<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q

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

 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2004

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

                        Commission File Number: 33-62526

                      COMMONWEALTH INCOME & GROWTH FUND IV
             (Exact name of registrant as specified in its charter)

         Pennsylvania                                 23-3080409
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
incorporation or organization)

                          470 John Young Way Suite 300
                                 Exton, PA 19341
          (Address, including zip code, of principal executive offices)

                                 (610) 594-9600
               (Registrant's telephone number including area code)

         Indicate by check mark whether the registrant (i) 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, and (ii) has been subject to such filing
requirements for the past 90 days: YES [X] NO [ ]

         Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12c-2 of the Act): YES [ ] NO [X]



<PAGE>



                      COMMONWEALTH INCOME & GROWTH FUND IV
                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                         JUNE 30,           DECEMBER 31,
                                                          2004                 2003
                                                       ---------------------------------
                                                       (UNAUDITED)
<S>                                                    <C>                     <C>
ASSETS

Cash and cash equivalents                              $    717,733        $  4,644,293
Lease income receivable                                     161,211              88,996
Other receivables - General Partner                          57,769                   -
Other receivables - Affiliated limited partnerships         394,863              56,639
Deferred revenue                                              1,675               2,438
Refundable deposits                                           1,130               1,130
Prepaid expenses                                             23,846                   -
                                                       ---------------------------------
                                                          1,358,227           4,793,496
                                                       ---------------------------------


Computer equipment, at cost                              12,493,388          10,738,728
Accumulated depreciation                                 (2,717,742)         (1,285,576)
                                                       ---------------------------------
                                                          9,775,646           9,453,152
                                                       ---------------------------------

Equipment acquisition costs and deferred expenses, net      374,456             378,428
Other receivables - Commonwealth Capital Corp               284,576             229,801
Prepaid acquisition fees                                    136,165             177,841
                                                       ---------------------------------
                                                            795,197             786,070
                                                       ---------------------------------

TOTAL ASSETS                                           $ 11,929,070        $ 15,032,718
                                                       =================================


LIABILITIES AND PARTNERS' CAPITAL

LIABILITIES
Accounts payable, primarily for equipment purchases          77,732           2,325,446
Accounts payable - General Partner                                -              71,024
Other accrued expenses                                            -              17,000
Unearned lease income                                        62,191             102,485
Notes payable                                             1,996,842           1,816,668
                                                       ---------------------------------
TOTAL LIABILITIES                                         2,136,765           4,332,623
                                                       ---------------------------------

PARTNERS' CAPITAL
General partner                                               1,000               1,000
Limited partners                                          9,791,305          10,699,095
                                                       ---------------------------------
TOTAL PARTNERS' CAPITAL                                   9,792,305          10,700,095
                                                       ---------------------------------

TOTAL LIABILITIES AND PARTNERS' CAPITAL                $ 11,929,070        $ 15,032,718
                                                       =================================
</TABLE>

                 see accompanying notes to financial statements


<PAGE>



                      COMMONWEALTH INCOME & GROWTH FUND IV
                            STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                       THREE MONTHS     THREE MONTHS     SIX MONTHS      SIX MONTHS
                                                          ENDED            ENDED           ENDED           ENDED
                                                         JUNE 30,         JUNE 30,        JUNE 30,        JUNE 30,
                                                           2004             2003            2004            2003
                                                       -------------------------------------------------------------
                                                                (UNAUDITED)                     (UNAUDITED)
<S>                                                    <C>               <C>            <C>             <C>
INCOME
Lease                                                  $ 1,067,397       $ 313,237      $ 2,035,089     $   583,492

Interest and other                                              60           4,942            7,723           6,529
                                                       -------------------------------------------------------------

TOTAL INCOME                                             1,067,457         318,179        2,042,812         590,021
                                                       -------------------------------------------------------------

EXPENSES
Operating, excluding depreciation                          160,372         426,956          498,742         665,012
Organizational costs                                             -          43,775                -          65,842
Equipment management fee - General Partner                  53,369          15,662          101,754          29,175
Interest                                                    27,660          11,207           55,712          21,649
Depreciation                                               769,721         201,141        1,456,557         387,689
Amortization of equipment
  acquisition costs and deferred expenses                   43,266          12,913           84,450          23,660
Loss on sale of computer equipment                               -               -            2,919               -

                                                       -------------------------------------------------------------
TOTAL EXPENSES                                           1,054,388         711,654        2,200,134       1,193,027
                                                       -------------------------------------------------------------

NET INCOME (LOSS)                                      $    13,069       $(393,475)     $  (157,322)    $  (603,006)
                                                       =============================================================

NET INCOME (LOSS) PER EQUIVALENT LIMITED
  PARTNERSHIP UNIT                                     $      0.02       $   (0.99)     $     (0.21)    $     (1.93)
                                                       =============================================================

