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, 2002

                                       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 Section12 (b) of the Act:

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

           Securities registered pursuant to Section12(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, 1999, the  Partnership  owned 38 Properties,  either
directly or indirectly through joint venture or tenancy in common  arrangements.
During the year ended December 31, 2000, the Partnership  sold its Properties in
Temple Terrace and Punta Gorda, Florida,  Topeka,  Kansas and Detroit,  Michigan
and distributed  the majority of the net sales proceeds to the limited  partners
as special  distributions  in 2000 and 2001.  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.  In January 2002,  Titusville Joint
Venture sold its  Property and the  Partnership  and the joint  venture  partner
liquidated  the  joint  venture;  the  Partnership  used  the  majority  of  the
liquidation  proceeds to pay liabilities of the  Partnership.  In February 2003,
the Partnership sold its property in Portland,  Indiana. The Partnership expects
to use the  majority  of the net sales  proceeds  to make  distributions  to the
limited partners and to pay liabilities of the  Partnership.  As of December 31,
2002, the Partnership owned 31 Properties.  The 31 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  tax  considerations.  Certain
lessees also have been granted options to purchase Properties,  generally at the
Property's  then fair market  value after a specified  portion of the lease term
has elapsed.  The  Partnership has no obligation to sell all or any portion of a
Property  at any  particular  time,  except as may be  required  under  property
purchase options granted to certain lessees.

Leases

         Although there are variations in the specific terms of the leases,  the
following  is  a  summarized   description  of  the  general  structure  of  the
Partnership's  leases. The leases of the Properties owned by the Partnership and
joint ventures in which the Partnership is a co-venturer and Properties owned as
tenants-in-common  with affiliates of the General  Partners  provide for initial
terms,  ranging from five to 20 years (the average  being 17 years),  and expire
between 2003 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
$18,600 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.
<PAGE>

         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 24 of the  Partnership's 31 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.

         In February 2002, a tenant,  Sybra, Inc., filed for bankruptcy.  During
2002,  the  Partnership  continued to receive  rental  payments  relating to the
Property  in  Zephyrhills,  Florida,  held  with  an  affiliate  of the  General
Partners,  as  tenants-in-common.  In December 2002, Sybra, Inc. was acquired by
Triarc  Companies,  Inc. and emerged from bankruptcy.  The lease relating to the
Property in Zephyrhills, Florida was affirmed.

         Effective  May 2002,  the leases  relating to two Arby's  Properties in
Portland and Winchester, Indiana, were amended to eliminate guaranteed scheduled
rent  increases.  The General  Partners do not believe that the rent  reductions
will  have a  material  adverse  effect  on the  results  of  operations  of the
Partnership. All other lease terms remain unchanged.

         The two tenants of the Property in Maywood, Illinois are not expected
to exercise their option to renew their leases, which will expire in June 2003.
The lost revenues that would result from the loss of these leases will have an
adverse effect on the results of operations of the Partnership if the
Partnership is unable to lease the Property in a timely manner

Major Tenants

         During 2002, two lessees of the Partnership,  Shoney's,  Inc. and Tampa
Foods,  L.P., each contributed more than ten percent of the Partnership's  total
rental revenues  (including the Partnership's  share of the 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, 2002, 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 2003.  In addition,  three  Restaurant
Chains,  Shoney's,  Denny's,  and Wendy's Old  Fashioned  Hamburger  Restaurants
("Wendy's"), each accounted for more than ten percent of the Partnership's total
rental  revenues  in 2002  (including  the  Partnership's  share  of the  rental
revenues  from  Properties  owned by joint  ventures and  Properties  owned with
affiliates  of the  General  Partners  as  tenants-in-common).  In  2003,  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.  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.
<PAGE>

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, 2002:
<TABLE>
<CAPTION>

               Entity Name             Year      Ownership           Partners                   Property
<S>     <C>    <C>    <C>    <C>    <C>    <C>

      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

      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
business entity. 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 business entity.

         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 joint  venture or tenancy in
common 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.

         During 2002,  Titusville  Joint Venture was liquidated upon the sale of
the  Property  held  by the  joint  venture  and  the net  sales  proceeds  were
distributed  to each joint venture  partner in accordance  with the terms of the
joint venture agreement.
<PAGE>

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

Certain Management Services

         RAI Restaurants,  Inc. (formerly known as CNL Restaurants XVIII, Inc.),
an affiliate of the General  Partners,  provides  certain  services  relating to
management  of the  Partnership  and its  Properties  pursuant  to a  management
agreement with the Partnership. CNL APF Partners, LP assigned its rights in, and
its  obligations  under,  the management  agreement with the  Partnership to RAI
Restaurants,  Inc.  ("Advisor")  effective January 1, 2002. All of the terms and
conditions of the management agreement,  including the payment of fees, remained
unchanged.  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 had 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.

Competition

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

Employees

         The  Partnership   has  no  employees.   The  officers  of  CNL  Realty
Corporation  and the officers and  employees  of CNL American  Properties  Fund,
Inc.,  the parent  company of the  Advisor,  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, 2002, the Partnership owned 31 Properties. Of the 31
Properties,  24 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.  Reference  is made to the Schedule of
Real Estate and  Accumulated  Depreciation  for a listing of the  Properties and
their  respective  costs,  including  acquisition  fees and certain  acquisition
expenses.


<PAGE>


Description of Properties

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

         The  following  table lists the  Properties  owned by the  Partnership,
directly  and  indirectly,  as of  December  31,  2002 by state.  More  detailed
information  regarding  the  location  of the  Properties  is  contained  in the
Schedule of Real Estate and Accumulated Depreciation for the year ended December
31, 2002.

                     State                      Number of Properties

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

                     Total Properties                    31
                                                  =================

         Buildings.  Each of the Properties owned by the  Partnership,  directly
and indirectly, 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.  In  addition,  the
Property in  Maywood,  Illinois  was leased to two tenants and each  operate one
separate  restaurant  chain.  The buildings  generally are  rectangular  and are
constructed from various  combinations of stucco,  steel,  wood, brick and tile.
The sizes of buildings owned by the Partnership range from  approximately  1,200
to  6,800  square  feet.  All  buildings  on  Properties  are  freestanding  and
surrounded by paved  parking  areas.  Buildings  are suitable for  conversion to
various uses, although modifications may be required prior to use for other than
restaurant operations. As of December 31, 2002, 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, 2002, 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  $15,047,560  and
$6,039,412, respectively.


<PAGE>



         The  following  table lists the  Properties  owned by the  Partnership,
directly and indirectly, as of December 31, 2002 by Restaurant Chain.

              Restaurant Chain             Number of Properties

              Arby's                                3
              Captain D's                           2
              Checkers                              1
              Denny's                               4
              Dunkin Donuts                         1
              Golden Corral                         2
              IHOP                                  1
              Jack in the Box                       1
              KFC                                   1
              Pizza Hut                             5
              Shoney's                              3
              Taco Bell                             1
              Waffle House                          1
              Wendy's                               2
              Other                                 4
                                              ---------------------
              Total Chains on Properties (1)       32
                                              =====================

        (1) One Property was leased to two tenants and each operate one separate
            restaurant chain.

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

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

         Leases. The Partnership leases the Properties to operators of selected
national and regional fast-food restaurant chains. The leases are generally on a
long-term "triple net" basis, meaning that the tenant is responsible for
repairs, maintenance, property taxes, utilities and insurance.

         At December 31, 2002,  2001,  2000, 1999, and 1998, the Properties were
100%, 97%, 94%, 97%, and 97% occupied, respectively. The following is a schedule
of the average rent per property for the years ended December 31:
<TABLE>
<CAPTION>

                                       2002              2001               2000             1999              1998
                                   --------------    --------------     -------------    -------------     -------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Rental Revenues (1)(2)               $ 1,975,618        $1,976,264       $ 2,255,228      $ 2,640,100       $ 2,544,386
Properties (2)                                31                31                32               37                36
Average Rent per Property              $  63,730         $  63,750         $  70,476        $  71,354         $  70,677
</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.


<PAGE>



         The following is a schedule of lease expirations for leases in place as
of December 31, 2002 for the next ten years and thereafter.
<TABLE>
<CAPTION>

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

              2003                              2               $   48,247                   2.60%
              2004                              1                   33,058                   1.78%
              2005                             --                       --                      --
              2006                             --                       --                      --
              2007                             --                       --                      --
              2008                             14                  836,223                  45.07%
              2009                              4                  344,144                  18.55%
              2010                              1                   72,803                   3.92%
              2011                              3                  187,970                  10.13%
              2012                             --                       --                      --
              Thereafter                        6                  333,078                  17.95%
                                        ----------        -----------------           -------------
              Total (1) (2)                    31             $  1,855,523                 100.00%
                                        ==========        =================           =============
</TABLE>

          (1) One  Property  was  leased to two  tenants  and each  operate  one
              separate restaurant chain.

          (2) Excludes a property sold in February 2003.

         Leases  with Major  Tenants.  The terms of each of the leases  with the
Partnership's  major  tenants as of December  31,  2002 (see Item 1.  Business -
Major  Tenants),  are  substantially  the  same as  those  described  in Item 1.
Business - Leases.

         Shoney's,  Inc. leases three Shoney's restaurants.  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).

         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 or any affiliate of
the General Partners,  nor any of their respective  Properties,  is party to, or
subject to, any material pending legal proceedings.


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

                  Not applicable.



