%      CNL Income Fund VI, Ltd.         Auburn, MA
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

 <c>
            Entity Name             Year      Ownership               Partners                   Property

      Kingsville Real Estate Joint     1993       68.87%      CNL Income Fund XII, Ltd.        Kingsville, TX
           Venture

      CNL Income Fund IV, Ltd., CNL    1996       53.00%      CNL Income Fund VI, Ltd. CNL     Clinton, NC
           Income Fund VI, CNL                                Income Fund X, Ltd.
           Ltd., Income Fund X,                               CNL Income Fund XV, Ltd.
           Ltd. and CNL Income Fund
           XV, Ltd., Tenants in
           Common

      Warren Joint Venture             1998       35.71%      CNL Income Fund VI, Ltd.         Warren, MI

      CNL Income Fund IV, Ltd. and     1999       76.00%      CNL Income Fund  XVII, Ltd.      Zephyrhills, FL
           CNL Income Fund XVII,
           Ltd., Tenants in Common
</TABLE>

         Each  joint  venture  or  tenancy  in  common  was  formed  to hold one
Property.  Each CNL Income Fund is an affiliate of the General Partners and is a
limited partnership  organized pursuant to the laws of the state of Florida. The
Partnership shares management control equally with the affiliates of the General
Partners.

         The joint  venture and tenancy in common  arrangements  provide for the
Partnership  and its joint venture or tenancy in common partners to share in all
costs and benefits in proportion to each  partner's  percentage  interest in the
entity or  Property.  The  Partnership  and its  partners  are also  jointly and
severally liable for all debts,  obligations and other  liabilities of the joint
venture or tenancy in common.  Net cash flow from  operations is  distributed to
each  joint  venture  or  tenancy  in  common  partner  in  accordance  with its
respective percentage interest in the entity or Property.

         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  partners
to dissolve the joint  venture.  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 until such balances equal zero,
and thereafter in proportion to each joint venture partner's percentage interest
in the joint venture.

         The joint  venture  and  tenancy  in common  agreements  restrict  each
party's ability to sell,  transfer or assign its interest without first offering
it for sale to its partners,  either upon such terms and  conditions as to which
the  parties may agree or, in the event the parties  cannot  agree,  on the same
terms and  conditions  as any offer from a third  party to  purchase  such joint
venture or tenancy in common interest.

         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.


<PAGE>


Certain Management Services

         RAI  Restaurants,  Inc.  (the  "Advisor"),  an affiliate of the General
Partners,  provided certain  services  relating to management of the Partnership
and its  Properties  pursuant to a management  agreement  with the  Partnership.
Under  this  agreement,  the  Advisor,  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.  The Advisor also assists the General  Partners in  negotiating  the
leases.  For these  services,  the  Partnership has agreed to pay the Advisor 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  property  management  agreement,  the  property  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.

         During 2003,  CNL Capital  Management,  Inc.,  ("CCM"),  a wholly owned
subsidiary of CNL Financial  Group,  Inc.,  began  providing  certain  strategic
advisory  services  to  the  General  Partners  relative  to  the  Partnership's
business. CCM is not reimbursed for these services by the Partnership.  CCM also
began  providing  some  accounting  and  portfolio  management  services  to the
Partnership during 2003, through a subcontract with the Advisor.

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,  the officers  and  employees of CNL  Restaurant  Properties,  Inc.
(formerly  CNL  American  Properties  Fund,  Inc.),  the  parent  company of the
Advisor,  and the officers and employees of CCM 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.


Item 2.  Properties

         As of December 31, 2003, the Partnership owned 28 Properties,  of which
21 are owned by the  Partnership  in fee simple,  five are owned  through  joint
venture  arrangements and two are owned through tenancy in common  arrangements.
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.

Description of Properties

         Land. The Partnership's  Property sites, owned directly and indirectly,
range from  approximately  14,100 to 76,147 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.



<PAGE>


         The  following  table lists the  Properties  owned by the  Partnership,
directly and indirectly, as of December 31, 2003 by state.

                State                               Number of Properties

                Alabama                                      3
                Florida                                      5
                Illinois                                     1
                Indiana                                      2
                Maryland                                     1
                Massachusetts                                1
                Michigan                                     3
                Mississippi                                  1
                North Carolina                               1
                Ohio                                         1
                Tennessee                                    1
                Texas                                        6
                Virginia                                     1
                Washington, D.C.                             1
                                                      -----------------
                Total Properties                             28
                                                      =================

         Buildings.  Each of the Properties 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  1,700 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, 2003, 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, 2003, 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  $12,651,645  and
$6,039,412, respectively.

         The  following  table lists the  Properties  owned by the  Partnership,
directly and indirectly, as of December 31, 2003 by Restaurant Chain.

                   Restaurant Chain                  Number of Properties

                   Arby's                                    2
                   Captain D's                               2
                   Checkers                                  1
                   Denny's                                   4
                   Golden Corral                             2
                   IHOP                                      1
                   Jack in the Box                           1
                   KFC                                       1
                   Pizza Hut                                 5
                   Shoney's                                  2
                   Taco Bell                                 1
                   Waffle House                              1
                   Wendy's                                   2
                   Other                                     3
                                                    ---------------------
                   Total Properties                          28
                                                    =====================



<PAGE>


         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
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.

         The  following  is a schedule  of the  average  rent per  property  and
occupancy rate for the years ended December 31:
<TABLE>
<CAPTION>

 <c>
                                       2003              2002               2001             2000              1999
                                   --------------    --------------     -------------    -------------     -------------

Rental revenues (1)(2)               $ 1,766,672        $1,975,618       $ 1,976,264      $ 2,255,228       $ 2,640,100
Properties (2)                                28                31                31               32                37
Average rent per property              $  63,095         $  63,730         $  63,750        $  70,476         $  71,354
Occupancy rate                              100%              100%               97%              94%               97%
</TABLE>


(1)      Rental revenues include the Partnership's share of rental revenues from
         the  Properties  owned  through  joint  venture  and  tenancy in common
         arrangements.

(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, 2003 for the next ten years and thereafter.
<TABLE>
<CAPTION>

 <c>
                                                                                     Percentage of
             Expiration                Number             Annual Rental               Gross Annual
              Year                   of Leases              Revenues                 Rental Income
             -----------------    ----------------    ---------------------    --------------------------

              2004                           1               $   33,058                   1.94%
              2005                          --                       --                      --
              2006                          --                       --                      --
              2007                          --                       --                      --
              2008                          14                  824,753                  48.44%
              2009                           4                  344,143                  20.21%
              2010                           1                   72,803                   4.28%
              2011                           2                   94,573                   5.55%
              2012                          --                       --                      --
              2013                           1                   61,326                   3.60%
              Thereafter                     5                  271,832                  15.98%
                                     ----------        -----------------           -------------
              Total                         28             $  1,702,488                 100.00%
                                     ==========        =================           =============
</TABLE>

         Leases  with Major  Tenants.  The terms of each of the leases  with the
Partnership's  major  tenants as of December  31,  2003 (see Item 1.  Business -
Major  Tenants),  are  substantially  the  same as  those  described  in Item 1.
Business - Leases.

         Shoney's,   Inc.   leases  two  Shoney's   restaurants  and  one  other
restaurant.  The initial  term of each lease is 20 years  (expiring in 2008) and
average minimum base rent is approximately  $75,000 (ranging from  approximately
$64,900 to $81,300).


<PAGE>


         Tampa Foods, L.P. leases one Wendy's Old Fashioned Hamburger Restaurant
and one  Green  Tea  Restaurant.  The  initial  term of each  lease  is 20 years
(expiring  in 2008) and  average  minimum  base rent is  approximately  $101,300
(approximately $108,000 and $94,600, respectively).


Item 3.  Legal Proceedings

         Neither the Partnership, nor its General Partners, nor any affiliate of
the Partnership, 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.


                                     PART II


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

(a)      As of March 12, 2004,  there were 2,852 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 2003,  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 have the right to prohibit  transfer of Units.  From
inception  through  December  2000,  the  price  paid for any  Unit  transferred
pursuant to the Plan  ranged  from $405 to $475 per Unit.  During 2002 and 2003,
due  primarily  to the  sales  of  Properties,  the  price  paid  for  any  Unit
transferred  pursuant to the Plan was $332 and $357 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 2003 and 2002 other than
pursuant to the Plan, net of commissions.
<TABLE>
<CAPTION>

 <c>
                                          2003 (1)                             2002 (1)
                             -----------------------------------  ------------------------------------
                               High         Low        Average      High          Low        Average
                             ----------   --------    ----------  ----------    --------    ----------
      First Quarter              $ 311       $220        $  251       $ 263        $200        $  232
      Second Quarter               334        200           275         259         259           259
      Third Quarter                334        260           295         508          23           249
      Fourth Quarter               325        289           310         325         228           281
</TABLE>

(1)      A total of 359 and 747 Units were  transferred  other than  pursuant to
         the Plan for the years ended December 31, 2003 and 2002, 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,  2003 and  2002,  the  Partnership
declared cash distributions of $2,691,900 and $2,095,788,  respectively,  to the
Limited Partners.  Distributions for the year ended December 31, 2003,  included
$650,000 in special distributions,  as a result of the distribution of net sales
proceeds  from  the  sales  of the  Richmond,  Virginia  and  Portland,  Indiana
Properties.  These special  distributions were effectively a return of a portion
of  the  Limited  Partners'   investment,   although,  in  accordance  with  the
Partnership  Agreement,  $650,000 was applied  toward the Limited  Partners' 10%
Preferred  Return.  The reduced number of Properties  for which the  Partnership
receives rental payments  reduced the  Partnership's  revenues.  Therefore,  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 in the quarter  ended
March 2003. No amounts  distributed to the partners for the years ended December
31, 2003 and 2002, 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                 2003              2002
                -------------------      ---------------    -------------
                March 31                     $1,160,475        $ 523,947
                June 30                         510,475          523,947
                September 30                    510,475          523,947
                December 31                     510,475          523,947

         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>

 <c>
                                         2003           2002             2001           2000            1999
                                     -------------- --------------   -------------- -------------- -----------------
Year ended December 31:
   Continuing operations (2):
      Revenues                         $ 1,393,961    $ 1,401,959      $ 1,574,186    $ 1,818,616     $  2,055,781
      Equity in earnings of
        unconsolidated joint
        ventures                           294,120        315,135          278,224        234,317          303,223
      Income from continuing
        operations (1)                   1,193,105      1,200,250          976,695      2,024,093        1,664,818

   Discontinued Operations (2):
      Revenues                              55,498        207,565          194,900        136,827          243,053
      Income (loss) from and gain
         on disposal of discontinued
         operations (4)                    115,076        (82,805 )        112,399         54,217          162,541

   Net income                            1,308,181      1,117,445        1,089,094      2,078,310        1,827,359

   Income (loss) per unit:
      Continuing operations              $   19.89      $   20.00       $    16.28      $   33.73       $    27.75
      Discontinued operations                 1.91          (1.38 )           1.87           0.91             2.71
                                     -------------- --------------   -------------- -------------- ----------------
                                         $   21.80      $   18.62       $    18.15      $   34.64       $    30.46
                                     ============== ==============   ============== ============== ================

   Cash distributions declared (3)     $ 2,691,900    $ 2,095,788      $ 3,147,894    $ 5,050,000      $ 2,400,000
   Cash distributions declared per
      unit (3)                               45.00          35.00            52.00          84.00            40.00

At December 31:
   Total assets                        $13,209,456    $14,587,910     $ 15,542,775    $17,616,159      $20,828,319
   Partners' capital                    12,374,807     13,758,526       14,736,869     16,795,669       19,767,359
</TABLE>


(1)      Years ended December 31, 2001 and 2000 includes  $178,817 and $439,132,
         respectively,  for provisions for write-down of assets.  Income for the
         years ended  December 31, 2001 and 2000 includes  $120,872 and $92,397,
         from losses on the sale of assets.  Income for the years ended December
         31, 2000 includes $1,134,692 from gains on the sale of assets.

