UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   ----------

                                   FORM 10-KSB

  X    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
-----  ACT OF 1934

 For the fiscal year ended December 31, 1997      Commission File Number 0-18278


                   PHOENIX LEASING CASH DISTRIBUTION FUND IV,
--------------------------------------------------------------------------------
                        A CALIFORNIA LIMITED PARTNERSHIP
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

        California                                        68-0191380
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)


2401 Kerner Boulevard, San Rafael, California                  94901-5527
--------------------------------------------------------------------------------
(Address of principal executive offices)                       (Zip Code)

Registrant's telephone number, including area code:     (415) 485-4500
                                                        --------------

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act: Units of Limited
                                                            Partnership Interest

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-B 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-KSB or any  amendment to
this Form 10-KSB. _____

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                Yes__X__ No _____

The Registrant's revenue for its most recent fiscal year was $8,454,000.

As of December 31, 1997,  6,208,563 Units of Limited  Partnership  interest were
outstanding.  No  market  exists  for the  Units  of  Partnership  interest  and
therefore there exists no aggregate market value at December 31, 1997.

                    DOCUMENTS INCORPORATED BY REFERENCE: NONE

Transitional Small Business Disclosure Format:

                               Yes _____ No __X__


                                  Page 1 of 27


<PAGE>



                   PHOENIX LEASING CASH DISTRIBUTION FUND IV,
                        A CALIFORNIA LIMITED PARTNERSHIP

                         1997 FORM 10-KSB ANNUAL REPORT


                                TABLE OF CONTENTS


                                                                           Page

                                     PART I

Item 1.  Business..........................................................   3
Item 2.  Properties........................................................   4
Item 3.  Legal Proceedings.................................................   4
Item 4.  Submission of Matters to a Vote of Security Holders...............   4


                                     PART II

Item 5.  Market for the Registrant's Securities and Related Security
         Holder Matters....................................................   5
Item 6.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations.............................................   6
Item 7.  Financial Statements and Supplementary Data.......................   8
Item 8.  Disagreements on Accounting and Financial Disclosure Matters......  24


                                    PART III

Item 9.  Directors and Executive Officers of the Registrant................  24
Item 10. Executive Compensation............................................  25
Item 11. Security Ownership of Certain Beneficial Owners and Management....  25
Item 12. Certain Relationships and Related Transactions....................  26


                                     PART IV

Item 13. Exhibits, Financial Statement Schedules and Reports on Form 8-K...  26


Signatures.................................................................  27


                                        2

<PAGE>



                                     PART I

Item 1.       Business.

General Development of Business.

         Phoenix  Leasing  Cash  Distribution  Fund  IV,  a  California  limited
partnership (the Partnership), was organized on August 22, 1989. The Partnership
was registered  with the Securities  and Exchange  Commission  with an effective
date of December 27, 1989 and shall  continue to operate  until its  termination
date unless dissolved sooner due to the sale of substantially  all of the assets
of the  Partnership  or a vote of the Limited  Partners.  The  Partnership  will
terminate  on  December  31,  2000.  The  General  Partner  is  Phoenix  Leasing
Incorporated,  a California  corporation.  The General Partner or its affiliates
also is or has been a general  partner in  several  other  limited  partnerships
formed to invest in capital equipment and other assets.

         The  initial  public  offering  was  for  3,750,000  units  of  limited
partnership  interest at a price of $20 per unit.  During 1991, the  Partnership
increased  the  public  offering  up  to  a  maximum  of  6,500,000  units.  The
Partnership  completed its public  offering on December 27, 1991. As of December
27, 1991, the  Partnership  sold 6,492,727 units for a total  capitalization  of
$129,847,540. Of the proceeds received through the offering, the Partnership has
incurred $16,292,000 in organizational and offering expenses.

Narrative Description of Business.

Equipment Leasing and Financing Operations

         From the initial  formation  of the  Partnership  through  December 31,
1997,  the total  investments  in equipment  leases and  financing  transactions
(loans),  including the  Partnership's  pro rata interest in investments made by
joint  ventures,  approximate  $273,825,000.  The average  initial  firm term of
contractual  payments from equipment subject to lease was 43.43 months,  and the
average  initial  net  monthly  payment  rate as a  percentage  of the  original
purchase price was 2.71%. The average initial firm term of contractual  payments
from loans was 61.22 months.

         The  Partnership's  principal  objective is to produce cash flow to the
investors on a  continuing  basis over the life of the  Partnership.  To achieve
this  objective,  the  Partnership  will  invest  in  various  types of  capital
equipment and other assets to provide  leasing or financing of the same to third
parties, including Fortune 1000 companies and their subsidiaries,  middle-market
companies,  emerging growth  companies,  franchised  businesses,  pay television
system  operators  and others,  on either a long-term or short-term  basis.  The
types of equipment that the Partnership will invest in will include,  but is not
limited to, computer  peripherals,  terminal  systems,  small computer  systems,
communications  equipment,  IBM mainframes,  IBM-software compatible mainframes,
office  systems,  CAE/CAD/CAM  equipment,  telecommunications  equipment,  cable
television equipment, medical equipment,  production and manufacturing equipment
and software products.

         In addition to  acquiring  equipment  for lease to third  parties,  the
Partnership,  either directly or through the investment in joint  ventures,  has
provided  limited  financing  to  certain  emerging  growth   companies,   cable
television  operators,  manufacturers  and their  lessees with respect to assets
leased  directly  by  such  manufacturers  to  third  parties.  The  Partnership
maintains a security  interest in the assets financed and in the receivables due
under any lease or rental  agreement  relating  to such  assets.  Such  security
interests  constitute a lien on the equipment and will give the  Partnership the
right, upon default, to obtain possession of the assets.

         During the Partnership  offering,  the Partnership acquired significant
amounts of  equipment  or assets and  provided  financing  with the net offering
proceeds. In addition, the Partnership has acquired equipment through the use of
debt financing.  The ratio of the outstanding debt to net capital  contributions
less any investment in Leveraged Joint Ventures at the end of the  Partnership's
offering  period will not exceed  one-to-one.  The cash flow  generated  by such
investments in equipment  leases or financing  transactions has been and will be
used to provide for debt service,  to provide cash distributions to the Partners
and the remainder will be reinvested in capital equipment or other assets.

         The Partnership has acquired and intends to acquire and lease equipment
pursuant to either  "Operating"  leases or "Financing"  leases.  At December 31,
1997, approximately 99% of the equipment owned by the Partnership was classified
as Financing  leases.  The  Partnership has also provided and intends to provide
financing  secured by assets in the form of notes  receivable.  Operating leases
are generally  short-term  leases under which the lessor will receive  aggregate
rental  payments  in an  amount  that is less  than  the  purchase  price of the


                                        3


<PAGE>


equipment.  Financing  leases are  generally  for a longer  term under which the
noncancellable  rental  payments due during the initial term of the lease are at
least sufficient to recover the purchase price of the equipment.

         Competition.  The General Partner has  concentrated  the  Partnership's
activities in the equipment  leasing and financing  industry,  an area where the
General Partner has developed an expertise.  The equipment  leasing  industry is
extremely  competitive.  The  Partnership  competes  with many well  established
companies having substantially greater financial resources.  Competitive factors
include pricing,  technological  innovation and methods of financing  (including
use of various short-term and long-term financing plans, as well as the outright
purchase  of  equipment).   Generally,  the  impact  of  these  factors  to  the
Partnership  would be the  realization of increased  equipment  remarketing  and
storage costs, as well as lower residuals  received from the sale or remarketing
of such equipment.

Other.

         A brief  description of the type of assets in which the Partnership has
invested as of December 31, 1997, together with information  concerning the uses
of assets is set forth in Item 2.


Item 2.       Properties.

Equipment Leasing and Financing Operations.

         The  Partnership  is engaged in the  equipment  leasing  and  financing
industry and as such,  does not own or operate any  principal  plants,  mines or
real property. The primary assets held by the Partnership are its investments in
leases and loans to businesses located throughout the United States.

         As of  December  31,  1997,  the  Partnership  owns  equipment  and has
outstanding  loans to borrowers with an aggregate  original cost of $65,375,000.
The following  table  summarizes the type of equipment  owned or financed by the
Partnership,  including its pro rata interest in joint ventures, at December 31,
1997.