WEIGHTED AVERAGE NUMBER OF EQUIVALENT LIMITED
  PARTNERSHIP UNITS OUTSTANDING DURING THE PERIOD          749,950         398,671          749,950         312,047
                                                       =============================================================
</TABLE>


                 see accompanying notes to financial statements


<PAGE>


                      COMMONWEALTH INCOME & GROWTH FUND IV
                         STATEMENTS OF PARTNERS' CAPITAL

<TABLE>
<CAPTION>
                                                          FOR THE SIX MONTHS ENDED JUNE 30, 2004
                                                                       (UNAUDITED)

                                                GENERAL      LIMITED
                                                PARTNER      PARTNER     GENERAL      LIMITED
                                                 UNITS        UNITS      PARTNER      PARTNER         TOTAL
                                            -------------------------------------------------------------------

<S>                                         <C>              <C>         <C>       <C>            <C>
PARTNERS' CAPITAL - DECEMBER 31, 2003                50      749,950     $ 1,000   $ 10,699,095   $ 10,700,095
  Net income (loss)                                   -            -       7,505       (164,827)      (157,322)
  Distributions                                       -            -      (7,505)      (742,963)      (750,468)
                                            ------------------------------------- -----------------------------
PARTNERS' CAPITAL - JUNE 30, 2004                    50      749,950     $ 1,000   $  9,791,305   $  9,792,305
                                            =========================  ========== ============== ==============
</TABLE>





                 see accompanying notes to financial statements


<PAGE>



                      COMMONWEALTH INCOME & GROWTH FUND IV
                             STATEMENTS OF CASH FLOW
                 FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003

<TABLE>
<CAPTION>
                                                                     2004                 2003
                                                                 ----------------------------------
OPERATING ACTIVITIES                                                         (UNAUDITED)
<S>                                                              <C>                  <C>
Net (loss)                                                       $    (157,322)       $   (603,006)
Adjustments to reconcile net (loss) to net cash
   (used in) provided by operating activities
       Depreciation and amortization                                 1,541,007             411,349
       Loss on sale of computer equipment                                2,919                   -
       Other noncash activities included in
          determination of net (loss)                                 (518,004)           (157,008)
     Changes in assets and liabilities
         (Increase) decrease in assets
              Lease income receivable                                  (72,215)              3,060
              Deferred revenue                                             763              (1,052)
              Other receivable, General Partner                        (57,769)              5,241
              Receivables from sales of equipment                            -             103,610
              Other receivables - Affiliated limited partnerships     (338,224)            (29,326)
              Refundable deposits                                            -              (1,130)
              Prepaid expenses                                         (23,846)                  -
         (Decrease) increase in liabilities
              Accounts payable                                      (2,247,714)            479,704
              Accounts payable, Commonwealth Capital Corp.                   -             (61,807)
              Accounts payable, General Partner                        (71,024)                  -
              Other accrued expenses                                   (17,000)                  -
              Unearned lease income                                    (40,294)             47,221
                                                                 ----------------------------------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES                 (1,998,723)            196,856
                                                                 ----------------------------------

INVESTING ACTIVITIES:
Capital expenditures                                                (1,139,223)         (1,705,068)
Prepaid acquisition fees                                                     -            (147,982)
Net proceeds from the sale of computer equipment                        55,431                   -
Equipment acquisition fees paid to General Partner                     (31,820)           (100,843)
                                                                 ----------------------------------
NET CASH (USED IN) INVESTING ACTIVITIES                             (1,115,612)         (1,953,893)
                                                                 ----------------------------------

FINANCING ACTIVITIES:
Contributions                                                                -           6,285,591
Offering costs                                                               -            (687,667)
Distributions to partners                                             (750,468)           (286,179)
Accounts receivable, Commonwealth Capital Corp.                        (54,775)           (156,029)
Debt placement fee paid to the General Partner                          (6,982)             (8,160)
                                                                 ----------------------------------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES                   (812,225)          5,147,556
                                                                 ----------------------------------


Net (decrease) increase in cash and cash equivalents                (3,926,560)          3,390,519
Cash and cash equivalents, beginning of period                       4,644,293             510,780
                                                                 ----------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                         $     717,733        $  3,901,299
                                                                 ==================================
</TABLE>


                 see accompanying notes to financial statements



<PAGE>

                          NOTES TO FINANCIAL STATEMENTS

1.  BUSINESS         Commonwealth Income & Growth Fund IV (the "Partnership") is
                     a limited partnership organized in the Commonwealth of
                     Pennsylvania on May 15, 2001. The Partnership was offering
                     for sale up to 750,000 units of the limited partnership at
                     the purchase price of $20 per unit (the "Offering"). The
                     Partnership reached the minimum amount in escrow and
                     commenced operations on July 8, 2002 and was fully
                     subscribed on September 15, 2003.