<PAGE>


                                     PART II


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

(a)          As of March 10,  2003,  there were  2,871  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  2002,
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  $405.10 to $475 per Unit.
During 2001 and 2002, due primarily to the sales of  Properties,  the price paid
for any Unit transferred pursuant to the Plan was $357.40 and $332 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 2002 and 2001 other than
pursuant to the Plan, net of commissions.
<TABLE>
<CAPTION>

                                                     2002 (1)                             2001 (1)
                                        -----------------------------------  ------------------------------------
                                          High         Low        Average      High          Low        Average
                                        ----------   --------    ----------  ----------    --------    ----------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

      First Quarter                         $ 263       $200        $  232       $ 324        $207        $  249
      Second Quarter                          259        259           259         400         253           303
      Third Quarter                           508         23           249         298         248           281
      Fourth Quarter                          325        228           281         287         216           241
</TABLE>

(1)      A total of 747 and 458 Units were  transferred  other than  pursuant to
         the Plan for the years ended December 31, 2002 and 2001, 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,  2002 and  2001,  the  Partnership
declared cash distributions of $2,095,788 and $3,147,894,  respectively,  to the
Limited Partners.  Distributions for the year ended December 31, 2001,  included
$1,050,000  in special  distributions,  as a result of the  distribution  of net
sales proceeds from the sale of several Properties.  These special distributions
were  effectively  a return of a portion of the  Limited  Partners'  investment,
although,  in accordance  with the Partnership  Agreement,  $989,873 was applied
toward the Limited Partners' 10% Preferred Return and the balance of $60,127 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.  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 September 2001. No amounts distributed
to the  partners for the years ended  December  31, 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.


<PAGE>

<TABLE>
<CAPTION>


                            Quarter Ended                                2002             2001
                            -------------------                      -------------    -------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                            March 31                                    $ 523,947        $ 975,000
                            June 30                                       523,947          525,000
                            September 30                                  523,947        1,123,947
                            December 31                                   523,947          523,947
</TABLE>

         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

<TABLE>
<CAPTION>

Item 6.  Selected Financial Data

                                          2002           2001             2000           1999            1998
                                     -------------- --------------   -------------- -------------- -----------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Year ended December 31:
   Revenues                            $ 1,609,524    $ 1,769,086      $ 1,955,443    $ 2,298,834      $ 2,375,840
    Equity in earnings (losses)
      of joint ventures                    315,135        278,224          234,317        303,223          (90,144)
   Net Income (1)                        1,117,445      1,089,094        2,078,310      1,827,359        1,821,449
   Cash distributions
      declared (2)                       2,095,788      3,147,894        5,050,000      2,400,000        3,633,748
   Net income per Unit                       18.62          18.15            34.64          30.15            30.15
   Cash distributions declared
      per Unit (2)                           34.93          52.46            84.17          40.00            60.56

At December 31:
   Total assets                        $14,797,910    $15,542,775      $17,616,159    $20,828,319      $21,189,833
   Partners' capital                    13,968,526     14,736,869       16,795,669     19,767,359       20,340,000

</TABLE>

   (1) Income  for the years  ended  December  31,  2002,  2001,  2000  includes
       $210,000,  $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, respectively, from losses on the sale
       of assets. Income for the years ended December 31, 2000 and 1998 includes
       $1,134,692 and $226,024, respectively, from gains on the sale of assets.

   (2) Distributions  for the  years  ended  December  31,  2001,  2000 and 1998
       include  special  distributions  to the Limited  Partners of  $1,050,000,
       $2,800,000 and $1,233,748,  respectively,  in net sales proceeds from the
       sale  of  two,  four  and  two   Properties  in  2001,   2000  and  1998,
       respectively.

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


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

         The  Partnership  was  organized on November  18, 1987,  to acquire for
cash,  either  directly  or  through  joint  venture  arrangements,  both  newly
constructed  and  existing  restaurant  Properties,  as well as land upon  which
restaurant  Properties  were to be  constructed,  which are leased  primarily to
operators  of  selected   national  and  regional   fast-food  and  family-style
Restaurant Chains.  Substantially all of the leases are triple-net leases,  with
the lessees  generally  responsible  for all repairs and  maintenance,  property
taxes,  insurance  and  utilities.  The leases  provide for minimum  base annual
rental  amounts  (payable in monthly  installments)  ranging from  approximately
$18,600 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.
<PAGE>

         As of December 31, 2000, the Partnership  owned 26 Properties  directly
and as of December 31, 2002 and 2001, 24 Properties directly.  In addition,  the
Partnership owned eight Properties  indirectly  through joint venture or tenancy
in common arrangements as of December 31, 2000 and 2001, and seven Properties as
of December 31, 2002.

Capital Resources

         For the  years  ended  December  31,  2002,  2001 and  2000,  cash from
operating  activities was $1,813,739,  $1,768,652 and $1,827,107,  respectively.
The increase in cash from operating activities during 2002, as compared to 2001,
primarily  resulted from changes in working capital,  while the decrease in cash
from  operating  activities  during  2001,  as compared to 2000,  resulted  from
changes in income and expenses.

         Other sources and uses of cash included the following  during the years
ended December 31, 2002, 2001, and 2000.

         In 2000, the Partnership sold its Property in Detroit,  Michigan to the
tenant and received  net sales  proceeds of  $1,089,325,  resulting in a gain of
approximately  $552,600.  In addition,  in July 2000, the  Partnership  sold its
Properties in Temple Terrace, Florida and Punta Gorda, Florida, to a third party
for $2,353,583 resulting in a gain of approximately $582,100. In connection with
the  sales  of  these  three  properties,   the  Partnership  incurred  deferred
subordinated  real estate  disposition  fees of $103,458.  In October 2000,  the
Partnership  distributed  $2,800,000 of the net sales proceeds from the sales of
these Properties as a special  distribution to the Limited Partners and used the
remaining net proceeds to pay Partnership liabilities.

         In November 2000, the Partnership  sold its Property in Topeka,  Kansas
to a third party and  received  net sales  proceeds of  approximately  $496,400,
resulting in a loss of approximately  $92,400.  In connection with the sale, the
Partnership  incurred a deferred,  subordinated,  real estate disposition fee of
$15,000. 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.

         The  Partnership  has entered into an agreement to sell the property in
Richmond,  Virginia.  In connection with the  anticipated  sale, a provision for
write-down of assets of $37,000 was recognized at December  2002.  This property
was identified for sale in February 2003. As of March 10, 2003, the sale had not
occurred.

         In February  2003,  the  Partnership  sold its  property  in  Portland,
Indiana and received net sales proceeds of approximately $776,100,  resulting in
a gain of  approximately  $129,400.  This  property was  identified  for sale in
February  2003.  The  Partnership  expects to use the  majority of the net sales
proceeds to make distributions to the Limited Partners and to pay liabilities of
the Partnership.
<PAGE>

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

         Currently, rental income from the Partnership's Properties are invested
in  short-term  highly liquid  investments  such as demand  deposit  accounts at
commercial  banks,  money market accounts and  certificates of deposit with less
than a 90-day  maturity  date,  pending  use of such  funds  to pay  Partnership
expenses,  or to make  distributions  to partners.  At December  31,  2002,  the
Partnership had $405,155 invested in such short-term  investments as compared to
$645,220 at December 31, 2001. The decrease in the amount invested in short-term
investments at December 31, 2002, as compared to December 31, 2001, is primarily
attributable to the Partnership making distributions to the limited partners. As
of December 31, 2002, the average interest rate earned by the Partnership on the
rental  income  deposited in demand  deposit  accounts at  commercial  banks was
approximately 1.18% annually.  The funds remaining at December 31, 2002, will be
used to pay distributions and other liabilities of the Partnership.

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 $2,095,788, $3,147,894, and $5,050,000,
for the  years  ended  December  31,  2002,  2001 and 2000,  respectively.  This
represents  distributions  of $ 34.93,  $52.46 and $84.16 per Unit for the years
ended December 31, 2002, 2001 and 2000, respectively. Distributions for the year
ended  December 31, 2001,  included  $1,050,000 in special  distributions,  as a
result  of the  distribution  of net  sales  proceeds  from the sale of  several
Properties.  These special  distributions were effectively a return of a portion
of  the  Limited  Partners'   investment,   although,  in  accordance  with  the
Partnership  agreement,  $989,873 was applied  toward the Limited  Partners' 10%
Preferred  Return and the  balance of $60,127 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.  Distributions for the year ended
December 31, 2000 included $2,800,000, in special distributions,  as a result of
the  distribution  of a portion of net sales  proceeds  from the sale of several
Properties.  The special distributions were effectively a return of a portion of
the Limited Partners'  investment,  although, in accordance with the Partnership
agreement,  they were applied to the Limited  Partners' unpaid preferred return.
The reduced  number of  Properties  for which the  Partnership  receives  rental
payments  reduced  the  Partnership's  revenues.  The  decrease  in  Partnership
revenues, combined with the fact that a significant portion of the Partnership's
expenses are fixed in nature, resulted in two decreases in cash distributions to
the Limited Partners  commencing the quarters ended September 30, 2000 and 2001.
No distributions  were made to the General Partners for the years ended December
31, 2002, 2001 and 2000. No amounts  distributed to the Limited Partners for the
years ended  December 31, 2002 and 2000, 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.
<PAGE>

         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, 2002, 2001 and 2000.

         As of December  31, 2002 and 2001,  the  Partnership  owed  $12,798 and
$4,841,  respectively,  to affiliates  for operating  expenses,  accounting  and
administrative  services,  and  management  fees.  As of  March  15,  2003,  the
Partnership had reimbursed the affiliates for these amounts. In addition, during
the year ended  December  31, 2001,  the  Partnership  incurred  $21,023 in real
estate  disposition  fees due to an  affiliate  as a result of its  services  in
connection  with the sale of  several  Properties.  The  payment of such fees is
deferred until the Limited Partners have received the sum of their 10% Preferred
Return and their adjusted capital contributions.

         Other  liabilities,   including  distributions  payable,  increased  to
$631,442 at December  31,  2002,  from  $615,921 at  December  31,  2001.  Total
liabilities  at  December  31,  2002,  to the extent  they  exceed cash and cash
equivalents,  will be paid from anticipated  future cash from operations,  or in
the event the General Partners elect to make additional capital contributions or
loans, from the future General Partners' contributions or loans.

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 Accounting Standard 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 at the
inception of 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  periodically  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.

         When the Partnership makes the decision to sell or commits to a plan to
sell a Property, its operating results are reported as discontinued operations.
<PAGE>

Results of Operations

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

         Total rental  revenues were  $1,515,900 for the year ended December 31,
2002 as  compared to  $1,542,156  in the same  period in 2001.  The  decrease in
rental  revenues  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 are expected to remain at reduced
amounts.