                                                                  Percentage of
         Asset Types                         Purchase Price(1)    Total Assets
-------------------------------            ---------------------  -------------
                                           (Amounts in Thousands)

Capital Equipment Leased to Emerging
 Growth Companies                                $  19,659              30%
Furniture and Fixtures                              13,749              21
Financing Related to Emerging Growth
 Companies                                           8,333              13
Computer Peripherals                                 8,210              13
Financing of Other Businesses                        6,754              10
Miscellaneous                                        3,208               5
Small Computer Systems                               3,154               5
Telecommunications                                   1,517               2
Financing Related to Pay TV Systems
 and Other Media                                       791               1
                                                 ---------             ---

TOTAL                                            $  65,375             100%
                                                 =========             ===

(1)    These amounts  include the  Partnership's  pro rata interest in equipment
       joint ventures of $4,156,000, a financing joint venture of $290,000, cost
       of equipment  on financing  leases of  $25,853,000  and original  cost of
       outstanding loans of $15,588,000 at December 31, 1997.


Item 3.       Legal Proceedings.

         The  Registrant is not a party to any pending legal  proceedings  which
would have a material adverse impact on its financial position.


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

         No matters were  submitted to a vote of limited  partners,  through the
solicitation of proxies or otherwise, during the year covered by this report.


                                        4


<PAGE>




                                     PART II

Item 5.       Market for the Registrant's Securities and Related Security Holder
              Matters.

         (a)  The Registrant's  limited  partnership  interests are not publicly
              traded.   There  is  no  market  for  the   Registrant's   limited
              partnership interests and it is unlikely that any will develop.

         (b)  Approximate Number of Equity Security Investments:

                                                    Number of Unit Holders
                    Title of Class                  as of December 31, 1997
              ----------------------------          -----------------------

              Limited Partners                               8,184
              General Partner                                    1


                                        5


<PAGE>



Item 6.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations.

Results of Operations

         Phoenix  Leasing  Cash   Distribution   Fund  IV  and  Subsidiary  (the
Partnership)  reported net income of $4,560,000  for the year ended December 31,
1997,  as compared to $5,856,000  during 1996.  The decline in net income during
1997,  as compared to 1996,  is due to a decrease  in  revenues  generated  from
leasing activities.

         The  decrease  in total  revenues  of  $4,463,000  for the  year  ended
December 31, 1997, as compared to 1996, is primarily the result of a decrease in
rental income of $2,889,000, and to a lesser extent, a decrease in earned income
from financing leases of $1,134,000. The decrease in rental income is reflective
of a reduction in the size of the equipment portfolio.  As of December 31, 1997,
the Partnership owned equipment with an aggregate original cost of $45.3 million
compared to $76.7 million at December 31, 1996.  Another factor  contributing to
the decrease in rental income is the equipment  being held for lease.  Until new
lessees or buyers of equipment  can be found,  the  equipment  will  continue to
generate  depreciation  expense  without any  corresponding  rental income.  The
effect of this will be a  reduction  of the  Partnership  earnings  during  this
remarketing  period.  As of December 31, 1997, the  Partnership  owned equipment
being held for lease with an original  purchase  price of  $8,635,000  and a net
book value of $68,000, compared to $17,496,000 and $1,015,000,  respectively, at
December 31, 1996.  The General  Partner is actively  engaged,  on behalf of the
Partnership,  in  remarketing  and selling  the  Partnership's  equipment  as it
becomes available.

          The decrease in earned income from financing leases for the year ended
December  31,  1997,  as  compared  to prior  year,  is due to a decrease in the
Partnership's net investment in financing leases to $9.6 million at December 31,
1997 from $17 million at December 31, 1996. The investment in financing  leases,
as well as earned  income from  financing  leases,  will decrease over the lease
term as the Partnership  amortizes income over the lease term using the interest
method of  accounting.  This  effect  will be  mitigated  to some  degree as the
Partnership  continues to invest in new financing  leases over its life.  During
1997 and 1996,  the  Partnership  invested  $2 million  and $6.4  million in new
financing leases, respectively.

         An additional factor  contributing to the decline in total revenues for
the year ended December 31, 1997,  compared to 1996, is the absence of a gain on
sale of securities,  compared to $977,000 in 1996.  The  securities  sold during
1996 consisted of common stock  received  through the exercise of stock warrants
granted  to the  Partnership  as  part of a  financing  agreement  with  several
emerging growth companies. In addition, the Partnership owns shares of stock and
stock  warrants in  emerging  growth  companies  that are  publicly  traded with
unrealized  gains of  $5,000  and  $525,000  at  December  31,  1997  and  1996,
respectively.  These  investments  in stock and  stock  warrants  carry  certain
restrictions, but generally can be exercised within a one year period.

         Partially  offsetting the factors  contributing to the decline in total
revenues  is an  increase  in gain on sale  of  equipment.  The  gain on sale of
equipment  was  $1,042,000  for  which  the  Partnership  received  proceeds  of
$1,496,000 for the year ended December 31, 1997,  compared to a gain of $381,000
and proceeds of $925,000 for 1996.  The increase in gain and proceeds  from sale
of equipment is a result of an increase in sales  activity of the  Partnership's
equipment  portfolio.  The Partnership sold equipment with an aggregate original
cost of $33.4  million for the year ended  December 31, 1997,  compared to $25.8
million during 1996.

         Total expenses  decreased by $3,120,000  during year ended December 31,
1997,  as compared to 1996. A majority of the decrease in total  expenses is due
to the decrease in depreciation  expense of $2,346,000 during 1997,  compared to
1996.  This decrease is due to a decline in the amount of depreciable  equipment
owned by the  Partnership,  as well as, an  increasing  portion of the equipment
owned by the Partnership becoming fully depreciated.

         Inflation  affects the  Partnership  in relation to the current cost of
equipment  placed on lease and the residual  values  realized when the equipment
comes  off-lease and is sold.  During the last several years  inflation has been
low, thereby having very little impact upon the investments of the Partnership.


Cable Television System:

         On October 10, 1996,  Phoenix Westcom  Cablevision Inc. sold all of its
tangible and  intangible  assets used in the  operation of its cable  television
system for proceeds of $735,000  resulting in a loss on the sale of these assets
of $64,000.  This loss on sale is included in Other  Income on the  Statement of
Operations during 1996. As a result of the sale of the cable television system's
assets, the subsidiary  ceased  operations.  Accordingly, there  are no  results


                                        6
<PAGE>



of operations from this cable  television  system during the year ended December
31,  1997.  The  revenues  from  this  cable  television  system  did not have a
significant impact upon total revenues during 1996.

Liquidity and Capital Resources

         The  Partnership's  primary  source of  liquidity  is derived  from its
contractual  obligations  with a  diversified  group of lessees  for fixed lease
terms at fixed rental  amounts,  and from  payments of principal and interest on
its  outstanding  notes  receivable.  As the  initial  lease terms  expire,  the
Partnership  will re-lease or sell the  equipment.  The future  liquidity of the
Partnership  will depend upon the General  Partner's  success in collecting  the
contractual  amounts owed, as well as re-leasing  and selling the  Partnership's
equipment as it comes off lease.

         The  Partnership  reported net cash  generated  by  equipment  leasing,
financing  and cable  television  activities  of  $16,837,000  during  1997,  as
compared to  $23,034,000  during 1996.  The  decrease in the net cash  generated
during 1997 is due to a decrease  in rental  income and  payments  on  financing
leases, as previously discussed in the Results of Operations.

         The  Partnership  received cash  distributions  from joint  ventures of
$1,931,000  during 1997, as compared to cash  distributions  of $727,000  during
1996.  Distributions from joint ventures were higher during 1997, as compared to
1997, due to the  Partnership  receiving a  distribution  of excess cash on hand
from a joint venture that was formed on August 1, 1994.  During 1994, this newly
formed joint venture made a significant distribution as a result of it receiving
proceeds from the issuance of lease backed certificates. As a result, this joint
venture  made a  distribution  of the  proceeds to the  Partnership.  This joint
venture was not expected to generate any  significant  amounts of cash available
for  distribution  until the outstanding  debt of this joint venture was paid in
full. In November of 1996, the  outstanding  debt had been repaid in full.  This
joint venture began making distributions to the Partnership in 1997.

         The Partnership anticipates reinvesting a portion of the cash generated
from  operations in new leasing or financing  transactions  over the life of the
Partnership. During 1997 and 1996, the Partnership made investments in financing
leases  with  an  aggregate  original  cost  of $2  million  and  $6.4  million,
respectively,  and invested in notes  receivable of $5 million and $2.4 million,
respectively.

