**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549








**FORM
      10-Q**





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





FOR
      THE
      QUARTERLY PERIOD ENDED JUNE 30, 2007





o
      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 ofincorporation
                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  x  NO  o





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





Large
                accelerated filer  o
            Accelerated
                filer  o
            Non-accelerated
                filer x





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







**1**





**FORM
      10-Q**


**JUNE
      30, 2007**





**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
            15Item
                4.
            Controls
                and Procedures
            16PART
                IIItem
                1.
            Legal
                Proceedings
            16Item
                1 A.
            Risk
                Factors
            18Item
                2.
            Unregistered
                Sales of Equity Securities and Use of
                Proceeds
            18Item
                3.
            Defaults
                Upon Senior Securities
            18Item
                4.
            Submission
                of Matters to a Vote of Securities
                Holders
            18Item
                5.
            Other
                Information
            18Item
                6.
            Exhibits
            18SignaturesCertifications




**2**
 ***Table
            of Contents***





**Part
      I. FINANCIAL INFORMATION**


**Item
      1. Financial Statements**




**Commonwealth
      Income & Growth Fund IV**


**Condensed
      Balance Sheets**








**June
                30,**
              **2007**
            
            
            December 31,
              2006**(unaudited)****Assets**Cash
                and cash equivalents
            
            $
            162,612
            
            
            $
            185,564Lease
                income receivable, net of reserves of  $270,937 as of June 30,
                2007 and $282,587 as of December 31, 2006
            
            
            196,355
            
            
            
            441,123Other
                receivables – other affiliated partnerships
            
            
            30,378
            
            
            
            26,493Refundable
                deposits
            
            
            1,130
            
            
            
            1,130Prepaid
                expenses
            
            
            6,564
            
            
            
            3,762****
            **397,039**
            
            
            
            658,072Computer
                equipment, at cost
            
            
            8,940,800
            
            
            
            10,748,987Accumulated
                depreciation
            
            
            (6,524,255
            )
            
            
            (7,326,525
            )****
            **2,416,545**
            
            
            
            3,422,462Equipment
                acquisition costs and deferred expenses, net
            
            
            66,733
            
            
            
            95,323Other
                receivables - Commonwealth Capital Corp
            
            
            128,985
            
            
            
            165,459Prepaid
                acquisition fees
            
            
            68,540
            
            
            
            70,528****
            **264,258**
            
            
            
            331,310**Total
                Assets**
            
            **$**
            **3,077,842**
            
            
            $
            4,411,844**Liabilities
                and Partners’ Capital****Liabilities**Accounts
                payable, primarily for equipment purchases
            
            $
            133,354
            
            
            $
            90,216Accounts
                payable – General Partner
            
            
            84,433
            
            
            
            58,367Other
                accrued expenses
            
            
            -
            
            
            
            13,318Unearned
                lease income
            
            
            71,107
            
            
            
            50,331Notes
                payable
            
            
            708,334
            
            
            
            975,457**Total
                Liabilities**
            
            ****
            **997,228**
            
            
            
            1,187,689**Partners'
                Capital**General
                partner
            
            
            1,000
            
            
            
            1,000Limited
                partners
            
            
            2,079,614
            
            
            
            3,223,155**Total
                Partners' Capital**
            
            ****
            **2,080,614**
            
            
            
            3,224,155**Total
                Liabilities and Partners' Capital**
            
            **$**
            **3,077,842**
            
            
            $
            4,411,844




*see
      accompanying notes to condensed financial statements*





**3**
 ***Table
            of Contents***





**Commonwealth
      Income & Growth Fund IV**


**Condensed
      Statements of Operations**




**Three months Ended**
                  **June
                    30**
                
                
                **Six Months Ended**
                  **June
                    30****2007**
                
                
                **2006**
                
                
                **2007**
                
                
                **2006****(unaudited)**
                
                
                **(unaudited)****Income**Lease
                
                $
                471,032
                
                
                $
                848,058
                
                
                $
                1,147,732
                
                
                $
                1,801,259Interest
                    and other
                
                
                4,651
                
                
                
                6,788
                
                
                
                19,757
                
                
                
                10,728**Total
                    income**
                
                
                475,683
                
                
                
                854,846
                
                
                
                1,167,489
                
                
                