                     The Partnership uses the proceeds of the Offering to
                     acquire, own and lease various types of computer peripheral
                     equipment and other similar capital equipment, which will
                     be leased primarily to U.S. corporations and institutions.
                     Commonwealth Capital Corp ("CCC"), on behalf of the
                     Partnership and other affiliated partnerships, will acquire
                     computer equipment subject to associated debt obligations
                     and lease agreements and allocate a participation in the
                     cost, debt and lease revenue to the various partnerships
                     based on certain risk factors.

                     The Partnership's General Partner is Commonwealth Income &
                     Growth Fund, Inc. (the "General Partner"), a Pennsylvania
                     corporation which is an indirect wholly owned subsidiary of
                     CCC. CCC is a member of the Investment Program Association
                     (IPA), Financial Planning Association (FPA), and the
                     Equipment Leasing Association (ELA). Approximately ten
                     years after the commencement of operations, the Partnership
                     intends to sell or otherwise dispose of all of its computer
                     equipment, make final distributions to partners, and to
                     dissolve. Unless sooner terminated, the Partnership will
                     continue until December 31, 2012.

2.  SUMMARY OF       BASIS OF PRESENTATION
    SIGNIFICANT
    ACCOUNTING       The  financial  information  presented as of any date other
    POLICIES         than December 31 has been prepared from the books and
                     records without audit. Financial information as of December
                     31 has been derived from the audited financial statements
                     of the Partnership, but does not include all disclosures
                     required by generally accepted accounting principles. In
                     the opinion of management, all adjustments, consisting only
                     of normal recurring adjustments, necessary for a fair
                     presentation of the financial information for the periods
                     indicated have been included. For further information
                     regarding the Partnership's accounting policies, refer to
                     the financial statements and related notes included in the
                     Partnership's annual report on Form 10-K for the year ended
                     December 31, 2003. Operating results for the six-month
                     period ended June 30, 2004 are not necessarily indicative
                     of financial results that may be expected for the full year
                     ended December 31, 2004.



<PAGE>

                     REVENUE RECOGNITION

                     Through June 30, 2004, the Partnership has only entered
                     into operating leases. Lease revenue is recognized on a
                     monthly basis in accordance with the terms of the operating
                     lease agreements.

                     The Partnership reviews a customer's credit history before
                     extending credit and may establish a provision for
                     uncollectible accounts receivable based upon the credit
                     risk of specific customers, historical trends and other
                     information.

                     USE OF ESTIMATES

                     The preparation of financial statements in conformity with
                     generally accepted accounting principles requires
                     management to make estimates and assumptions that affect
                     the reported amounts of assets and liabilities and
                     disclosure of contingent assets and liabilities at the date
                     of the financial statements and the reported amounts of
                     revenues and expenses during the reporting period. Actual
                     results could differ from those estimates.

                     LONG-LIVED ASSETS

                     The Partnership evaluates its long-lived assets when events
                     or circumstances indicate that the value of the asset may
                     not be recoverable. The Partnership determines whether an
                     impairment exists by estimating the undiscounted cash flows
                     to be generated by each asset. If the estimated
                     undiscounted cash flows are less than the carrying value of
                     the asset then an impairment exists. The amount of the
                     impairment is determined based on the difference between
                     the carrying value and the fair value. The fair value is
                     determined based on estimated discounted cash flows to be
                     generated by the asset. As of June 30, 2004, there is no
                     impairment.

                     Depreciation on computer equipment for financial statement
                     purposes is based on the straight-line method over
                     estimated useful lives of four years.

                     INTANGIBLE ASSETS

                     Equipment acquisition costs and deferred expenses are
                     amortized on a straight-line basis over two- to-four year
                     lives. Unamortized acquisition fees and deferred expenses
                     are charged to amortization expense when the associated
                     leased equipment is sold.

                     CASH AND CASH EQUIVALENTS

                     The Partnership considers all highly liquid investments
                     with a maturity of three months or less to be cash
                     equivalents. Cash equivalents have been invested in a money
                     market fund investing directly in Treasury obligations.



<PAGE>

                     INCOME TAXES

                     The Partnership is not subject to federal income taxes;
                     instead, any taxable income (loss) is passed through to the
                     partners and included on their respective income tax
                     returns.

                     Taxable income differs from financial statement net income
                     as a result of reporting certain income and expense items
                     for tax purposes in periods other than those used for
                     financial statement purposes, principally relating to
                     depreciation, amortization, and lease income.

                     OFFERING COSTS

                     Offering costs are payments for selling commissions, dealer
                     manager fees, professional fees and other offering expenses
                     relating to the syndication. Selling commissions were 8% of
                     the partners' contributed capital and dealer manager fees
                     were 1% of the partners' contributed capital. These costs
                     have been deducted from partnership capital in the
                     accompanying financial statements.