(2)      Certain  items in the  prior  year's  financial  statements  have  been
         reclassified to conform to 2003 presentation.  These  reclassifications
         had no effect on total net income.  The results of operations  relating
         to properties  that were either  disposed of or were classified as held
         for  sale  as  of  December  31,  2003  are  reported  as  discontinued
         operations.  The results of operations relating to properties that were
         identified for sale as of December 31, 2001 but sold  subsequently  are
         reported as continuing operations.

(3)      Distributions  for the years ended  December  31,  2003,  2001 and 2000
         include  special  distributions  to the Limited  Partners of  $650,000,
         $1,050,000 and $2,800,000, respectively, in net sales proceeds from the
         sale of two,  two,  and  four  Properties  in  2003,  2001,  and  2000,
         respectively.

(4)      The year ended  December  31, 2003  includes a gain on the  disposal of
         discontinued  operations of $107,039 and a provision for  write-down of
         assets  of  $36,000.  The year  ended  December  31,  2002  includes  a
         provision for write-down of assets of $210,000.

         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 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.  The leases provide for minimum base
annual  rental   amounts   (payable  in  monthly   installments)   ranging  from
approximately  $20,300 to  $126,600.  The  majority  of the leases  provide  for
percentage  rent, based on sales in excess of a specified  amount.  In addition,
some of the leases provide that,  commencing in specified lease years (generally
the sixth  lease  year),  the annual base rent  required  under the terms of the
lease will increase.

         As of December 31, 2003, the Partnership  owned 21 Properties  directly
and as of December 31, 2002 and 2001, 24 Properties directly.  In addition,  the
Partnership owned seven Properties  indirectly  through joint venture or tenancy
in common arrangements as of December 31, 2003 and 2002, and eight Properties as
of December 31, 2001.

Capital Resources

         For the  years  ended  December  31,  2003,  2002 and  2001,  cash from
operating  activities was $1,594,436,  $1,813,739 and $1,768,652,  respectively.
The decrease in cash from  operating  activities  during the year ended December
31,  2003,  as  compared to 2002,  was a result of changes in the  Partnership's
working capital,  such as the timing of transactions  relating to the collection
of receivables and the payment of expenses,  and changes in income and expenses,
such as changes in rental  revenues  resulting  from the sales of Properties and
changes in operating and Property  related  expenses.  The increase in cash from
operating  activities  during 2002, as compared to 2001, was a result of changes
in the  Partnership's  working  capital,  such  as the  timing  of  transactions
relating to the collection of receivables and the payment of expenses.

         Other sources and uses of cash included the following  during the years
ended December 31, 2003, 2002, and 2001.

         In November 2000, the Partnership  sold its Property in Topeka,  Kansas
to a third party and received net sales proceeds of approximately  $496,400.  In
January 2001,  the  Partnership  distributed  $450,000 of the net sales proceeds
from the sale of this Property as a special distribution to the Limited Partners
and used the remaining net proceeds to pay Partnership liabilities.

         During 2001, the  Partnership  sold its  Properties in Corpus  Christi,
Texas, and Palm Bay,  Florida,  and received net sales proceeds of approximately
$679,900,  resulting in losses of $120,872.  In  connection  with the sale,  the
Partnership  incurred  deferred,  real estate  disposition  fees of $21,023.  In
October 2001,  the  Partnership  distributed  $600,000 of the net sales proceeds
from the sales of these  Properties  as a special  distribution  to the  Limited
Partners and used the remaining net proceeds to pay Partnership liabilities.

         In January 2002,  Titusville  Joint Venture,  in which the  Partnership
owned a 26.6%  interest,  sold its  Property to a third party and  received  net
sales proceeds of  approximately  $165,600  resulting in a gain of approximately
$4,900  to the  joint  venture.  This  Property  was  identified  for sale as of
December 31, 2001. The Partnership  and the joint venture partner  dissolved the
joint venture in accordance with the joint venture agreement and the Partnership
received  approximately  $42,000  representing  its pro rata  share of the joint
venture's liquidating distribution. No gain or loss was recorded relating to the
dissolution  of the joint  venture.  The  Partnership  used the  majority of the
liquidation proceeds to pay liabilities of the Partnership.

         In February  2003,  the  Partnership  sold the  property  in  Portland,
Indiana and received net sales proceeds of approximately $776,100,  resulting in
a gain on disposal of assets of approximately  $129,400.  In connection with the
sale, the Partnership incurred a deferred, subordinated, real estate disposition
fee of approximately $24,000.

         In March 2003, the Partnership sold the Property in Richmond,  Virginia
and received net sales proceeds of approximately  $922,700,  resulting in a loss
on disposal of assets of approximately  $22,400.  The Partnership had recorded a
provision for write-down of assets, of $37,000, relating to this property in the
previous year in  anticipation  of the sale of the property.  In connection with
the sale,  the  Partnership  incurred  a  deferred,  subordinated,  real  estate
disposition fee of $28,500.

         In July 2003, the Partnership sold the property in Maywood, Illinois to
the tenant and received net sales proceeds of  approximately  $346,000.  Because
the Partnership  recorded a provision for write-down of assets of $36,000 during
the year ended  December  31,  2003,  no gain or loss on  disposal of assets was
recognized  relating to this sale.  The  provision  represented  the  difference
between the  carrying  value of the property and its  estimated  fair value.  In
connection  with the sale, the  Partnership  incurred a deferred,  subordinated,
real estate disposition fee of $10,500.

         In December  2003,  the tenant of the  Property in  Kingsville,  Texas,
owned by Kingsville  Real Estate Joint Venture,  in which the  Partnership has a
68.87%  interest,  did not  exercise  its option to renew its  lease.  The lease
expired in January 2004.

         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.

         At December 31, 2003, the Partnership  had $1,338,928  invested in cash
and cash  equivalents  as compared to $405,155 at December 31, 2002. At December
31,  2003,  these funds were held in a demand  deposit  account at a  commercial
bank.  The increase at December 31, 2003,  as compared to December 31, 2002,  is
primarily a result of the Partnership holding a portion of the proceeds from the
sale of the Property in Richmond, Virginia and the net proceeds from the sale of
the Property in Maywood,  Illinois,  pending the Partnership's use of such funds
to pay its  expenses or to make  distributions  to the limited  partners.  As of
December 31, 2003,  the average  interest rate earned by the  Partnership on the
rental income  deposited in demand deposit accounts at commercial banks was less
than one percent  annually.  The funds remaining at December 31, 2003, after the
payment  of  distributions  and  other  liabilities,  will be  used to meet  the
Partnership's working capital needs.


Short-Term Liquidity

         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 net cash
flow in excess of operating expenses.

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

         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.

         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 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
net  sales  proceeds  from  the sale of  Properties,  the  Partnership  declared
distributions to the Limited Partners of $2,691,900, $2,095,788, and $3,147,894,
for the  years  ended  December  31,  2003,  2002 and 2001,  respectively.  This
represents  distributions  of $45,  $35 and $52 per  Unit  for the  years  ended
December 31, 2003, 2002 and 2001, respectively. Distributions for the year ended
December 31, 2003 and 2001, included $650,000 and $1,050,000,  respectively,  in
special  distributions,  as a result of the  distribution  of net sales proceeds
from the sale of several Properties.  These special  distributions,  in 2003 and
2001,  were  effectively  a  return  of  a  portion  of  the  Limited  Partners'
investment, although, in accordance with the Partnership agreement, $650,000 and
$989,873,  respectively,  was applied toward the Limited Partners' 10% Preferred
Return. The remaining balance of $60,127, from the 2001 special distribution was
treated as a return of capital for purposes of calculating the Limited Partners'
10% Preferred  Return.  As a result of the return of capital,  the amount of the
Limited Partners' invested capital contributions (which generally is the Limited
Partners' capital contributions,  less distributions from the sale of a Property
that are  considered to be a return of capital) was  decreased;  therefore,  the
amount of the Limited Partners' invested capital  contributions on which the 10%
Preferred  Return is calculated was lowered  accordingly.  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 two decreases in cash distributions to the Limited Partners
commencing  the  quarters  ended  September  30,  2001 and  March 31,  2003.  No
distributions were made to the General Partners for the years ended December 31,
2003,  2002 and 2001.  No amounts  distributed  to the Limited  Partners for the
years ended  December 31, 2003 and 2002, 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.

         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 years ended December 31, 2003, 2002 and 2001.

         As of December  31, 2003 and 2002,  the  Partnership  owed  $11,194 and
$12,798,  respectively,  to affiliates  for operating  expenses,  accounting and
administrative  services,  and  management  fees.  As of  March  12,  2004,  the
Partnership had reimbursed the affiliates for these amounts. In addition, during
the year ended  December  31, 2003,  the  Partnership  incurred  $62,959 in real
estate  disposition  fees due to an  affiliate  as a result of its  services  in
connection  with the sale of  three  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.


<PAGE>


         Other  liabilities,   including  distributions  payable,  decreased  to
$575,353 at December 31, 2003,  from $631,442 at December 31, 2002. The decrease
is  primarily a result of a decrease in real estate taxes  payable.  The General
Partners  believe that the  Partnership  has sufficient cash on hand to meet its
current working capital needs.

Off-Balance Sheet Transactions

         The Partnership holds interests in various unconsolidated joint venture
and  tenancy  in common  arrangements  that are  accounted  for using the equity
method.  The  General  Partners  do not  believe  that any such  interest  would
constitute an off-balance sheet arrangement requiring any additional disclosures
under the provisions of the Sarbanes-Oxley Act of 2002.

Contractual Obligations, Contingent Liabilities, and Commitments

         The Partnership has no contractual obligations, contingent liabilities,
or commitments as of December 31, 2003.

Long-Term Liquidity

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

Critical Accounting Policies

         The  Partnership's  leases are  accounted  for under the  provisions of
Statement of Financial  Accounting  Standards  No. 13,  "Accounting  for Leases"
("FAS 13"), and have been accounted for using either the direct financing or the
operating  method.  FAS 13 requires  management to estimate the economic life of
the leased  property,  the residual value of the leased property and the present
value of minimum  lease  payments to be received  from the tenant.  In addition,
management  assumes  that all  payments  to be  received  under its  leases  are
collectible.   Changes  in  management's   estimates  or  assumptions  regarding
collectibility  of lease payments could result in a change in accounting for the
lease.

         The Partnership  accounts for its  unconsolidated  joint ventures using
the equity method of accounting. Under generally accepted accounting principles,
the equity method of accounting is  appropriate  for entities that are partially
owned by the  Partnership,  but for which  operations of the investee are shared
with other partners.  The  Partnership's  joint venture  agreements  require the
consent of all partners on all key  decisions  affecting  the  operations of the
underlying Property.

         Management  reviews the  Partnership's  Properties  and  investments in
unconsolidated  entities for impairment at least once a year or whenever  events
or changes in  circumstances  indicate that the carrying  amount of an asset may
not be  recoverable.  The  assessment  is based on the  carrying  amount  of the
Property or investment at the date it is tested for  recoverability  compared to
the sum of the estimated future cash flows expected to result from its operation
and sale through the expected holding period. If an impairment is indicated, the
asset is adjusted to its estimated fair value.