         Rental  revenues  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  relating to the new lease will have a material
adverse affect on the Partnership's financial position or results of operations.

         The decrease in rental  revenues,  during 2002, was partially offset by
an increase in rental  revenues as a result of the  Partnership  re-leasing  the
Property in Richmond,  Virginia in 2001.  This  Property  was vacant  during the
first quarter of 2001.

         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 owns 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  $73,600. 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.

         In February 2002, a tenant,  Sybra, Inc., filed for bankruptcy.  During
2002,  the  Partnership  continued to receive  rental  payments  relating to the
Property  in  Zephyrhills,  Florida,  held  with  an  affiliate  of the  General
Partners,  as  tenants-in-common.  In December 2002, Sybra, Inc. was acquired by
Triarc  Companies,  Inc. and emerged from bankruptcy.  The lease relating to the
Property in Zephyrhills, Florida was affirmed.

         During 2002, two lessees of the Partnership,  Shoney's,  Inc. and Tampa
Foods,  L.P., each contributed more than ten percent of the Partnership's  total
rental revenues  (including the Partnership's  share of the 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, 2002, 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 2003.  In addition,  three  Restaurant
Chains,  Shoney's,  Denny's,  and Wendy's Old  Fashioned  Hamburger  Restaurants
("Wendy's"), each accounted for more than ten percent of the Partnership's total
rental  revenues  in 2002  (including  the  Partnership's  share  of the  rental
revenues  from  Properties  owned by joint  ventures and  Properties  owned with
affiliates  of the  General  Partners  as  tenants-in-common).  In  2003,  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.
<PAGE>

         During the years ended December 31, 2002 and 2001, the Partnership also
earned $15,440 and $78,307, 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 $807,214 and $837,344 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. During 2001,
the  Partnership  sold this  Property  and  recognized  a loss of  approximately
$27,100.  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 are not expected to exercise  their option to renew
their  leases,  which will expire in June 2003.  The provision  represented  the
difference  between the carrying  value of the property and its  estimated  fair
value.  The lost  revenues  that would result from the loss of these leases will
have an adverse  effect on the results of operations of the  Partnership  if the
Partnership is unable to lease the Property in a timely manner. In addition, the
Partnership  also  recorded a provision  for  write-down of assets of $37,000 in
December 2002 relating to the property in Richmond,  Virginia in anticipation of
the sale of this Property.  The provision represented the difference between the
carrying  value of the Property and its  estimated  fair value.  As of March 10,
2003, the sale of this Property had not occurred.

         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.

         Effective  January  1,  2002,  the  Partnership  adopted  Statement  of
Financial  Accounting  Standards  No.  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.

         The Property in  Titusville,  Florida,  which was sold during 2002, did
not meet the criteria of this standard  because it was identified for sale as of
December 31, 2001.



<PAGE>


Comparison  of the year ended  December 31, 2001 to the year ended  December 31,
2000

         Total rental  revenues were  $1,542,156 for the year ended December 31,
2001 as  compared to  $1,860,652  in the same  period in 2000.  The  decrease in
rental  revenues  during  2001,  as  compared  to the same  period in 2000,  was
partially attributable to the 2001 and 2000 sales of various Properties.  During
2001 and 2000, the  Partnership  distributed a portion of the net sales proceeds
from the sale of several Properties to the Limited Partners. Rental revenues are
expected to remain at reduced  amounts as a result of the  distributions  of the
net sales  proceeds  from the 2001 and 2000 sales of  Properties  to the Limited
Partners.

         Rental  revenues were also higher  during 2000 because the  Partnership
collected  and  recognized  as income  approximately  $39,000 in past due rental
amounts from the guarantor of a tenant of the Property in Palm Bay, Florida, who
had vacated the Property in October 1997. In August 2001, the  Partnership  sold
this Property.

         Rental  revenues also  decreased by  approximately  $20,100 during 2001
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, and the Partnership  received  approximately  $67,100 in lease termination
income, as described above.

         In June 2000, the tenant of a Boston Market Property rejected the lease
relating to this Property.  As a result, the tenant  discontinued  making rental
payments on the rejected lease. In December 2000, the Partnership entered into a
new  lease  with a new  tenant  for this  Property  for  which  rental  payments
commenced  in March  2001.  The  decrease  in rental  revenues  during  2001 was
partially  offset  by  an  increase  in  rental  revenues  as a  result  of  the
Partnership entering into this new lease.

         During the years ended December 31, 2001 and 2000, the Partnership also
earned  $81,550 and $24,545,  respectively,  in contingent  rental  income.  The
increase in  contingent  rental  income in 2001 was  partially  attributable  to
increases in gross sales for certain restaurant  Properties whose leases require
the payment of contingent rental income.

         During the years  ended  December  31, 2001 and 2000,  the  Partnership
earned  $278,224  and  $234,317,  respectively,  attributable  to the net income
earned by unconsolidated joint ventures. During 1997, the tenant of the Property
owned by Titusville  Joint Venture  vacated the Property and ceased  operations.
During 2001,  Titusville  Joint Venture (in which the  Partnership  owns a 26.6%
interest  in the  profits and losses of the joint  venture)  incurred  expenses,
which are fixed in nature, such as real estate taxes, insurance and maintenance.
In addition,  during 2001 and 2000, the joint venture established provisions for
write-down of assets for this Property for  approximately  $73,600 and $227,100,
respectively.  The provisions  represented the difference between the Property's
carrying values at December 31, 2001 and 2000,  respectively,  and its estimated
fair value.  During  January 2002,  the joint venture sold this Property and the
Partnership  and the joint  venture  partner  dissolved the joint  venture.  Net
income  earned by joint  ventures is expected to remain at reduced  amounts as a
result  of the  Partnership  using  its pro rata  share of the  joint  venture's
liquidating distribution to pay liabilities of the Partnership.

         During the years ended December 31, 2001 and 2000, the Partnership also
earned  $78,307 and $70,246,  respectively,  in interest and other  income.  The
increase in interest and other income  during 2001,  as compared to the previous
year,  was  due  to  higher  average  cash  balances  during  2001  pending  the
distribution of net sales proceeds to the Limited Partners.

         Operating expenses, including depreciation and amortization expense and
provision for  write-down of assets,  were $837,344 and $1,153,745 for the years
ended December 31, 2001 and 2000,  respectively.  During 2000,  the  Partnership
established a provision for write-down of assets in the amount of $400,442,  for
the Property in Palm Bay, Florida.  The tenant of this Property  defaulted under
the terms of its lease and vacated the Property.  The provision  represented the
difference  between the Property's  carrying value at December 31, 2000, and its
estimated  fair value.  During  2001,  the  Partnership  recorded an  additional
provision for  write-down  of assets of $178,817.  The increase in the provision
represented  the  difference  between the carrying value of the Property at June
30, 2001,  and its estimated  fair value based on a sales  contract with a third
party. In connection with the sale of the Property,  the Partnership  recognized
an additional loss of approximately $27,100 during 2001.

         During 2000, the  Partnership  also recorded a provision for write-down
of assets of $38,690 relating to the property located in Richmond, Virginia. The
tenant of a Boston Market Property rejected the lease relating to this Property,
as  described  above.  The  provision  represented  the  difference  between the
carrying value of the property and its estimated fair value.

         The decrease in operating  expenses for 2001, as compared to 2000,  was
partially  due to a  reduction  in  depreciation  expense  due to  the  sale  of
Properties in 2000 and 2001. The decrease in operating  expenses during 2001 was
partially  offset  by an  increase  in the  costs  incurred  for  administrative
expenses for servicing the Partnership  and its Properties,  as permitted by the
Partnership  agreement.   During  2000,  the  Partnership  incurred  $36,493  in
transaction costs related to the General Partners retaining  financial and legal
advisors to assist them in evaluating and  negotiating  the proposed merger with
CNL  American  Properties  Fund,  Inc.  ("APF").  On March 1, 2000,  the general
partners and APF mutually agreed to terminate the merger.

         As a result of the sale of the Property in Corpus Christi,  Texas,  the
Partnership  recognized a loss of approximately $93,800 during 2001. As a result
of the sale of three Properties during 2000, the Partnership  recognized a total
gain of  $1,134,692.  In  addition,  as a result of the sale of the  Property in
Topeka, Kansas, the Partnership recognized a loss of $92,397 for 2000.

         The  restaurant  industry  has been  relatively  resilient  during this
volatile time with steady performance during 2002. However, the industry remains
in a state of cautious optimism.  Restaurant  operators expect their business to
be better in 2003,  according to a nationwide  survey  conducted by the National
Restaurant  Association,   but  are  concerned  by  the  budget  deficits  being
experienced  by many states and the  potential  of new taxes on the  industry to
alleviate the situation.

         The  Partnership's  leases  as of  December  31,  2002,  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,  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 (more  commonly  referred to as  special-purpose  entities or
off-balance sheet  structures),  FIN 46 requires that a variable interest entity
be considered 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.  Consolidation  of  variable
interests  entities will provide more complete  information about the resources,
obligations,   risks  and  opportunities  of  the  consolidated   company.   The
consolidation  requirements  of FIN 46 apply  immediately  to variable  interest
entities  created  after  January 31, 2003,  and to older  entities in the first
fiscal year or interim period beginning after June 15, 2003. Management believes
adoption  of this  standard  may result in either  consolidation  or  additional
disclosure  requirements with respect to the Partnership's  unconsolidated joint
ventures  or  Properties  held  with  affiliates  of  the  General  Partners  as
tenants-in-common,  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                             24-34

<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, 2002 and 2001,  and the results of its  operations
and its cash flows for each of the three years in the period ended  December 31,
2002 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  Standard  No.  144
"Accounting for the Impairment or Disposal of Long-Lived Assets."