                     NET INCOME (LOSS) PER EQUIVALENT LIMITED PARTNERSHIP UNIT

                     The net income (loss) per equivalent limited partnership
                     unit is computed based upon net income (loss) allocated to
                     the limited partners and the weighted average number of
                     equivalent units outstanding during the period.

                     REIMBURSABLE EXPENSES

                     Reimbursable expenses, which are charged to the Partnership
                     by CCC in connection with the administration and operation
                     of the Partnership, are allocated to the Partnership based
                     upon several factors including, but not limited to, the
                     number of investors, compliance issues, and the number of
                     existing leases.

3.  COMPUTER         The Partnership is the lessor of equipment under operating
    EQUIPMENT        leases with periods ranging from 16 to 36 months. In
                     general, the lessee pays associated costs such as repairs
                     and maintenance, insurance and property taxes.

                     The Partnership's share of the computer equipment in which
                     it participates with other partnerships at June 30, 2004
                     and December 31, 2003 was approximately $952,000 and
                     $8,000, respectively, which is included in the
                     Partnership's fixed assets on its balance sheet, and the
                     total cost of the equipment shared by the Partnership with
                     other partnerships at June 30, 2004 and December 31, 2003
                     was approximately $1,913,000 and $48,000, respectively. The
                     Partnership's share of the outstanding debt associated with
                     this equipment at June 30, 2004 was approximately $577,000,
                     which is included in the Partnership's notes payables on
                     the balance sheet, and the total outstanding debt at June
                     30, 2004 related to the equipment shared by the Partnership
                     was approximately $1,134,000. The Partnership did not share
                     in any outstanding debt associated with this equipment as
                     of December 31, 2003.



<PAGE>

                     The following is a schedule of future minimum rentals on
                     noncancellable operating leases at June 30, 2004:

                                                                         Amount
                     -----------------------------------------------------------
                     Six Months ending December 31, 2004            $ 2,152,000
                     Year Ended December 31, 2005                     4,064,000
                     Year Ended December 31, 2006                     2,458,000
                     Year Ended December 31, 2007                        66,000
                                                                     -----------
                                                                    $ 8,740,000
                     ===========================================================


4.  RELATED PARTY
    TRANSACTIONS
                     OTHER RECEIVABLES

                     As of June 30, 2004, the Partnership has a non-interest
                     bearing receivable from CCC, a related party to the
                     Partnership, in the amount of approximately $285,000, which
                     primarily originated in 2003. CCC, through its indirect
                     subsidiaries, including the General Partner of the
                     Partnership, earns fees based on revenues and new lease
                     purchases from this fund. CCC intends to repay these
                     receivables, through acquisition fees, debt placement fees
                     and reimbursement of expenses, with a minimum amount of
                     $12,500 per quarter, commencing in the quarter ending
                     March, 2004. During the quarter ended June 30, 2004, CCC
                     has reduced the receivable to the Partnership by
                     approximately $30,000.

                     REIMBURSABLE EXPENSES

                     The General Partner and its affiliates are entitled to
                     reimbursement by the Partnership for the cost of supplies
                     and services obtained and used by the General Partner in
                     connection with the administration and operation of the
                     Partnership from third parties unaffiliated with the
                     General Partner. In addition, the General Partner and its
                     affiliates are entitled to reimbursement for certain
                     expenses incurred by the General Partner and its affiliates
                     in connection with the administration and operation of the
                     Partnership. During the six months ended June 30, 2004 and
                     2003, the Partnership recorded $425,000 and $499,000,
                     respectively, for reimbursement of expenses to the General
                     Partner, which are included in operating expenses.

                     EQUIPMENT ACQUISITION FEE

                     The General Partner is entitled to be paid an equipment
                     acquisition fee of 4% of the purchase price of each item of
                     equipment purchased as compensation for the negotiation of
                     the acquisition of the equipment and lease thereof or sale
                     under a conditional sales contract. During the six months
                     ended June 30, 2004 and 2003, equipment acquisition fees of
                     approximately $74,000 and $101,000, respectively, were
                     earned by the General Partner.



<PAGE>

                     DEBT PLACEMENT FEE

                     As compensation for arranging term debt to finance the
                     acquisition of equipment by the Partnership, the General
                     Partner is paid a fee equal to 1% of such indebtedness;
                     provided, however, that such fee shall be reduced to the
                     extent the Partnership incurs such fees to third parties,
                     unaffiliated with the General Partner or the lender, with
                     respect to such indebtedness and no such fee will be paid
                     with respect to borrowings from the General Partner or its
                     affiliates. During the six months ended June 30, 2004 and
                     2003, debt placement fees of approximately $7,000 and
                     $8,000, respectively, were earned by the General Partner.

