UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549








FORM
10-Q





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





FOR
THE QUARTERLY PERIOD ENDED MARCH 31, 2008





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





Commission
File
Number:                                                                333-62526





COMMONWEALTH
INCOME & GROWTH FUND IV


(Exact
name of registrant as specified in its charter)





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





Brandywine
Bldg. One, Suite 200


2 Christy
Drive


Chadds
Ford, PA 19317


(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  TNO   ̈





Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See definition of "accelerated filer,
“large accelerated filer" and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one):





Large
      accelerated filer  ̈
            Accelerated
      filer  ̈Non-accelerated
      filer  ̈
            Smaller
      reporting company T(Do
      not check if a smaller reporting company.)








Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).   YES   ̈NO  T







1






FORM
10-Q


MARCH
31, 2008


TABLE OF CONTENTS





PART
      IItem 1.
            Financial Statements
            3Item 2.
            Management's Discussion and Analysis of Financial Condition
      and Results of Operations
            11Item 3.
            Quantitative and Qualitative Disclosures About Market
      Risk
            13Item 4T.
            Controls and Procedures
            13PART
      IIItem 1.
            Legal Proceedings
            13Item 1 A.
            Risk Factors
            14Item 2.
            Unregistered Sales of Equity Securities and Use of
      Proceeds
            14Item 3.
            Defaults Upon Senior Securities
            14Item 4.
            Submission of Matters to a Vote of Securities
      Holders
            14Item 5.
            Other Information
            14Item 6.
            Exhibits
            14







2




Part
I. FINANCIAL INFORMATION


Item
1. Financial Statements





Commonwealth
      Income & Growth Fund IVCondensed Balance SheetsMarch 31,
            
            
            December
      31,2008
            
            
            2007(unaudited)AssetsCash
      and cash equivalents
            
            $
            7,269
            
            
            $
            91,908Lease
      income receivable, net of reserves of  $308,587 and
      $311,137
            
            
            129,471
            
            
            
            117,122as of
      March 31, 2008 and December 31, 2007Accounts
      receivable – affiliated limited partnerships
            
            
            -
            
            
            
            25,256Refundable
      deposits
            
            
            1,130
            
            
            
            1,130Prepaid
      expenses
            
            
            3,611
            
            
            
            115141,481
            
            
            
            235,531Computer
      equipment, at cost
            
            
            6,583,704
            
            
            
            7,435,278Accumulated
      depreciation
            
            
            (5,287,073
            )
            
            
            (5,864,450
            )1,296,631
            
            
            
            1,570,828Equipment
      acquisition costs and deferred expenses, net of
accumulatedamortization of
      $61,028 and $89,959, at March 31, 2008 and December 31,
    2007
            
            
            37,188
            
            
            
            45,575Prepaid
      acquisition fees, General Partner
            
            
            62,465
            
            
            
            63,24199,653
            
            
            
            108,816Total
      Assets
            
            $
            1,537,765
            
            
            $
            1,915,175Liabilities
      and Partners’ CapitalLiabilitiesAccounts
      payable
            
            $
            31,654
            
            
            $
            29,954Accounts
      payable, General Partner
            
            
            231,464
            
            
            
            164,602Accounts
      payable, Commonwealth Capital Corp.
            
            
            492,664
            
            
            
            33,860Accounts
      payable, Investor Distributions
            
            
            -
            
            
            
            370,569Unearned
      lease income
            
            
            31,014
            
            
            
            47,002Notes
      payable
            
            
            306,116
            
            
            
            399,677Total
      Liabilities
            
            
            1,092,912
            
            
            
            1,045,664Partners'
      CapitalGeneral
      partner
            
            
            1,000
            
            
            
            1,000Limited
      partners
            
            
            443,853
            
            
            
            868,511Total
      Partners' Capital
            
            
            444,853
            
            
            