/s/ PricewaterhouseCoopers LLP

Orlando, Florida
January 31, 2003, except for Note 11, as to which the date is February 28, 2003




<PAGE>



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

                                 BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                                         December 31,
                                                                                 2002                   2001
                                                                           ------------------     ------------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                               ASSETS

  Real estate properties with operating leases, net                            $  10,590,312          $  11,106,349
  Net investment in direct financing leases                                          300,064                323,935
  Investment in joint ventures                                                     2,979,763              3,108,042
  Cash and cash equivalents                                                          405,155                645,220
  Receivables                                                                          9,755                 51,516
  Due from related parties                                                                --                  4,574
  Accrued rental income                                                              275,823                269,464
  Other assets                                                                        27,038                 33,675
                                                                           ------------------     ------------------

                                                                               $  14,587,910          $  15,542,775
                                                                           ==================     ==================

                   LIABILITIES AND PARTNERS' CAPITAL

  Accounts payable and accrued expenses                                          $    10,757            $    10,252
  Real estate taxes payable                                                           47,973                 48,654
  Distributions payable                                                              523,947                523,947
  Due to related parties                                                             197,942                189,985
  Rents paid in advance and deposits                                                  48,765                 33,068
                                                                           ------------------     ------------------
          Total liabilities                                                          829,384                805,906

  Commitment (Note 9)

  Partners' capital                                                               13,758,526             14,736,869
                                                                           ------------------     ------------------

                                                                               $  14,587,910          $  15,542,775
                                                                           ==================     ==================

</TABLE>
                 See accompanying notes to financial statements.


<PAGE>


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

                              STATEMENTS OF INCOME

<TABLE>
<CAPTION>

                                                                            Year Ended December 31,

                                                                  2002               2001                2000
                                                             ----------------   ----------------    ----------------

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

Revenues:
   Rental income from operating leases                          $  1,483,121       $  1,506,977        $  1,781,392
   Earned income from direct financing leases                         32,779             35,179              79,260
   Contingent rental income                                           78,184             81,550              24,545
   Lease termination income                                               --             67,073                  --
   Interest and other income                                          15,440             78,307              70,246
                                                                                ----------------
                                                             ----------------                       ----------------
                                                                   1,609,524          1,769,086           1,955,443
                                                             ----------------   ----------------    ----------------
Expenses:
   General operating and administrative                              238,752            236,930             169,862
   Property expenses                                                  35,664             57,879              76,081
   Provision for doubtful accounts                                        --             10,792              12,685
   State and other taxes                                              14,283             30,350              15,479
   Depreciation and amortization                                     308,515            322,576             404,013
   Provision for write-down of assets                                210,000            178,817             439,132
   Transaction costs                                                      --                 --              36,493
                                                             ----------------   ----------------    ----------------
                                                                     807,214            837,344           1,153,745
                                                             ----------------   ----------------    ----------------
Income Before Gain (Loss) on Sale of Assets
   and Equity in Earnings of Joint Ventures                          802,310            931,742             801,698

Gain (Loss) on Sale of Assets                                             --           (120,872 )         1,042,295

Equity in Earnings of Joint Ventures                                 315,135            278,224             234,317
                                                             ----------------   ----------------    ----------------

Net Income                                                      $  1,117,445       $  1,089,094        $  2,078,310
                                                             ================   ================    ================


Net Income per Limited Partner Unit                               $    18.62         $    18.15          $    34.64
                                                             ================   ================    ================

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, 2002, 2001, and 2000

<TABLE>
<CAPTION>

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


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

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

Balance, December 31, 2000            557,804        229,547        30,000,000     (36,291,711 )    25,740,029         (3,440,000 )

   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         (3,440,000 )

   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      $  (3,440,000 )
                                  ============  =============    ==============  ==============   =============    ===============

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                                                                                                           Total
                                                                                                                   ----------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>



                                                                                                                       $ 19,767,359



                                                                                                                         (5,050,000
                                                                                                                          2,078,310
                                                                                                                    ---------------

                                                                                                                         16,795,669



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

                                                                                                                         14,736,869



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

                                                                                                                       $ 13,758,526
                                                                                                                    ===============


</TABLE>


                 See accompanying notes to financial statements.


<PAGE>

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

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                          Year Ended December 31,
                                                                2002                2001               2000
                                                           ----------------    ----------------   ----------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Increase (Decrease) in Cash and Cash Equivalents:

      Cash Flows from Operating Activities:
      Net income                                              $ 1,117,445         $ 1,089,094        $ 2,078,310
                                                           ----------------    ----------------   ----------------
      Adjustments to reconcile net income to net cash provided by operating
        activities:
           Depreciation                                           306,037             320,213            376,013
           Amortization                                             2,478               2,363             28,000
           Provision for doubtful accounts                             --              10,792             12,685
           Provision for write-down of assets                     210,000             178,817            439,132
           Loss (gain) on sale of assets                               --             120,872         (1,042,295  )
           Equity in earnings of joint ventures,
              net of distributions                                 86,295              89,468            134,502
           Decrease (increase) in receivables                      41,804             (17,164  )          83,846
           Decrease (increase) in due from related
              parties                                               4,531              10,652            (15,226  )
           Amortization of investment in direct
              financing leases                                     23,871              15,754             31,769
           Increase in accrued rental income                       (6,359  )          (18,829  )         (16,153  )
           Increase in other assets                                 4,159               1,174                452
           Increase (decrease) in accounts
              payable and accrued expenses                            505             (34,818  )         (46,004  )
           Increase (decrease) in accrued and
              escrowed real estate taxes                             (681  )              146            (15,077  )
           Increase (decrease) in due to related                    7,957              (3,715  )        (187,290  )
parties
           Increase (decrease) in rents paid in
              advance and deposits                                 15,697               3,833            (35,557  )
                                                           ----------------    ----------------   ----------------
                Total adjustments                                 696,294             679,558           (251,203  )
                                                           ----------------    ----------------   ----------------
              Net Cash Provided by Operating
                Activities                                      1,813,739           1,768,652          1,827,107
                                                           ----------------    ----------------   ----------------

      Cash Flows from Investing Activities:
           Proceeds from sale of real estate properties                --             679,894          3,939,271
           Liquidating distribution from joint venture             41,984                  --                 --
           Payment of lease costs                                      --             (21,250  )              --
                                                           ----------------    ----------------   ----------------
              Net cash provided by investing activities            41,984             658,644          3,939,271
                                                           ----------------    ----------------   ----------------

      Cash Flows from Financing Activities:
        Distributions to limited partners                      (2,095,788  )       (3,148,947  )      (5,125,000  )
                                                           ----------------    ----------------   ----------------
              Net cash used in financing activities            (2,095,788  )       (3,148,947  )      (5,125,000  )
                                                           ----------------    ----------------   ----------------

Net Increase (Decrease) in Cash and Cash
   Equivalents                                                   (240,065  )         (721,651  )         641,378

Cash and Cash Equivalents at Beginning of Year                    645,220           1,366,871            725,493
                                                           ----------------    ----------------   ----------------

Cash and Cash Equivalents at End of Year                       $  405,155          $  645,220        $ 1,366,871
                                                           ================    ================   ================
</TABLE>

                 See accompanying notes to financial statements.
<PAGE>


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

                      STATEMENTS OF CASH FLOWS - CONTINUED

<TABLE>
<CAPTION>

                                                                          Year Ended December 31,
                                                                2002                2001               2000
                                                           ----------------    ----------------   ----------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Supplemental Schedule of Non-Cash Investing
   and Financing Activities:

      Deferred real estate disposition fees incurred
        and unpaid at December 31                                 $    --          $   21,023         $  118,458
                                                           ================    ================   ================

      Distributions declared and unpaid at
        December 31                                            $  523,947          $  523,947         $  525,000
                                                           ================    ================   ================
</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, 2002, 2001, and 2000


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, 2002,  2001 and 2000,  tenants paid
         directly to real estate  taxing  authorities  $202,200,  $193,800,  and
         $200,400,  respectively,  in real estate taxes in  accordance  with the
         terms of their triple net leases with the Partnership.

         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
         direct  financing or the operating  method.  Such methods are described
         below:

                   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.

                   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.

                   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 - CONTINUED

                  Years Ended December 31, 2002, 2001, and 2000


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 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 and money market funds (some of which are
         backed by government  securities).  Cash equivalents are stated at cost
         plus accrued interest, which approximates market value.

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

         Lease Costs - 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 - CONTINUED

                  Years Ended December 31, 2002, 2001, and 2000


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.

         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 2002  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 ("FAS  144") -
         Effective  January  1,  2002,  the  Partnership  adopted  Statement  of
         Financial  Accounting  Standards No. 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 ("FIN 46") - In January 2003,  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   (more   commonly   referred   to   as
         special-purpose  entities  or  off-balance  sheet  structures),  FIN 46
         requires that a variable  interest entity be considered 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.  Consolidation of
         variable  interests  entities  will provide more  complete  information
         about  the  resources,  obligations,  risks  and  opportunities  of the
         consolidated  company.  The consolidation  requirements of FIN 46 apply
         immediately  to variable  interest  entities  created after January 31,
         2003,  and to older entities in the first fiscal year or interim period
         beginning  after June 15, 2003.  Management  believes  adoption of this
         standard may result in either  consolidation  or additional  disclosure
         requirements  with respect to the  Partnership's  unconsolidated  joint
         ventures or properties held with affiliates of the general  partners as
         tenants-in-common,  which are currently  accounted for under the equity
         method.  However,  such  consolidation is not expected to significantly
         impact the Partnership's results of operations.