                     EQUIPMENT MANAGEMENT FEE

                     The General Partner is entitled to be paid a monthly fee
                     equal to the lesser of (i) the fees which would be charged
                     by an independent third party for similar services for
                     similar equipment or (ii) the sum of (a) two percent of (1)
                     the gross lease revenues attributable to equipment which is
                     subject to full payout net leases which contain net lease
                     provisions plus (2) the purchase price paid on conditional
                     sales contracts as received by the Partnership and (b) 5%
                     of the gross lease revenues attributable to equipment which
                     is subject to operating and capital leases. During the six
                     months ended June 30, 2004 and 2003, equipment management
                     fees of approximately $102,000 and $29,000, respectively,
                     were earned by the General Partner.

                     EQUIPMENT LIQUIDATION FEE

                     With respect to each item of equipment sold by the General
                     Partner (other than in connection with a conditional sales
                     contract), a fee equal to the lesser of (i) 50% of the
                     competitive equipment sale commission or (ii) three percent
                     of the sales price for such equipment is payable to the
                     General Partner. The payment of such fee is subordinated to
                     the receipt by the limited partners of the net disposition
                     proceeds from such sale in accordance with the Partnership
                     Agreement. Such fee will be reduced to the extent any
                     liquidation or resale fees are paid to unaffiliated
                     parties. During the six months ended June 30, 2004,
                     equipment liquidation fees of approximately $2,000 were
                     earned by the General Partner. There were no equipment
                     liquidation fees earned by the General Partner during the
                     six months ended June 30, 2003.



<PAGE>


5.  NOTES PAYABLE    Notes payable consisted of the following:

<TABLE>
<CAPTION>
                                                         JUNE 30,        DECEMBER 31,
                                                           2004              2003
                     ----------------------------------------------------------------
<S>                                                    <C>               <C>
                     Installment notes payable to
                     banks; interest ranging from
                     5.75% to 7.75%, due in monthly
                     installments ranging from $60
                     to $1,980, including interest,
                     with final payments due from
                     June through December 2004.
                                                       $    20,306       $    56,857

                     Installment notes payable to
                     banks; interest ranging from
                     5.00% to 6.75%, due in monthly
                     installments ranging from $151
                     to $4,212, including interest,
                     with final payments due from
                     January through December 2005.
                                                           272,480           396,330
                     Installment notes payable to
                     banks; interest ranging from
                     4.85% to 6.00%, due in monthly
                     installments ranging from $155
                     to $22,902, including interest,
                     with final payments due in
                     January through December 2006.
                                                         1,416,829         1,363,481

                     Installment note payable to
                     a bank; interest at 4.78%,
                     due in a monthly installment
                     of $9,868, including interest,
                     with final payment due in
                     January 2007.
                                                           287,227                 -
                                                        -----------------------------
                                                       $ 1,996,842       $ 1,816,668
                     ================================================================
</TABLE>

                     These notes are secured by specific computer equipment and
                     are nonrecourse liabilities of the Partnership. Aggregate
                     maturities of notes payable for each of the periods
                     subsequent to June 30, 2004 are as follows:

                                                                         Amount
                                                                     -----------
                     Six months ending December 31, 2004            $   558,362
                     Year ended December 31, 2005                       979,623
                     Year ended December 31, 2006                       449,029
                     Year ended December 31, 2007                         9,828
                                                                     -----------
                                                                    $ 1,996,842
                                                                     -----------


<PAGE>



6.  SUPPLEMENTAL     Other noncash activities included in the determination of
    CASH FLOW        net loss are as follows:
    INFORMATION

Six Months Ended June 30,                        2004          2003
-------------------------------------------------------     ---------

Lease income, net of interest expense on
   notes payable realized as a result of
   direct payment of principal by lessee
   to bank                                    $ 518,004     $ 157,008

       No interest or principal on notes payable was paid by the Partnership
       because direct payment was made by lessee to the bank in lieu of
       collection of lease income and payment of interest and principal by the
       Partnership.

             Noncash investing and financing activities include the following:

Six Months Ended June 30,                        2004          2003
-------------------------------------------------------     ---------

   Debt assumed in connection with
    purchase of computer equipment            $ 698,178     $ 816,004
=====================================================================
   Equipment acquisition fees earned by
    General Partner upon purchase of
    equipment from prepaid acquisition fees   $  41,676     $  64,885
=====================================================================


    ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                               RESULTS OF OPERATIONS

CRITICAL ACCOUNTING POLICIES

Financial Reporting Release No. 60, which was released by the Securities and
Exchange Commission, requires all companies to include a discussion of critical
accounting policies or methods used in the preparation of financial statements.
Our significant accounting policies are described in Note 2 of the Notes to the
Financial Statements. The significant accounting policies that we believe are
the most critical to aid in fully understanding our reported financial results
include the following:

COMPUTER EQUIPMENT

Commonwealth Capital Corp, on behalf of the Partnership and other affiliated
partnerships, acquires computer equipment subject to associated debt obligations
and lease revenue and allocates a participation in the cost, debt and lease
revenue to the various partnerships based on certain risk factors. The
Partnership will acquire equipment with no associated debt obligations with the
original contributions. The Partnership plans on acquiring equipment leases with
associated debt obligations from the monthly rental payments associated with the
equipment acquired with its original capital contributions. Depreciation on
computer equipment for financial statement purposes is based on the
straight-line method over estimated useful lives of four years.