            869,511Total
      Liabilities and Partners' Capital
            
            $
            1,537,765
            
            
            $
            1,915,175





see
accompanying notes to condensed financial statements


3




Table of
Contents


Commonwealth
      Income & Growth Fund IVCondensed
      Statements of OperationsThree
      Months EndedMarch
      31,2008
            
            
            2007(unaudited)RevenueLease
            
            $
            292,692
            
            
            $
            676,700Interest
      and other
            
            
            1,610
            
            
            
            15,106Gain
      on sale of computer equipment
            
            
            5,187
            
            
            
            -Total
      revenue
            
            
            299,489
            
            
            
            691,806ExpensesOperating,
      excluding depreciation
            
            
            106,909
            
            
            
            116,534Equipment
      management fee - General Partner
            
            
            14,720
            
            
            
            33,835Interest
            
            
            5,593
            
            
            
            10,500Depreciation
            
            
            219,743
            
            
            
            525,891Amortization
      of equipment acquisition costs and deferred expenses
            
            
            9,163
            
            
            
            23,333Bad
      debt expense
            
            
            (2,550
            )
            
            
            -Loss
      on sale of computer equipment
            
            
            -
            
            
            
            135,737Total
      expenses
            
            
            353,578
            
            
            
            845,830Net
      (loss)
            
            $
            (54,089
            )
            
            $
            (154,024
            )Net
      (loss) allocated to limited partners
            
            $
            (54,089
            )
            
            $
            (157,767
            )Net
      (loss) per equivalent limited partnership unit
            
            $
            (0.07
            )
            
            $
            (0.21
            )Weighted
      average number of equivalent limited partnershipunits
      outstanding during the period
            
            
            749,400
            
            
            
            749,400





see
accompanying notes to condensed financial statements


4




Table of
Contents


Commonwealth
      Income & Growth Find IVCondensed
      Statements of Partners’ CapitalFor
      the Three Months ended March 31, 2008(unaudited)General
            LimitedPartner
            Partner
            General
            LimitedUnits
            Units
            Partner
            Partners
            TotalBalance
      – January 1, 2008
            50
            749,400
            $                 1,000
            $            868,511
            $            869,511Net
      income (loss)
            -
            -
            -
            (54,089)
            (54,089)Distributions
            -
            -
            -
            (370,569)
            (370,569)Balance
      – March 31, 2008
            50
            749,400
            $                 1,000
            $            443,853
            $            444,853





see
accompanying notes to condensed financial statements


5




Table of
Contents





Commonwealth
      Income & Growth Fund IVCondensed
      Statements of Cash FlowThree
      months EndedMarch
      31,2008
            
            
            2007(unaudited)Net
      cash provided by operating activities
            
            $
            226,290
            
            
            $
            54,905Investing
      activities:Capital
      expenditures
            
            
            (19,404
            )
            
            
            (53,636
            )Prepaid
      acquisition fees
            
            
            776
            
            
            
            682Net
      proceeds from sale of computer equipment
            
            
            79,044
            
            
            
            201,361Equipment
      acquisition fees paid to General Partner
            
            
            (776
            )
            
            
            (11,982
            )Net
      cash provided by investing activities
            
            
            59,640
            
            
            
            136,425Financing
      activities:Distributions
      to partners
            
            
            (370,569
            )
            
            
            (374,311
            )Other
      receivable, Commonwealth Capital Corp.
            
            
            -
            
            
            
            66,767Debt
      Placement fee paid to the General Partner
            
            
            -
            
            
            
            (2,459
            )Net
      cash (used in) financing activities
            
            
            (370,569
            )
            
            
            (310,003
            )Net
      decrease in cash and cash equivalents
            
            
            (84,639
            )
            
            
            (118,673
            )Cash
      and cash equivalents, beginning of period
            
            
            91,908
            
            
            
            185,564Cash
      and cash equivalents, end of period
            
            $
            7,269
            
            
            $
            66,891





see
accompanying notes to condensed financial statements


6




Table of
Contents


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 offered 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 used the proceeds of the Offering to acquire, own and lease various
types of computer information technology (I.T.) equipment and other similar
capital equipment, which is leased primarily to U.S. corporations and
institutions.  Commonwealth Capital Corp. (“CCC”), on behalf of the
Partnership and other affiliated partnerships, acquires computer equipment
subject to associated debt obligations and lease agreements and allocates a
participation in the cost, debt and lease revenue to the various partnerships it
controls 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.