<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2002, 2001, and 2000


2.       Real Estate Properties with Operating Leases:
         --------------------------------------------

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

                                                                 2002                 2001
                                                           ------------------   ------------------

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

                  Land                                         $   5,653,381          $ 5,768,381
                  Buildings                                        8,932,177            9,027,177
                                                           ------------------   ------------------
                                                                  14,585,558           14,795,558
                  Less accumulated depreciation                   (3,995,246 )         (3,689,209 )
                                                           ------------------   ------------------

                                                               $  10,590,312         $ 11,106,349
                                                           ==================   ==================
</TABLE>

         As of December  31,  2000,  the  Partnership  recorded a provision  for
         write-down of assets of $400,442, relating to the property in Palm Bay,
         Florida.  The tenant of this property  filed for  bankruptcy and ceased
         payment  of  rents  under  the  terms  of  its  lease  agreement.   The
         Partnership  also  recorded a  provision  for  write-down  of assets of
         approximately  $38,700 for the property located in Richmond,  Virginia.
         The provisions represented the difference between the carrying value of
         the  properties  and their  estimated  fair  value.  During  2001,  the
         Partnership  increased  the  provision  for the  property  in Palm Bay,
         Florida by $178,817 to $579,259.  The additional provision  represented
         the  difference  between the carrying value of the property at June 30,
         2001 and its  estimated  fair value  based on a sales  contract  with a
         third party.  In August  2001,  the  Partnership  sold the property and
         received net sales proceeds of approximately  $289,894,  resulting in a
         loss of  approximately  $27,100.  In  connection  with  the  sale,  the
         Partnership incurred a deferred,  subordinated, real estate disposition
         fee of $9,323.

         In June 2001,  the  Partnership  sold its  property in Corpus  Christi,
         Texas to the  tenant  and  received  net sales  proceeds  of  $390,000,
         resulting in a loss of  approximately  $93,800.  In connection with the
         sale, the  Partnership  incurred a deferred  subordinated,  real estate
         disposition fee of $11,700.

         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  are not  expected to exercise
         their option to renew their leases, which will expire in June 2003. The
         provision  represented the difference between the carrying value of the
         property and its estimated fair value.

         In addition in December 2002, the Partnership also 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
         provision  represented the difference between the carrying value of the
         Property and its estimated fair value.

         The following is a schedule of the future  minimum lease payments to be
         received on noncancellable operating leases at December 31, 2002:

                             2003              $   1,453,621
                             2004                  1,450,350
                             2005                  1,463,030
                             2006                  1,466,800
                             2007                  1,470,384
                             Thereafter            3,963,605
                                              ---------------

                                               $  11,267,790
                                              ===============


<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2002, 2001, and 2000


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>

                                                                         2002                 2001
                                                                   -----------------    -----------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                   Minimum lease payments receivable                    $   322,398          $   379,048
                   Estimated residual values                                114,886              114,886
                   Less unearned income                                    (137,220 )           (169,999 )
                                                                   -----------------    -----------------

                   Net investment in direct financing
                      leases                                            $   300,064          $   323,935
                                                                   =================    =================
</TABLE>

         The following is a schedule of future minimum lease payments to be
received on direct financing leases at December 31, 2002:

                             2003              $   53,568
                             2004                  53,568
                             2005                  53,568
                             2006                  53,568
                             2007                  53,568
                             Thereafter            54,558
                                               -----------

                                               $  322,398
                                               ===========

4.       Investment in Joint Ventures:
         ----------------------------

         As of December 31, 2002, 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 and leases one property to an operator of national  fast-food
         or family-style restaurants.

         As of  December  31,  2000,  Titusville  Joint  Venture,  in which  the
         Partnership  owned a 26.6%  interest,  had  recorded  a  provision  for
         write-down of assets of $499,383.  During 1997, the tenant of the joint
         venture's  property  vacated  and  ceased  operations.   The  provision
         represented  the difference  between the carrying value of the property
         at December  31,  2000 and its  estimated  fair value.  During the year
         ended December 31, 2001,  the joint venture  increased the provision by
         $73,570  to  $572,954.   The  additional   provision   represented  the
         difference  between the carrying  value of the property at December 31,
         2001 and its  estimated  fair value  based on a sales  contract  with a
         third party.  In January 2002,  the joint venture sold the property and
         received net sales proceeds of  approximately  $165,600  resulting in a
         gain of  approximately  $4,900 to the joint  venture.  The property was
         identified  for sale as of December 31, 2001. The  Partnership  and the
         joint venture  partner  dissolved the joint venture and the Partnership
         received


<PAGE>



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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2002, 2001, and 2000


4.       Investment in Joint Ventures - Continued:
         ----------------------------------------

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

                                                                               December 31,
                                                                        2002                 2001
                                                                  ------------------   ------------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                   Real estate properties with operating
                      leases, net                                     $   4,399,190        $   4,672,053
                   Net investment in direct financing lease                 325,247              343,619
                   Cash                                                      19,781               24,547
                   Receivables                                               33,692               23,086
                   Accrued rental income, less
                      allowance for doubtful accounts                       157,190              161,143
                   Other assets                                                 170                3,111
                   Liabilities                                               11,554               21,941
                   Partners' capital                                      4,923,716            5,205,618


                                                                        Year Ended December 31,
                                                               2002              2001              2000
                                                           --------------   ---------------    -----------
                 Rental revenues                              $  629,838       $   613,956        $  606,228
                 Expenses                                       (129,383 )        (152,765 )        (156,256 )
                 Provision for write-down of assets                   --           (73,750 )        (227,093 )
                 Gain on disposal of assets                        4,901                --                --
                                                           --------------   ---------------    --------------
                 Net Income                                   $  505,356       $   387,441        $  222,879
                                                           ==============   ===============    ==============
</TABLE>


         The  Partnership  recognized  income  totaling  $315,135,  $278,224 and
         $234,317  for the  years  ended  December  31,  2002,  2001  and  2000,
         respectively, from these joint ventures.

5.       Allocations and Distributions:
         -----------------------------

         From inception through December 31, 1999, generally, all net income and
         net losses of the Partnership, excluding gains and losses from the sale
         of property,  were allocated 99 percent to the limited partners and one
         percent to the general  partners.  From inception  through December 31,
         1999,  distributions  of net cash  flow  were  made 99  percent  to the
         limited partners and one percent to the general partners.  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").


<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2002, 2001, and 2000


5.       Allocations and Distributions - Continued:
         -----------------------------------------

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

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

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

         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, 2002, 2001 and 2000.

         During each of the years ended  December 31, 2002,  2001 and 2000,  the
         Partnership   declared   distributions   to  the  limited  partners  of
         $2,095,788, $3,147,894 and $5,050,000, respectively.  Distributions for
         the year ended  December 31,  2000,  included  $2,800,000  in a special
         distribution,  as a result of the  distribution  of net sales  proceeds
         from the sale of the  properties  in Temple  Terrace  and Punta  Gorda,
         Florida and  Detroit,  Michigan.  This  amount was  applied  toward the
         limited  partners' 10%  Preferred  Return.  Distributions  for the year
         ended December 31, 2001, included $1,050,000 in special  distributions,
         as a result of the distributions of net sales proceeds from the sale of
         several  properties.  These special  distributions  were  effectively a
         return of a portion of the limited partners'  investment,  although, in
         accordance with the Partnership agreement,  $989,873 was applied toward
         the limited  partners' 10% Preferred  Return and the balance of $60,127
         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

<PAGE>



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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2002, 2001, and 2000


5.       Allocations and Distributions - Continued:
         -----------------------------------------

         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.

6.       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>

                                                                  2002             2001            2000
                                                              -------------    -------------   -------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

              Net income for financial reporting
                 purposes                                      $ 1,117,445      $ 1,089,094     $ 2,078,310

              Effect of timing differences relating to
                 depreciation                                       11,954            6,102          (3,055 )

              Provision for write-down of assets                   210,000          178,817         439,132

              Direct financing leases recorded as
                 operating leases for tax reporting
                 purposes                                           23,871           15,754          31,769

              Effect of timing differences relating to
                 gains/losses on real estate property sales             --         (576,193 )        89,247

              Deduction of transaction costs for tax
                 reporting purposes                                     --               --        (160,530 )

              Effect of timing differences relating to
                 equity  in earnings of joint ventures            (128,173 )         20,451          73,569

              Effect of timing differences relating to
                 allowance for doubtful accounts                        --         (301,517 )        86,488

              Accrued rental income                                 (6,359 )        (18,829 )       (16,153 )

              Rents paid in advance                                 15,697           (1,772 )       (11,518 )
                                                              -------------    -------------   -------------
              Net income for federal income tax
                 purposes                                      $ 1,244,435       $  411,907     $ 2,607,259
                                                              =============    =============   =============
</TABLE>



<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2002, 2001, and 2000


7.       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 American
         Properties Fund, Inc. ("APF") 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.  (formerly known as CNL
         Restaurants  XVIII,  Inc.). RAI Restaurants,  Inc. ("the Advisor") is a
         wholly owned  subsidiary of APF. The  individual  general  partners are
         stockholders and directors of APF.

         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  incurred  payable only after the
         limited  partners receive their 10% Preferred  Return.  Due to the fact
         that these fees are  noncumulative,  if the limited  partners  have not
         received  their  10%  Preferred  Return  in  any  particular  year,  no
         management  fees will be due or payable  for such year.  As a result of
         such threshold, no management fees were incurred during the years ended
         December 31, 2002, 2001 and 2000.

         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, 2001 and 2000, the  Partnership  incurred
         $21,023 and $118,458,  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,  2002,   2001  and  2000,  the
         Partnership's  advisor  and  its  affiliates  provided  accounting  and
         administrative  services.  The Partnership incurred $159,198,  $152,529
         and $88,356  for the years  ended  December  31,  2002,  2001 and 2000,
         respectively, for such services.

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

                                                                             2002              2001
                                                                         --------------    --------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                    Due to the Advisor:
                        Accounting and administrative services              $   12,798         $   4,841
                        Deferred, subordinated real estate
                          disposition fee                                      185,144           185,144
                                                                         --------------    --------------
                                                                            $  197,942        $  189,985
                                                                         ==============    ==============

</TABLE>


<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2002, 2001, and 2000


8. 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 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>

                                                          2002               2001             2000
                                                      --------------     -------------    --------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                 Shoney's, Inc.                           $ 284,611         $ 279,529         $ 313,115
                 Tampa Foods, L.P.                          207,354           203,277               N/A
</TABLE>

         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  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>

                                                                2002             2001              2000
                                                            --------------   --------------    -------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                Wendy's Old Fashioned
                   Hamburger Restaurants                       $  329,268        $ 330,682        $ 386,618
                Denny's                                           241,596          127,024          236,184
                Shoney's                                          237,036          232,325          327,448
                Pizza Hut                                             N/A          212,266              N/A
</TABLE>

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

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

9.       Commitment:
         ----------

         The  Partnership  has entered into an agreement to sell the property in
         Richmond,   Virginia.  In  connection  with  the  anticipated  sale,  a
         provision  for  write-down  of  assets of  $37,000  was  recognized  at
         December 2002.  This property was identified for sale in February 2003.
         As of March 10, 2003, the sale had not occurred.


