<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 SEPTEMBER 30, 2005

( ) 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]

                                                                               1
<PAGE>
                                    FORM 10-Q
                               SEPTEMBER 30, 2005

                                TABLE OF CONTENTS

                                     PART I
Item 1.     Condensed Financial Statements                                     3
Item 2.     Management's Discussion and Analysis of Financial Condition
            and Results of Operations                                         12
Item 3.     Quantitative and Qualitative Disclosures About Market Risk        16
Item 4.     Controls and Procedures                                           16

                                     PART II
Item 1.     Legal Proceedings                                                 17
Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds.      17
Item 3.     Defaults Upon Senior Securities                                   17
Item 4.     Submission of Matters to a Vote of Securities Holders             17
Item 5.     Other Information                                                 17
            Index to Exhibits
Item 6.                                                                       17

            Signatures

            Certifications

                                                                               2

<PAGE>
                      COMMONWEALTH INCOME & GROWTH FUND IV
                            CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                   SEPTEMBER 30,           DECEMBER 31,
                                                                       2005                   2004
                                                                  -------------------------------------
                                                                   (UNAUDITED)
<S>                                                               <C>                     <C>
ASSETS

Cash and cash equivalents                                         $    1,171,202           $    719,161
Lease income receivable, net of reserves of $0
  as of September 30, 2005 and  December 31, 2004                        181,988                157,741
Other receivables - other affiliated partnerships                         14,270                      -
Other assets                                                               1,399                  2,043
                                                                  -------------------------------------
                                                                       1,368,859                878,945
                                                                  -------------------------------------


Computer equipment, at cost                                           14,258,295             14,299,155
Accumulated depreciation                                              (6,350,461)            (4,386,199)
                                                                  -------------------------------------
                                                                       7,907,834              9,912,956
                                                                  -------------------------------------

Equipment acquisition costs and deferred expenses, net                   250,332                369,202
Other receivables - Commonwealth Capital Corp                            233,170                243,435
Prepaid acquisition fees                                                 100,138                 98,321
                                                                  -------------------------------------
                                                                         583,640                710,958
                                                                  -------------------------------------

TOTAL ASSETS                                                      $    9,860,333         $   11,502,859
                                                                  =====================================


LIABILITIES AND PARTNERS' CAPITAL

LIABILITIES
Accounts payable, primarily for equipment purchases               $      102,472         $      118,403
Accounts payable - other affiliated partnerships                               -                376,552
Accounts payable - General Partner                                        75,896                 53,075
Accounts payable - Commonwealth Capital Corp.                             13,547                      -
Unearned lease income                                                    120,218                 60,464
Notes payable                                                          1,834,517              2,035,898
                                                                  -------------------------------------
TOTAL LIABILITIES                                                      2,146,650              2,644,392
                                                                  -------------------------------------

PARTNERS' CAPITAL
General partner                                                            1,000                  1,000
Limited partners                                                       7,712,683              8,857,467
                                                                  -------------------------------------
TOTAL PARTNERS' CAPITAL                                                7,713,683              8,858,467
                                                                  -------------------------------------

TOTAL LIABILITIES AND PARTNERS' CAPITAL                           $    9,860,333         $   11,502,859
                                                                  =====================================
</TABLE>

            see accompanying notes to condensed financial statements

                                                                               3
<PAGE>
                      COMMONWEALTH INCOME & GROWTH FUND IV
                       CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                     THREE MONTHS        THREE MONTHS         NINE MONTHS        NINE MONTHS
                                                         ENDED              ENDED               ENDED               ENDED
                                                     SEPTEMBER 30,       SEPTEMBER 30,       SEPTEMBER 30,      SEPTEMBER 30,
                                                         2005                2004                2005               2004
                                                     ------------------------------------------------------------------------
                                                                 (UNAUDITED)                            (UNAUDITED)
<S>                                                  <C>                 <C>                 <C>                <C>
INCOME
Lease                                                $   1,247,392       $   1,104,082       $   3,766,826      $   3,139,172
Interest and other                                           2,461               1,620               3,019              9,343
                                                     -------------       -------------       -------------      -------------

TOTAL INCOME                                             1,249,853           1,105,702           3,769,845          3,148,515
                                                     -------------       -------------       -------------      -------------