         Effective  January  1,  2002,  the  Partnership  adopted  Statement  of
Financial  Accounting  Standards  No. 144,  "Accounting  for the  Impairment  or
Disposal of Long-Lived  Assets" ("FAS 144").  Accordingly,  when the Partnership
makes the  decision  to sell or commits to a plan to sell a Property  within one
year, its operating results are reported as discontinued operations.

Results of Operations

Comparison of the year ended December 31, 2003 to the year ended December 31,
2002

         Rental revenues from continuing operations were $1,293,931 for the year
ended  December 31, 2003 as compared to  $1,309,560  in the same period in 2002,
decreasing slightly as a result of amendments to the leases of two Properties.


<PAGE>


         During the years ended December 31, 2003 and 2002, the Partnership also
earned  $98,045 and $78,184,  respectively,  in contingent  rental  income.  The
increase in contingent  rental income during 2003, as compared to 2002,  was due
primarily  to an  increase  in  the  reported  gross  sales  of  several  of the
restaurants with leases that require the payment of contingent rental income.

         During the years  ended  December  31, 2003 and 2002,  the  Partnership
earned  $294,120  and  $315,135,  respectively,  attributable  to the net income
earned by  unconsolidated  joint  ventures,  respectively.  Net income earned by
unconsolidated joint ventures decreased slightly during 2003, as compared to the
same period of 2002, due to the fact that  Kingsville Real Estate Joint Venture,
in which the  Partnership  owns a 68.87%  interest,  recorded  a  provision  for
write-down  of assets in the amount of  $30,800,  relating  to its  property  in
Kingsville, Texas because the tenant of the property did not exercise its option
to renew its lease. The lease expired in January 2004. The provision represented
the  difference  between the carrying value of the property at December 31, 2003
and its estimated  fair value.  The lost revenues that will result from the loss
of this lease will have an adverse effect on net income earned by joint ventures
if the joint venture is unable to re-lease the Property in a timely manner.

         During 2003, two lessees of the Partnership,  Shoney's,  Inc. and Tampa
Foods,  L.P.,  each  contributed  more than ten percent of total rental revenues
(including  the  Partnership's  share of total rental  revenues from  Properties
owned by joint  ventures and  Properties  owned with  affiliates  of the General
Partners as tenants-in-common).  As of December 31, 2003, Shoney's, Inc. was the
lessee under leases relating to three restaurants, and Tampa Foods, L.P. was the
lessee relating to two restaurants. It is anticipated that, based on the minimum
rental payments required by the leases,  Shoney's,  Inc. and Tampa Foods,  L.P.,
each will  continue to  contribute  more than ten  percent of the  Partnership's
total rental revenues in 2004. In addition,  three Restaurant Chains, Pizza Hut,
Denny's,  and Wendy's,  each accounted for more than ten percent of total rental
revenues in 2003  (including the  Partnership's  share of total rental  revenues
from Properties  owned by joint ventures and Properties owned with affiliates of
the General  Partners as  tenants-in-common).  In 2004, it is  anticipated  that
these three  Restaurant  Chains each will  continue to account for more than ten
percent of the total rental  revenues to which the Partnership is entitled under
the terms of the leases. Any failure of these lessees or these Restaurant Chains
will materially affect the Partnership's operating results if the Partnership is
unable to re-lease the Property in a timely manner.

         During the years  ended  December  31, 2003 and 2002,  the  Partnership
earned $1,985 and $14,215,  respectively, in interest and other income. Interest
and other income  during 2002 was higher  because the  Partnership  received and
recorded as income proceeds  received from the right of way taking relating to a
parcel of land on its Property in Streator, Illinois.

         Operating expenses,  including  depreciation and amortization  expense,
were  $494,976  and  $516,844  for the years ended  December  31, 2003 and 2002,
respectively. The decrease in operating expenses during 2003, as compared to the
same  period  in  2002,  was  due  to a  decrease  in  the  costs  incurred  for
administrative  expenses for servicing the Partnership  and its Properties.  The
decrease was partially  offset by an increase in state tax expenses  relating to
several states where the Partnership conducts business.

         During the year ended December 31, 2003, the Partnership identified for
sale three Properties,  located in Portland,  Indiana;  Richmond,  Virginia; and
Maywood,  Illinois,  which were  classified  as  Discontinued  Operations in the
accompanying  financial  statements.  In  connection  with  the  sale  of  these
Properties,   the   Partnership   received   aggregate  net  sales  proceeds  of
approximately  $2,044,700,  resulting  in an  aggregate  net gain on disposal of
assets of  $107,000.  In  anticipation  of the sale of the Property in Richmond,
Virginia the  Partnership  had recorded a provision for  write-down of assets in
the previous  year. The  Partnership  had recorded a provision for write-down of
assets of $36,000  during 2003 in  anticipation  of the sale of the  Property in
Maywood,  Illinois.  In addition,  the  Partnership had recorded a provision for
write-down  of  assets  relating  to  this  Property  in a  previous  year.  The
provisions represented the difference between the carrying value of the Property
and  its  estimated  fair  value  at the  end of each  period.  The  Partnership
recognized net rental income (rental revenues less Property related expenses and
provision for  write-down of assets) of $8,037 during 2003 and a net rental loss
(Property  related  expenses and provision for write-down of assets in excess of
rental revenues) of $82,805 during 2002, relating to these three Properties.

         In December 2003, Holland Joint Venture,  in which the Partnership owns
a 51%  interest,  entered  into  negotiations  with a third  party  to sell  the
Property in Holland,  Michigan.  As a result, the joint venture reclassified the
assets  relating to this property from land and building on operating  leases to
real  estate  held for  sale.  The  Property  was  recorded  at the lower of its
carrying amount or fair value less cost to sell. In addition,  the joint venture
stopped  recording  depreciation upon identifying the Property as held for sale.
The financial results for this property are reflected as Discontinued Operations
in the condensed joint venture financial  information presented in the footnotes
to the accompanying financial statements.

Comparison of the year ended December 31, 2002 to the year ended December 31,
2001

         Rental revenues from continuing operations were $1,309,560 for the year
ended  December 31, 2002 as compared to  $1,347,378  in the same period in 2001.
The decrease in rental  revenues  from  continuing  operations  during 2002,  as
compared to the same period in 2001, was partially  attributable  to the sale of
the  Properties  in Palm Bay,  Florida and Corpus  Christi,  Texas  during 2001.
During 2001,  the  Partnership  distributed a portion of the net sales  proceeds
from the sale of these Properties to the Limited Partners,  as a result,  rental
revenues from continuing operations are expected to remain at reduced amounts.

         Rental revenues from continuing  operations also decreased  during 2002
because the  Partnership  entered  into a new lease  relating to the Property in
Streator,  Illinois. The former lease for this Property,  which was scheduled to
expire in December 2002, was terminated by the Partnership and the tenant during
2001. In connection therewith, the Partnership received approximately $67,100 in
lease  termination  income in  consideration  for the Partnership  releasing the
tenant from its  obligations  under the lease.  The  Partnership  re-leased this
Property to a new tenant with terms  substantially the same as the Partnership's
other  leases.  Rents due under the new lease are lower than rents due under the
previous  lease;  therefore,  the  Partnership  expects that rental  revenues in
future period will remain at reduced amounts.  However,  the General Partners do
not anticipate that the decrease in rental  revenues from continuing  operations
relating  to  the  new  lease  will  have  a  material  adverse  affect  on  the
Partnership's financial position or results of operations.

         During the years ended December 31, 2002 and 2001, the Partnership also
earned $78,184 and $81,550, respectively, in contingent rental income.

         During the years  ended  December  31, 2002 and 2001,  the  Partnership
earned  $315,135  and  $278,224,  respectively,  attributable  to the net income
earned by  unconsolidated  joint ventures,  respectively.  Net operating results
reported  by joint  ventures  were lower  during  2001,  as compared to the same
period  in  2002,  due to the fact  that the  tenant  of the  Property  owned by
Titusville Joint Venture (in which the Partnership owned a 26.6% interest in the
profits and losses of the joint  venture)  vacated the Property in 1997, and the
Partnership incurred expenses,  which are of a fixed nature, such as real estate
taxes,  insurance and  maintenance  during 2001. In addition,  during 2001,  the
joint venture  established a provision for write-down of assets for its Property
for approximately  $73,800. The provision represented the difference between the
Property's carrying value at December 31, 2001, and its estimated fair value. In
January 2002, the joint venture sold this Property. This Property was identified
for sale as of December 31, 2001.

         During the years ended December 31, 2002 and 2001, the Partnership also
earned $14,215 and $78,185, respectively, in interest and other income. Interest
and other income during 2001 was higher because the Partnership  earned interest
on the  net  sales  proceeds  received  from  the  sale  of  Properties  pending
distribution to the Limited Partners.  During 2002, the Partnership received and
recorded as income proceeds  received from the right of way taking relating to a
parcel of land on its Property in Streator, Illinois.

         Operating expenses, including depreciation and amortization expense and
provision  for  write-down  of assets,  were $516,844 and $754,843 for the years
ended  December  31, 2002 and 2001,  respectively.  The  decrease  in  operating
expenses  during 2002, as compared to the same period in 2001, was partially due
to a decrease in depreciation expense due to the sale of two Properties in 2001.
In addition, the Partnership recorded a provision 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.  The  decrease in
operating expenses during 2002, as compared to the same period in 2001, was also
partially due to the fact that during 2001, the  Partnership  incurred  expenses
such as legal fees,  repairs and maintenance,  and real estate taxes relating to
several  Properties  with tenants who  experienced  financial  difficulties.  In
addition, state taxes were higher during 2001, as compared to the same period in
2002, due to the fact that the Partnership incurred additional taxes on gains on
sale of assets.

         During 2001,  the  Partnership  recorded a provision for  write-down of
assets of approximately  $178,800 relating to the Property in Palm Bay, Florida.
The tenant defaulted under the terms of its lease and vacated the Property.  The
increase in the provision  represented the difference between the carrying value
of the Property at December 31, 2001, and its estimated fair value.

         As a result of the sales of the Properties in Corpus Christi, Texas and
Palm  Bay,   Florida  during  2001,  the   Partnership   recognized   losses  of
approximately $120,900 during 2001.

         As discussed  above,  the  Properties in Portland,  Indiana,  Richmond,
Virginia and Maywood, Illinois were classified as Discontinued Operations in the
accompanying  financial statements.  In anticipation of the sale of the Property
in Richmond,  Virginia the  Partnership  recorded a provision for  write-down of
assets of $37,000 during 2002.  Also,  during 2002, the  Partnership  recorded a
provision  for  write-down  of assets of $173,000  relating  to the  Property in
Maywood,  Illinois.  The  provisions  represented  the  difference  between  the
carrying  value of the Property and its estimated  fair value.  The  Partnership
recognized  a net rental loss  (Property  related  expenses  and  provision  for
write-down  of assets in excess of rental  revenues) of $82,805  during 2002 and
net rental income (rental revenues less Property  related  expenses) of $112,399
during 2001, relating to these Properties.

         The General Partners continuously  evaluate strategic  alternatives for
the  Partnership,  including  alternatives  to provide  liquidity to the Limited
Partners.