<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2002, 2001, and 2000


10.   Selected Quarterly Financial Data:
      ---------------------------------

         The following table presents  selected  unaudited  quarterly  financial
         data for each full quarter during the years ended December 31, 2002 and
         2001:
<TABLE>
<CAPTION>

                  2002 Quarter              First         Second         Third           Fourth            Year
         ------------------------------  ----------    -----------    -----------     -----------     -------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

         Revenue (1)                      $405,902       $386,302       $418,153       $ 399,167        $1,609,524
         Equity in earnings of joint
             ventures                       71,923         80,011         75,218          87,983           315,135
         Net income (2)                    315,404        312,118        352,326         137,597         1,117,445
         Net income per limited
             partner unit                     5.26           5.20           5.87            2.29             18.62


                 2001 Quarter              First         Second         Third           Fourth           Year
         -----------------------------    ---------    -----------    -----------     ------------    ------------

         Revenue (1)                                     $424,480       $462,523         $419,254      $1,769,086
                                          $462,829
         Equity in earnings of
             joint ventures                 73,501         58,596         80,513           65,614         278,224
         Net income                                        42,616        376,751          367,605       1,089,094
                                           302,122
         Net income per limited
             partner unit                     5.04           0.71           6.27             6.13           18.15
</TABLE>

        (1) Certain items in the quarterly financial data have been reclassified
            to conform to the 2002 presentation.  These reclassifications had no
            effect on total net income.

        (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  are not
            expected to exercise their option to renew their leases,  which will
            expire in June 2003. In addition in December 2002,  the  Partnership
            also  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.

11.      Subsequent Event:
         ----------------

         In February  2003,  the  Partnership  sold its  property  in  Portland,
         Indiana and  received  net sales  proceeds of  approximately  $776,100,
         resulting  in a gain  of  approximately  $129,400.  This  property  was
         identified for sale in February 2003.




<PAGE>



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

   None.


                                    PART III

Item 10.  Directors and Executive Officers of the Registrant

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

         James M. Seneff, Jr., age 56. 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 APF, a public,  unlisted  real
estate  investment  trust,  since 1994.  Mr.  Seneff  served as Chief  Executive
Officer  of APF from 1994  through  August  1999,  and has  served  as  co-Chief
Executive  Officer of APF since  December 2000. Mr. Seneff served as Chairman of
the Board and Chief Executive Officer of CNL Fund Advisors,  Inc.,  formerly the
Partnership's advisor, until it merged with a wholly-owned  subsidiary of APF in
September  1999, and in June 2000, was re-elected to those positions of CNL Fund
Advisors, Inc. Mr. Seneff is a principal stockholder of CNL Holdings,  Inc., the
parent  company of CNL  Financial  Group,  Inc.  (formerly CNL Group,  Inc.),  a
diversified real estate company,  and has served as a Director,  Chairman of the
Board and  Chief  Executive  Officer  of CNL  Financial  Group,  Inc.  since its
formation in 1980.  CNL  Financial  Group,  Inc. is the parent  company,  either
directly or indirectly through subsidiaries,  of CNL Real Estate Services, Inc.,
CNL Capital Markets,  Inc., CNL Investment Company and CNL Securities Corp., all
of which are engaged in the  business of real estate  finance.  Mr.  Seneff also
serves as a Director,  Chairman of the Board and Chief Executive  Officer of CNL
Hospitality  Properties,  Inc., a public, unlisted real estate investment trust,
as well as, CNL  Hospitality  Corp.,  its advisor.  In addition,  he serves as a
Director,  Chairman of the Board and Chief  Executive  Officer of CNL Retirement
Properties,  Inc.,  a public,  unlisted  real  estate  investment  trust and its
advisor,  CNL  Retirement  Corp.  Since  1992,  Mr.  Seneff has also served as a
Director,  Chairman of the Board and Chief  Executive  Officer of Commercial Net
Lease Realty,  Inc., a public real estate investment trust that is listed on the
New York Stock Exchange.  Mr. Seneff has also served as a Director,  Chairman of
the Board and Chief Executive  Officer of CNL Securities  Corp.  since 1979; CNL
Investment  Company  since  1990;  and  CNL  Institutional  Advisors,   Inc.,  a
registered investment advisor for pension plans, since 1990. Mr. Seneff formerly
served  as a  Director  of First  Union  National  Bank of  Florida,  N.A.,  and
currently  serves as the  Chairman  of the Board of CNL  Bank,  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 more than $60 billion of
retirement funds. Mr. Seneff received his degree in Business Administration from
Florida State University in 1968.

         Robert A.  Bourne,  age 55. Mr.  Bourne has  participated  as a general
partner  or  co-venturer  in over  100  real  estate  ventures  involved  in the
financing,  acquisition,   construction,  and  leasing  of  restaurants,  office
buildings,  apartment complexes,  hotels, and other real estate. Mr. Bourne is a
Director  of APF.  Mr.  Bourne  served as  President  of APF from  1994  through
February  1999. He also served as Treasurer  from  February 1999 through  August
1999  and from May  1994  through  December  1994.  He also  served  in  various
executive  positions  with CNL Fund  Advisors,  Inc.  prior to its merger with a
wholly-owned subsidiary of APF including,  President from 1994 through September
1997, and Director from 1994 through August 1999. Mr. Bourne serves as President
and  Treasurer of CNL  Financial  Group,  Inc.;  Director,  Vice Chairman of the
Board, and Treasurer , and from 1997 until June 2002 served as President, of CNL
Hospitality  Properties,  Inc., a public, unlisted real estate investment trust;
as well as, Director,  Vice Chairman of the Board, and Treasurer,  and from 1997
until June 2002 served as President,  of CNL Hospitality Corp., its advisor.  In
addition,  Mr.  Bourne  serves as  Director,  Vice  Chairman  of the Board,  and
Treasurer,  and from 1997 until June 2002 served as President, of CNL Retirement
Properties, Inc., a public, unlisted real estate investment trust; as well as, a
Director,  Vice Chairman of the Board,  and Treasurer,  and from 1997 until June
2002 served as President,  of its advisor,  CNL Retirement Corp. Mr. Bourne also
serves as a Director of CNL Bank. He has served as a Director  since 1992,  Vice
Chairman of the Board since February 1996, Secretary and Treasurer from February
1996 through  1997,  and  President  from July 1992 through  February  1996,  of
Commercial Net Lease Realty,  Inc., a public real estate investment trust listed
on the New York Stock  Exchange.  Mr. Bourne also serves as Director,  President
and Treasurer for various affiliates of CNL Financial Group, Inc. including, CNL
Investment Company, CNL Securities Corp. and CNL Institutional Advisors, Inc., a
registered  investment advisor for pension plans. Mr. Bourne began his career as
a certified public  accountant  employed by Coopers & Lybrand,  Certified Public
Accountants,  from 1971  through  1978,  where he attained  the  position of Tax
Manager in 1975.  Mr. Bourne  graduated  from Florida  State  University in 1970
where he received a B.A. in Accounting, with honors.

         Curtis B.  McWilliams,  age 47. Mr.  McWilliams  has served as Co-Chief
Executive  Officer of APF since  December  2000 and  previously  served as Chief
Executive  Officer from  September  1999  through  December  2000.  Prior to the
acquisition of CNL Fund Advisors,  Inc., Mr.  McWilliams  served as President of
APF from  February  1999 until  September  1999.  From February 1998 to February
1999, he served as Executive  Vice President of APF. Mr.  McWilliams  joined CNL
Financial  Group,  Inc. in April 1997 and served as an Executive  Vice President
from October 1997 until September 1999. In addition,  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 APF in
September  1999.  From  September  1983 through March 1997,  Mr.  McWilliams was
employed by Merrill  Lynch & Co. The  majority of his career at Merrill  Lynch &
Co.  was in the  Investment  Banking  division  where he  served  as a  Managing
Director.  Mr.  McWilliams  received  a  B.S.E.  in  Chemical  Engineering  from
Princeton University in 1977 and a Master of Business Administration degree with
a concentration in finance from the University of Chicago in 1983.

         Steven  D.  Shackelford,  age  39.  Mr.  Shackelford  was  promoted  to
Executive Vice President of APF in June 2000. He served as Senior Vice President
from September 1999 until his promotion in June 2000. Mr. Shackelford has served
as Chief  Financial  Officer  since January 1997 and has served as Secretary and
Treasurer of APF 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.

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 2002.



<PAGE>


Item 11.  Executive Compensation

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


Item 12.  Security Ownership of Certain Beneficial Owners and Management

         As of March 10,  2003,  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 10, 2003,  the beneficial
ownership interests of the General Partners in the Registrant.
<TABLE>
<CAPTION>

                    Title of Class                           Name of Partner                 Percent of Class
<S>     <C>    <C>    <C>    <C>    <C>    <C>

           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, 2002,  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>

                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         and Recipient                         Method of Computation                  Ended December 31, 2002
---------------------------------      --------------------------------------      ------------------------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Reimbursement  to affiliates for       Operating  expenses are reimbursed at       Accounting and
operating expenses                     the  lower  of  cost  or  90%  of the       administra-tive     services:
                                       prevailing  rate at which  comparable       $159,198
                                       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.