EXPENSES
Operating, excluding depreciation                           98,930             160,238             421,099            767,636
Equipment management fee - General Partner                  62,370              55,205             188,341            156,959
Interest                                                    25,749              27,059              84,349             82,771
Depreciation                                               906,692             810,375           2,752,193          2,266,932
Amortization of equipment
  acquisition costs and deferred expenses                   53,648              46,970             163,614            131,420
Loss on sale of computer equipment                          87,697              14,646             163,280             17,565
                                                     -------------       -------------       -------------      -------------
TOTAL EXPENSES                                           1,235,086           1,114,493           3,772,876          3,423,283
                                                     -------------       -------------       -------------      -------------

NET INCOME (LOSS)                                    $      14,767       $      (8,791)      $      (3,031)     $    (274,768)
                                                     =============       =============       =============      =============

NET INCOME (LOSS) PER EQUIVALENT LIMITED
  PARTNERSHIP UNIT                                   $        0.02       $       (0.01)      $      (0.004)     $       (0.37)
                                                     =============       =============       =============      =============

WEIGHTED AVERAGE NUMBER OF EQUIVALENT LIMITED
  PARTNERSHIP UNITS OUTSTANDING DURING THE PERIOD          749,950             749,950             749,950            749,950
                                                     =============       =============       =============      =============
</TABLE>
            see accompanying notes to condensed financial statements

                                                                               4
<PAGE>
                      COMMONWEALTH INCOME & GROWTH FUND IV
                    CONDENSED STATEMENTS OF PARTNERS' CAPITAL
<TABLE>
<CAPTION>
                                                                     FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005
                                                                                      (UNAUDITED)

                                                GENERAL          LIMITED
                                                PARTNER          PARTNER            GENERAL           LIMITED
                                                 UNITS            UNITS             PARTNER           PARTNER             TOTAL
                                            ---------------------------------------------------------------------------------------
<S>                                        <C>                 <C>                <C>             <C>                 <C>
PARTNERS' CAPITAL - DECEMBER 31, 2004             50             749,950           $  1,000        $  8,857,466        $  8,858,466
  Net income (loss)                                -                   -             11,239             (14,270)             (3,031)
  Redemption                                                                                            (17,825)            (17,825)
  Distributions                                    -                   -            (11,239)         (1,112,688)         (1,123,927)
                                            ---------------------------------------------------------------------------------------
PARTNERS' CAPITAL - SEPTEMBER 30, 2005            50             749,950           $  1,000        $  7,712,683        $  7,713,683
                                            =======================================================================================
</TABLE>
            see accompanying notes to condensed financial statements

                                                                               5
<PAGE>
                      COMMONWEALTH INCOME & GROWTH FUND IV
                        CONDENSED STATEMENTS OF CASH FLOW
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
<TABLE>
<CAPTION>
                                                                         2005                    2004
                                                                    -------------            -----------
                                                                                 (UNAUDITED)
<S>                                                                 <C>                      <C>
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                 $   1,719,735            $  (573,550)
                                                                    -------------            -----------

INVESTING ACTIVITIES:
Capital expenditures                                                     (324,613)            (1,497,860)
Acquisition fees                                                          (38,451)               (41,079)
Net proceeds from sale of computer equipment                              225,284                 65,262
                                                                    -------------            -----------
NET CASH (USED IN) INVESTING ACTIVITIES                                  (137,780)            (1,473,677)
                                                                    -------------            -----------

FINANCING ACTIVITIES:
Redemptions                                                               (17,825)                     -
Distributions to partners                                              (1,123,927)            (1,125,444)
Other receivable, Commonwealth Capital Corp                                19,949                (33,441)
Debt Placement fee paid to the General Partner                             (8,110)                (8,910)
                                                                    -------------            -----------
NET CASH (USED IN)  FINANCING ACTIVITIES                               (1,129,914)            (1,167,795)
                                                                    -------------            -----------


Net increase (decrease) in cash and cash equivalents                      452,041             (3,215,022)
Cash and cash equivalents, beginning of period                            719,161              4,644,293
                                                                    -------------            -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD                            $   1,171,202            $ 1,429,271
                                                                    =============            ===========
</TABLE>
            SEE ACCOMPANYING NOTES TO CONDENSED FINANCIAL STATEMENTS


                                                                               6
<PAGE>
                     NOTES TO CONDENSED 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. 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
        POLICIES            other 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, 2004. Operating results for
                            the nine-month period ended September 30, 2005 are
                            not necessarily indicative of financial results that
                            may be expected for the full year ended December 31,
                            2005.