                1,811,987**Expenses**Operating,
                    excluding depreciation
                
                
                135,643
                
                
                
                194,348
                
                
                
                252,178
                
                
                
                396,091Equipment
                    management fee - General Partner
                
                
                -
                
                
                
                42,403
                
                
                
                33,835
                
                
                
                90,063Interest
                
                
                9,906
                
                
                
                18,661
                
                
                
                20,406
                
                
                
                41,588Depreciation
                
                
                529,757
                
                
                
                862,718
                
                
                
                1,055,647
                
                
                
                1,661,729Amortization
                    of equipment acquisition costs and deferred expenses
                
                
                21,006
                
                
                
                45,640
                
                
                
                44,339
                
                
                
                98,334Bad
                    debt expense
                
                
                3,631
                
                
                
                -
                
                
                
                3,631
                
                
                
                -Loss
                    on sale of computer equipment
                
                
                16,634
                
                
                
                50,115
                
                
                
                152,370
                
                
                
                258,068**Total
                    expenses**
                
                
                716,577
                
                
                
                1,213,885
                
                
                
                1,562,406
                
                
                
                2,545,873**Net
                    (loss)**
                
                **$**
                **(240,894**
                **)**
                
                **$**
                **(359,039**
                **)**
                
                **$**
                **(394,918**
                **)**
                
                **$**
                **(733,886**
                **)****Net
                    (loss) allocated to limited partners**
                
                **$**
                **(244,637**
                **)**
                
                **$**
                **(362,756**
                **)**
                
                **$**
                **(402,404**
                **)**
                
                **$**
                **(741,349**
                **)****Net
                    (loss) per equivalent limited partnership unit**
                
                **$**
                **(0.33**
                **)**
                
                **$**
                **(0.48**
                **)**
                
                **$**
                **(0.54**
                **)**
                
                **$**
                **(0.99**
                **)****Weighted
                    Average number of equivalent limited partnership units outstanding
                    during
                    the period**
                
                ****
                **749,400**
                
                
                ****
                **749,400**
                
                
                ****
                **749,400**
                
                
                ****
                **749,400**





*see
      accompanying notes to condensed financial statements*





**4**
 ***Table
            of Contents***





**Commonwealth
      Income & Growth Find IV**


**Condensed
      Statements of Partners’ Capital**


**For
      the Six Months ended June 30, 2007**


**(unaudited)**





***General***
              ***Partner***
              ***Units***
            
            
            ***Limited***
              ***Partner***
              ***Units***
            
            
            ***General***
              ***Partner***
            
            
            ***Limited***
              ***Partner***
            
            
            ***Total*****Partners'
                capital – January 1, 2007**
            
            ****
            **50**
            
            
            ****
            **749,400**
            
            
            **$**
            **1,000**
            
            
            **$**
            **3,223,155**
            
            
            **$**
            **3,224,155**Net
                income (loss)
            
            
            -
            
            
            
            -
            
            
            
            7,486
            
            
            
            (402,404
            )
            
            
            (394,918
            )Distributions
            
            
            -
            
            
            
            -
            
            
            
            (7,486
            )
            
            
            (741,137
            )
            
            
            (748,623
            )**Partners'
                capital – June 30, 2007**
            
            ****
            **50**
            
            
            ****
            **749,400**
            
            
            **$**
            **1,000**
            
            
            **$**
            **2,079,614**
            
            
            **$**
            **2,080,614**





*see
      accompanying notes to condensed financial statements*





**5**
 ***Table
            of Contents***





**Commonwealth
      Income & Growth Fund IV**


**Condensed
      Statements of Cash Flow**


**Six months Ended**
                  **June
                    30,****2007**
                
                
                **2006****(unaudited)****Net
                    cash provided by operating activities**
                
                **$**
                **659,138**
                
                
                $
                598,090**Investing
                    activities:**Capital
                    expenditures
                
                
                (206,223
                )
                
                
                (316,469
                )Prepaid
                    acquisition fees
                
                
                1,988
                
                
                
                11,369Net
                    proceeds from sale of computer equipment
                
                
                250,042
                
                
                
                229,377Equipment
                    acquisition fees paid to General Partner
                
                
                (13,289
                )
                
                
                (19,237
                )**Net
                    cash provided by (used in) investing activities**
                