</TABLE>


<PAGE>


<TABLE>
<CAPTION>

                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         and Recipient                         Method of Computation                  Ended December 31, 2002
---------------------------------      --------------------------------------      ------------------------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Deferred,    subordinated   real       A deferred,  subordinated real estate       $-0-
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
</TABLE>


<PAGE>

<TABLE>
<CAPTION>


                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         and Recipient                         Method of Computation                  Ended December 31, 2002
---------------------------------      --------------------------------------      ------------------------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

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.   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  within 90 days prior to the
filing  of this  Annual  Report  on Form  10-K and  have  determined  that  such
disclosure controls and procedures are effective.

         Subsequent to the above evaluation,  there were no significant  changes
in internal  controls or other  factors  that could  significantly  affect these
controls,   including  any   corrective   actions  with  regard  to  significant
deficiencies and material weaknesses.

                                     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.
<TABLE>
<CAPTION>

         1.   Financial Statements
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                  Report of Independent Certified Public Accountants

                  Balance Sheets at December 31, 2002 and 2001

                  Statements of Income for the years ended December 31, 2002, 2001 and 2000

                  Statements of Partners' Capital for the years ended December 31, 2002, 2001 and 2000

                  Statements of Cash Flows for the years ended December 31, 2002, 2001 and 2000

                  Notes to Financial Statements

          2.   Financial Statement Schedules

                  Schedule II - Valuation and Qualifying Accounts for the years
                  ended December 31, 2002, 2001 and 2000

                  Schedule III - Real Estate and Accumulated Depreciation at December 31, 2002

                  Notes to Schedule III - Real Estate and Accumulated Depreciation at December 31, 2002

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

           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.)

                   99.1 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.)

                   99.2 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, 2002 through December 31, 2002.






<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, 2003.


                                              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>

             Signature                                    Title                                    Date
<S>     <C>    <C>    <C>    <C>    <C>    <C>

     /s/ Robert A. Bourne                 President, Treasurer and Director                March 24, 2003
     ---------------------------
     Robert A. Bourne                     (Principal Financial and Accounting
                                          Officer)

     /s/ James M. Seneff, Jr.             Chief Executive Officer and Director             March 24, 2003
     ---------------------------
     James M. Seneff, Jr.                 (Principal Executive Officer)

</TABLE>


<PAGE>


                    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


         I, James M.  Seneff,  Jr.,  the Chief  Executive  Officer of CNL Realty
Corporation,  the  corporate  general  partner of CNL Income Fund IV, Ltd.  (the
"registrant"), certify that:

         1. I have reviewed this annual report on Form 10-K of the registrant;

         2. Based on my  knowledge,  this  annual  report  does not  contain any
            untrue statement of a material fact or omit to state a material fact
            necessary to make the statements made, in light of the circumstances
            under which such  statements  were made, not misleading with respect
            to the period covered by this annual report;

         3. Based on my knowledge, the financial statements, and other financial
            information  included in this annual  report,  fairly present in all
            material respects the financial condition, results of operations and
            cash flows of the  registrant as of, and for, the periods  presented
            in this annual report;

         4. The registrant's  other certifying officer and I are responsible for
            establishing and maintaining  disclosure controls and procedures (as
            defined in Exchange Act Rules 13a-14 and 15d-14) for the  registrant
            and have:

               a.   designed such  disclosure  controls and procedures to ensure
                    that  material   information  relating  to  the  registrant,
                    including its consolidated subsidiaries, is made known to us
                    by others  within those  entities,  particularly  during the
                    period in which this annual report is being prepared;

               b.   evaluated the  effectiveness of the registrant's  disclosure
                    controls and procedures as of a date within 90 days prior to
                    the  filing  date of this  annual  report  (the  "Evaluation
                    Date"); and

               c.   presented in this annual  report our  conclusions  about the
                    effectiveness  of the  disclosure  controls  and  procedures
                    based on our evaluation as of the Evaluation Date;

         5. The  registrant's  other  certifying  officer and I have  disclosed,
            based on our most recent  evaluation,  to the registrant's  auditors
            and the audit  committee  of  registrant's  board of  directors  (or
            persons performing the equivalent functions):

               a.   all  significant  deficiencies in the design or operation of
                    internal   controls   which  could   adversely   affect  the
                    registrant's  ability  to  record,  process,  summarize  and
                    report   financial   data  and  have   identified   for  the
                    registrant's  auditors any material  weaknesses  in internal
                    controls; and

               b.   any fraud, whether or not material, that involves management
                    or  other  employees  who  have a  significant  role  in the
                    registrant's internal controls; and

         6. The registrant's  other  certifying  officer and I have indicated in
            this annual report whether or not there were significant  changes in
            internal  controls  or in other  factors  that  could  significantly
            affect internal  controls  subsequent to the date of our most recent
            evaluation,   including  any  corrective   actions  with  regard  to
            significant deficiencies and material weaknesses.

Date:  March 24, 2003


/s/ James M. Seneff, Jr.
---------------------------
 James M. Seneff, Jr.
Chief Executive Officer


<PAGE>


                    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

         I, Robert A. Bourne, President and Treasurer of CNL Realty Corporation,
the corporate  general  partner of CNL Income Fund IV, Ltd.  (the  "registrant")
certify that:

         1. I have reviewed this annual report on Form 10-K of the registrant;

         2. Based on my  knowledge,  this  annual  report  does not  contain any
            untrue statement of a material fact or omit to state a material fact
            necessary to make the statements made, in light of the circumstances
            under which such  statements  were made, not misleading with respect
            to the period covered by this annual report;

         3. Based on my knowledge, the financial statements, and other financial
            information  included in this annual  report,  fairly present in all
            material respects the financial condition, results of operations and
            cash flows of the  registrant as of, and for, the periods  presented
            in this annual report;

         4. The registrant's  other certifying officer and I are responsible for
            establishing and maintaining  disclosure controls and procedures (as
            defined in Exchange Act Rules 13a-14 and 15d-14) for the  registrant
            and have:

               a.   designed such  disclosure  controls and procedures to ensure
                    that  material   information  relating  to  the  registrant,
                    including its consolidated subsidiaries, is made known to us
                    by others  within those  entities,  particularly  during the
                    period in which this annual report is being prepared;

               b.   evaluated the  effectiveness of the registrant's  disclosure
                    controls and procedures as of a date within 90 days prior to
                    the  filing  date of this  annual  report  (the  "Evaluation
                    Date"); and

               c.   presented in this annual  report our  conclusions  about the
                    effectiveness  of the  disclosure  controls  and  procedures
                    based on our evaluation as of the Evaluation Date;

         5. The  registrant's  other  certifying  officer and I have  disclosed,
            based on our most recent  evaluation,  to the registrant's  auditors
            and the audit  committee  of  registrant's  board of  directors  (or
            persons performing the equivalent functions):

               a.   all  significant  deficiencies in the design or operation of
                    internal   controls   which  could   adversely   affect  the
                    registrant's  ability  to  record,  process,  summarize  and
                    report   financial   data  and  have   identified   for  the
                    registrant's  auditors any material  weaknesses  in internal
                    controls; and

               b.   any fraud, whether or not material, that involves management
                    or  other  employees  who  have a  significant  role  in the
                    registrant's internal controls; and

         6. The registrant's  other  certifying  officer and I have indicated in
            this annual report whether or not there were significant  changes in
            internal  controls  or in other  factors  that  could  significantly
            affect internal  controls  subsequent to the date of our most recent
            evaluation,   including  any  corrective   actions  with  regard  to
            significant deficiencies and material weaknesses.


Date:  March 24, 2003


/s/ Robert A. Bourne
Robert A. Bourne
President and Treasurer


<PAGE>


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

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                  Years Ended December 31, 2002, 2001, and 2000

<TABLE>
<CAPTION>

                                                     Additions                           Deductions
                                          ---------------------------------    -------------------------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                                                                                          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
----------    -----------------   --------------  ---------------  ----------------    -------------     ------------  ------------

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

  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)       $   --        $   --
                                  ==============  ===============  ================    =============     ============  ============


              (a) Deducted from receivables on the balance sheet.

              (b) Reduction of rental and other income.

              (c) Amounts written off as uncollectible.
</TABLE>


<PAGE>


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

             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 2002

<TABLE>
<CAPTION>


                                                                                Costs Capitalized
                                                                                Subsequent to
                                                      Initial Cost              Acquisition
                                           -------------------------  -------------------
                             Encum-                     Buildings and Improve-    Carrying
                             brances          Land       Improvements   ments     Costs

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

Properties the Partnership
  has Invested in Under
  Operating Leases:

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

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

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

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

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

    Golden Corral Family
      Steakhouse Restaurants:
          Franklin, Indiana     -             107,560       586,375           -        -

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

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

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

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

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

    The Vitamin Shoppe:
      Richmond, Virginia (j)                  504,169       522,025           -        -



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

    Other Restaurants:
                Maywood, Illinoi- (e)         310,966             -     443,473        -
                                           -----------  ------------  ----------  -------

                                           $5,768,381    $6,093,530   $2,933,647       -
                                           ===========  ============  ==========  =======

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

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

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

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

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

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

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

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


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

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

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

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

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

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

Properties the Partnership has
    Invested in Under Direct
    Financing Leases:

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

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

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



                                                                           Life on Which
               Net Cost Basis at Which                                     Depreciation in
               Carried at Close of Period (c)         Date                 Latest Income
---------------------------------------
               Buildings and             Accumulated  of Con-   Date       Statement is
    Land       Improvements   Total      Depreciation structioAcquired       Computed
-------------  -----------  -----------  -----------  ------  ---------    ------------





    $287,769     $567,785     $855,554     $239,574   1988     07/88           (b)
     187,928      657,931      845,859      265,750   1989     11/88           (b)


     120,210      279,689      399,899      130,751   1988     12/88           (b)
     169,951      281,686      451,637      130,928   1988     12/88           (b)


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


     161,616      650,934      812,550      311,002   1988     08/88           (b)


     135,407      334,665      470,072      120,079   1989     10/88           (h)
     251,650      372,278      623,928      175,798   1988     10/88           (b)



     107,560      586,375      693,935      283,415   1988     06/88           (b)


     476,755      368,405      845,160      171,997   1987     12/88           (b)


     352,957      368,702      721,659      170,013   1989     11/88           (b)