<PAGE>

REVENUE RECOGNITION

Through June 30, 2004, the Partnership has only entered into operating leases.
Lease revenue is recognized on a monthly basis in accordance with the terms of
the operating lease agreements.

The Partnership reviews a customer's credit history extending credit and
establishes provisions for uncollectible accounts based upon the credit risk of
specific customers, historical trends and other information.

LONG-LIVED ASSETS

The Partnership evaluates its long-lived assets when events or circumstances
indicate that the value of the asset may not be recoverable. The Partnership
determines whether an impairment exists by estimating the undiscounted cash
flows to be generated by each asset. If the estimated undiscounted cash flows
are less than the carrying value of the asset then an impairment exists. The
amount of the impairment is determined based on the difference between the
carrying value and the fair value. Fair value is determined based on estimated
discounted cash flows to be generated by the asset.

LIQUIDITY AND CAPITAL RESOURCES

The Partnership's primary source of capital for the six months ended June 30,
2004 was from net proceeds received from sale of equipment of approximately
$55,000. The Partnership's primary sources of capital for the six months ended
June 30, 2003 were cash generated from operations of approximately $197,000 and
contributions of approximately $6,286,000. The primary uses of cash for the six
months ended June 30, 2004 and 2003 were for capital expenditures for new
equipment of approximately $1,139,000 and $1,705,000, respectively, the payment
of preferred distributions to partners of approximately $750,000 and $286,000,
respectively, and payment of an advance by the Partnership to CCC, a related
party to the Partnership, in the amount of approximately $55,000 and $156,000,
respectively and cash used in operations of approximately $1,999,000 for the six
months ended June 30 ,2004. The Partnership also incurred offering costs of
approximately $688,000 for the six months ended June 30, 2003. The Partnership
incurred no offering costs in the six months ended June 30, 2004.

For the six month period ended June 30, 2004, the Partnership used cash flows
from operating activities of approximately $1,999,000, which includes a net loss
of approximately $157,000, a loss on sale of equipment of approximately $3,000,
payment of accounts payable, which was primarily for the purchase of computer
equipment of approximately $2,240,000 and depreciation and amortization expenses
of approximately $1,541,000. Other noncash activities included in the
determination of net income include direct payments of lease income by lessees
to banks of approximately $518,000.

For the six month period ended June 30, 2003, the Partnership generated cash
flows from operating activities of $197,000, which includes a net loss of
$603,000, depreciation and amortization expenses of $411,000. Other noncash
activities included in the determination of net income include direct payments
of lease income by lessees to banks of $157,000.



<PAGE>

Cash is invested in money market accounts that invest directly in treasury
obligations pending the Partnership's use of such funds to purchase additional
computer equipment, to pay Partnership expenses or to make distributions to the
Partners. At June 30, 2004, the Partnership had approximately $50,000 invested
in these money market accounts.

The Partnership's investment strategy of acquiring computer equipment and
generally leasing it under "triple-net leases" to operators who generally meet
specified financial standards minimizes the Partnership's operating expenses. As
of June 30, 2004, the Partnership had future minimum rentals on non-cancelable
operating leases of $2,152,000 for the balance of the year ending December 31,
2004 and $6,588,000 thereafter. At June 30, 2004, the outstanding debt was
$1,997,000, with interest rates ranging from 4.78% to 7.75%, and will be payable
through January 2007.

As of June 30, 2004, the Partnership has a non-interest bearing receivable from
CCC, a related party to the Partnership, in the amount of approximately
$285,000, which primarily originated in 2003. CCC, through its indirect
subsidiaries, including the General Partner of the Partnership, earns fees based
on revenues and new lease purchases from this fund. CCC intends to repay these
receivables, through acquisition fees, debt placement fees and reimbursement of
expenses, with a minimum amount of $12,500 per quarter, commencing in the
quarter ending March, 2004. During the quarter ended June 30, 2004, CCC has
reduced the receivable to the Partnership by approximately $30,000.