The
Partnership had a negative working capital balance at March 31, 2008.  This
was primarily attributable to liabilities owed to affiliates of the
Partnership. The General Partner will continue to reassess the funding of
LP distributions on a quarterly basis in 2008 and will waive certain fees if
Management determines it is in the best interest of the Partnership to do
so.





2.
Summary of Significant Accounting Policies





Recent
Accounting Pronouncements





Management’s
assessment of the following accounting pronouncements has changed since
disclosed in its Form 10K for December 31, 2007.





In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Liabilities, including an amendment of FASB Statement No.
115” (“SFAS No. 159”).
SFAS No. 159 permits entities to choose, at specified election dates, to measure
many financial instruments and certain other items at fair value that are not
currently required to be measured at fair value. Unrealized gains and losses
will be reported on items for which the fair value option has been elected in
earnings at each subsequent reporting date. SFAS No. 159 is effective for fiscal
years beginning after November 15, 2007. Early adoption is permitted as of the
beginning of a fiscal year that begins on or before November 15, 2007, provided
the entity also elects to apply the provisions of SFAS No. 157 “Fair Value
Measurements".   As of January 1, 2008 the Partnership adopted
SFAS No.159. The Partnership has not elected the fair value option for any
assets or liabilities.





In
September 2006, the FASB issued Statement of Financial Accounting Standards 157,
“Fair Value Measurements” (“SFAS 157”), which
provides guidance on measuring the fair value of assets and liabilities. SFAS
157 applies to other accounting pronouncements that require or permit assets or
liabilities to be measured at fair value but does not expand the use of fair
value to any new circumstances. This standard also requires additional
disclosures in both annual and quarterly reports. SFAS 157 is effective for
financial statements issued for fiscal years beginning after November 15, 2007
and will be adopted by the Partnership in the first quarter of its fiscal year
2008.   In February 2008, the FASB issued two Staff Positions on
SFAS 157: (1) FASB Staff Position No. FAS 157-1 ("FAS 157-1"), “Application of FASB Statement
No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements
That Address Fair Value Measurements for Purposes of Lease Classification or
Measurement Under Statement 13,” and (2) FASB Staff Position
No. FAS 157-2 ("FAS 157-2"), “Effective Date of FASB Statement
No 157.” FAS 157-1 excludes FASB Statement No. 13, Accounting for Leases, as
well as other accounting pronouncements that address fair value measurements on
lease classification or measurement under Statement 13, from SFAS 157’s
scope. FAS157-2 partially defers Statement 157’s effective date.  As of
January 1, 2008 the Partnership partially adopted SFAS No. 157 for all financial
assets.   Adoption of this pronouncement did not impact the
financial statements of the Partnership at March 31, 2008.




7
 Table of
Contents




Basis
of Presentation





The
financial information presented as of any date other than December 31, 2007 has
been prepared from the books and records without audit.  Financial
information as of December 31, 2007 has been derived from the audited financial
statements of the Partnership, but does not include all disclosures required by
generally accepted accounting principles to be included in audited financial
statements.  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, 2007.  Operating results for the three months ended March
31, 2008 are not necessarily indicative of financial results that may be
expected for the full year ended December 31, 2008.




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,
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 three months ended March 31, 2008 and
2007.





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 Equipment





The
Partnership is the lessor of equipment under operating leases with periods
ranging from 22 to 37 months. In general, associated costs such as repairs and
maintenance, insurance and property taxes are paid by the lessee.