                                                                               7
<PAGE>

                            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. The Partnership determined that no
                            impairment had occurred during the nine months ended
                            September 30, 2005.

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

                            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.

3.      COMPUTER            The Partnership is the lessor of equipment under
        EQUIPMENT           operating 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.

                            Through September 30, 2005, 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.

                            Remarketing fees are paid to the leasing companies
                            from which the Partnership purchases leases. These
                            are fees that are earned by the leasing companies
                            when the initial terms of the lease have been met.
                            The General Partner believes that this strategy adds
                            value since it entices the leasing company to "stay
                            with the lease" for potential extensions,
                            remarketing or sale of equipment. This strategy
                            potentially minimizes any conflicts the leasing
                            company may have with a potential new lease and will
                            potentially assist in maximizing overall portfolio
                            performance. The remarketing fee is tied into lease
                            performance thresholds and is factored in the
                            negotiation of the fee. Remarketing fees incurred in
                            connection with lease extensions are accounted for
                            as operating costs. Remarketing fees incurred in
                            connection with the sale of computer equipment are
                            included in our gain or loss calculations. For the
                            nine-month and three month periods ended September
                            30, 2005, remarketing fees were incurred in the
                            amounts of $40,000 and $33,000, respectively. No
                            remarketing fees were incurred for the period ended
                            September 30, 2004.


                                                                               8
<PAGE>

                            The Partnership's share of the computer equipment in
                            which they participate at September 30, 2005 and
                            December 31, 2004 was approximately $1,083,000 and
                            $909,000 respectively, which is included in the
                            Partnership's fixed assets on their balance sheet,
                            and the total cost of the equipment shared by the
                            Partnership with other partnerships at September 30,
                            2005 and December 31, 2004 was approximately
                            $2,146,000 and $1,798,000, respectively.

                            The following is a schedule of future minimum
                            rentals on noncancellable operating leases at
                            September 30, 2005:

                                                                       Amount
                            ----------------------------------------------------
                            Three  Months ended December 31, 2005    $ 1,114,000
                            Year Ended December 31, 2006               3,331,000
                            Year Ended December 31, 2007                 843,000
                            Year Ended December 31, 2008                  29,000
                                                                     -----------
                                                                     $ 5,317,000
                            ====================================================

4.      RELATED PARTY
        TRANSACTIONS
                            OTHER RECEIVABLES

                            As of September 30, 2005, the Partnership has an
                            unsecured, non-interest bearing receivable from CCC,
                            a related party to the Partnership, in the amount of
                            approximately $233,000, 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, which
                            commenced in the quarter ending March, 2004.

                            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 nine months ended
                            September 30, 2005 and 2004, the Partnership
                            recorded $254,000 and $668,000, respectively, for
                            reimbursement of expenses to the General Partner.

                            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 nine months
                            ended September 30, 2005 and 2004, equipment
                            acquisition fees of approximately $45,000 and
                            $96,000, respectively, were earned by the General
                            Partner.

                                                                               9
<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 nine months ended
                            September 30, 2005 and 2004, debt placement fees of
                            approximately $8,000 and $9,000, 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 nine months ended September 30,
                            2005 and 2004, equipment management fees of
                            approximately $188,000 and $157,000, 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 nine
                            months ended September 30, 2005 and 2004, equipment
                            liquidation fees of approximately $8,000 and $2,000,
                            respectively, were earned by the General Partner.

                                                                              10
<PAGE>
5.      NOTES PAYABLE       Notes payable consisted of the following:
<TABLE>
<CAPTION>
                                                                          SEPTEMBER 30,       DECEMBER 31,
                                                                               2005               2004
                            ------------------------------------------------------------------------------
<S>                                                                      <C>                 <C>
                            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.          $      12,335       $     139,927

                            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 August 2006.                       355,163             865,709

                            Installment notes payable to banks;
                            interest ranging from 4.29% to 6.35%,
                            due in monthly installments ranging
                            from $3,746 to $13,488, including
                            interest, with final payments due in
                            January through December 2007.                   1,111,964           1,030,262

                            Installment notes payable to banks;
                            interest ranging from 5.36% to 6.06%,
                            due in monthly installments ranging
                            from $162 to $6,973 including
                            interest, with final payment due in
                            January through April 2008.                        355,055                   -
                                                                         ---------------------------------
                                                                         $   1,834,517       $   2,035,898
                            ==============================================================================
</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 September 30,
                            2005 are as follows:

                                                                        Amount
                                                                     -----------
                            Three months ended December 31, 2005     $   335,631
                            Year ended December 31, 2006                 943,731
                            Year ended December 31, 2007                 516,425
                            Year ended December 31, 2008                  38,730
                                                                     -----------
                                                                     $ 1,834,517
                                                                     ===========

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

                                                                              11
<PAGE>

Nine months Ended September 30,                       2005          2004
==============================================================    ----------

Lease income, net of interest expense on
  notes payable realized as a result of
  direct payment of principal by lessee to bank   $  1,012,403    $  807,179

     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:

Nine months Ended September 30,                       2005          2004
==============================================================    ----------

  Debt assumed in connection with purchase of
    computer equipment                            $    811,022    $  890,992
==============================================    ============    ==========
  Equipment acquisition fees earned by General
    Partner upon purchase of equipment from
    prepaid acquisition fees                      $          -    $   54,475
============================================================================

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

CRITICAL ACCOUNTING POLICIES

The Partnership's discussion and analysis of its financial condition and results
of operations are based upon its financial statements which have been prepared
in accordance with accounting principles generally accepted in the United
States. The preparation of these financial statements requires the Partnership
to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses. The Partnership bases its estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

The Partnership believes that its critical accounting policies affect its more
significant judgments and estimates used in the preparation of its financial
statements.

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.

                                                                              12
<PAGE>
REVENUE RECOGNITION

Through September 30, 2005, 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 nine months ended September
30, 2005 and 2004 was from net proceeds received from sale of equipment of
approximately $225,000 and $65,000, respectively. The primary uses of cash for
the nine months ended September 30, 2005 and 2004 were for capital expenditures
for new equipment of approximately $325,000 and $1,498,000, respectively, and
the payment of preferred distributions to partners of approximately $1,124,000
and $1,125,000, respectively. The Partnership also made an advance to CCC, a
related party to the Partnership, in the amount of approximately $33,000 for the
nine months ended September 30, 2004.

For the nine month period ended September 30, 2005, the Partnership generated
cash flows from operating activities of approximately $1,720,000, which includes
a net loss of approximately $3,000, payment of accounts payable, which was
primarily for the purchase of equipment of approximately $16,000, a loss on sale
of equipment of approximately $163,000, and depreciation and amortization
expenses of approximately $2,916,000. Other non-cash activities included in the
determination of net income include direct payments of lease income by lessees
to banks of approximately $1,012,000.

For the nine month period ended September 30, 2004, the Partnership used cash
flows from operating activities of approximately $574,000, which includes a net
loss of approximately $275,000, a loss on sale of equipment of approximately
$18,000, payment of accounts payable, which was primarily for the purchase of
computer equipment of approximately $2,261,000 and depreciation and amortization
expenses of approximately $2,398,000. Other noncash activities included in the
determination of net income include direct payments of lease income by lessees
to banks of approximately $807,000.

                                                                              13
<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 September 30, 2005 and 2004, the Partnership had $1,009,000 and
$1,312,000, respectively, 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 September 30, 2005, the Partnership had future minimum rentals on
non-cancelable operating leases of $1,114,000 for the balance of the year ending
December 31, 2005 and $4,203,000 thereafter. At September 30, 2005, the
outstanding debt was $1,835,000, with interest rates ranging from 4.29% to
6.75%, and will be payable through April 2008.

As of September 30, 2005, the Partnership has an unsecured, non-interest bearing
receivable from CCC, a related party to the Partnership, in the amount of
approximately $233,000, 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, which
commenced in the quarter ending March, 2004.

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 intends to invest $800,000 in additional equipment for the
remainder of 2005. The acquisition of this equipment will be funded by debt
financing, and the debt service will be funded from cash flows from lease rental
payments.

The Partnership's share of the computer equipment in which they participate at
September 30, 2005 and September 30, 2004 was approximately $1,083,000 and
$631,000, respectively, which is included in the Partnership's fixed assets on
their balance sheet, and the total cost of the equipment shared by the
Partnership with other partnerships at September 30, 2005 and September 30, 2004
was approximately $2,147,000 and $1,272,000, respectively.