         The total cash distributed to partners during 1997 was $15,747,000,  as
compared  to  $15,880,000  during  1996.  In  accordance  with  the  partnership
agreement,  the limited  partners are entitled to 95% of the cash  available for
distribution and the General Partner is entitled to 5%. As a result, the limited
partners   received   $14,959,000   and   $15,085,000   during  1997  and  1996,
respectively.   The  cumulative  cash  distributions  to  limited  partners  was
$103,181,000  at December 31, 1997, as compared to  $88,222,000  at December 31,
1996. The General  Partner  received  $788,000 and $795,000 for its share of the
cash  available  for  distribution  during  1997  and  1996,  respectively.  The
Partnership anticpates making distributions during 1998 at a lower rate than the
current distributions made during 1997.

         As provided for by the partnership  agreement,  the General Partner has
determined  to  exercise  its  discretion  that no  further  redemptions  in the
Partnership  will be  permitted  after  March 31,  1998.  During  the year ended
December  31,  1997,  the  number  of units  that have  been  redeemed  has been
immaterial.

         The cash to be  generated  from  leasing and  financing  operations  is
anticipated to be sufficient to meet the  Partnership's  continuing  operational
expenses and to provide for distributions to partners.

         Forward-looking statements in this report are made pursuant to the safe
harbor  provisions  of the  Private  Securities  Litigation  Reform Act of 1995.
Actual  results could differ from those  anticipated  by some of the  statements
made above. Limited Partners are cautioned that such forward-looking  statements
involve risks and uncertainties including without limitation the following:  (I)
the  Partnership's  plans are subject to change at any time at the discretion of
the General Partner of the Partnership,  (ii) future technological  developments
in the industry in which the Partnership operates, (iii) competitive pressure on
pricing or services,  (iv) substantial  customer defaults or cancellations,  (v)
changes  in  business  conditions  and the  general  economy,  (vi)  changes  in
government regulations affecting the Partnership's core businesses and (vii) the
ability of the Partnership to sell its remaining assets.


                                        7

<PAGE>



















        Item 7. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                      PHOENIX LEASING CASH DISTRIBUTION FUND IV,
                   A CALIFORNIA LIMITED PARTNERSHIP AND SUBSIDIARY

                             YEAR ENDED DECEMBER 31, 1997


















                                        8


<PAGE>















                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the  Partners of Phoenix  Leasing  Cash  Distribution  Fund IV, a  California
limited partnership:

We have audited the accompanying  consolidated  balance sheet of Phoenix Leasing
Cash Distribution Fund IV, a California limited partnership and Subsidiary as of
December  31,  1997  and the  related  consolidated  statements  of  operations,
partners'  capital  and cash  flows for the year  then  ended.  These  financial
statements  are  the  responsibility  of  the  Partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit. The consolidated statements of operations, partners' capital and cash
flows of Phoenix Leasing Cash Distribution Fund IV as of December 31, 1996, were
audited by other  auditors  whose  report dated  January 20, 1997,  expressed an
unqualified opinion on these statements.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the financial position of Phoenix Leasing Cash
Distribution  Fund IV, a California  limited  partnership  and  Subsidiary as of
December 31, 1997, and the results of their  operations and their cash flows for
the  year  then  ended,  in  conformity  with  generally   accepted   accounting
principles.




San Francisco, California,                                ARTHUR ANDERSEN LLP
  January 23, 1998



                                        9

<PAGE>



                   PHOENIX LEASING CASH DISTRIBUTION FUND IV,
                 A CALIFORNIA LIMITED PARTNERSHIP AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEET
                 (Amounts in Thousands Except for Unit Amounts)

                                                             December 31, 1997
                                                             -----------------
ASSETS

Cash and cash equivalents                                       $   9,218

Accounts receivable (net of allowance for
 losses on accounts receivable of $389)                               509

Notes receivable (net of allowance for
 losses on notes receivable of $2,268)                              6,458

Equipment on operating leases and held for
 lease (net of accumulated depreciation of $11,646)                   128

Net investment in financing leases (net of
 allowance for early terminations of $777)                          9,631

Investment in joint ventures                                          680

Capitalized acquisition fees (net of accumulated
 amortization of $10,252)                                             680

Other assets                                                           86
                                                                ---------
     Total Assets                                               $  27,390
                                                                =========

LIABILITIES AND PARTNERS' CAPITAL

Liabilities:

   Accounts payable and accrued expenses                        $   1,216
                                                                ---------

     Total Liabilities                                              1,216
                                                                ---------
Partners' Capital:

   General Partner                                                    -

   Limited Partners, 6,500,000 units authorized,
    6,492,727 units issued, 6,208,563 units outstanding            26,169

   Unrealized gain on available-for-sale securities                     5
                                                                ---------
     Total Partners' Capital                                       26,174
                                                                ---------
     Total Liabilities and Partners' Capital                    $  27,390
                                                                =========

                          The accompanying notes are an
                       integral part of these statements.


                                       10


<PAGE>



                   PHOENIX LEASING CASH DISTRIBUTION FUND IV,
                 A CALIFORNIA LIMITED PARTNERSHIP AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
               (Amounts in Thousands Except for Per Unit Amounts)

                                               For the Years Ended December 31,
                                                      1997           1996
                                                      ----           ----
INCOME

   Rental income                                    $ 2,939      $   5,828

   Earned income, financing leases                    2,238          3,372

   Gain on sale of equipment                          1,042            381

   Interest income, notes receivable                  1,315          1,202

   Gain on sale of securities                           -              977

   Equity in earnings from joint ventures, net          333            412

   Other income                                         587            745
                                                    -------        -------

     Total Income                                     8,454         12,917
                                                    -------        -------

EXPENSES

   Depreciation                                         944          3,290

   Amortization of acquisition fees                     557            733

   Lease related operating expenses                     229            296

   Management fees to General Partner                   698            971

   Reimbursed administrative costs to General
     Partner                                            500            734

   Provision for losses on receivables                  455            338

   Legal expenses                                       311            203

   General and administrative expenses                  207            456
                                                    -------        -------

     Total Expenses                                   3,901          7,021
                                                    -------        -------

NET INCOME BEFORE INCOME TAXES                        4,553          5,896

   Income tax benefit (expense) of subsidiary             7           (40)
                                                    -------        -------

NET INCOME                                          $ 4,560        $ 5,856
                                                    =======        =======

NET INCOME PER LIMITED PARTNERSHIP UNIT             $   .61        $   .81
                                                    =======        =======

ALLOCATION OF NET INCOME:

   General Partner                                  $   788        $   795

   Limited Partners                                   3,772          5,061
                                                    -------        -------

                                                    $ 4,560        $ 5,856
                                                    =======        =======

                          The accompanying notes are an
                       integral part of these statements.

                                       11

<PAGE>



                   PHOENIX LEASING CASH DISTRIBUTION FUND IV,
                 A CALIFORNIA LIMITED PARTNERSHIP AND SUBSIDIARY
                  CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
                 (Amounts in Thousands Except for Unit Amounts)


                             General
                             Partner's  Limited Partners     Unrealized  Total
                             Amount    Units        Amount     Gains     Amount
                             --------- --------------------  ----------  ------

Balance, December 31, 1995    $   --   6,318,955  $  48,068    $ 377   $ 48,445

Distributions to partners
 ($2.40 per limited
 partnership unit)               (795)       --     (15,085)     --     (15,880)

Redemptions of capital            --     (76,012)      (505)     --        (505)

Net income                        795        --       5,061      --       5,856

Change for the year in
 unrealized gain on
 available-for-sale
 securities                       --         --         --       148        148
                              -------  ---------  ---------    -----   --------

Balance, December 31, 1996        --   6,242,943     37,539      525     38,064

Distributions to partners
 ($2.40 per limited
 partnership unit)               (788)       --     (14,959)     --     (15,747)

Redemptions of Capital            --     (34,380)      (183)     --        (183)

Net income                        788        --       3,772      --       4,560

Change for the year in
 unrealized gain on
 available-for-sale
 securities                       --         --         --      (520)      (520)
                              -------  ---------  ---------    -----   --------

Balance, December 31, 1997    $   --   6,208,563  $  26,169    $   5   $ 26,174
                              =======  =========  =========    =====   ========

                          The accompanying notes are an
                       integral part of these statements.