         The  Partnership's  leases  as of  December  31,  2003,  are  generally
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.  Inflation,  overall,  has had a minimal effect on
results of operations of the Partnership.  Continued inflation 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 January 2003,  the Financial  Accounting  Standards  Board  ("FASB")
issued  FASB  Interpretation  No.  46 ("FIN  46"),  "Consolidation  of  Variable
Interest Entities" to expand upon and strengthen  existing  accounting  guidance
that  addresses  when a company  should  include  the  assets,  liabilities  and
activities of another entity in its financial  statements.  To improve financial
reporting by companies involved with variable interest entities, FIN 46 requires
that a variable  interest entity be consolidated by a company if that company is
subject  to a  majority  risk  of  loss  from  the  variable  interest  entity's
activities or entitled to receive a majority of the entity's residual returns or
both.  Prior to FIN 46, a  company  generally  included  another  entity  in its
consolidated  financial  statements  only if it  controlled  the entity  through
voting interests.  In December 2003, the FASB issued FASB Interpretation No. 46R
("FIN 46R"), to clarify some of the provisions of FIN 46. Under FIN 46R, special
effective date provisions apply to entities that have fully or partially applied
FIN 46  prior  to  issuance  of FIN 46R.  Otherwise,  application  of FIN 46R is
required in  financial  statements  of public  entities  that have  interests in
structures that are commonly referred to as special-purpose entities for periods
ending after December 15, 2003. Application by public entities, other than small
business issuers,  for all other types of variable interest entities is required
in financial statements for periods ending after March 15, 2004. The Partnership
did not fully or partially  apply FIN 46 prior to the issuance of FIN 46R. Also,
the Partnership  does not have interests in structures  commonly  referred to as
special-purpose entities.  Therefore,  application of FIN 46R is required in the
Partnership's  financial statements for periods ending after March 15, 2004. The
General  Partners  believe  adoption  of this  standard  may  result  in  either
consolidation  or  additional  disclosure   requirements  of  the  Partnership's
unconsolidated  joint  ventures,  which are  currently  accounted  for under the
equity method.  However,  such  consolidation  is not expected to  significantly
impact the Partnership's results of operations.


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                                    24-36

<PAGE>






               Report of Independent Certified Public Accountants





To the Partners
CNL Income Fund IV, Ltd.


In our opinion,  the accompanying  balance sheets and the related  statements of
income,  of partners'  capital and of cash flows present fairly, in all material
respects,  the financial position of CNL Income Fund IV, Ltd. (a Florida limited
partnership)  at December 31, 2003 and 2002,  and the results of its  operations
and its cash flows for each of the three years in the period ended  December 31,
2003 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 15(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.

As  described in Note 1 to the  financial  statements,  on January 1, 2002,  the
Partnership  adopted  Statement  of  Financial   Accounting  Standards  No.  144
"Accounting for the Impairment or Disposal of Long-Lived Assets."




/s/PricewaterhouseCoopers LLP

Orlando, Florida
March 24, 2004






<PAGE>



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

                                 BALANCE SHEETS
<TABLE>
<CAPTION>

 <c>

                                                                                         December 31,
                                                                                 2003                   2002
                                                                           ------------------     ------------------
                                ASSETS

  Real estate properties with operating leases, net                             $  8,498,647           $  8,750,170
  Net investment in direct financing leases                                          276,945                300,064
  Real estate held for sale                                                               --              1,917,775
  Investment in joint ventures                                                     2,869,536              2,979,763
  Cash and cash equivalents                                                        1,338,928                405,155
  Receivables, less allowance for doubtful accounts
        of $3,214 in 2003                                                             10,207                  9,755
  Accrued rental income                                                              200,145                215,631
  Other assets                                                                        15,048                  9,597
                                                                           ------------------     ------------------

                                                                                $ 13,209,456          $  14,587,910
                                                                           ==================     ==================

                   LIABILITIES AND PARTNERS' CAPITAL

  Accounts payable and accrued expenses                                           $    6,595            $    10,757
  Real estate taxes payable                                                            8,829                 47,973
  Distributions payable                                                              510,475                523,947
  Due to related parties                                                             259,296                197,942
  Rents paid in advance and deposits                                                  49,454                 48,765
                                                                           ------------------     ------------------
          Total liabilities                                                          834,649                829,384

  Partners' capital                                                               12,374,807             13,758,526
                                                                           ------------------     ------------------

                                                                                $ 13,209,456          $  14,587,910
                                                                           ==================     ==================

</TABLE>
                See accompanying notes to financial statements.


<PAGE>


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

                              STATEMENTS OF INCOME
<TABLE>
<CAPTION>

 <c>

                                                                            Year Ended December 31,
                                                                  2003               2002                2001
                                                             ----------------   ----------------    ----------------

Revenues:
   Rental income from operating leases                          $  1,263,483       $  1,276,781        $  1,312,199
   Earned income from direct financing leases                         30,448             32,779              35,179
   Contingent rental income                                           98,045             78,184              81,550
   Lease termination income                                               --                 --              67,073
   Interest and other income                                           1,985             14,215              78,185
                                                             ----------------   ----------------    ----------------
                                                                   1,393,961          1,401,959           1,574,186
                                                             ----------------   ----------------    ----------------
Expenses:
   General operating and administrative                              213,501            239,580             236,921
   Property related                                                    7,001             10,542              42,255
   State and other taxes                                              22,952             14,283              30,350
   Depreciation and amortization                                     251,522            252,439             266,500
   Provision for write-down of assets                                     --                 --             178,817
                                                             ----------------   ----------------    ----------------
                                                                     494,976            516,844             754,843
                                                             ----------------   ----------------    ----------------

Income before loss on sale of assets and equity in
   earnings of unconsolidated joint ventures                         898,985            885,115             819,343

Loss on sale of assets                                                    --                 --            (120,872 )

Equity in earnings of unconsolidated joint ventures                  294,120            315,135             278,224
                                                             ----------------   ----------------    ----------------
Income from continuing operations                                  1,193,105          1,200,250             976,695
                                                             ----------------   ----------------    ----------------

Discontinued operations
   Income (loss) from discontinued operations                          8,037            (82,805 )           112,399
   Gain on disposal of discontinued operations                       107,039                 --                  --
                                                             ----------------   ----------------    ----------------
                                                                     115,076            (82,805 )           112,399
                                                             ----------------   ----------------    ----------------

Net income                                                      $  1,308,181       $  1,117,445        $  1,089,094
                                                             ================   ================    ================

Income (loss) per limited partner unit
   Continuing operations                                          $    19.89         $    20.00          $    16.28
   Discontinued operations                                              1.91              (1.38 )              1.87
                                                             ----------------   ----------------    ----------------
                                                                  $    21.80         $    18.62          $    18.15
                                                             ================   ================    ================

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, 2003, 2002, and 2001
<TABLE>
<CAPTION>

 <c>

                                              General Partners                                          Limited Partners
                                     -----------------------------------    --------------------------------------------------------
                                                          Accumulated                                               Accumulated
                                      Contributions        Earnings          Contributions      Distributions        Earnings
                                     ----------------   ----------------    ----------------   ----------------   ----------------

Balance, December 31, 2000               $   557,804        $   229,547        $ 30,000,000      $ (36,291,711 )     $ 25,740,029

   Distributions to limited
      partners ($52 per limited
      partner unit)                               --                 --             (60,127 )       (3,087,767 )               --
   Net income                                     --                 --                  --                 --          1,089,094
                                     ----------------   ----------------    ----------------   ----------------   ----------------

Balance, December 31, 2001                   557,804            229,547          29,939,873        (39,379,478 )       26,829,123

   Distributions to limited
      partners ($35 per limited
      partner unit)                               --                 --                  --         (2,095,788 )               --
   Net income                                     --                 --                  --                 --          1,117,445
                                     ----------------   ----------------    ----------------   ----------------   ----------------

Balance, December 31, 2002                   557,804            229,547          29,939,873        (41,475,266 )       27,946,568

   Distributions to limited
      partners ($45 per limited
      partner unit)                                                                                 (2,691,900 )
   Net income                                                                                                           1,308,181
                                     ----------------   ----------------    ----------------   ----------------   ----------------

Balance, December 31, 2003               $   557,804        $   229,547        $ 29,939,873      $ (44,167,166 )     $ 29,254,749
                                     ================   ================    ================   ================   ================
</TABLE>

<PAGE>

-----------------
   Syndication
      Costs               Total
  ---------------    ----------------

   $  (3,440,000 )      $ 16,795,669



              --          (3,147,894 )
              --           1,089,094
  ---------------    ----------------

      (3,440,000 )        14,736,869



              --          (2,095,788 )
              --           1,117,445
  ---------------    ----------------

      (3,440,000 )        13,758,526



                          (2,691,900 )
                           1,308,181
  ---------------    ----------------

    $ (3,440,000 )      $ 12,374,807
  ===============    ================



                See accompanying notes to financial statements.


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

                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

 <c>
                                                                          Year Ended December 31,
                                                                2003                2002               2001
                                                           ----------------    ----------------   ----------------


      Cash Flows from Operating Activities:
      Net income                                              $ 1,308,181         $ 1,117,445        $ 1,089,094
                                                           ----------------    ----------------   ----------------

      Adjustments to reconcile net income to net cash
        provided by operating activities:
           Depreciation                                           256,962             306,037            320,213
           Amortization                                               265               2,478              2,363
           Provision for doubtful accounts                                                 --             10,792
           Provision for write-down of assets                      36,000             210,000            178,817
           Loss (gain) on sale of assets                         (107,039  )               --            120,872
           Equity in earnings of joint ventures,
              net of distributions                                110,227              86,295             89,468
           Decrease (increase) in receivables                        (452  )           41,804            (17,164  )
           Decrease in due from related parties                       --                4,531             10,652
           Amortization of investment in direct
              financing leases                                     23,119              23,871             15,754
           Decrease (increase) in accrued rental
              income                                               15,044              (6,359  )         (18,829  )
           Decrease (increase) in other assets                     (3,649  )            4,159              1,174
           Increase (decrease) in accounts
              payable and accrued expenses                         (4,162  )              505            (34,818  )
           Increase (decrease) in  real estate taxes
              payable                                             (39,144  )             (681  )             146
           Increase (decrease) in due to related
              parties                                              (1,605  )            7,957             (3,715  )
           Increase in rents paid in advance and
              deposits                                                689              15,697              3,833
                                                           ----------------    ----------------   ----------------
                Total adjustments                                 286,255             696,294            679,558
                                                           ----------------    ----------------   ----------------

              Net cash provided by operating
                activities                                      1,594,436           1,813,739          1,768,652
                                                           ----------------    ----------------   ----------------

      Cash Flows from Investing Activities:
           Proceeds from sale of real estate properties         2,044,709                  --            679,894
           Liquidating distribution from joint venture                 --              41,984                 --
           Payment of lease costs                                      --                  --            (21,250  )
                                                           ----------------    ----------------   ----------------

              Net cash provided by investing activities         2,044,709              41,984            658,644
                                                           ----------------    ----------------   ----------------

      Cash Flows from Financing Activities:
        Distributions to limited partners                      (2,705,372  )       (2,095,788  )      (3,148,947  )
                                                           ----------------    ----------------   ----------------
              Net cash used in financing activities            (2,705,372  )       (2,095,788  )      (3,148,947  )
                                                           ----------------    ----------------   ----------------

Net increase (decrease) in cash and cash
   equivalents                                                    933,773            (240,065  )        (721,651  )

Cash and cash equivalents at beginning of year                    405,155             645,220          1,366,871
                                                           ----------------    ----------------   ----------------

Cash and cash equivalents at end of year                      $ 1,338,928          $  405,155         $  645,220
                                                           ================    ================   ================
</TABLE>
                See accompanying notes to financial statements.