RESULTS OF OPERATIONS

                Three Months Ended September 30, 2005 compared to
                     Three Months Ended September 30, 2004

For the three months ended September 30, 2005, the Partnership recognized income
of approximately $1,250,000, and expenses of approximately $1,235,000, resulting
in net income of approximately $15,000. For the three months ended September 30,
2004, the Partnership recognized income of approximately $1,106,000 and expenses
of approximately $1,115,000 resulting in a net loss of approximately $9,000.

                                                                              14
<PAGE>
Lease income increased by 13% to $1,247,000 for the quarter ended September 30,
2005, from $1,104,000 for the quarter ended September 30, 2004, primarily due to
the fact that more lease agreements were entered into since the quarter ended
September 30, 2004.

Operating expenses, excluding depreciation, primarily consist of accounting,
legal, outside service fees and reimbursement of expenses to CCC, a related
party, for administration and operation of the Partnership. The expenses
decreased 38% to approximately $99,000 for the quarter ended September 30, 2005,
from $160,000 for the quarter ended September 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 13% to approximately $62,000 for the quarter ended
September 30, 2005, from $55,000 for the quarter ended September 30, 2004, 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
12% to approximately $960,000 for the quarter ended September 30, 2005, from
$857,000 for the quarter ended September 30, 2004 due to additional equipment
being purchased and the associated acquisition and finance fees being recorded
by the Partnership since the quarter ended September 30, 2004.

The Partnership sold computer equipment with a net book value of approximately
$269,000 for the quarter ended September 30, 2005, for a net loss of
approximately $88,000.

                Nine months Ended September 30, 2005 compared to
                      Nine months Ended September 30, 2004

For the nine months ended September 30, 2005, the Partnership recognized income
of approximately $3,770,000, and expenses of approximately $3,773,000, resulting
in a net loss of approximately $3,000. For the nine months ended September 30,
2004, the Partnership recognized income of approximately $3,148,000, and
expenses of approximately $3,423,000, resulting in a net loss of approximately
$275,000.

Lease income increased by 20% to $3,767,000 for the nine months ended September
30, 2005, from $3,139,000 for the nine months ended September 30, 2004,
primarily due to the fact that more lease agreements were entered into since the
nine months ended September 30, 2004.

Operating expenses, excluding depreciation, primarily consist of accounting,
legal, outside service fees and reimbursement of expenses to CCC, a related
party, for administration and operation of the Partnership. The expenses
decreased 45% to approximately $421,000 for the quarter ended September 30,
2005, from $768,000 for the quarter ended September 30, 2004, primarily due to a
decrease in the amount charged by CCC, a related party, to the Partnership for
its administration and operation of approximately $238,000, a decrease in due
diligence costs or approximately $43,000, and a decrease in accounting fees of
approximately $32,000.

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 20% to approximately $188,000 for the nine months ended
September 30, 2005, from $157,000 for the nine months ended September 30, 2004,
which is consistent with the increase in lease income.

                                                                              15
<PAGE>
Depreciation and amortization expenses consist of depreciation on computer
equipment and amortization of equipment acquisition fees. The expenses increased
22% to approximately $2,916,000 for the nine months ended September 30, 2005,
from $2,398,000 for the nine months ended September 30, 2004 due to additional
equipment being purchased and the associated acquisition and finance fees being
recorded by the Partnership since the nine months ended September 30, 2004.

The Partnership sold computer equipment with a net book value of approximately
$389,000 for the nine months ended September 30, 2005, for a net loss of
approximately $163,000. The Partnership sold computer equipment with a net book
value of approximately $83,000 for the nine months ended September 30, 2004, for
a net loss of approximately $18,000.

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.

ITEM 4. CONTROLS AND PROCEDURES

The Chief Executive Officer and a Financial Officer of the General Partner have
conducted a review of the Partnership's disclosure controls and procedures as of
September 30, 2005.

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 General Partner's Chief Executive Officer and a
Financial Officer have concluded that the Partnership's disclosure controls (as
defined in pursuant to Rule 13a-14 c 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.

There have been no changes in the General Partner's internal controls or in
other factors that could materially affect our disclosure controls and
procedures in the quarter ended September 30, 2005, that have materially
affected or are reasonably likely to materially affect the General Partner's
internal controls over financial reporting.

                                                                              16
<PAGE>
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


                                    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

November 14, 2005                   By: /s/ Kimberly A. Springsteen
-----------------                       ----------------------------
Date                                Kimberly A. Springsteen
                                    President

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