                                       12


<PAGE>



                   PHOENIX LEASING CASH DISTRIBUTION FUND IV,
                 A CALIFORNIA LIMITED PARTNERSHIP AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Amounts in Thousands)

                                                          For the Years Ended
                                                             December 31,
                                                            1997       1996
                                                            ----       ----
Operating Activities:

   Net income                                            $  4,560   $  5,856
   Adjustments to reconcile net income to net
     cash provided by operating activities:
       Depreciation                                           944      3,290
       Amortization of acquisition fees                       557        733
       Gain on sale of equipment                           (1,042)      (381)
       Gain on sale of securities                            --         (977)
       Loss on sale of assets of the cable
        television system                                    --           64
       Equity in earnings from joint ventures, net           (333)      (412)
       Provision for early termination, financing leases      199        352
       Provision for (recovery of) losses on
        notes receivable                                      154        (17)
       Provision for losses on accounts receivable            102          3
       Decrease (increase) in accounts receivable            (127)        88
       Decrease in accounts payable and accrued expenses     (298)      (118)
       Decrease in other assets                               120         92
       Decrease (increase) in deferred income tax asset        (7)        40
                                                         --------   --------
Net cash provided by operating activities                   4,829      8,613
                                                         --------   --------

Investing Activities:
   Principal payments, financing leases                     9,001     11,263
   Principal payments, notes receivable                     3,007      3,158
   Proceeds from sale of equipment                          1,496        925
   Proceeds from sale of securities                          --        1,005
   Proceeds from sale of assets of the
    cable television system                                  --          735
   Distributions from joint ventures                        1,931        727
   Investment in financing leases                          (2,008)    (6,446)
   Cable systems, property and equipment                     --          (36)
   Investment in notes receivable                          (4,965)    (2,440)
   Investment in joint ventures                              --          (69)
   Investment in securities                                  --          (28)
   Payment of acquisition fees                               (277)      (459)
                                                         --------   --------
Net cash provided by investing activities                   8,185      8,335
                                                         --------   --------

Financing Activities:
   Redemptions of capital                                    (183)      (505)
   Distributions to partners                              (15,747)   (15,880)
                                                         --------   --------
Net cash used by financing activities                     (15,930)   (16,385)
                                                         --------   --------

Increase (decrease) in cash and cash equivalents           (2,916)       563

Cash and cash equivalents, beginning of period             12,134     11,571
                                                         --------   --------

Cash and cash equivalents, end of period                 $  9,218   $ 12,134
                                                         ========   ========


                          The accompanying notes are an
                       integral part of these statements.


                                       13


<PAGE>



                   PHOENIX LEASING CASH DISTRIBUTION FUND IV,
                 A CALIFORNIA LIMITED PARTNERSHIP AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 1997


Note 1.     Organization and Partnership Matters.

         Phoenix  Leasing  Cash  Distribution  Fund  IV,  a  California  limited
partnership (the Partnership), was formed on July 14, 1989, to invest in capital
equipment  of various  types and to lease  such  equipment  to third  parties on
either a long-term or short-term basis and provide  financing to emerging growth
companies and cable television system operators. The Partnership met its minimum
investment requirements on January 12, 1990. The Partnership's  termination date
is December 31, 2000.

         The  Partnership  has also  made  investments  in joint  ventures  with
affiliated  partnerships  managed  by the  General  Partner  for the  purpose of
reducing the risks of financing or acquiring certain capital equipment leased to
third parties (see Note 6).

         On  December  23,  1994,  the  Partnership   foreclosed  upon  a  cable
television  system in  Arizona  that was in  default  on a loan  payable  to the
Partnership with a carrying amount of  approximately  $885,000 which was carried
over to the basis in the cable system.  Phoenix Westcom  Cablevision,  Inc. (the
Subsidiary), a wholly owned subsidiary of the Partnership,  was formed under the
laws of  Nevada  on  August 5,  1994 to own and  operate  the  foreclosed  cable
television  system.   Phoenix  Westcom  Cablevision,   Inc.  is  a  wholly-owned
subsidiary of the Partnership  (hereinafter,  the Partnership and the Subsidiary
are collectively referred to as the Consolidated  Partnership).  The acquisition
of Westcom  Cablevision by the Subsidiary through  foreclosure was accounted for
using the "purchase method" of accounting in which the net carrying value of the
loan was allocated to the net assets in accordance with the relative fair market
value of the assets acquired and liabilities assumed.

         On October 23, 1996, Phoenix Westcom Cablevision,  Inc. sold the assets
used in the operation of the cable  television  system receiving net proceeds of
approximately  $735,000,  recognizing a loss on sale of the assets of this cable
television  system of $64,000.  As a result of the sale of the cable  television
system's assets, the Subsidiary ceased operations.

         For financial reporting purposes, Partnership income shall be allocated
as follows:  (a) first,  to the General  Partner until the cumulative  income so
allocated is equal to the cumulative  distributions to the General Partner,  (b)
second, one percent to the General Partner and 99% to the Limited Partners until
the cumulative  income so allocated is equal to any cumulative  Partnership loss
and syndication  expenses for the current and all prior accounting periods,  and
(c) the balance,  if any, to the Unit Holders.  All Partnership  losses shall be
allocated one percent to the General Partner and 99% to the Unit Holders.

         The General  Partner is entitled  to receive  five  percent of all cash
distributions  until the Limited  Partners have recovered  their initial capital
contributions plus a cumulative return of twelve percent per annum.  Thereafter,
the General Partner will receive 15% of all cash  distributions.  From inception
of the Partnership  until December 31, 1996, the General  Partner's  interest in
Cash Available for  Distribution  was subordinated in any calendar quarter until
the Limited Partners received quarterly  distributions equal to three percent of
their  Capital  Contributions  (i.e.,  12% per annum),  prorated for any partial
period.

         In the event the General  Partner has a deficit  balance in its capital
account  at the  time  of  Partnership  liquidation,  it  will  be  required  to
contribute the amount of such deficit to the Partnership.

         As compensation for management services subject to certain limitations,
the General Partner  receives a fee,  payable  quarterly,  in an amount equal to
3.5% of the Partnership's gross revenues for the quarter from which such payment
is being made,  which  revenues  shall  include,  but are not limited to, rental
receipts,  maintenance  fees,  proceeds  from the sale of equipment and interest
income.

         The General  Partner  will be  compensated  for  services  performed in
connection  with the  analysis  of  assets  available  to the  Partnership,  the
selection  of such  assets  and the  acquisition  thereof,  including  obtaining
lessees for the equipment,  negotiating and concluding  master lease  agreements
with certain  lessees.   As compensation  for  such  acquisition  services,  the

                                       14

<PAGE>



General  Partner  will receive a fee equal to four  percent,  subject to certain
limitations,  of (a) the purchase price of equipment acquired by the Partnership
or equipment leased by manufacturers, the financing for which is provided by the
Partnership,  or (b) financing  provided to businesses such as cable  operators,
emerging growth companies, or other businesses, payable upon such acquisition or
financing,  as the case may be.  Acquisition fees are amortized over the life of
the assets principally on a straight-line basis.

         Phoenix  Cable  Management  Inc.  (PCMI),  an  affiliate of the General
Partner,  provided  day  to day  management  services  in  connection  with  the
operation of the Subsidiary.  The Subsidiary paid a management fee equal to four
and one-half  percent of the System's  monthly gross revenue for these services.
Revenues subject to a management fee at the Subsidiary level were not subject to
management fees at the Partnership level.

         A schedule of compensation paid and  distributions  made to the General
Partner and affiliate for the years ended December 31, follows:

                                                1997          1996
                                                ----          ----
                                              (Amounts in Thousands)

       Management fees                       $    698      $    971
       Acquisition fees                           279           355
       Cash distributions                         788           795
                                             --------      --------

                                             $  1,765      $  2,121
                                             ========      ========

       Redemptions  of  Limited  Partner  units  will only be made to the extent
permitted by applicable laws and regulations,  the Partnership Agreement and if,
in the  opinion  of the  General  Partner,  it is in the  best  interest  of the
Partnership. In addition, redemptions will not be made if such redemptions would
cause the  Partnership to be categorized as a publicly  traded  partnership  for
federal income tax purposes.

       The Partnership will acquire such limited partnership units for an amount
equal to 85% of the "accrual  basis  capital  account"  relating to the redeemed
units.  The  Partnership  will retain the  remaining  15% of the "accrual  basis
capital  account"  relating to the redeemed units.  Redemptions  retained by the
Partnership  were $27,000 and $68,000  during the years ended  December 31, 1997
and  1996,  respectively.   "Accrual  basis  capital  account"  is  computed  in
accordance  with the books and records  regularly  maintained by the Partnership
for financial reporting purposes, utilizing the accrual method of accounting.


Note 2.    Summary of Significant Accounting Policies.

       Principles of Consolidation.  The 1996 consolidated  financial statements
include the accounts of the Partnership and its wholly-owned subsidiary, Phoenix
Westcom Cablevision, Inc., since the date of acquisition, December 23, 1994. All
significant  intercompany  accounts and  transactions  have been  eliminated  in
consolidation.