      26,510      231,874      258,384      110,462   1985     09/88           (b)
      40,444      232,823      273,267      110,914   1981     09/88           (b)
       8,826      178,570      187,396       85,069   1981     09/88           (b)
      63,708      184,279      247,987       87,788   1974     09/88           (b)
     191,737           (f)     191,737           (d)  1986     01/89           (d)


     202,438      428,406      630,844      200,275   1988     12/88           (b)
     312,574      452,601      765,175      211,627   1988     12/88           (b)
     363,432      426,123      789,555      199,247   1988     12/88           (b)


     440,355      523,478      963,833      242,108   1989     10/88           (b)


     484,169      505,025      989,194      104,453   1996     12/96           (b)






     346,627      502,117      848,744      235,716   1988     12/88           (b)
     530,456      432,958      963,414      202,134   1984     12/88           (b)


     215,966      365,473      581,439      206,146   1988     09/88           (b)
-------------  -----------  -----------  -----------

  $5,653,381   $8,932,177   $14,585,558  $3,995,246
=============  ===========  ===========  ===========








    $295,987     $780,451   $1,076,438     $368,546   1988     10/87           (b)
=============  ===========  ===========  ===========








    $183,229     $192,857     $376,086      $83,627   1986     12/89           (b)
=============  ===========  ===========  ===========








    $507,965     $889,080   $1,397,045     $127,313   1996     09/98           (b)
=============  ===========  ===========  ===========








    $484,362           (f)    $484,362           (d)  1989     03/90           (d)
=============               ===========  ===========






    $150,742     $243,326     $394,068      $51,228   1988     10/88           (h)
=============  ===========  ===========  ===========









    $138,382     $676,588     $814,970     $156,485   1996     01/96           (b)
=============  ===========  ===========  ===========







    $260,146     $441,434     $701,580      $58,160   1990     01/99           (b)
=============  ===========  ===========  ===========






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








           -           (f)          (f)          (d)  1989     03/90           (d)
=============

</TABLE>
<PAGE>






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

        NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 2002


         (a)  Transactions  in real estate and accumulated  depreciation  during
2002, 2001 and 2000 summarized as follows:
<TABLE>
<CAPTION>

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

         Properties the Partnership has Invested
           in Under Operating Leases:

              Balance, December 31, 1999                                 $ 19,231,068        $  4,150,097
              Dispositions                                                 (2,624,687 )          (692,463 )
              Provision for write-down of assets                             (387,612 )                --
              Depreciation expense                                                 --             376,013
                                                                      ----------------   -----------------

              Balance, December 31, 2000                                   16,218,769           3,833,647
              Dispositions                                                 (1,244,394 )          (464,651 )
              Provisions for write-down of assets                            (178,817 )                --
              Depreciation expense                                                 --             320,213
                                                                      ----------------   -----------------

              Balance, December 31, 2001                                   14,795,558           3,689,209
              Provision for write-down of assets                             (210,000 )                --
              Depreciation expense                                                 --             306,037
                                                                      ----------------   -----------------

              Balance, December 31, 2002                                 $ 14,585,558        $  3,995,246
                                                                      ================   =================

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

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

              Balance, December 31, 2000                                    1,076,438             316,516
              Depreciation expense                                                 --              26,015
                                                                      ----------------   -----------------

              Balance, December 31, 2001                                    1,076,438             342,531
              Depreciation expense                                                 --              26,015
                                                                      ----------------   -----------------

              Balance, December 31, 2002                                 $  1,076,438         $   368,546
                                                                      ================   =================
</TABLE>



<PAGE>


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

   NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION CONTINUED

                                December 31, 2002

<TABLE>
<CAPTION>

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

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

               Balance, December 31, 1999                                  $   750,045         $   262,930
               Depreciation expense                                                 --              16,936
               Provision for write-down of assets (i)                         (227,094 )                --
                                                                       ----------------   -----------------
               Balance, December 31, 2000                                      522,951             279,866
               Depreciation expense                                                 --               8,804
               Provision for write-down of assets (i)                          (73,570 )                --
                                                                       ----------------   -----------------

               Balance, December 31, 2001                                      449,381             288,670
               Depreciation expense                                                 --                  --
               Disposition (i)                                                (449,381 )          (288,670 )
                                                                       ----------------   -----------------
               Balance, December 31, 2002                              $            --     $             --
                                                                       ================   =================

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

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

               Balance, December 31, 2000                                      376,086              70,769
               Depreciation expense                                                 --               6,429
                                                                       ----------------   -----------------

               Balance, December 31, 2001                                      376,086              77,198
               Depreciation expense                                                 --               6,429
                                                                       ----------------   -----------------

               Balance, December 31, 2002                                  $   376,086         $    83,627
                                                                       ================   =================

</TABLE>


<PAGE>


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

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

                                December 31, 2002

<TABLE>
<CAPTION>

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

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

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

               Balance, December 31, 2000                                    1,397,045              68,041
               Depreciation expense                                                 --              29,636
                                                                       ----------------   -----------------

               Balance, December 31, 2001                                    1,397,045              97,677
               Depreciation expense                                                 --              29,636
                                                                       ----------------   -----------------

               Balance, December 31, 2002                                 $  1,397,045         $   127,313
                                                                       ================   =================

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

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

               Balance, December 31, 2000                                      484,362                  --
               Depreciation expense (d)                                             --                  --
                                                                       ----------------   -----------------

               Balance, December 31, 2001                                      484,362                  --
               Depreciation expense (d)                                             --                  --
                                                                       ----------------   -----------------

               Balance, December 31, 2002                                  $   484,362            $     --
                                                                       ================   =================
</TABLE>


<PAGE>


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

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

                                December 31, 2002

<TABLE>
<CAPTION>

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

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

            Balance, December 31, 1999 (i) (h)                          $   394,068         $    12,807
            Depreciation expense                                                 --              12,807
                                                                   -----------------   -----------------

            Balance, December 31, 2000 (i) (h)                              394,068              25,614
            Depreciation expense                                                 --              12,807
                                                                   -----------------   -----------------

            Balance, December 31, 2001 (i) (h)                              394,068              38,421
            Depreciation expense                                                 --              12,807
                                                                   -----------------   -----------------

            Balance, December 31, 2002 (i)(h)                           $   394,068         $    51,228
                                                                   =================   =================

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

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

            Balance, December 31, 2000                                      814,970             111,379
            Depreciation expense                                                 --              22,553
                                                                   -----------------   -----------------

            Balance, December 31, 2001                                      814,970             133,932
            Depreciation expense                                                 --              22,553
                                                                   -----------------   -----------------

            Balance, December 31, 2002                                  $   814,970         $   156,485
                                                                   =================   =================
</TABLE>



<PAGE>


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

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

                                December 31, 2002

<TABLE>
<CAPTION>

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

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

            Balance, December 31, 1999                               $      701,580         $    13,532

            Depreciation expense                                                 --              15,202
                                                                   -----------------   -----------------

            Balance, December 31, 2000                                      701,580              28,734
            Depreciation expense                                                 --              14,714
                                                                   -----------------   -----------------

            Balance, December 31, 2001                                      701,580              43,448
            Depreciation expense                                                 --              14,712
                                                                   -----------------   -----------------

            Balance, December 31, 2002                                  $   701,580          $   58,160
                                                                   =================   =================
</TABLE>


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

         (c)   As of December 31, 2002,  the  aggregate  cost of the  Properties
               owned by the  Partnership  and joint  ventures for federal income
               tax purposes was $15,047,560 and $6,039,412, respectively. 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  restaurant  on  the  Property  in  Maywood,   Illinois,  was
               converted to a Dunkin Donuts restaurant and a Holsum Bread bakery
               in 1993.  The  undepreciated  cost of the  Property  in  Maywood,
               Illinois  was  written  down to its  estimated  fair  value.  The
               Partnership  recognized  the  impairment by recording a provision
               for  write-down  of assets in the amount of  $173,000  during the
               year  ended  December  31,  2002  since the two  tenants  of this
               Property are not expected to exercise their option to renew their
               leases, which will expire in June 2003. The provision represented
               the  difference  between the  Property's  carrying  value and its
               estimated fair value. The cost of the Property  presented on this
               schedule is the net amount at which the  Property  was carried at
               December 31, 2002,  including  the  provision  for  write-down of
               assets.

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

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

         (h)   Effective  January  1,  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>


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

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

                                December 31, 2002


         (i)   Due  to an  anticipated  impairment  in  value,  the  Partnership
               recorded a provision for write-down of assets for the Property in
               Kingsville, Texas in the amount of $119,447 at December 31, 1998.
               The tenant of this Property  experienced  financial  difficulties
               and  ceased  payment  of rents  under  the  terms of their  lease
               agreement.  The impairment at December 31, 1998,  represented the
               difference between the Property's  carrying value at December 31,
               1998,  and its  estimated  fair  value.  During  1999,  the joint
               venture re-leased the Property to a new tenant,  resulting in the
               reclassification  of the  building  portion  of the  lease  as an
               operating  lease.  The building was recorded at net book value as
               of January 15, 1999, and  depreciated  over the remaining life of
               approximately  19 years.  The cost of land for this the  Property
               presented  on this  schedule  is the net cost  basis at which the
               Property  was  carried  at  December  31,  2002,   including  the
               provision for write-down of assets.

         (j)   The undepreciated cost of the Property in Richmond,  Virginia was
               written  down  to  its  estimated  fair  value.  The  Partnership
               recognized the impairment by recording a provision for write-down
               of assets in the amount of $37,000 during the year ended December
               31,  2002 in  anticipation  of the  sale of  this  Property.  The
               provision  represented  the  difference  between  the  Property's
               carrying value and the estimated fair value of the Property.  The
               cost of the Property presented on this schedule is the net amount
               at which the Property was carried at December 31, 2002, including
               the provision for write-down of assets. As of March 10, 2003, the
               sale had not occurred.




<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.)

         99.2   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.)

         99.2   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 99.1



<PAGE>









                                  EXHIBIT 99.2


<PAGE>