<PAGE>


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

                      STATEMENTS OF CASH FLOWS - CONTINUED

<TABLE>
<CAPTION>

 <c>
                                                                          Year Ended December 31,
                                                                2003                2002               2001
                                                           ----------------    ----------------   ----------------

Supplemental Schedule of Non-Cash Investing
   and Financing Activities:

      Deferred real estate disposition fees incurred
        and unpaid at December 31                              $   62,959             $    --         $   21,023
                                                           ================    ================   ================

      Distributions declared and unpaid at
        December 31                                            $  510,475          $  523,947         $  523,947
                                                           ================    ================   ================
</TABLE>
                See accompanying notes to financial statements.

<PAGE>

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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


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%  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 real
         estate  property  acquisitions  at cost.  The  properties are leased to
         third parties  generally 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.
         During the years ended December 31, 2003, 2002 and 2001,  tenants paid,
         or are  expected to pay,  directly to real  estate  taxing  authorities
         approximately  $191,900,  $202,200,  and  $193,800,   respectively,  in
         estimated  real  estate  taxes in  accordance  with the  terms of their
         leases.

         The leases of the  Partnership  provide for base minimum  annual rental
         payments payable in monthly installments.  In addition,  certain leases
         provide for  contingent  rental  revenues  based on the tenants'  gross
         sales in  excess  of a  specified  threshold.  The  Partnership  defers
         recognition  of  the  contingent  rental  revenues  until  the  defined
         thresholds  are met.  The leases  are  accounted  for using  either the
         operating or the direct financing method.

              Operating  method - Real estate property 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.

              Direct  financing  method - 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).  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 investment in the
              leases.  For property  leases  classified as direct  financing
              leases,  the  building  portions  of the  majority of property
              leases are accounted for as direct  financing leases while the
              land  portions of these leases are  accounted for as operating
              leases.

         Accrued  rental  income  represents  the  aggregate  amount  of  income
         recognized  on a  straight-line  basis in  excess of  scheduled  rental
         payments to date.



<PAGE>


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

                         NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


1.       Significant Accounting Policies - Continued

         The  majority  of the  leases  are for 15 to 20 years and  provide  for
         minimum and  contingent  rentals.  The lease  options  generally  allow
         tenants  to  renew  the  leases  for two to four  successive  five-year
         periods  subject to the same terms and conditions of 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.

         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 or  deferred  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 estimated fair value.

         When the  collection  of amounts  recorded as rental or other income is
         considered  to be  doubtful,  a provision  is recorded to increase  the
         allowance for doubtful accounts. 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,  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 each
         joint venture agreement requires the consent of all partners on all key
         decisions affecting the operations of the underlying property.

         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. 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 may exceed  federally  insured  levels;
         however,  the  Partnership  has  not  experienced  any  losses  in such
         accounts.

         Lease Costs - Other  assets  include  brokerage  fees  associated  with
         negotiating  leases and 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.


<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


1.       Significant Accounting Policies - Continued

         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 represent a reduction
         of  Partnership  equity and a reduction in the basis of each  partner's
         investment.

         Rents Paid in  Advance - Rents  paid in  advance by lessees  for future
         periods are deferred upon receipt and are recognized as revenues during
         the period in which the rental income is earned.

         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.

         Reclassification   -  Certain  items  in  the  prior  year's  financial
         statements  have been  reclassified  to conform  to 2003  presentation,
         including a change in  presentation of the statement of cash flows from
         the  direct to the  indirect  method.  These  reclassifications  had no
         effect on partner's capital, net income or cash flows.

         Statement of Financial Accounting Standards No. 144 - Effective January
         1, 2002,  the  Partnership  adopted  Statement of Financial  Accounting
         Standards  No.  144  ("FAS  144")  "Accounting  for the  Impairment  or
         Disposal  of  Long-Lived   Assets."  This  statement  requires  that  a
         long-lived  asset be  tested  for  recoverability  whenever  events  or
         changes in  circumstances  indicate that its carrying amount may not be
         recoverable.   The  carrying  amount  of  a  long-lived  asset  is  not
         recoverable  if it  exceeds  the  sum of the  undiscounted  cash  flows
         expected to result from the use and eventual  disposition of the asset.
         The assessment is based on the carrying amount of the asset at the date
         it is tested for recoverability.  An impairment loss is recognized when
         the carrying  amount of a long-lived  asset exceeds its estimated  fair
         value. If an impairment is recognized,  the adjusted carrying amount of
         a long-lived  asset is its new cost basis.  The statement also requires
         that the results of  operations of a component of an entity that either
         has been disposed of or is classified as held for sale be reported as a
         discontinued   operation  if  the  disposal   activity  was   initiated
         subsequent to the adoption of the Standard.

         FASB Interpretation No. 46 - In January 2003, the Financial  Accounting
         Standards Board ("FASB") issued FASB  Interpretation No. 46 ("FIN 46"),
         "Consolidation  of  Variable  Interest  Entities"  to  expand  upon and
         strengthen  existing  accounting guidance that addresses when a company
         should include the assets, liabilities and activities of another entity
         in  its  financial  statements.   To  improve  financial  reporting  by
         companies  involved with variable  interest  entities,  FIN 46 requires
         that a variable  interest  entity be  consolidated by a company if that
         company  is  subject  to a  majority  risk of loss  from  the  variable
         interest  entity's  activities or entitled to receive a majority of the
         entity's residual returns or both. Prior to FIN 46, a company generally
         included another entity in its consolidated  financial  statements only
         if it controlled the entity through voting interests. In December 2003,
         the FASB issued FASB  Interpretation  No. 46R ("FIN  46R"),  to clarify
         some of the provisions of FIN 46. Under FIN 46R, special effective date
         provisions  apply to entities that have fully or partially  applied FIN
         46 prior to issuance of FIN 46R.  Otherwise,  application of FIN 46R is
         required in financial statements of public entities that have interests
         in structures that are commonly referred to as special-purpose entities
         for periods  ending  after  December 15,  2003.  Application  by public
         entities,  other than small  business  issuers,  for all other types of
         variable  interest  entities is required in  financial  statements  for
         periods ending after March 15, 2004. The Partnership did not fully or

<PAGE>



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

                         NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


1.       Significant Accounting Policies - Continued

         partially  apply FIN 46 prior to the  issuance  of FIN 46R.  Also,  the
         Partnership does not have interests in structures  commonly referred to
         as  special-purpose  entities.  Therefore,  application  of FIN  46R is
         required in the Partnership's  financial  statements for periods ending
         after March 15, 2004.  The General  Partners  believe  adoption of this
         standard may result in either  consolidation  or additional  disclosure
         requirements of the Partnership's  unconsolidated joint ventures, which
         are currently  accounted  for under the equity  method.  However,  such
         consolidation is not expected to significantly impact the Partnership's
         results of operations.

2.       Real Estate Properties with Operating Leases

         Real estate properties with operating leases consisted of the following
         at December 31:
<TABLE>
<CAPTION>

 <c>
                                                                 2003                 2002
                                                           ------------------   ------------------

                  Land                                         $   4,765,319        $   4,765,319
                  Buildings                                        7,403,747            7,403,747
                                                           ------------------   ------------------
                                                                  12,169,066           12,169,066
                  Less accumulated depreciation                   (3,670,419 )         (3,418,896 )
                                                           ------------------   ------------------

                                                               $   8,498,647         $  8,750,170
                                                           ==================   ==================
</TABLE>

         The following is a schedule of the future  minimum lease payments to be
         received on noncancellable operating leases at December 31, 2003:

                    2004                           $   1,288,883
                    2005                               1,298,141
                    2006                               1,301,132
                    2007                               1,301,132
                    2008                               1,236,840
                    Thereafter                         1,817,888
                                               ------------------

                                                   $   8,244,016
                                               ==================

3.       Net Investment in Direct Financing Leases

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

 <c>
                                                                         2003                 2002
                                                                   -----------------    -----------------

                   Minimum lease payments receivable                    $   268,831          $   322,398
                   Estimated residual values                                114,886              114,886
                   Less unearned income                                    (106,772 )           (137,220 )
                                                                   -----------------    -----------------

                   Net investment in direct financing
                      leases                                            $   276,945          $   300,064
                                                                   =================    =================

</TABLE>


<PAGE>


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

                         NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001

3.       Net Investment in Direct Financing Leases - Continued

         The  following  is a schedule of future  minimum  lease  payments to be
         received on direct financing leases at December 31, 2003:

                      2004                              $   53,568
                      2005                                  53,568
                      2006                                  53,568
                      2007                                  53,568
                      2008                                  53,568
                      Thereafter                               991
                                                 ------------------

                                                        $  268,831
                                                 ==================

4.       Investment in Joint Ventures

         As of December 31, 2003, the Partnership had a 51%, 57%, 96.1%, 68.87%,
         and 35.71% interest in the profits and losses of Holland Joint Venture,
         Cocoa Joint Venture, Auburn Joint Venture, Kingsville Real Estate Joint
         Venture  and  Warren  Joint  Venture,  respectively,  and a 53% and 76%
         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,  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 one property.

         In December 2003, Holland Joint Venture,  in which the Partnership owns
         a 51% interest,  entered into  negotiations  with a third party to sell
         the  property  in Holland,  Michigan.  As a result,  the joint  venture
         reclassified  the  assets  relating  to this  property  from  land  and
         building on operating leases to real estate held for sale. The property
         was  recorded  at the lower of its  carrying  amount or fair value less
         cost  to  sell.  In  addition,  the  joint  venture  stopped  recording
         depreciation  upon  identifying  the  property  as held for  sale.  The
         financial  results for this  property  are  reflected  as  Discontinued
         Operations in the condensed financial information presented below.

         During the year ended December 31, 2003,  Kingsville  Real Estate Joint
         Venture  recorded a provision for write-down of assets in the amount of
         $30,800,  relating to its  property in  Kingsville,  Texas  because the
         tenant of the  property did not exercise its option to renew its lease.
         The lease  expired in  January  2004.  The  provision  represented  the
         difference  between the carrying  value of the Property at December 31,
         2003 and its estimated fair value.

         The following presents the combined,  condensed  financial  information
         for the joint  ventures and the  properties  held as  tenants-in-common
         with affiliates at:



<PAGE>



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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


4.       Investment in Joint Ventures - Continued
<TABLE>
<CAPTION>

 <c>

                                                                            December 31,
                                                                  2003                        2002
                                                            -----------------            ----------------

             Real estate properties with operating             $   3,574,362                $  3,691,298
                  leases, net
             Net investment in direct financing leases               303,858                     325,247
             Real estate held for sale                               768,120                     794,554
             Cash                                                     50,783                      19,781
             Receivables                                              27,303                      33,692
             Accrued rental income                                    65,326                      70,528
             Other assets                                                 --                         170
             Liabilities                                              41,229                      11,554
             Partners' capital                                     4,748,523                   4,923,716


                                                                       Year Ended December 31,
                                                                 2003           2002            2001
                                                            --------------- --------------  --------------

             Revenues                                          $   501,756     $  509,590      $  493,708
             Expenses                                              (89,195 )     (102,516 )      (124,828 )
             Provision for write-down of assets                    (30,800 )           --         (73,750 )
             Gain on disposal of assets                                 --          4,901              --
                                                            --------------- --------------  --------------
                  Income from continuing operations                381,761        411,975         295,130
                                                            --------------- --------------  --------------

             Discontinued operations:
                  Revenues                                         120,744        120,248         120,248
                  Expenses                                         (26,425 )      (26,867 )       (27,937 )
                                                            --------------- --------------  --------------
                                                                    94,319         93,381          92,311
                                                            --------------- --------------  --------------

             Net income                                        $   476,080     $  505,356      $  387,441
                                                            =============== ==============  ==============
</TABLE>


         The  Partnership  recognized  income  totaling  $294,120,  $315,135 and
         $278,224  for the  years  ended  December  31,  2003,  2002  and  2001,
         respectively, from these joint ventures.