The Partnership's cash from operations is expected to continue to be adequate to
cover all operating expenses, liabilities, and preferred distributions to
Partners during the next 12-month period. If available Cash Flow or Net
Disposition Proceeds are insufficient to cover the Partnership expenses and
liabilities on a short and long term basis, the Partnership will attempt to
obtain additional funds by disposing of or refinancing Equipment, or by
borrowing within its permissible limits. The Partnership may, from time to time,
reduce the distributions to its Partners if it deems necessary. Since the
Partnership's leases are on a "triple-net" basis, no reserve for maintenance and
repairs are deemed necessary.

The Partnership's share of the computer equipment in which it participates with
other partnerships at June 30, 2004 and December 31, 2003 was approximately
$952,000 and $8,000, respectively, which is included in the Partnership's fixed
assets on its balance sheet, and the total cost of the equipment shared by the
Partnership with other partnerships at June 30, 2004 and December 31, 2003 was
approximately $1,913,000 and $48,000, respectively. The Partnership's share of
the outstanding debt associated with this equipment at June 30, 2004 was
approximately $577,000, which is included in the Partnership's notes payables on
the balance sheet, and the total outstanding debt at June 30, 2004 related to
the equipment shared by the Partnership was approximately $1,134,000. The
Partnership did not share in any outstanding debt associated with this equipment
as of December 31, 2003.

RESULTS OF OPERATIONS

Three Months Ended June 30, 2004 compared to Three Months Ended June 30, 2003
-----------------------------------------------------------------------------

For the quarter ended June 30, 2004, the Partnership recognized income of
approximately $1,067,000, and expenses of approximately $1,054,000, resulting in
net income of approximately $13,000. For the quarter ended June 30, 2003, the
Partnership recognized income of approximately $318,000 and expenses of
approximately $711,000 resulting in a net loss of approximately $393,000.



<PAGE>

Lease income increased by 241% to $1,067,000 for the quarter ended June 30,
2004, from $313,000 for the quarter ended June 30, 2003, primarily due to the
fact that more lease agreements were entered into since the quarter ended June
30, 2003.

Operating expenses, excluding depreciation, primarily consist of accounting,
legal, outside service fees and reimbursement of expenses to CCC for
administration and operation of the Partnership. The expense decreased 62% to
approximately $160,000 for the quarter ended June 30, 2004, from $427,000 for
the quarter ended June 30, 2003, which is primarily attributable to a decrease
in the amount charged by CCC, a related party, to the Partnership for its
administration and operation of approximately $21,000. There was also a decrease
in printing services of approximately $38,000, a decrease in due diligence
expenses of approximately $66,000, a decrease in advertising of approximately
$8,000, a decrease in wholesalers' expenses of approximately $23,000, a decrease
in professional services of approximately $9,000 and a decrease in outside
office services of approximately $91,000. During the Offering Stage, which the
Partnership was in during the quarter ended June 30, 2003, the Partnership
incurred certain expenses, such as wholesalers' expenses, due diligence,
printing services, and various outside office services that are not being
incurred during the Operational Stage, which the Partnership is currently in
during the quarter ended June 30, 2004, due to the nature of the different
stages in the life of the Partnership.

Organizational costs were approximately $44,000 for the quarter ended June 30,
2003. There were no organizational costs incurred in the quarter ended June 30,
2004.

The equipment management fee is approximately 5% of the gross lease revenue
attributable to equipment that is subject to operating leases. The equipment
management fee increased 241% to approximately $53,000 for the quarter ended
June 30, 2004, from $16,000 for the quarter ended June 30, 2003, which is
consistent with the increase in lease income.

Depreciation and amortization expenses consist of depreciation on computer
equipment and amortization of equipment acquisition fees. The expenses increased
280% to approximately $813,000 for the quarter ended June 30, 2004, from
$214,000 for the quarter ended June 30, 2003 due to additional equipment being
purchased and the associated acquisition and finance fees being recorded by the
Partnership since the quarter ended June 30, 2003.

Interest expense increased 147% to $28,000 for the quarter ended June 30, 2004
from $11,000 for the quarter ended June 30, 2003, primarily due to the increase
in debt relating to the purchase of computer equipment and due to the fact that
more lease agreements were entered into with debt since the quarter ended June
30, 2003.

Six Months Ended June 30, 2004 compared to Six Months Ended June 30, 2003
-------------------------------------------------------------------------

For the six months ended June 30, 2004, the Partnership recognized income of
approximately $2,043,000, and expenses of approximately $2,200,000, resulting in
a net loss of approximately $157,000. For the six months ended June 30, 2003,
the Partnership recognized income of approximately $590,000 and expenses of
approximately $1,193,000 resulting in a net loss of approximately $603,000.



<PAGE>

Lease income increased by 249% to $2,035,000 for the six months ended June 30,
2004, from $583,000 for the six months ended June 30, 2003, primarily due to the
fact that more lease agreements were entered into since the six months ended
June 30, 2003.