                ****
                **32,518**
                
                
                
                (94,960
                )**Financing
                    activities:**Distributions
                    to partners
                
                
                (748,623
                )
                
                
                (748,723
                )Other
                    receivable, Commonwealth Capital Corp
                
                
                36,474
                
                
                
                51,996Debt
                    Placement fee paid to the General Partner
                
                
                (2,459
                )
                
                
                (1,645
                )**Net
                    cash (used in) financing activities**
                
                ****
                **(714,608**
                **)**
                
                
                (698,373
                )Net
                    (decrease) in cash and cash equivalents
                
                
                (22,952
                )
                
                
                (195,243
                )Cash
                    and cash equivalents, beginning of period
                
                
                185,564
                
                
                
                891,708**Cash
                    and cash equivalents, end of period**
                
                **$**
                **162,612**
                
                
                $
                696,465







*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, 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
      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.





**2.
      Summary of Significant Accounting Policies**





**Basis
      of Presentation**





The
      financial information presented as of any date other than December 31, 2006
      has
      been prepared from the books and records without audit.  Financial
      information as of December 31, 2006 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, 2006.  Operating results for the six months ended
      June 30, 2007 are not necessarily indicative of financial results that may
      be
      expected for the full year ended December 31, 2007.





**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 recorded
      impairment charges of approximately $67,000 to reflect the assets at their
      current estimated net realizable value for the period ended June 30,
      2007.





**7**
 ***Table
            of Contents***





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 12 to 42 months. In general, associated costs such as repairs
      and
      maintenance, insurance and property taxes are paid by the lessee.





Through
      June 30, 2007, 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 six months ended June 30, 2007 and 2006,
      remarketing fees were incurred in the amounts of $21,000 and $8,000,
      respectively





The
      Partnership’s share of the computer equipment in which it participates with
      other partnerships at June 30, 2007 and December 31, 2006 was $1,900,000 and
      $1,600,000, 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 June 30, 2007 and December 31, 2006
      was
      $5,409,000 and $4,500,000, respectively. The Partnership’s share of the
      outstanding debt associated with this equipment at June 30, 2007 and December
      31, 2006 was $330,000 and $164,000, respectively.  The total
      outstanding debt at June 30, 2007 and December 31, 2006 was $932,000 and
      $328,000, respectively.





The
      following is a schedule of future minimum rentals on noncancellable operating
      leases at June 30, 2007:





*Amount*Six
                Months ended December 31, 2007
            
            $
            600,112Year
                Ended December 31, 2008
            
            
            601,401Year
                Ended December 31, 2009
            
            
            252,228Year
                Ended December 31, 2010
            
            
            25,698**$**
            **1,479,439**





**8**
 ***Table
            of Contents***





**4.
      Related Party Transactions**





**Receivables/Payables**





As
      of
      June 30, 2007, the Partnership’s related party receivables and payables are
      short term, unsecured, and non-interest bearing.





**Other
      Receivables**





As
      of
      June 30, 2007, the Partnership has an unsecured, non-interest bearing receivable
      from CCC, a related party to the Partnership, in the amount of approximately
      $129,000 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
      has been repaying 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 31, 2005.





**Reimbursable
      Expenses**





The
      General Partner and its affiliates are entitled to reimbursement by the
      Partnership for the cost of supplies and services obtained and used by the
      General Partner in connection with the administration and operation of the
      Partnership from third parties unaffiliated with the General
      Partner.  In addition, the General Partner and its affiliates are
      entitled to reimbursement for certain expenses incurred by the General Partner
      and its affiliates in connection with the administration and operation of the
      Partnership.  During the six months ended June 30, 2007, the
      Partnership recorded approximately $198,000 for reimbursement of expenses to
      the
      General Partner.  During the six months ended June 30, 2006, the
      Partnership recorded $316,000 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 six months ended June 30, 2007,
      equipment acquisition fees of approximately $13,000 were earned
      by******the General Partner.  For the six
      months ended June 30, 2006, equipment acquisition fees of approximately $19,000
      were earned by the 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.  For the six months ended June 30, 2007, debt placement
      fees of approximately $2,000 were earned by the General Partner.  For
      the six months ended June 30, 2006, debt placement fees of approximately $1,600
      were earned by the General Partner.