5.       Discontinued Operations

         In February  2003,  the  Partnership  sold the  property  in  Portland,
         Indiana and  received  net sales  proceeds of  approximately  $776,100,
         resulting  in a gain on disposal of assets of $129,403.  In  connection
         with the sale, the Partnership incurred a deferred,  subordinated, real
         estate disposition fee of $23,959.


<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


5.       Discontinued Operations - Continued

         In March 2003, the Partnership sold the property in Richmond,  Virginia
         and received net sales proceeds of approximately $922,700, resulting in
         a loss on disposal of assets of $22,364. The Partnership had recorded a
         provision  for  write-down  of assets  relating to this property in the
         previous  year  in  anticipation  of  the  sale  of  the  property.  In
         connection  with  the  sale,  the  Partnership   incurred  a  deferred,
         subordinated, real estate disposition fee of $28,500.

         In July 2003, the Partnership sold the property in Maywood, Illinois to
         the tenant and received net sales proceeds of  approximately  $346,000.
         Because the  Partnership  recorded a provision for write-down of assets
         of $36,000  during the year ended December 31, 2003, no gain or loss on
         disposal of assets was recognized  relating to this sale. The provision
         represented  the difference  between the carrying value of the property
         and its  estimated  fair  value.  In  connection  with  the  sale,  the
         Partnership recorded a deferred,  subordinated, real estate disposition
         fee of $10,500.

         The   financial   results  for  these   properties   are  reflected  as
         Discontinued  Operations in the accompanying financial statements.  The
         operating results of discontinued operations are as follows:

<TABLE>
<CAPTION>

 <c>
                                                                          Year Ended December 31,
                                                                  2003               2002              2001
                                                            ----------------- ----------------- -------------------

            Rental revenues                                       $   55,270        $  206,340         $  194,778
            Other income                                                 228             1,225                122
            Expenses                                                 (11,461 )         (80,370 )          (82,501 )
            Provisions for write-down of assets                      (36,000 )        (210,000 )               --
                                                           ------------------ -----------------  ------------------
            Income(loss) from discontinued
               Operations                                         $    8,037        $  (82,805 )       $  112,399
                                                           ================== ================= ===================
</TABLE>



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  properties,  were  allocated  99% 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% to the  limited
         partners  and one percent to the  general  partners.  However,  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% 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

                  Years Ended December 31, 2003, 2002, and 2001


6.       Allocations and Distributions - Continued

         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% 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% to the
         limited partners and five percent to the general partners.

         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 years
         ended December 31, 2003, 2002 and 2001.

         During each of the years ended  December 31, 2003,  2002 and 2001,  the
         Partnership   declared   distributions   to  the  limited  partners  of
         $2,691,900, $2,095,788 and $3,147,894, respectively.  Distributions for
         the  year  ended  December  31,  2003 and 2001  included  $650,000  and
         $1,050,000,  respectively, in special distributions, as a result of the
         distributions   of  net  sales   proceeds  from  the  sale  of  several
         properties.  These  special  distributions,  in  2003  and  2001,  were
         effectively a return of a portion of the limited partners'  investment,
         although,  in accordance with the Partnership  agreement,  $650,000 and
         $989,873  respectively,  was applied  toward the limited  partners' 10%
         Preferred  Return.  The  balance of  $60,127,  remaining  from the 2001
         special  distribution,  was treated as a return of capital for purposes
         of calculating the limited partners 10% Preferred  Return.  As a result
         of the return of capital,  the amount of the limited partners' invested
         capital contributions (which generally is the limited partners' capital
         contributions,  less distributions from the sale of a property that are
         considered  to be a return of capital) was  decreased;  therefore,  the
         amount of the limited partners' invested capital contributions on which
         the 10% Preferred  Return is  calculated  was lowered  accordingly.  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

                  Years Ended December 31, 2003, 2002, and 2001


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>

 <c>
                                                                  2003             2002            2001
                                                              -------------    -------------   -------------

              Net income for financial reporting
                 purposes                                      $ 1,308,181      $ 1,117,445     $ 1,089,094

              Effect of timing differences relating to
                 depreciation                                       (4,831 )         11,954           6,102

              Provision for write-down of assets                    36,000          210,000         178,817

              Direct financing leases recorded as
                 operating leases for tax reporting
                 purposes                                           23,120           23,871          15,754

              Effect of timing differences relating to
                 gains/losses on real estate property sales        (27,853 )             --        (576,193 )

              Effect of timing differences relating to
                 equity  in earnings of joint ventures              58,600         (128,173 )        20,451

              Effect of timing differences relating to
                 allowance for doubtful accounts                     3,215               --        (301,517 )

              Accrued rental income                                 15,044           (6,359 )       (18,829 )

              Rents paid in advance                                 10,527           15,697          (1,772 )

              Other                                                   (235 )             --              --
                                                              -------------    -------------   -------------

              Net income for federal income tax
                 purposes                                      $ 1,421,768      $ 1,244,435      $  411,907
                                                              =============    =============   =============
</TABLE>



<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


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 APF Partners,  LP, a wholly owned subsidiary of CNL Restaurant
         Properties,  Inc.  (formerly  known as CNL  American  Properties  Fund,
         Inc.), served as the Partnership's  advisor until January 1, 2002, when
         it assigned its rights and obligations under a management  agreement to
         RAI Restaurants,  Inc. (the  "Advisor").  The Advisor is a wholly owned
         subsidiary of CNL Restaurant Properties, Inc. ("CNL-RP") The individual
         general partners are stockholders and directors of CNL-RP.

         The Advisor provides services  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  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, 2003,
         2002 and 2001.

         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, 2003 and 2001, the  Partnership  incurred
         $62,959 and  $21,023,  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, 2002.

         During  the  years  ended  December  31,  2003,   2002  and  2001,  the
         Partnership's  advisor  and  its  affiliates  provided  accounting  and
         administrative  services.  The Partnership incurred $123,859,  $159,198
         and  $152,529 for the years ended  December  31,  2003,  2002 and 2001,
         respectively, for such services.

         The due to related parties consisted of the following at December 31:
<TABLE>
<CAPTION>

 <c>
                                                                       2003              2002
                                                                   --------------    --------------

                  Accounting and administrative services               $  11,193        $   12,798
                  Deferred, subordinated real estate
                    disposition fee                                      248,103           185,144
                                                                   --------------    --------------

                                                                       $ 259,296        $  197,942
                                                                   ==============    ==============
</TABLE>



<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


  9.     Concentration of Credit Risk

         The following  schedule  presents total rental revenues from individual
         lessees,  each  representing  more than ten percent of rental  revenues
         (including the  Partnership's  share of total rental  revenues from the
         joint  ventures  and  the  properties  held as  tenants-in-common  with
         affiliates  of the  General  Partners),  for  each of the  years  ended
         December 31:

                                      2003            2002           2001
                                    -----------   ------------   ------------

              Shoney's, Inc.         $ 218,202      $ 284,611       $279,529
              Tampa Foods, L.P.        203,771        207,354        203,277

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

 <c>
                                                        2003             2002              2001
                                                    --------------   --------------    -------------

                  Wendy's Old Fashioned
                     Hamburger Restaurants             $  349,805       $  329,268        $ 330,682
                  Denny's                                 235,146          241,596          127,024
                  Pizza Hut                               193,002              N/A          212,266
                  Shoney's                                    N/A          237,036          232,325
</TABLE>


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

         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 will  significantly  impact the results of operations
         of the Partnership.

10.      Selected Quarterly Financial Data

         The following table presents  selected  unaudited  quarterly  financial
         data for each full quarter during the years ended December 31, 2003 and
         2002:




<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001

10.      Selected Quarterly Financial Data - Continued
<TABLE>
<CAPTION>

 <c>
          2003 Quarter                 First          Second          Third          Fourth            Year
----------------------------------   -----------    -----------    ------------    ------------    --------------

Continuing operations (1):
    Revenues                           $338,499       $336,122        $342,619        $376,721       $ 1,393,961
    Equity in earnings of
      unconsolidated joint
      ventures                           76,633         78,051          74,723          64,713           294,120
    Income from continuing
      operations                        261,573        295,350         301,275         334,907         1,193,105
Discontinued operations (1)(2):
    Revenues                             44,315          9,589           8,415          (6,821  )         55,498
    Income from and gain on
      disposal of discontinued
      operations                        101,115          7,252           6,616              93           115,076

Net income                              362,688        302,602         307,891         335,000         1,308,181

Income per limited partner unit:
    Continuing operations               $  4.36        $  4.92         $  5.02         $  5.59          $  19.89
    Discontinued operations                1.68           0.12            0.11              --              1.91
                                     -----------    -----------    ------------    ------------    --------------
                                        $  6.04        $  5.04         $  5.13         $  5.59          $  21.80
                                     ===========    ===========    ============    ============    ==============

                2002 Quarter                First         Second          Third          Fourth            Year
     -----------------------------------  -----------    ----------     -----------    ------------    --------------

     Continuing operations (1):
         Revenues                           $352,932      $333,331        $363,957       $ 351,739        $1,401,959
         Equity in earnings of
           unconsolidated joint
           ventures                           71,923        80,011          75,218          87,983           315,135
         Income from continuing
           operations                        277,235       279,486         319,477         324,052         1,200,250

     Discontinued operations (1)(2):
         Revenues                             52,970        52,971          54,196          47,428           207,565
         Income (loss) from and gain
           on the disposal of
           discontinued operations            38,169        32,631          32,849        (186,454  )        (82,805  )

     Net income                              315,404       312,117         352,326         137,598         1,117,445
     Income (loss) per limited partner
         unit:
         Continuing operations                $ 4.62        $ 4.66         $  5.32         $  5.40          $  20.00
         Discontinued operations                0.64          0.54            0.55           (3.11  )          (1.38  )
                                          -----------    ----------     -----------    ------------    --------------
                                              $ 5.26        $ 5.20         $  5.87         $  2.29          $  18.62
                                          ===========    ==========     ===========    ============    ==============

</TABLE>

<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


  10.    Selected Quarterly Financial Data - Continued

         (1)  Certain   items  in  the  quarterly   financial   data  have  been
              reclassified   to   conform   to  the  2003   presentation.   This
              reclassification  had no  effect on net  income.  The  results  of
              operations relating to properties that were identified for sale as
              of  December  31,  2001  but sold  subsequently  are  reported  as
              continuing  operations.  The  results of  operations  relating  to
              properties  that were either  identified  for sale and disposed of
              subsequent to January 1, 2002 or were  classified as held for sale
              as of December  31, 2003 are reported as  discontinued  operations
              for all periods presented.

         (2)  In  December  2002,  the  Partnership  recorded  a  provision  for
              write-down  of assets of  $173,000  relating  to the  property  in
              Maywood,  Illinois since the two tenants of this Property were not
              expected  to  exercise  their  option to renew  their  leases.  An
              additional  $36,000 was recorded as a provision for  write-down of
              assets in 2003 in anticipation of the sale of this property. Also,
              in  December  2002,  the  Partnership  recorded  a  provision  for
              write-down  of assets  of  $37,000  relating  to the  property  in
              Richmond,  Virginia in  anticipation of the sale of this property.
              The provisions  represented  the  difference  between the carrying
              values of the properties and their estimated fair values.  Both of
              these properties were sold during 2003.





<PAGE>



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

        None.