       Leasing Operations.  The Partnership's leasing operations consist of both
financing and operating  leases.  The financing  method of accounting for leases
records as  unearned  income at the  inception  of the lease,  the excess of net
rentals  receivable  and estimated  residual value at the end of the lease term,
over the cost of equipment leased. Unearned income is credited to income monthly
over the term of the lease on a declining basis to provide an approximate  level
rate of return on the unrecovered  cost of the investment.  Initial direct costs
of  consummating  new  leases  are  capitalized  and  included  in the  cost  of
equipment.  The  Partnership  reviews its  estimates of residual  value at least
annually.  If a decline in value has occurred which is other than  temporary,  a
reduction in the investment is recognized currently.

         Under the  operating  method  of  accounting  for  leases,  the  leased
equipment  is recorded as an asset at cost and  depreciated.  The  Partnership's
leased  equipment is depreciated  primarily  using an  accelerated  depreciation
method over the estimated useful life of six years.

         The  Partnership's  policy  is  to  review  periodically  the  expected
economic life of its rental  equipment in order to determine the  probability of
recovering its  undepreciated  cost. Such reviews  address,  among other things,
recent and anticipated  technological  developments affecting computer equipment
and competitive  factors within the computer  marketplace.  Where reviews of the
equipment  portfolio  indicate that rentals plus anticipated sales proceeds will
not  exceed  expenses  in  any  future  period,  the  Partnership   revises  its
depreciation policy and may provide additional depreciation as appropriate. As a
result  of  such  periodic   reviews,   the  Partnership   provided   additional


                                       15
<PAGE>



depreciation  expense  of  $577,000  and  $544,000  ($.09  and $.09 per  limited
partnership unit) for the years ended December 31, 1997 and 1996, respectively.

         Rental  income  for the  year is  determined  on the  basis  of  rental
payments due for the period under the terms of the lease.  Maintenance,  repairs
and minor renewals of the leased equipment are charged to expense.

       Cable  Television  System  Operations.   The  consolidated  statement  of
operations  includes the operating activity of the Subsidiary for the year ended
December 31, 1996. The Subsidiary's cable operations consisted of a cable system
located in the  counties  of  Maricopa  and  Mohave in the State of Arizona  and
consisted  of headend  equipment  and 69 miles of plant  passing,  approximately
2,060 homes and serving  approximately 737 cable  subscribers.  The Subsidiary's
cable  television  system served the  communities of Cave Creek,  Perryville and
Peach  Springs.  The  Subsidiary  operated  under four  non-exclusive  franchise
agreements with the Town of Cave Creek, Maricopa County,  Yavapai County and the
Hualapai Tribe in Mohave County.

       Cable  television  services were billed  monthly in advance.  Revenue was
deferred and recognized as the services were provided.

       Cash and Cash Equivalents.  Cash and cash equivalents include deposits at
banks,  investments  in money market funds and other  highly  liquid  short-term
investments with original maturities of less than 90 days.

       Credit  and   Collateral.   The   Partnership's   activities   have  been
concentrated  in  the  equipment  leasing  and  financing  industry.   A  credit
evaluation  is performed  by the General  Partner for all leases and loans made,
with  the  collateral  requirements  determined  on a  case-by-case  basis.  The
Partnership's  loans are generally  secured by the equipment or assets  financed
and, in some cases,  other collateral of the borrower.  In the event of default,
the  Partnership  has the right to foreclose upon the collateral  used to secure
such loans.

       Notes Receivable.   Notes  receivable  generally  are  stated  at   their
outstanding unpaid principal balances, which includes accrued interest. Interest
income is accrued on the unpaid principal balance.

       Impaired Notes Receivable.  Generally, notes receivable are classified as
impaired  and the  accrual of interest  on such notes is  discontinued  when the
contractual  payment of  principal  or  interest  has become 90 days past due or
management has serious doubts about further  collectibility  of the  contractual
payments,  even  though  the  loan  may  currently  be  performing.  When a note
receivable is classified as impaired,  income  recognition is discontinued.  Any
payments  received  subsequent  to the  placement of the note  receivable  on to
impaired  status  will  generally  be  applied  towards  the  reduction  of  the
outstanding  note  receivable  balance,  which may  include  previously  accrued
interest as well as principal.  Once the principal and accrued  interest balance
has been reduced to zero,  the  remaining  payments  will be applied to interest
income.  Generally,  notes  receivable  are restored to accrual  status when the
obligation is brought current,  has performed in accordance with the contractual
terms for a  reasonable  period of time and the ultimate  collectibility  of the
total contractual principal and interest is no longer in doubt.

       Allowance  for Losses.  An allowance  for losses is  established  through
provisions for losses charged  against  income.  Notes  receivable  deemed to be
uncollectible  are charged  against the  allowance  for losses,  and  subsequent
recoveries, if any, are credited to the allowance.

       Investments in Joint Ventures.  Minority investments in net assets of the
equipment,  financing and foreclosed  cable systems joint  ventures  reflect the
Partnership's  equity  basis  in  the  ventures.  Under  the  equity  method  of
accounting,  the  original  investment  is  recorded  at  cost  and is  adjusted
periodically  to recognize the  Partnership's  share of earnings,  losses,  cash
contributions and cash distributions after the date of acquisition.

       Investment  in   Available-for-Sale   Securities.   The  Partnership  has
investments in stock warrants in public  companies that have been  determined to
be available for sale.  Available-for-sale  securities  are stated at their fair
market value, with unrealized gains and losses reported as a separate  component
of partners' capital.

       Reclassification.  Certain 1996 amounts have been reclassified to conform
 to the 1997 presentation.

       Use of Estimates.  The preparation of financial  statements in conformity
with  generally  accepted  accounting  principles  requires  management  to make
estimates  and  assumptions  that affect the amounts  reported in the  financial
statements  and  accompanying  notes.  Actual  results  could  differ from those
estimates.


                                       16
<PAGE>



Note 3.    Accounts Receivable.

       Accounts receivable consist of the following at December 31:

                                                                  1997
                                                                  ----
                                                         (Amounts in Thousands)

         Lease payments                                        $     785
         Reimbursement for property taxes                             70
         General Partners and Affiliates                              24
         Other                                                        19
                                                               ---------
                                                                     898
         Less:  allowance for losses on accounts receivable         (389)
                                                               ---------
              Total                                            $     509
                                                               =========


Note 4.    Notes Receivable.

         Notes receivable consist of the following at December 31:

                                                                  1997
                                                                  ----
                                                         (Amounts in Thousands)

         Notes receivable from emerging growth
              companies,  with stated interest
              ranging from 10% to 21% per annum,
              receivable  in  installments ranging
              from 36 to 60 months, collateralized
              by a security interest in the equipment
              financed.                                        $   4,719

         Notes receivable  from cable  television
              system operators with stated interest
              ranging from 11% to 13% per annum,
              receivable  in installments  ranging
              from 78 to 96 months,  collateralized by
              a security  interest in the cable system
              assets.  These notes have a graduated repayment
              schedule followed with a balloon payment.              459

         Notes receivable from other businesses with
              stated interest ranging from 13% to 18%
              per annum, receivable in installments
              ranging from 35 to 85 months, collateralized
              by the equipment financed.                           3,548
                                                               ---------
                                                                   8,726

         Less:  allowance for losses on notes receivable          (2,268)
                                                               ---------

         Total                                                 $   6,458
                                                               =========

         Minimum payments to be received on non-cancelable  notes receivable for
the years ended December 31, are as follows:

                                                         (Amounts in Thousands)

         1998.........................................         $   3,196
         1999.........................................             2,158
         2000.........................................             1,803
         2001.........................................               811
         2002.........................................               445
         Thereafter...................................               175
                                                               ---------


                                       17


<PAGE>



         Total minimum payments to be received........             8,588
         Impaired notes receivable....................             2,006
         Less:  unearned interest.....................            (1,868)
         Less:  allowance for losses..................            (2,268)
                                                               ---------

         Net investment in notes receivable...........         $   6,458
                                                               =========


         The Partnership's notes receivable to cable television system operators
provide  for a  monthly  payment  rate  in an  amount  that  is  less  than  the
contractual  interest  rate.  The  difference  between the payment  rate and the
contractual interest rate is added to the principal and therefore deferred until
the maturity date of the note. Upon maturity of the note, the original principal
and  deferred  interest is due and  payable in full.  Although  the  contractual
interest  rates may be higher,  the amount of interest  being  recognized on the
Partnership's  outstanding notes receivable to cable television system operators
is being limited to the amount of the payments  received,  thereby deferring the
recognition of a portion of the deferred interest until the loan is paid off.