Operating expenses, excluding depreciation, primarily consist of accounting,
legal, outside service fees and reimbursement of expenses to CCC for
administration and operation of the Partnership. The expense decreased 25% to
approximately $499,000 for the six months ended June 30, 2004, from $665,000 for
the six months ended June 30, 2003, which is primarily attributable to a
decrease in printing services of approximately $51,000, a decrease in due
diligence expenses of approximately $38,000, a decrease in advertising of
approximately $10,000, a decrease in wholesalers' expenses of approximately
$54,000, a decrease in outside office services of approximately $125,000 and a
decrease in conventions of approximately $12,000. There was also an increase in
the amount charged by CCC, a related party, to the Partnership for its
administration and operation of approximately $62,000 and an increase in
professional services of approximately $46,000. During the Offering Stage, which
the Partnership was in during the six months ended June 30, 2003, the
Partnership incurred certain expenses, such as wholesalers' expenses, due
diligence, printing services, and various outside office services that are not
being incurred during the Operational Stage, which the Partnership is currently
in during the six months ended June 30, 2004, due to the nature of the different
stages in the life of the Partnership.

Organizational costs were approximately $66,000 for the six months ended June
30, 2003. There were no organizational costs incurred in the six months ended
June 30, 2004.

The equipment management fee is approximately 5% of the gross lease revenue
attributable to equipment that is subject to operating leases. The equipment
management fee increased 249% to approximately $102,000 for the six months ended
June 30, 2004, from $29,000 for the six months ended June 30, 2003, which is
consistent with the increase in lease income.

Depreciation and amortization expenses consist of depreciation on computer
equipment and amortization of equipment acquisition fees. The expenses increased
275% to approximately $1,541,000 for the six months ended June 30, 2004, from
$411,000 for the six months ended June 30, 2003 due to additional equipment
being purchased and the associated acquisition and finance fees being recorded
by the Partnership since the six months ended June 30, 2003.

Interest expense increased 157% to $56,000 for the six months ended June 30,
2004 from $22,000 for the six months ended June 30, 2003, primarily due to the
increase in debt relating to the purchase of computer equipment and due to the
fact that more lease agreements were entered into with debt since the six months
ended June 30, 2003.

The Partnership sold computer equipment with a net book value of approximately
$58,000 for the six months ended June 30, 2004, for a net loss of approximately
$3,000. The Partnership did not sell any computer equipment for the six months
ended June 30, 2003.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Partnership believes its exposure to market risk is not material due to the
fixed interest rate of its long-term debt.



<PAGE>

ITEM 4.  CONTROLS AND PROCEDURES

The Chief Executive Officer and a Financial Officer of the Partnership have
conducted a review of the Partnership's disclosure controls and procedures as of
June 30, 2004.

The Partnership's disclosure controls and procedures include the Partnership's
controls and other procedures designed to ensure that information required to be
disclosed in this and other reports filed under the Securities Exchange Act of
1934, as amended (the " Exchange Act") is accumulated and communicated to the
Partnership's management, including its chief executive officer and a financial
officer, to allow timely decisions regarding required disclosure and to ensure
that such information is recorded, processed, summarized and reported with the
required time quarters.

Based upon this review, the Partnership's Chief Executive Officer and a
Financial Officer have concluded that the Partnership's disclosure controls (as
defined in Rule 13a-14c promulgated under the Exchange Act) are sufficiently
effective to ensure that the information required to be disclosed by the
Partnership in the reports it files under the Exchange Act is recorded,
processed, summarized and reported with adequate timeliness.

PART II:  OTHER INFORMATION

                      COMMONWEALTH INCOME & GROWTH FUND IV

         Item 1.   LEGAL PROCEEDINGS.

                   Inapplicable

         Item 2.   CHANGES IN SECURITIES.

                   Inapplicable

         Item 3.   DEFAULTS UPON SENIOR SECURITIES.

                   Inapplicable

         Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS.

                   Inapplicable

         Item 5.   OTHER INFORMATION.

                   Inapplicable

         Item 6.   EXHIBITS AND REPORTS ON FORM 8-K.

                   a)  Exhibits:

                       31.1 THE RULE 15D-14(A)
                       31.2 THE RULE 15D-14(A)
                       32.1 SECTION 1350 CERTIFICATION OF CEO
                       32.2 SECTION 1350 CERTIFICATION OF CFO

                   b)  Report on Form 8-K: None



<PAGE>

                                    SIGNATURE

Pursuant to the requirements 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.

                                    COMMONWEALTH INCOME & GROWTH FUND IV
                                        BY: COMMONWEALTH INCOME &
                                        GROWTH FUND, INC. General Partner

August 13, 2004                     By: /s/ George S. Springsteen
---------------                         -------------------------
Date                                        George S. Springsteen
                                            President