**9**
 ***Table
            of Contents***





**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.  The equipment management fees were waived for the
      three months ended June 30,2007.  For the six months ended June 30,
      2007, equipment management fees of approximately $34,000 were earned
      by******the General Partner.  For the six
      months ended June 30, 2006, equipment management fees of approximately $90,000
      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.  For the six months
      ended June 30, 2007 equipment liquidation fees of approximately $10,000 were
      earned by the General Partner.  For the six months ended June 30, 2006
      equipment liquidation fees of approximately $8,000 were earned by the General
      Partner.





**5.
      Notes Payable**





Notes
      payable consisted of the following:





**June
                30,**
              **2007**
            
            
            December 31,
              2006Installment
                notes payable to banks; interest ranging from 4.29% to 7.50%, due
                in
                monthly installments ranging from $256 to $13,488, including interest,
                with final payments due in January through December 2007.
            
            **$**
            **111,005**
            
            
            $
            424,863Installment
                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.
            
            ****
            **196,865**
            
            
            
            309,316Installment
                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.
            
            ****
            **400,464**
            
            
            
            241,278**$**
            **708,334**
            
            
            $
            975,457





**10**
 ***Table
            of Contents***





These
      notes are secured by specific computer equipment and are nonrecourse liabilities
      of the Partnership.  Aggregate maturities of notes payable for each of
      the periods subsequent to June 30, 2007 are as follows:





***Amount***Six
                months ended December 31, 2007
            
            $
            308,394Year
                ended December 31, 2008
            
            
            252,421Year
                ended December 31, 2009
            
            
            147,519**$**
            **708,334**




**6.
      Supplemental Cash Flow Information**





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





*Six
                months Ended June 30,*
            
            **2007**
            
            
            2006Lease
                income, net of interest expense on notes payable realized as a result
                of
                direct payment of principal by lessee to bank
            
            **$**
            **513,045**
            
            
            $
            634,321








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





Noncash
      investing and financing
      activities include the following:





*Six
                months Ended June 30,*
            
            **2007**
            
            
            2006Debt
                assumed in connection with purchase of computer equipment
            
            ****
            **-**
            
            
            $
            164,000Equipment
                acquisition fees earned by General Partner upon purchase of equipment
                from
                prepaid acquisition fees
            
            **$**
            **1,988**
            
            
            $
            11,370








**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.





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**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
      June 30, 2007, 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 recorded impairment
      charges of approximately $67,000 to reflect the assets at their current
      estimated net realizable value for the period ending June 30, 2007.





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**Liquidity
      and Capital Resources**





The
      Partnership’s primary source of capital for the six months ended June 30, 2007
      and 2006 was from net proceeds received from sale of equipment of approximately
      $250,000 and $229,000, respectively.  The primary uses of cash for the
      six months ended June 30, 2007 and 2006 were for capital expenditures for new
      equipment of approximately $206,000 and $316,000, respectively, and the payment
      of preferred distributions to partners of approximately $749,000 for both
      years.





While
      the
      Partnership intends to invest additional capital in equipment during the
      remainder of 2007, 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
      six months ended June 30, 2007, the Partnership generated cash flows from
      operating activities of approximately $659,000, which includes a net loss of
      approximately $395,000, a loss on sale of equipment of approximately
      $152,000, and depreciation and amortization expenses of approximately
      $1,100,000. Other non-cash activities included in the determination of net
      income include direct payments of lease income by lessees to banks of
      approximately $513,000.





For
      the
      six months ended June 30, 2006, the Partnership generated cash flows from
      operating activities of approximately $598,000, which includes a net loss of
      approximately $734,000, a loss on sale of equipment of approximately
      $258,000, and depreciation and amortization expenses of approximately
      $1,760,000. Other non-cash activities included in the determination of net
      income include direct payments of lease income by lessees to banks of
      approximately $634,000.





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 June 30, 2007, the Partnership had future minimum
      rentals on non-cancelable operating leases of approximately $600,000 for the
      balance of the year ending December 31, 2007 and approximately $879,000
      thereafter.  At June 30, 2007, the outstanding debt was approximately
      $708,000, with interest rates ranging from 4.29% to 6.50%, and will be payable
      through October 2009.