Through
March 31, 2008, the Partnership has only entered into operating
leases.  Lease revenue is recognized on the monthly straight-line
basis which is generally 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 three months ended March 31, 2008 and 2007,
remarketing fees were incurred in the amounts of $7,000 and $4,500,
respectively. For the three months ended March 31, 2008 and 2007, remarketing
fees were paid in the amounts of $9,000 and $2,000, respectively.





The
Partnership’s share of the computer equipment in which it participates with
other partnerships at March 31, 2008 and December 31, 2007 was $1,133,000 and
$1,128,000, respectively, which is included in the Partnership’s fixed assets on
its balance sheet.  The total cost of the equipment shared by the
Partnership with other partnerships at March 31, 2008 and December 31, 2007 was
$3,895,000 and $3,886,000, respectively. The Partnership’s share of the
outstanding debt associated with this equipment at March 31, 2008 and December
31, 2007 was $232,000 and $265,000, respectively.  The total
outstanding debt at March 31, 2008 and December 31, 2007 was $658,000 and
$751,000, respectively.


8
   Table of
Contents





The
following is a schedule of future minimum rentals on noncancellable operating
leases at March 31, 2008:





AmountNine
      Months ended December 31, 2008
            
            $
            474,742Year
      Ended December 31, 2009
            
            
            295,722Year
      Ended December 31, 2010
            
            
            34,114Year
      Ended December 31, 2011
            
            
            720$
            805,298




4.
Related Party Transactions





Receivables/Payables





As of
March 31, 2008, the Partnership’s related party payables are short term,
unsecured, and non-interest bearing.





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 three months ended March 31, 2008 and 2007,
the Partnership recorded approximately $518,000 and $114,000 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.  For the three months ended March 31,
2008 and 2007, equipment acquisition fees of approximately $800 and $12,000 were
earned bythe
General Partner.





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.  There were no debt placement fees earned by the General
Partner for the three months ended March 31, 2008.  For the three
months ended March 31, 2007 debt placement fees of approximately $2,500 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.  For the three months ended March 31, 2008 and 2007,
equipment management fees of approximately $15,000 and $34,000 were earned
bythe
General Partner.





9
   Table of
Contents


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.  For the three months
ended March 31, 2008 and 2007, equipment liquidation fees of approximately
$2,500 and $8,000 were earned by the General Partner.




5.
Notes Payable





Notes
payable consisted of the following:




March
      31, 2008
            
            
            December
      31, 2007Installment
      notes payable to banks; interest ranging from 4.65% to 6.06%, due in
      monthly installments ranging
              from
      $162 to $7,289 including interest, with final payment due in January
      through September 2008.
            
            $
            29,316
            
            
            $
            81,043Installment
      notes payable to banks; interest ranging from 5.9% to 6.25%, due in
      monthly installments ranging
              from
      $1,901 to $73,654, including interest, with final payments from January
      through October 2009.
            
            
            276,800
            
            
            
            318,634$
            306,116
            
            
            $
            399,677




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 March 31, 2008 are as follows:




AmountNine
      months ended December 31, 2008
            
            $
            149,509Year
      ended December 31, 2009
            
            
            156,607$
            306,116




6.
Supplemental Cash Flow Information





Other
noncash activities included in the determination of net loss are as
follows:





Three
      months ended March 31,
            
            2008
            
            
            2007Lease
      income, net of interest expense on notes payable realized as a result of
      direct payment of principal by lessee to bank
            
            $
            93,561
            
            
            $
            329,624


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:





Three
      months ended March 31,
            
            2008
            
            
            2007Debt
      assumed in connection with purchase of computer equipment
            
            $
            -
            
            
            $
            246,000Equipment
      acquisition fees earned by General Partner upon purchase of equipment from
      prepaid acquisition fees
            
            $
            776
            
            
            $
            680





10
   Table of
Contents




Item
2: Management’s Discussion and Analysis of Financial Condition
and Results of Operations