         At  December  31,  1997,  the  recorded  investment  in notes  that are
considered to be impaired was $2,006,000.  Included in this amount is $1,874,000
of impaired  notes for which the related  allowance for losses is $1,874,000 and
$132,000 of impaired notes for which there is no allowance. The average recorded
investment in impaired  loans during the years ended  December 31, 1997 and 1996
was  approximately  $1,991,000 and  $2,479,000,  respectively.  The  Partnership
recognized  $16,000 and $287,000 of interest income on impaired notes receivable
during the years ended December 31, 1997 and 1996, respectively.

         On February 14, 1996, the  Partnership  foreclosed upon a nonperforming
outstanding  note  receivable  to  a  cable  television  operator  to  whom  the
Partnership,  along with other  affiliated  partnerships  managed by the General
Partner,  had extended credit.  Upon foreclosure,  this note was reclassified to
Investment  in Joint  Ventures  on the  balance  sheet.  The  Partnership's  net
carrying value for this outstanding  note receivable was $73,000,  for which the
Partnership  had an allowance for losses on notes of $17,000.  This allowance of
$17,000 was reversed and recognized as income during the year ended December 31,
1996. This joint venture  subsequently  sold the cable system on August 30, 1996
at a small gain.

         During the year ended  December 31, 1996,  the  Partnership  received a
settlement  on one of its  notes  receivable  from  a  cable  television  system
operator  which was  considered  to be  impaired.  The  Partnership  received  a
recovery  of  $856,000  as a  settlement  which  was  applied  to  the  $605,000
outstanding  note  receivable   balance  and  the  difference  of  $251,000  was
recognized  as  interest  income  from  notes  receivable  during the year ended
December 31, 1996.

         The activity in the allowance for losses on notes receivable during the
years ended December 31, is as follows:

                                                         1997
                                                         ----
                                                (Amounts in Thousands)

         Beginning balance                            $   2,224
              Provision for losses                          154
              Write downs                                  (110)
                                                      ---------
         Ending balance                               $   2,268
                                                      =========


Note 5.    Equipment on Operating Leases and Investment in Financing Leases.

         Equipment on lease  consists  primarily of computer  peripheral,  small
computers and other capital equipment.

         The  Partnership's  operating  leases are for  initial  lease  terms of
approximately 24 to 48 months.  During the remaining terms of existing operating
leases,  the  Partnership  will not  recover all of the  undepreciated  cost and
related expenses of its rental equipment,  and therefore must remarket a portion
of its equipment in future years.

         The  Partnership  has  entered  into  direct  lease  arrangements  with
businesses  in  different  industries  located  throughout  the  United  States.
Generally,  it is the  responsibility  of the lessee to provide  maintenance  on
leased  equipment.  The General Partner  administers the equipment  portfolio of
leases acquired through the direct leasing program.  Administration includes the
collection of rents from the lessees and remarketing of the equipment.


                                       18

<PAGE>



         The net  investment  in financing  leases  consists of the following at
December 31:

                                                                  1997
                                                                  ----
                                                          (Amounts in Thousands)

         Minimum lease payments to be received                 $  12,018
         Less:  unearned income                                   (1,610)
                allowance for early termination                     (777)
                                                               ---------
         Net investment in financing leases                    $   9,631
                                                               =========

         Minimum  rentals  to  be  received  on  noncancellable   operating  and
financing leases for the years ended December 31 are as follows:

                                                      Operating       Financing
                                                      ---------       ---------
                                                        (Amounts in Thousands)

         1998....................................     $     946       $   6,749
         1999....................................           548           3,748
         2000....................................           230           1,284
         2001....................................             5             203
         2002....................................           -                34
                                                      ---------       ---------

         Total                                        $   1,729       $  12,018
                                                      =========       =========

         The net book value of  equipment  held for lease at  December  31, 1997
amounted to $68,000.


Note 6.    Investment in Joint Ventures.

Equipment Joint Venture.

         On August 1, 1994, the Partnership entered into an agreement along with
two other affiliated  partnerships to contribute certain leased assets and notes
receivable (the "Assets") to Phoenix  Acceptance  Limited Liability  Company,  a
Delaware  limited  liability  company  (the "Joint  Venture")  in exchange for a
44.97% equity interest in the Joint Venture.  The interest received in the Joint
Venture  was  accounted  for  at  the  historical   cost  basis  of  the  Assets
transferred.  The Partnership has accounted for its net investment in this Joint
Venture using the equity method of  accounting.  The Joint Venture was organized
to hold title to the assets and subsequently transfer such assets to a trust for
the purpose of the trust  issuing two classes of lease  backed  certificates  to
third parties in exchange for cash proceeds.  The transaction  between the Joint
Venture and the trust has been  accounted  for as a financing  arrangement.  The
Joint Venture retains a residual interest in the assets transferred  through the
ownership of a third class of subordinated trust certificates.  The lease backed
certificates  are  recourse  only  to  the  assets  used  to  collateralize  the
obligation.

         The net carrying value of such assets contributed by the Partnership to
the Joint Venture was  approximately  $11.2 million and the total carrying value
of all of the assets  contributed by all three  partnerships  approximated $24.7
million. The net proceeds from the issuance of the lease backed certificates are
being distributed back to the partnerships who contributed to the Joint Venture.
On August 5, 1994, the Joint Venture received  proceeds from the issuance of the
7.10%  Class A lease  backed  certificates  in the  principal  amount  of  $18.5
million.  On August 12,  1994,  the Joint  Venture  received  proceeds  from the
issuance of the 8.25% Class B lease backed  certificates in the principal amount
of $5.3  million.  The lease backed  certificates  were paid in full in November
1996.

         An analysis of the  Partnership's  investment  in the  Equipment  Joint
Venture is as follows:
                                                                         Net
                 Net Investment                                       Investment
                 at Beginning                 Equity in                at End
Date             of Period      Contributions Earnings  Distributions of Period
----             -------------- ------------- --------- ------------- ---------
                                      (Amounts in Thousands)

Year Ended
  December 31, 1996   $1,657       $   69      $  393      $  483       $1,636
                      ======       ======      ======      ======       ======


                                       19


<PAGE>



Year Ended
  December 31, 1997   $1,636       $   -       $  467      $1,848       $  255
                      ======       ======      ======      ======       ======

         The aggregate  financial  information of the Equipment Joint Venture is
presented as follows:

                                                        December 31,
                                                            1997
                                                            ----
                                                    (Amounts in Thousands)

         Assets                                          $    730
         Liabilities                                          156
         Partners' Capital                                    574

                                               For the Years Ended December 31,
                                                  1997                  1996
                                                  ----                  ----
                                                    (Amounts in Thousands)

         Revenue                               $  1,129              $  2,025
         Expenses                                    78                 1,149
         Net Income (Loss)                        1,051                   876

         As of December  31,  1997 the  Partnership's  pro rata  interest in the
Equipment Joint Venture's net book value of off-lease equipment was $0.

         The General Partner earns a management fee of 3.5% of the Partnership's
respective  interest in gross  revenues of the  Equipment  Joint  Venture.  Cash
proceeds  subject to a management fee at the joint venture level are not subject
to management fees at the Partnership level.

Financing Joint Venture.

         The Partnership  owns a 25% interest in Phoenix Joint Venture 1994-2, a
Financing  Joint  Venture.  This  investment  is accounted  for using the equity
method of accounting.  The other partners of the venture are entities  organized
and managed by the General Partner.

         An analysis of the  Partnership's  investment  account in the Financing
Joint Venture is as follows:
                                                                         Net
                 Net Investment                                       Investment
                 at Beginning                 Equity in                at End
Date             of Period      Contributions Earnings  Distributions of Period
----             -------------- ------------- --------- ------------- ----------
                                      (Amounts in Thousands)

Year Ended
  December 31, 1996   $  271       $   -       $   39      $   86       $  224
                      ======       ======      ======      ======       ======

Year Ended
  December 31, 1997   $  224       $   -       $   28      $   81       $  171
                      ======       ======      ======      ======       ======

         The aggregate  financial  information of the Financing Joint Venture is
presented as follows:

                                                         December 31,
                                                            1997
                                                            ----
                                                    (Amounts in Thousands)

         Assets                                           $   803
         Liabilities                                          136
         Partners' Capital                                    667


                                       20

<PAGE>



                                               For the Years Ended December 31,
                                                  1997                  1996
                                                  ----                  ----
                                                    (Amounts in Thousands)

         Revenue                               $    127              $    162
         Expenses                                    25                     6
         Net Income (Loss)                          102                   156

         The General Partner earns a management fee of 3.5% of the Partnership's
respective  interest in gross payments received for the Financing Joint Venture.
Revenues  subject to a management fee at the joint venture level are not subject
to management fees at the Partnership level.