As
      of
      June 30, 2007, the Partnership has an unsecured, non-interest bearing receivable
      from CCC, a related party to the Partnership, in the amount of approximately
      $129,000, 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 has been paying 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 31, 2005.





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.





**13**
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While
      the
      Partnership intends to invest additional capital in equipment during the
      remainder of 2007, 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.





The
      Partnership’s share of the computer equipment in which it participates at June
      30, 2007 and December 31, 2006 was $1,900,000 and $1,600,000 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
      June
      30, 2007 and December 31, 2006 was $5,409,000 and $4,500,000
      respectively.





**Results
      of Operations**





Three
      Months Ended June 30, 2007 compared to Three Months June 30,
      2006





For
      the
      three months ended June 30, 2007, the Partnership recognized income of
      approximately $476,000, and expenses of approximately $717,000, resulting in
      net
      loss of approximately $241,000.  For the three months ended June 30,
      2006, the Partnership recognized income of approximately $855,000, and expenses
      of approximately $1,214,000, resulting in net loss of approximately
      $359,000.





Lease
      income decreased by 45% to $471,000 for the three months ended June 30, 2007,
      from $848,000 for the three months ended June 30, 2006.  This decrease
      was primarily due to more lease agreements ending versus new lease agreements
      being acquired during the three months ended June 30, 2007.





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.  With the exception
      of legal and accounting fees, CCC has determined that in the best interest
      of
      the Partnership, the majority of shared expenses will not be allocated to the
      Partnership.  The expenses decreased 30% to approximately $136,000 for
      the three months ended June 30, 2007, from $194,000 for the three months ended
      June 30, 2006. This decrease is primarily attributable to a decrease in other
      LP
      expenses of approximately $33,000 and a decrease in partnership tax of
      $26,000.





The
      equipment management fee is approximately 5% of the gross lease revenue
      attributable to equipment that is subject to operating leases. This fee was
      approximately $42,000 for the three months ended June 30, 2007, and was waived
      by the general partner, in an effort to assist in the operating results of
      the
      Partnership. The equipment management fee was approximately $42,000 for the
      three months ended June 30, 2006.





Depreciation
      and amortization expenses consist of depreciation on computer equipment,
      including impairment charges, and amortization of equipment acquisition
      fees. The expenses decreased 39% to approximately $551,000 for the three months
      ended June 30, 2007, from $908,000 for the three months ended June 30, 2006
      due
      to equipment and acquisition fees being fully depreciated/amortized and not
      being replaced with as many new purchases.





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Six
      Months Ended June 30, 2006 compared to Six Months Ended June 30,
      2005





For
      the
      six months ended June 30, 2007, the Partnership recognized income of
      approximately $1,167,000, and expenses of approximately $1,562,000, resulting
      in
      a net loss of approximately $395,000.  For the six months ended June
      30, 2006, the Partnership recognized income of approximately $1,812,000, and
      expenses of approximately $2,546,000, resulting in a net loss of approximately
      $734,000.





Lease
      income decreased by 36% to $1,148,000 for the six months ended June 30, 2007,
      from $1,801,000 for the six months ended June 30, 2006, primarily due to fewer
      lease agreements have been entered into since the six months ended June 30,
      2006.





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 36% to approximately $252,000 for the six months ended June 30, 2007,
      from $396,000 for the six months ended June 30, 2006, primarily due to a
      decrease in other LP expenses of approximately $73,000, a decrease in the amount
      charged by CCC to the Partnership for its legal fees of approximately $30,000
      and a decrease in partnership tax of approximately $26,000.





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 decreased 62% to approximately $34,000 for the six months ended
      June 30, 2007, from $90,000 for the six months ended June 30,
      2006.  This decrease is primarily attributable to the suspension of
      the equipment management fees for the three months ended June 30, 2007 and
      is
      consistent with the decrease in lease income.





Depreciation
      and amortization expenses consist of depreciation on computer equipment and
      amortization of equipment acquisition fees. The expenses decreased 38% to
      approximately $1,100,000 for the six months ended June 30, 2007, from $1,760,000
      for the six months ended June 30, 2006 due to specific equipment and acquisition
      fees being fully depreciated/amortized. The Partnership identified specific
      computer equipment and associated equipment acquisition costs, which were
      reevaluated due to technological changes.  The Partnership recorded
      impairment charges of approximately $67,000 to reflect the assets at their
      current estimated net realizable value for the period ending June 30,
      2007.  No such adjustment was necessary for the period ended June 30,
      2006.