FORWARD
LOOKING STATEMENTS




Certain
statements within this Quarterly Report on Form 10-Q may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 (“PSLRA”). These statements are being made
pursuant to the PSLRA, with the intention of obtaining the benefits of the “safe
harbor” provisions of the PSLRA, and, other than as required by law, we assume
no obligation to update or supplement such statements. Forward-looking
statements are those that do not relate solely to historical fact. They include,
but are not limited to, any statement that may predict, forecast, indicate or
imply future results, performance, achievements or events. You can identify
these statements by the use of words such as “may,” “will,” “could,”
“anticipate,” “believe,” “estimate,” “expects,” “intend,” “predict” or “project”
and variations of these words or comparable words or phrases of similar meaning.
These forward-looking statements reflect our current beliefs and expectations
with respect to future events and are based on assumptions and are subject to
risks and uncertainties and other factors outside our control that may cause
actual results to differ materially from those projected.




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





REVENUE
RECOGNITION





Through
March 31, 2008, the Partnership has only entered into operating
leases.  Lease revenue is recognized on the monthly straight-line
basis which is generally in accordance with the terms of the operating lease
agreements.





The
Partnership reviews a customer’s credit history before 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.  The Partnership determined that
no impairment had occurred during the three months ended March 31, 2008 or
2007.




11
   Table of
Contents




LIQUIDITY
AND CAPITAL RESOURCES





The
Partnership’s primary source of capital for the three months ended March 31,
2008 was from operating activities of approximately $226,000.  The
Partnership’s primary source of capital for the three months ended March 31,
2007 was net proceeds received from sale of equipment of approximately
$201,000.  The primary uses of cash for the three months ended March
31, 2008 and 2007 were for capital expenditures for new equipment of $19,000 and
$54,000, respectively, and the payment of distributions to partners of
approximately $370,000 and $374,000.





While the
Partnership intends to invest additional capital in equipment during the
remainder of 2008, the amount of such additional investment is uncertain, and
may be impacted by the status or outcome of the Allserve bankruptcy. See “Legal
Proceedings” in Part II, Item I. Any acquisition of equipment will be funded by
debt financing, and the debt service will be funded from cash flows from lease
rental payments.





For the
three months ended March 31, 2008, the Partnership generated cash flows from
operating activities of approximately $226,000, which includes a net loss of
approximately $54,000, a gain on sale of equipment of approximately
$5,000, and depreciation and amortization expenses of approximately
$229,000. Other non-cash activities included in the determination of net income
include direct payments of lease income by lessees to banks of approximately
$94,000.





For the
three months ended March 31, 2007, the Partnership generated cash flows from
operating activities of approximately $55,000, which includes a net loss of
approximately $154,000, a loss on sale of equipment of approximately
$136,000, and depreciation and amortization expenses of approximately
$549,000. Other non-cash activities included in the determination of net income
include direct payments of lease income by lessees to banks of approximately
$330,000.




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 March 31, 2008, the Partnership had future minimum
rentals on non-cancelable operating leases of approximately $475,000 for the
balance of the year ending December 31, 2008 and approximately $331,000
thereafter.  At March 31, 2008, the outstanding debt was approximately
$306,000, with interest rates ranging from 4.65% to 6.25%, and will be payable
through October 2009.





The
Partnership had a negative working capital balance at March 31, 2008.  This
was primarily attributable to liabilities owed to affiliates of the Partnership.
 In an effort to increase cash flow for the Fund, the General Partner and
CCC have helped finance distributions to Limited Partners and have forgiven
certain fees owed to the General Partner.  Limited Partners’
distributions for the first quarter of 2008 were partially funded from CCC.
 The General Partner will continue to reassess the funding of LP
distributions on a quarterly basis in 2008 and will waive certain fees if
Management determines it is in the best interest of the Partnership to do so.
 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. 
Since the Partnership’s leases are on a “triple-net” basis, no reserve for
maintenance and repairs is deemed necessary.  The Partnership’s cash
from operations is expected to be adequate to cover all operating expenses,
liabilities, and distributions to Partners during the next 12-month
period.