Foreclosed Cable Systems Joint Ventures.

         The  Partnership  owns an interest in  foreclosed  cable  systems joint
ventures along with other  partnerships  managed by the General  Partner and its
affiliates.  The Partnership  foreclosed upon  nonperforming  outstanding  notes
receivable to cable  television  operators to whom the  Partnership,  along with
other  affiliated  partnerships  managed by the General  Partner,  had  extended
credit. The partnerships'  notes receivables were exchanged for interests (their
capital contribution), on a pro rata basis, in newly formed joint ventures owned
by the  partnerships  and  managed by the  General  Partner.  Title to the cable
television  systems  is  held  by the  joint  ventures.  These  investments  are
accounted for using the equity method of accounting.

                                                               Weighted
               Joint Venture                              Percentage Interest
               -------------                              -------------------

         Phoenix Pacific Northwest Cable J.V.                    37.22%
         Phoenix Country Cable J.V. (1)                          46.65
         Phoenix Independence Cable, LLC                         43.69
         Phoenix Grassroots Cable System, LLC (2)                  .80

(1) Cable system sold in 1995 and joint venture closed in 1996.
(2) Cable system sold in 1996.

                                                                         Net
                 Net Investment               Equity in               Investment
                 at Beginning                 Earnings                  at End
Date             of Period      Contributions (Losses)  Distributions of Period
----             -------------- ------------- --------- ------------- ----------
                                      (Amounts in Thousands)

Year Ended
  December 31, 1996   $  523       $   73      $  (20)      $  158      $  418
                      ======       ======      ======       ======      ======

Year Ended
  December 31, 1997   $  418       $   -       $ (162)      $    2      $  254
                      ======       ======      ======       ======      ======

         The aggregate  combined  financial  information of the foreclosed cable
systems joint ventures is presented as follows:

                                                       December 31,
                                                           1997
                                                           ----
                                                  (Amounts in Thousands)

         Assets                                         $    909
         Liabilities                                         240
         Partners' Capital                                   669


                                       21


<PAGE>



                                               For the Years Ended December 31,
                                                  1997                  1996
                                                  ----                  ----
                                                    (Amounts in Thousands)

         Revenue                               $    529              $  2,168
         Expenses                                   789                 2,213
         Net Income (Loss)                         (260)                  (45)

         Phoenix  Cable  Management  Inc.  (PCMI),  an  affiliate of the General
Partner,  provides  day  to day  management  services  in  connection  with  the
operation of the foreclosed  cable systems joint ventures.  The foreclosed cable
systems  joint  ventures  will pay a  management  fee equal to four and one-half
percent of the  System's  monthly  gross  revenue for these  services.  Revenues
subject to a management  fee at the joint  venture  level will not be subject to
management fees at the Partnership level.


Note 7.    Accounts Payable and Accrued Expenses.

         Accounts  payable  and accrued  expenses  consist of the  following  at
December 31:

                                                          1997
                                                          ----
                                                 (Amounts in Thousands)

         Equipment lease operations                    $    559
         General Partner and affiliates                     181
         Security deposits                                  202
         Other                                              147
         Sales Tax                                          127
                                                       --------
                                                       $  1,216
                                                       ========


Note 8.    Income Taxes.

         Federal  and state  income tax  regulations  provide  that taxes on the
income  or loss of the  Partnership  are  reportable  by the  partners  in their
individual income tax returns. Accordingly, no provision for such taxes has been
made in the accompanying financial statements.

         The net differences  between the tax basis and the reported  amounts of
the Partnership's assets and liabilities is as follows at December 31, 1997:

                        Reported Amounts        Tax Basis         Net Difference
                        ----------------        ---------         --------------
                                         (Amounts in Thousands)

         Assets            $  27,390          $   32,809           $   (5,419)
         Liabilities           1,216                 735                  481


Note 9.    Related Entities.

         The General  Partner and  affiliates  serve in the  capacity of general
partner in other partnerships, all of which are engaged in the equipment leasing
and financing business.


Note 10.   Reimbursed Costs to the General Partner.

         The General Partner incurs certain  administrative  costs, such as data
processing,   investor   and  lessee   communications,   lease   administration,
accounting,  equipment  storage  and  equipment  remarketing,  for  which  it is
reimbursed by the  Partnership.  These expenses  incurred by the General Partner
are to be  reimbursed at the lower of the actual costs or an amount equal to 90%
of the fair market value for such services.


                                       22


<PAGE>



         The  reimbursed  administrative  costs  to  the  General  Partner  were
$500,000  and  $734,000  for  the  years  ended  December  31,  1997  and  1996,
respectively.  The equipment  storage,  remarketing  and data  processing  costs
reimbursed to the General  Partner  during the years ended December 31, 1997 and
1996 were $181,000 and $237,000, respectively.


Note 11.   Net Income (Loss) and Distributions per Limited Partnership Unit.

         Net income and distributions per limited partnership unit were based on
the limited  partner's share of consolidated net income and  distributions,  and
the weighted average number of units  outstanding of 6,223,655 and 6,273,582 for
the years ended  December 31, 1997 and 1996,  respectively.  For the purposes of
allocating  consolidated  income  (loss) and  distributions  to each  individual
limited partner,  the Partnership  allocates  consolidated net income (loss) and
distributions   based  upon  each  respective   limited  partner's  net  capital
contributions.


Note 12.   Subsequent Events.

         In January 1998,  cash  distributions  of $196,000 and $2,399,000  were
made to the General and Limited Partners, respectively.


Note 13.   Fair Value of Financial Instruments.

         The carrying  amounts  reported on the balance  sheet for cash and cash
equivalents,  available-for-sale securities and notes receivable approximate the
fair values.


                                       23


<PAGE>



Item 8.    Disagreements on Accounting and Financial Disclosure Matters.

         None.


                                    PART III

Item 9.  Directors and Executive Officers of the Registrant.

         The  registrant  is  a  limited  partnership  and,  therefore,  has  no
executive  officers or  directors.  The  general  partner of the  registrant  is
Phoenix  Leasing  Incorporated,  a California  corporation.  The  directors  and
executive officers of Phoenix Leasing Incorporated (PLI) are as follows:

         GUS CONSTANTIN,  age 60, is President,  Chief  Executive  Officer and a
Director of PLI. Mr.  Constantin  received a B.S. degree in Engineering from the
University of Michigan and a Master's Degree in Management Science from Columbia
University.  From 1969 to 1972,  he served as Director,  Computer and  Technical
Equipment of DCL Incorporated  (formerly Diebold Computer Leasing Incorporated),
a  corporation  formerly  listed on the  American  Stock  Exchange,  and as Vice
President  and  General  Manager  of DCL  Capital  Corporation,  a  wholly-owned
subsidiary of DCL Incorporated. Mr. Constantin was actively engaged in marketing
manufacturer  leasing programs to computer and medical  equipment  manufacturers
and in directing DCL Incorporated's IBM System/370 marketing  activities.  Prior
to  1969,  Mr.  Constantin  was  employed  by IBM as a data  processing  systems
engineer for four years. Mr. Constantin is an individual general partner in four
active partnerships and is an NASD registered  principal.  Mr. Constantin is the
founder of PLI and the  beneficial  owner of all of the common  stock of Phoenix
American Incorporated.

         GARY W. MARTINEZ, age 47, is Executive Vice President,  Chief Operating
Officer and a Director of PLI. He has been  associated  with PLI since 1976.  He
manages the Asset Management Department, which is responsible for lease and loan
portfolio   management.   This  includes   credit   analysis,   contract  terms,
documentation  and  funding;  remittance  application,   change  processing  and
maintenance  of customer  accounts;  customer  service,  invoicing,  collection,
settlements and litigation;  negotiating lease renewals,  extensions,  sales and
buyouts; and management information  reporting.  From 1973 to 1976, Mr. Martinez
was a Loan Officer with Crocker National Bank, San Francisco.  Prior to 1973, he
was an Area Manager with Pennsylvania Life Insurance Company.  Mr. Martinez is a
graduate of California State University, Chico.