Item 9A.Controls and Procedures

         The  General  Partners  maintain  a  set  of  disclosure  controls  and
procedures  designed to ensure that information  required to be disclosed in the
Partnership's  filings  under the  Securities  Exchange Act of 1934 is recorded,
processed,  summarized  and reported  within the time  periods  specified in the
Securities and Exchange  Commission's  rules and forms. The principal  executive
and  financial  officers of the  corporate  general  partner have  evaluated the
Partnership's  disclosure  controls and  procedures  as of the end of the period
covered  by this  Annual  Report  on Form  10-K and have  determined  that  such
disclosure controls and procedures are effective.

         There was no change in internal  control over financial  reporting that
occurred during the most recent fiscal quarter that has materially affected,  or
is  reasonably  likely to materially  affect,  internal  control over  financial
reporting.


                                    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-RP,  CCM, CNL Financial  Group,  Inc. and their
affiliates, all of which are affiliates of the General Partners.

         James M. Seneff, Jr., age 57. 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-RP, a public,  unlisted real
estate investment trust since 1994. Mr. Seneff served as Chief Executive Officer
of CNL-RP from 1994 through August 1999 and as Co-Chief  Executive  Officer from
December 2000 through September 2003. Mr. Seneff served as Chairman of the Board
and  Chief  Executive  Officer  of  CNL  Fund  Advisors,   Inc.,   formerly  the
Partnership's  advisor,  from  its  inception  in 1990  until it  merged  with a
wholly-owned  subsidiary  of CNL-RP in  September  1999,  and in June 2000,  was
re-elected  to those  positions of CNL Fund  Advisors,  Inc. CNL Fund  Advisors,
Inc.,  formerly CNL  Institutional  Advisors,  Inc., is a registered  investment
advisor. Mr. Seneff is a principal stockholder of CNL Holdings, Inc., the parent
company of CNL Financial 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 1973. CNL Financial Group, Inc. is and 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.,  all of which are  engaged  in the  business  of real  estate
finance.  Mr.  Seneff also serves as a Director and Chairman of the Board of CNL
Hospitality  Properties,  Inc., a public, unlisted real estate investment trust;
and served as Chief Executive Officer of CNL Hospitality  Properties,  Inc. from
its inception in 1997 until 2003 and served as Co-Chief  Executive  Officer from
February 2003 until May 1, 2003.  Mr. Seneff has served as Chairman of the Board
of CNL Hospitality Corp., the advisor to CNL Hospitality Properties, Inc., since
its inception in 1997.  Mr. Seneff also served as Chief  Executive  Officer from
its inception in 1997 through  February 2003,  and currently  serves as Co-Chief
Executive Officer of CNL Hospitality Corp. Mr. Seneff has served as Director and
Chairman  of the Board of CNL  Retirement  Corp.  since 1997 and served as Chief
Executive Officer of CNL Retirement Corp. from 1997 through 2003. CNL Retirement
Corp. is the advisor to CNL Retirement Properties, Inc., a public, unlisted real
estate  investment trust. Mr. Seneff has also served as Director and Chairman of
the Board of Commercial Net Lease Realty,  Inc., a public real estate investment
trust  that is listed on the New York Stock  Exchange,  since 1992 and served as
Chief Executive  Officer of Commercial Net Lease Realty,  Inc. from 1992 through
February 2004. Mr. Seneff Has served as a Director,  Chairman of the Board,  and
Chief Executive Officer of CNL Securities Corp. since its formation in 1979; CNL
Investment  Company  since  1990;  and  CNL  Institutional  Advisors,   Inc.,  a
registered  investment  advisor for pension  plans,  since 1990.  Mr. Seneff has
served as Chairman of the Board and Chief  Executive  Officer of CNL  Commercial
Finance,  Inc.  since 2000.  Mr.  Seneff also serves as Chairman of the Board of
CNLBank, an independent,  state-chartered commercial 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 the
Florida  state  retirement  plan.  Mr.  Seneff  received  his degree in Business
Administration from Florida State University in 1968.

         Robert A.  Bourne,  age 56. 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 has
served as a Director and Vice  Chairman of the Board of CNL-RP  since 1994.  Mr.
Bourne also served as President of CNL-RP from 1994  through  February  1999 and
served as Treasurer  from  February  1999 through  August 1999 and from May 1994
through December 1994. Mr. Bourne served in various executive positions with CNL
Fund Advisors, Inc. prior to its merger with a wholly-owned subsidiary of CNL-RP
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. Mr. Bourne serves as Director,  Vice Chairman of the Board
and  Treasurer  and from  1997  until  June  2002  served  as  President  of CNL
Hospitality  Properties,  Inc. and as Director,  President  and Treasurer of CNL
Hospitality  Corp.  Mr.  Bourne  also serves as Director  and  Treasurer  of CNL
Retirement  Properties,  Inc.  and as Director and  Treasurer of CNL  Retirement
Corp. Mr. Bourne serves as a Director of CNLBank.  Mr. Bourne has also 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. Mr. Bourne 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. 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 48. Mr. McWilliams has served as President of
CNL-RP since May 2001 and as Chief  Executive  Officer of CNL-RP since September
2003.  Mr.  McWilliams  served as  Co-Chief  Executive  Officer  of CNL-RP  from
December 2000 through  September 2003 and served as Chief Executive Officer from
September 1999 through  December 2000. Mr.  McWilliams  also served as President
and Chief  Executive  Officer of CNL  Franchise  Network  Corp.,  a wholly owned
subsidiary  of CNL-RP  since  August 2002 and served as President of CNL-RP from
February 1999 until  September  1999 and as Executive  Vice  President of CNL-RP
from 1997 through  February  1999.  Mr.  McWillimas  served as an Executive Vice
President of CNL  Financial  Group,  Inc. from the time he joined the company in
April 1997 until September 1999. Mr.  McWilliams served as President of CNL Fund
Advisors,  Inc. and CNL Financial  Services,  Inc., a corporation engaged in the
business of real estate financing, from April 1997 until the acquisition of such
entities  by  wholly  owned  subsidiaries  of  CNL-RP 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.

         Steven  D.  Shackelford,  age  40.  Mr.  Shackelford  was  promoted  to
Executive  Vice  President  and Chief  Operating  Officer of CNL-RP in September
2003. Mr.  Shackelford has also served as Chief Financial  Officer since January
1997.  He served as Senior Vice  President  of CNL-RP from  January 1997 through
July 2000, when he was promoted to Executive Vice President. Mr. Shackelford has
also served as Secretary and Treasurer of CNL-RP since  September  1999. He also
served as Chief Financial Officer of CNL Fund Advisors, Inc. 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.

         Thomas Arasi, age 46. Mr. Arasi has served as President of CCM since it
was formed in July 2003 to provide  strategic  advisory  services to the General
Partners. He has served in various consulting capacities to CNL Hospitality Corp
and other CNL affiliates  since January 2003. Since November 2001 he has been an
independent  consultant  working  for a  variety  of  operating  and  investment
companies  in the  hospitality  industry.  Until  October  2001,  Mr.  Arasi was
President & Chief Executive  Officer,  and a member of the Board of Directors of
Lodgian,  Inc., a New York Stock  Exchange  traded  company,  one of the largest
independent hotel  owner/operators in North America, with hotel properties under
most brand names  including  Marriott,  Courtyard by Marriott,  Fairfield Inn by
Marriott,  Crowne  Plaza,  Holiday Inn,  Hilton,  and  Radisson.  From June 1997
through  November 2000,  Mr. Arasi was a member of the Management  Committee and
held  several top  operating  positions  with Bass Hotels & Resorts,  one of the
leading international owners, operators and franchisors of hotels, most recently
serving as President, Bass Hotels & Resort--The Americas. Mr. Arasi was formerly
President of Tishman  Hotel  Corporation,  Vice  President of Salomon  Brothers,
Inc.,  in New York,  Tokyo and Los Angeles  and held  positions  with  Sheraton,
Westin and HVS  International.  Mr. Arasi  graduated from Cornell  University in
January  1981,  where he received a  Bachelor's  degree in Hotel and  Restaurant
Administration.

Section 16(a) Beneficial Ownership Reporting Compliance

         Section  16(a) of the Exchange Act requires the General  Partners,  the
officers of the  corporate  General  Partner,  and persons who own more than ten
percent  of  a  registered  class  of  the   Partnership's   equity   securities
(collectively,  the  "Reporting  Persons"),  to file  reports of  ownership  and
changes in  ownership  on Forms 3, 4 and 5 with the SEC.  Reporting  Persons are
required by SEC regulation to furnish the  Partnership  with copies of all Forms
3, 4 and 5 that they file.

         Based  solely on the  General  Partners'  review of the  copies of such
forms the  Partnership  has  received and written  representations  from certain
Reporting  Persons  that they  were not  required  to file  Forms 5 for the last
fiscal year, the General  Partners  believe that all Reporting  Persons complied
with all filing  requirements  applicable  to them with respect to  transactions
during fiscal 2003.

Code of Business Conduct

         The  Partnership  does not have  employees  and,  accordingly,  has not
adopted a code of business  conduct  applicable  exclusively to the Partnership.
However,  employees of the General Partners or their  affiliates,  including the
individual  General Partners,  are bound by the Code of Business Conduct adopted
November 11, 2003 by CNL Holdings, Inc. Separately, the employees of the Advisor
are bound by the similar  Code of  Business  Conduct  adopted by CNL  Restaurant
Properties,  Inc. Each of these codes of business conduct will be made available
to any person who writes the Partnership requesting a copy.

Audit Committee Financial Expert

         Due to its organization as a limited partnership,  the Partnership does
not  have  an  audit   committee  that  is  responsible   for   supervising  the
Partnership's  relationship with its independent auditors.  For the Partnership,
this role is performed by the General Partners. Based on his previous service as
the principal  financial officer of companies with businesses similar to that of
the  Partnership,  Robert  A.  Bourne,  one of the  General  Partners,  has  the
requisite  experience to be considered an "audit committee  financial expert" as
defined  in  the  rules  under  the  Securities  Exchange  Act of  1934,  if the
Partnership  had an audit  committee.  As a General  Partner,  Mr. Bourne is not
independent of the Partnership.


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 and
         Related Stockholder Matters

         As of March 12,  2004,  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 12, 2004,  the beneficial
ownership interests of the General Partners in the Registrant.
<TABLE>
<CAPTION>

 <c>
                    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%
                                                                                                   ========
</TABLE>

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

         The Partnership does not have any equity compensation plans.



<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, 2003, 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>

 <c>
                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         and Recipient                         Method of Computation                  Ended December 31, 2003
---------------------------------      --------------------------------------      ------------------------------

Reimbursement  to affiliates for       Operating  expenses are reimbursed at       Accounting  and
operating expenses                     the  lower  of  cost  or  90%  of the       administrative     services:
                                       prevailing  rate at which  comparable       $123,859
                                       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-
man-agement 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, 2003
---------------------------------      --------------------------------------      ------------------------------

Deferred,    subordinated   real       A deferred,  subordinated real estate       $62,959
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, 2003
---------------------------------      --------------------------------------      ------------------------------

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>


Item 14.   Principal Accountant Fees and Services

         The  following  table  outlines  the only fees paid or  accrued  by the
Partnership  for the audit  and other  services  provided  by the  Partnership's
independent  certified public accountants,  PricewaterhouseCoopers  LLP, for the
years ended December 31:

                                   2003                  2002
                             -------------------     ------------------

     Audit Fees (1)                    $   10,429        $     8,200
     Tax Fees (2)                           6,789              6,727
                               -------------------     ------------------
       Total                           $   17,218        $    14,927
                               ===================     ==================


(1)      Audit  services  of  PricewaterhouseCoopers   LLP  for  2003  and  2002
         consisted  of  the  examination  of  the  financial  statements  of the
         Partnership and quarterly review of financial statements.

(2)      Tax Fees relates to tax consulting and compliance services.