The
      Partnership sold computer equipment with a net book value of approximately
      $402,000 for the six months ended June 30, 2007, for a net loss of approximately
      $152,000.  The Partnership sold computer equipment with a net book
      value of approximately $488,000 for the six months ended June 30, 2006, for
      a
      net loss of approximately $258,000.





**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 and its associated fixed revenue
      streams.





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**Item
      4.  Controls and Procedures**





The
      Chief
      Executive Officer and Principal Financial Officer of the Partnership have
      conducted a review of the Partnership's disclosure controls and procedures
      as of
      June 30, 2007.





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 recorded, processed, summarized and
      reported within the time periods specified in the Securities and Exchange
      Commission’s rules and forms.  The Partnership’s disclosure controls and
      procedures also 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 Exchange Act is accumulated and communicated to the
      Partnership's management, including its Chief Executive Officer and Principal
      Financial Officer, to allow timely decisions regarding required disclosure
      and
      to ensure that such information is recorded, processed, summarized and reported
      within the required time periods.





Based
      upon this review, the Partnership’s Chief Executive Officer and Principal
      Financial Officer have concluded that the Partnership's disclosure controls
      (as
      defined in Rule 13a-15e promulgated under the Exchange Act) are effective to
      ensure that the information required to be disclosed by the Partnership in
      the
      reports it files under the Exchange Act (i) is recorded, processed, summarized
      and reported within the time periods specified in the Securities and Exchange
      Commission rules and forms and (ii) is accumulated and communicated to the
      Partnership's management, including its Chief Executive Officer and Principal
      Financial Officer, to allow timely decisions regarding required disclosure
      and
      to ensure that such information is recorded, processed, summarized and reported
      within the required time periods.





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 six months ended June 30, 2007, that have materially affected or are
      reasonably likely to materially affect the General Partner’s internal controls
      over financial reporting.





**Part
                II:**
            **OTHER
                INFORMATION**





**Commonwealth
      Income & Growth Fund IV**





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.





**16**
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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 will be audited and tested, as well as evaluated for
      sale or re-lease.





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. As of August 14, 2007, it is the
      intention of the Partnership to review the audit reports prepared by Global
      Key,
      a third party who received and tested the Nortel equipment; and to obtain a
      list
      of what parts would be required in order to bring the equipment up to
      specifications for sale. Once this upgrade has taken place, the Partnership
      is
      particularity interested in exploring the third world market. 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 2007. In recognition of such, the Partnership recorded
      a further impairment charge of approximately 25% as of December 31,
      2006.





The
      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 also recorded impairment charges of approximately
      $363,000.





**17**
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Item
                1A.
            **Risk
                Factors**





There
      have been no material changes to the risk factors set forth in our Annual Report
      on Form 10-K for the year ended December 31, 2006, as filed with the SEC.
      In addition to the other information set forth in this report, you should
      carefully consider the factors discussed in Part I, Item 1A, “Risk
      Factors” in our Annual Report on Form 10-K which could materially affect our
      business, financial condition or future results. The risks described in our
      Annual Report on Form 10-K are not the only risks facing our company. Additional
      risks and uncertainties not currently known to us or that we currently deem
      immaterial also may have a material adverse effect on our business, financial
      condition and/or operating results.





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





N/A





Item
                3.
            **Defaults
                Upon Senior Securities**





N/A





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





N/A





Item
                5.
            **Other
                Information**





On
      June
      20th, 2007, Ms. Katrina Mason tendered her resignation, due to the impending
      birth of her first child.  In her resignation, she stated that "she has
      decided to embark on the new adventure of motherhood and devote her full
      attention to her family."  Her resignation was effective June 14,
      2007.  Ms. Mason tendered her resignation to Commonwealth organization and
      the positions she held with affiliates of the registrant and her position on
      the
      Board, as previously disclosed by the registrant in a Current Report filed
      with
      the SEC on Form  8-K.





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**





**18**
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**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





August
                14, 2007
            By:
                /s/ Kimberly A. SpringsteenDate
            Kimberly
                A. SpringsteenChief
                Executive Officer






**19**