RESULTS
OF OPERATIONS





Three Months Ended March 31,
2008 compared to Three Months March 31, 2007





For the
three months ended March 31, 2008, the Partnership recognized revenue of
approximately $299,000, and expenses of approximately $354,000, resulting in net
loss of approximately $55,000.  For the three months ended March 31,
2007, the Partnership recognized income of approximately $692,000, and expenses
of approximately $846,000, resulting in net loss of approximately
$154,000.





Lease
income decreased by 57% to $293,000 for the three months ended March 31, 2008,
from $677,000 for the three months ended March 31, 2007.  This
decrease was primarily due to more lease agreements ending versus new lease
agreements being acquired during the three months ended March 31,
2008.





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 8% to approximately $107,000 for the three months ended March 31,
2008, from $117,000 for the three months ended March 31, 2007. This decrease is
primarily attributable to a decrease in legal fees of approximately $6,000 and a
decrease in shipping fees of approximately $4,000.




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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 was approximately $15,000 and $34,000 for the three months ended
March 31, 2008 and 2007, respectively.





Depreciation
and amortization expenses consist of depreciation on computer equipment,
including impairment charges, and amortization of equipment acquisition fees.
The expenses decreased 58% to approximately $229,000 for the three months ended
March 31, 2008, from $549,000 for the three months ended March 31, 2007 due to
equipment and acquisition fees being fully depreciated/amortized and not being
replaced with as many new purchases.





The
Partnership sold computer equipment with a net book value of approximately
$74,000 for the three months ended March 31, 2008, for a net gain of
approximately $5,000.  The Partnership sold computer equipment with a
net book value of approximately $337,000 for the three months ended March 31,
2007, for a net loss of approximately $136,000.





Item
3.Quantitative and Qualitative Disclosures About Market
Risk





N/A





Item
4T.  Controls and Procedures





Our
management, under the supervision and with the participation of the principal
executive officer and principal financial offer, have evaluated the
effectiveness of our controls and procedures related to our reporting and
disclosure obligations as of March 31, 2008 which is the end of the period
covered by this Quarterly Report on Form 10-Q.  Based on that
evaluation, the principal executive officer and principal financial officer have
concluded that our disclosure controls and procedures are effective to provide
that (a) material information relating to us, including our consolidated
affiliates is made known to these officers by us and our consolidated
affiliates’ other employees, particularly material information related to the
period for which this periodic report is being prepared; and (b) this
information is recorded, processed, summarized, evaluated and reported, as
applicable, within the time periods specified in the rules and forms promulgated
by the Securities and Exchange Commission.  There have been no
significant changes in the General Partner’s internal controls or in other
factors that could significantly affect our disclosure controls and procedures
in the first quarter of 2008 or subsequent to the date of the
evaluation.




Part
II:                      OTHER
INFORMATION





Item
1.                               Legal Proceedings





In
the 4th quarter
of 2005, CCC identified payment problems with Allserve Systems Corp.
(“Allserve”), one of the Partnerships’ lessees. The bank had returned a number
of Allserve’s checks issued in October 2005.  The Partnership
immediately began communication with the lessee, only to ultimately find that
they filed for protection under Chapter 11 of the United States Bankruptcy Code
on November 18, 2005.  The General Partner responded to the Bankruptcy
petition promptly and assertively.  Counsel was retained for the
Partnership.  All litigation meetings and equipment inspections were
attended by the General Partner, for purpose of identifying and tagging all
assets belonging to the Partnership. The Partnership owns either all or portions
of 5 equipment leases with Allserve, with original purchase prices of
approximately $2,789,000.





On
January 12, 2006, the trustee filed a petition before the court asking for the
bankruptcy petition to be changed to a Chapter 7 Liquidation, due to Allerve’s
inability to pay its ongoing bills and the trustee’s belief that Allserve was
not being honest in its dealings with the Trustee.  The Judge granted this
request.