         Each of the  non-audit  services  described  above was  approved by the
General  Partners.  Due  to  its  organization  as a  limited  partnership,  the
Partnership does not have an audit committee.



<PAGE>


                                     PART IV



Item 15. 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, 2003 and 2002

          Statements of Income for the years ended  December 31, 2003,  2002 and
          2001

          Statements of Partners' Capital for the years ended December 31, 2003,
          2002 and 2001

          Statements of Cash Flows for the years ended  December 31, 2003,  2002
          and 2001

          Notes to Financial Statements

    2.  Financial Statement Schedules

          Schedule II - Valuation  and  Qualifying  Accounts for the years ended
          December 31, 2003, 2002 and 2001

          Schedule III - Real Estate and  Accumulated  Depreciation  at December
          31, 2003

          Notes to Schedule III - Real Estate and  Accumulated  Depreciation  at
          December 31, 2003

          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.)

          10.4   Assignment of Management Agreement from CNL Fund Advisors, Inc.
                 to CNL APF Partners, LP. (Included as Exhibit 10.4 to Form 10-Q
                 filed with the Securities and Exchange  Commission on August 9,
                 2001, and incorporated herein by reference.)

          10.5   Assignment of Management Agreement from CNL APF Partners, LP to
                 CNL Restaurants  XVIII, Inc.  (Included as Exhibit 10.5 to Form
                 10-Q filed  with the  Securities  and  Exchange  Commission  on
                 August 14, 2002, and incorporated herein by reference.)

          31.1   Certification of Chief Executive  Officer of Corporate  General
                 Partner  Pursuant to Rule 13a-14 as Adopted Pursuant to Section
                 302 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)

          31.2   Certification of Chief Financial  Officer of Corporate  General
                 Partner  Pursuant to Rule 13a-14 as Adopted Pursuant to Section
                 302 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)

          32.1   Certification of Chief Executive  Officer of Corporate  General
                 Partner Pursuant to 18 U.S.C.  Section 1350 as Adopted Pursuant
                 to  Section  906 of the  Sarbanes-Oxley  Act  of  2002.  (Filed
                 herewith.)

          32.2   Certification of Chief Financial  Officer of Corporate  General
                 Partner Pursuant to 18 U.S.C.  Section 1350 as Adopted Pursuant
                 to  Section  906 of the  Sarbanes-Oxley  Act  of  2002.  (Filed
                 herewith.)

(b) The  Registrant  filed no reports on Form 8-K during the period from October
    1, 2003 through December 31, 2003.






<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 24th day of
March, 2004.


                                 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>

 <c>
             Signature                                    Title                                    Date

     /s/ Robert A. Bourne                 President, Treasurer and Director                March 24, 2004
     ---------------------------          (Principal Financial and Accounting
     Robert A. Bourne                     (Officer)


     /s/ James M. Seneff, Jr.             Chief Executive Officer and Director             March 24, 2004
     ---------------------------          (Principal Executive Officer)
     James M. Seneff, Jr.

</TABLE>




<PAGE>

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

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                  Years Ended December 31, 2003, 2002, and 2001

<TABLE>
<CAPTION>

 <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
----------    -----------------   --------------  ---------------  ----------------    -------------     ------------  ------------

  2001        Allowance for
                  doubtful
                  accounts (a)        $ 301,517       $   10,792        $   16,339 (b)    $ 309,608 (c)     $ 19,040        $   --
                                  ==============  ===============  ================    =============     ============  ============

  2002        Allowance for
                  doubtful
                  accounts (a)           $   --          $    --        $   11,830 (b)    $  11,830 (c)       $   --        $   --
                                  ==============  ===============  ================    =============     ============  ============

  2003        Allowance for
                  doubtful
                  accounts (a)          $    --         $    ---        $    3,214 (b)      $    --          $    --      $  3,214
                                  ==============  ===============  ================    =============     ============  ============
</TABLE>


(a) Deducted from receivables on the balance sheet.

(b) Reduction of rental and other income.

(c) Amounts written off as uncollectible.


<PAGE>



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

             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 2003

<TABLE>
<CAPTION>
<S> <c>
                                                                         Costs Capitalized
                                                                            Subsequent to          Net Cost Basis at Which
                                                  Initial Cost              Acquisition           arried at Close of Period (c)
                                           -------------------------  --------------------  --------------------------------------
                             Encum-                    Buildings and   Improve-    Carrying              Buildings and
                             brances          Land       Improvements   ments      Costs       Land      Improvements    Total
                            ----------     ------------  -----------  -----------  -------  -----------  ------------  -----------
Properties the Partnership
  has Invested in Under
  Operating Leases:

    Arby's Restaurants:
      Winchester, Indiana       -             $287,769            -     $567,785        -     $287,769      $567,785     $855,554

    Captain D's Restaurants:
      Alexander City, Alabama   -              120,210      279,689            -        -      120,210       279,689      399,899
      Oak Ridge, Tennessee      -              169,951      281,686            -        -      169,951       281,686      451,637

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

    Chipper's Grill Restaurant:
          Streator, Illinois    -              161,616      650,934            -        -      161,616       650,934      812,550

    Denny's Restaurants:
      Marion, Ohio              -              135,407      334,665            -        -      135,407       334,665      470,072
      Dundee, Michigan          -              251,650            -      372,278        -      251,650       372,278      623,928

    Golden Corral
      Buffet and Grill
          Franklin, Indiana     -              107,560      586,375            -        -      107,560       586,375      693,935

    Green Tea Restaurant:
      Tampa, Floridaa, Florida  -              476,755      368,405            -        -      476,755       368,405      845,160

    Jack in the Box Restaurant:
      San Antonio, Texas        -              352,957            -      368,702        -      352,957       368,702      721,659

    Pizza Hut Restaurants:
      Memphis, Texas            -               26,510      231,874            -        -       26,510       231,874      258,384
      Carthage, Texas           -               40,444      232,823            -        -       40,444       232,823      273,267
      Crystal City, Texas       -                8,826      178,570            -        -        8,826       178,570      187,396
      Sequin, Texas             -               63,708      184,279            -        -       63,708       184,279      247,987
      Washington, D.C.          -              191,737            -            -        -      191,737            (f)     191,737

    Shoney's Restaurants:
      Alexander City, Alabama   -              202,438      428,406            -        -      202,438       428,406      630,844
      Brookhaven, Mississippi   -              312,574      452,601            -        -      312,574       452,601      765,175
      Auburn, Alabama           -              363,432      426,123            -        -      363,432       426,123      789,555

    Taco Bell Restaurant:
      Edgewood, Maryland        -              440,355            -      523,478        -      440,355       523,478      963,833

    Wendy's Old Fashioned
           Hamburger Restaurants:
                Mechanicsville, -irginia       346,627      502,117            -        -      346,627       502,117      848,744
                Tampa, Florida  -              530,457      432,957            -        -      530,457       432,957      963,414
                                           ------------  -----------  -----------  -------  -----------  ------------  -----------

                                            $4,765,319   $5,571,504   $1,832,243        -   $4,765,319    $7,403,747   $12,169,066
                                           ============  ===========  ===========  =======  ===========  ============  ===========
Properties the Partnership has
    Invested in Under Direct
    Financing Leases:

      Pizza Hut Restaurant:
           Washington, D. C.    -                    -     $459,543            -        -            -            (f)          (f)
                                           ============  ===========  ===========  =======  ===========
</TABLE>

<PAGE>


                                  Life on Which
                                  Depreciation in
               Date                Latest Income
 Accumulated  of Con-    Date       Statement is
 Depreciation struction  Acquired    Computed
 -----------  ---------  -------- ---------------





    $260,263   1988     07/88           (b)


     140,075   1988     12/88           (b)
     141,094   1988     12/88           (b)


          (e)   -       06/94           (e)


     332,698   1988     08/88           (b)


     133,423   1989     10/88           (f)
     188,206   1988     10/88           (b)



     302,963   1988     06/88           (b)


     184,273   1987     12/88           (b)


     182,301   1989     11/88           (b)


     118,190   1985     09/88           (b)
     118,678   1981     09/88           (b)
      91,021   1981     09/88           (b)
      93,932   1974     09/88           (b)
          (d)  1986     01/89           (d)


     214,555   1988     12/88           (b)
     226,711   1988     12/88           (b)
     213,455   1988     12/88           (b)


     259,556   1989     10/88           (b)



     252,456   1988     12/88           (b)
     216,569   1984     12/88           (b)
  -----------

  $3,670,419
  ===========





          (d)  1986     01/89           (d)




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

        NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 2003


(a)      Transactions in real estate and accumulated  depreciation  during 2003,
         2002 and 2001 summarized as follows:
<TABLE>
<CAPTION>
<S> <c>
                                                                                           Accumulated
                                                                           Cost            Depreciation
                                                                      ----------------   -----------------
         Properties the Partnership has Invested in Under
              Operating Leases:

              Balance, December 31, 2000                                 $ 13,592,277        $  3,369,450
              Dispositions                                                 (1,244,394 )          (464,651 )
              Provisions for write-down of assets                            (178,817 )                --
              Depreciation expense                                                 --             264,137
                                                                      ----------------   -----------------

              Balance, December 31, 2001                                   12,169,066           3,168,936
              Depreciation expense                                                 --             249,961
                                                                      ----------------   -----------------

              Balance, December 31, 2002                                   12,169,066           3,418,897
              Depreciation expense                                                 --             251,522
                                                                      ----------------   -----------------

              Balance, December 31, 2003                                 $ 12,169,066        $  3,670,419
                                                                      ================   =================
</TABLE>



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

(c)      As of December 31, 2003, the aggregate cost of the Partnership's wholly
         owned  Properties was $12,651,645 for federal income tax purposes.  All
         of the leases are treated as  operating  leases for federal  income tax
         purposes.

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

(f)      Effective  January 1, 1999,  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, 1999, and  depreciated  over remaining  estimated life of
         approximately 19 years.





<PAGE>




                                  EXHIBIT INDEX


Exhibit Number

(a) 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.)

        10.4  Assignment of Management Agreement from CNL Fund Advisors, Inc. to
              CNL APF Partners, LP. (Included as Exhibit 10.4 to Form 10-Q filed
              with the Securities and Exchange Commission on August 9, 2001, and
              incorporated herein by reference.)

        10.5  Assignment of Management  Agreement  from CNL APF Partners,  LP to
              CNL Restaurants XVIII, Inc. (Included as Exhibit 10.5 to Form 10-Q
              filed with the  Securities  and Exchange  Commission on August 14,
              2002, and incorporated herein by reference.)

        31.1  Certification  of Chief  Executive  Officer of  Corporate  General
              Partner Pursuant to Rule 13a-14 as Adopted Pursuant to Section 302
              of the Sarbanes-Oxley Act of 2002. (Filed herewith.)

        31.2  Certification  of Chief  Financial  Officer of  Corporate  General
              Partner Pursuant to Rule 13a-14 as Adopted Pursuant to Section 302
              of the Sarbanes-Oxley Act of 2002. (Filed herewith.)

        32.1  Certification  of Chief  Executive  Officer of  Corporate  General
              Partner Pursuant to 18 U.S.C.  Section 1350 as Adopted Pursuant to
              Section 906 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)

        32.2  Certification  of Chief  Financial  Officer of  Corporate  General
              Partner Pursuant to 18 U.S.C.  Section 1350 as Adopted Pursuant to
              Section 906 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)



<PAGE>



                                  EXHIBIT 31.1




<PAGE>


                                  EXHIBIT 31.2



<PAGE>



                                  EXHIBIT 32.1


<PAGE>




                                  EXHIBIT 32.2