         HOWARD  SOLOVEI,  age 36, is the Chief Financial Officer, Treasurer and
a Director of PLI.  He has been  associated  with PLI  since  1984.  Mr. Solovei
oversees  the  Finance  Department.  He  is  responsible  for  the  structuring,
planning,  and monitoring of the  partnerships  sponsored by the General Partner
and its  affiliates,  as well as  maintaining  the  banking  relationships.  Mr.
Solovei graduated with a B.S. in Business  Administration from the University of
California, Berkeley.

         BRYANT J. TONG, age 43, is Senior Vice President,  Financial Operations
and a Director of PLI. He has been with PLI since 1982.  Mr. Tong is responsible
for  investor  services and overall  company  financial  operations.  He is also
responsible  for  the  technical  and  administrative  operations  of  the  cash
management,  corporate accounting,  partnership accounting,  accounting systems,
internal  controls and tax  departments,  in addition to Securities and Exchange
Commission and other regulatory agency reporting.  Prior to his association with
PLI, Mr. Tong was  Controller-Partnership  Accounting  with the Robert A. McNeil
Corporation for two years and was an auditor with Ernst & Whinney  (succeeded by
Ernst & Young) from 1977 through 1980. Mr. Tong holds a B.S. in Accounting  from
the University of California, Berkeley, and is a Certified Public Accountant.

         CYNTHIA E. PARKS, age 42, is Senior Vice President, General Counsel and
Assistant  Secretary  of PLI.  Prior to joining  PLI in 1984,  she was with GATX
Leasing  Corporation,  and had  previously  been  Corporate  Counsel  for  Stone
Financial  Companies,  and an Assistant  Vice  President of the Bank of America,
Bank Amerilease  Group. She has a bachelor's degree from Santa Clara University,
and earned her J.D. from the University of San Francisco School of Law.

         Neither the General  Partner nor any  Executive  Officer of the General
Partner has any family relationship with the others.

         Phoenix  Leasing  Incorporated  or its  affiliates  and  the  executive
officers of the General  Partner  serve in a similar  capacity to the  following
affiliated limited partnerships:


                                       24


<PAGE>



              Phoenix Leasing American Business Fund, L.P.
              Phoenix Leasing Cash Distribution Fund V, L.P.
              Phoenix Income Fund, L.P.
              Phoenix High Tech/High Yield Fund
              Phoenix Leasing Cash Distribution Fund III and
              Phoenix Leasing Income Fund VII

Disclosure Pursuant to Section 16, Item 405 of Regulation S-K:

         The General  Partner (and any corporate  general partner of the General
Partner) of the  Registrant,  and the executive  officers of the General Partner
(or any corporate  general  partner of the General  Partner) of the  Registrant,
file reports  pursuant to Section 16(a) of the Securities  Exchange Act of 1934,
as amended.  Based solely on the Registrant's review of the copies of such forms
received by the Registrant,  the Registrant believes that, during 1997, all such
required  reports  were filed on a timely  basis,  except for  reports on Form 3
(Initial  Statement of Beneficial  Ownership of Securities) filed late by Howard
Solovei and Cynthia E. Parks,  each an executive  officer of the General Partner
(or any corporate general partner of the General Partner) of the Registrant.  No
units of limited partnership interest are held by such executive officers.

Certain Legal Proceedings.

         On October 28, 1997 a Class Action  Complaint was filed against Phoenix
Leasing  Incorporated,  Phoenix  Leasing  Associates,  II and III L.P.,  Phoenix
Securities  Inc.  and  Phoenix  American   Incorporated   (the  "Companies")  in
California  Superior Court for the County of Sacramento by eleven individuals on
behalf of investors in Phoenix Leasing Cash Distribution  Funds I through V (the
"Partnerships").  The  Companies  were served with the  Complaint on December 9,
1997. The Complaint  seeks  declaratory and other relief  including  accounting,
receivership,  imposition of  constructive  trust and judicial  dissolution  and
winding up of the Partnerships,  and damages based on fraud, breach of fiduciary
duty and  breach  of  contract  by the  Companies  as  general  partners  of the
Partnerships.  The  Companies  received  an  extension  of  time to  answer  the
Complaint  and formal  discovery  has not  commenced.  The  Companies  intend to
vigorously defend the Complaint.


Item 10.    Executive Compensation.

         Set forth is the information  relating to all direct  remuneration paid
or accrued by the Registrant during the last year to the General Partner and its
affiliate.

<TABLE>

        (A)                (B)                                 (C)                               (D)

                                                         Cash and cash-                    Aggregate of
Name of Individual    Capacities in                      equivalent forms                  contingent forms
or persons in group   which served                       of remuneration                   of remuneration
-------------------   -------------        -------------------------------------------     ----------------
                                                  (C1)                        (C2)
                                                                    Securities or property
                                      Salaries, fees, directors'    insurance benefits or
                                      fees, commissions, and        reimbursement, personal
                                      bonuses                       benefits
                                      -------------------------     -----------------------
                                                    (Amounts in Thousands)
<S>                   <C>                     <C>                            <C>                 <C>
Phoenix Leasing
  Incorporated        General Partner         $   977                        $   0               $   0
                                              =======                        =====               =====

(1)  consists of management and acquisition fees.
</TABLE>


Item 11.      Security Ownership of Certain Beneficial Owners and Management.

         (a)  No person  owns of record,  or is known by the  Registrant  to own
              beneficially,  more  than  five  percent  of any  class of  voting
              securities of the Registrant.

         (b)  The General Partner of the Registrant  owns the equity  securities
              of the Registrant set forth in the following table:


                                       25


<PAGE>



          (1)                           (2)                             (3)
    Title of Class         Amount Beneficially Owned            Percent of Class
    --------------         -------------------------            ----------------
General Partner Interest   Represents a 5% interest in the              100%
                           Registrant's profits and
                           distributions, until the Limited
                           Partners have recovered their
                           capital contributions plus a
                           cumulative return of 12% per annum,
                           compounded quarterly, on the
                           unrecovered portion thereof.
                           Thereafter, the General Partner
                           will receive 15%interest in the
                           Registrant's profits and distributions.

Limited Partner Interest   1,100 units                                  .02


Item 12.      Certain Relationships and Related Transactions.

         None.

                                     PART IV

Item 13.      Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

                                                                      Page No.
                                                                      --------
(a)      1.   Financial Statements:

              Consolidated Balance Sheet as of December 31, 1997          10
              Consolidated Statements of Operations for
                the Years Ended December 31, 1997 and 1996                11
              Consolidated Statements of Partners' Capital
                for the Years Ended December 31, 1997 and 1996            12
              Consolidated Statements of Cash Flows for the
                Years Ended December 31, 1997 and 1996                    13
              Notes to Consolidated Financial Statements                4-23

         All other schedules are omitted because they are not applicable, or not
required,  or because the  required  information  is  included in the  financial
statements or notes thereto.

(b)      Reports on Form 8-K:

         No reports on Form 8-K were filed for the quarter  ended  December  31,
         1997.

(c)      21.  Additional Exhibits.

              a)  Balance Sheets of Phoenix Leasing Incorporated    E21 1-14

         27.  Financial Data Schedule


                                       26


<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.

                                      PHOENIX LEASING CASH DISTRIBUTION FUND IV,
                                           A CALIFORNIA LIMITED PARTNERSHIP
                                                      (Registrant)

                                      BY:  PHOENIX LEASING INCORPORATED,
                                           A CALIFORNIA CORPORATION
                                           GENERAL PARTNER

         Date: March 24, 1998         By:  /S/ GUS CONSTNTIN
               --------------              ----------------------------
                                           Gus Constantin, President

         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.

    Signature                          Title                           Date
    ---------                          -----                           ----


/S/ GUS CONSTANTIN     President, Chief Executive Officer and a   March 24, 1998
---------------------  Director of Phoenix Leasing Incorporated,  --------------
(Gus Constantin)       General Partner



/S/ GARY W. MARTINEZ   Executive Vice President,                  March 24, 1998
---------------------  Chief Operating Officer and a Director of  --------------
(Gary W. Martinez)     Phoenix Leasing Incorporated
                       General Partner



/S/ HOWARD SOLOVEI     Chief Financial Officer,                   March 24, 1998
---------------------  Treasurer and a Director of                --------------
(Howard Solovei)       Phoenix Leasing Incorporated
                       General Partner



/S/ BRYANT J. TONG     Senior Vice President,                     March 24, 1998
---------------------  Financial Operations                       --------------
(Bryant J. Tong)       (Principal Accounting Officer)
                       and a Director of
                       Phoenix Leasing Incorporated
                       General Partner


                                       27