An
official creditors’ committee (“Creditors’ Committee”) was organized by the
Trustee in February 2006.  An officer of CCC is a member of the Creditors’
Committee.  Other creditors affected and represented on the creditors
committee include IBM Credit LLC, DB Zwirn and Universal Equipment
Leasing.  A forensic accounting firm is being retained by the Creditors’
Committee to investigate transfers of significant quantities of cash from
Allserve accounts, prior to its Bankruptcy petition.  On March 16, 2006,
the Trustee granted stay relief to allow the Partnership and other creditors to
take possession of their assets.  As of March 23, 2006, the Partnership had
recovered all of its equipment which was subject to leases with
Allserve.  The equipment was relocated to an asset management location
in New Jersey, where it was audited and tested, as well as evaluated for sale or
re-lease.




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   Table of
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In
January 2007, executive management of Commonwealth Capital Corp. met with a
nationally known leasing company that has been in business for over 25 years.
This company has helped other Allserve creditors sell and/or re-lease recovered
equipment and they are currently doing an analysis of the best possible way to
bring Commonwealth’s equipment to market. As there is a great deal of this
equipment currently available, due to the size of the Allserve bankruptcy, this
process will take more time than normal.  Since August 14, 2007, the
Partnership has been in the process of reviewing the audit reports prepared by
Global Key, a third party who received and tested the equipment; and obtaining a
list of parts required in order to bring the equipment up to specifications for
sale.  It has been the intention of the Partnership to attempt to
market the equipment in the third world market once this upgrade has taken
place.  Further, the Partnership intends to offer the equipment “as
is” both domestically and internationally while soliciting a buyer (or buyers)
in order to maximize revenue.  Management of the Partnership
anticipates this process to continue until the end of 2008.  In
recognition of such, the Partnership recorded further impairment charges of
approximately $79,000 as of December 31, 2007.





The
Allserve equipment leases were purchased by the Partnership between December
2003 and December 2004.   The Partnership believes there is
resale value for this equipment and will be pursuing resale and litigation
options in an attempt to maximize investor’s total return on this
equipment.  The Partnership received lease payments up through and
including September 2005.  Therefore, the Partnership has recovered a
portion of the equipment’s purchase price to date.  The Partnership
recorded a reserve against all outstanding rentals in the amount of
approximately $261,000 through December 31, 2006 and has recorded cumulative
impairment charges against the equipment leased to Allserve of approximately
$724,000 through December 31, 2007.





As of
December 31, 2007, the Allserve equipment had a net book value of zero. The
Partnership has not experienced any significant changes related to this matter
during the first quarter of 2008, and does not anticipate any further
significant impact to the Partnership’s financials statements unless, and until,
the equipment can be sold.





Item
1A.    Risk
Factors





N/A





Item
2.  Unregistered Sales
of Equity Securities and Use of Proceeds





N/A





Item
3.  DefaultsUpon
Senior Securities





N/A





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





N/A





Item
5.   Other
Information





N/A





Item
6.    
Exhibits




31.1 THE RULE 15d-14(a) CERTIFICATION OF PRINCIPAL
EXECUTIVE OFFICER


31.2 THE RULE 15d-14(a) CERTIFICATION OF PRINCIPAL
FINANCIAL OFFICER


32.1 SECTION 1350 CERTIFICATION OF PRINCIPAL EXECUTIVE
OFFICER


32.2 SECTION 1350 CERTIFICATION OF PRINCIPAL FINANCIAL
OFFICER




14




Table
of Contents





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 IVBY:
      COMMONWEALTH INCOME & GROWTH FUND, INC., General
    Partner





May 15,
      2008
            By:/s/ Kimberly A.
      SpringsteenDate
            Kimberly
      A. SpringsteenChief
      Executive OfficerBy:/s/ Lynn A.
      FranceschinaLynn
      A. FranceschinaExecutive
      Vice President, Chief Operating Officer


15