SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

                                   (Mark One)

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

For the quarterly period ended December 31, 1996


                                       OR


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

                         Commission File Number 33-89968


                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
             (Exact name of registrant as specified in its charter)


         Delaware                                              13-3809869
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                             Identification No.)


625 Madison Avenue, New York, New York                            10022
(Address of principal executive offices)                        (Zip Code)


Registrant's telephone number, including area code (212)421-5333


     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]  No [ ]

<PAGE>

                         
                         PART I - FINANCIAL INFORMATION


Item 1.  Financial Statements                                       

                                                                 
                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
                           Consolidated Balance Sheets
                                   (Unaudited)

                                             ===========   ===========
                                             December 31,   March 31,
                                                 1996         1996
                                             -----------   -----------
ASSETS

Property and equipment at cost,
   net of accumulated depreciation
   of $212,766 and $22,951,
   respectively                              $16,073,689   $ 2,657,976
Construction in progress                       3,136,474             0
Cash and cash equivalents                      6,491,317     8,484,832
Investments available for sale                24,900,000    11,502,412
Cash held in escrow                            3,474,126     3,000,000
Deferred costs, net of accumulated
   amortization
   of $16,562 and $5,921, respectively         2,217,931     1,700,358
Other assets                                     321,875       260,114
                                             -----------   -----------

   Total assets                              $56,615,412   $27,605,692
                                             ===========   ===========
LIABILITIES AND PARTNERS' CAPITAL

Liabilities:
   Mortgage notes payable                    $ 9,235,649   $         0
   Construction loan payable                   2,370,816     2,039,174
   Accounts payable and other liabilities      2,546,874       106,084
   Due to local general partners and
    affiliates                                   262,482       311,987
   Due to general partner and affiliates         149,027       288,599
                                             -----------   -----------

    Total liabilities                         14,564,848     2,745,844
                                             -----------   -----------
Minority interest                                940,387       321,081
                                             -----------   -----------
Partners' capital:
   Limited partners (100,000 BACs
    authorized; 45,844 and 27,333
    issued and outstanding,
    respectively)                             41,106,608    24,536,153
   General partner                                 3,569         2,614
                                             -----------   -----------
    Total partners' capital                   41,110,177    24,538,767
                                             -----------   -----------
    Total liabilities and partners'
      capital                                $56,615,412   $27,605,692
                                             ===========   ===========


           See Accompanying Notes to Consolidated Financial Statements

                                       2

<PAGE>


                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
                      Consolidated Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>
                                      ========================     =======================
                                        Three Months Ended            Nine Months Ended
                                           December 31,                 December 31,
                                        1996           1995          1996          1995
                                      ---------      ---------     ---------     ---------
<S>                                   <C>            <C>           <C>         <C>        

Revenues
 Rental income                        $ 226,456      $       0     $ 394,187   $         0
 Other income                                                                  
  (principally interest                                                        
  on capital                                                                   
  contributions)                        324,242         68,937       825,851        68,937
                                      ---------      ---------     ---------     ---------
 Total revenues                         550,698         68,937     1,220,038        68,937
                                      ---------      ---------     ---------     ---------
Expenses                                                                       
 General and                                                                   
  administrative                        157,948          4,157       306,112         6,369
 General and administrative-                                                   
  related parties                                                              
  (Note 2)                              125,930         13,195       252,730        18,207
 Repairs and                                                                   
  maintenance                            30,760              0        46,091             0
 Operating and                                                                 
  other                                  18,712              0        47,729             0
 Real estate taxes                       21,957              0        21,957             0
 Insurance                               21,264              0        31,687             0
 Interest                               146,190              0       221,013             0
 Depreciation and                                                              
  amortization                          123,744          2,560       200,456         2,560
                                      ---------      ---------     ---------     ---------
 Total expenses                         646,505         19,912     1,127,775        27,136
                                      ---------      ---------     ---------     ---------
Net income (loss)                                                              
 before minority                                                               
 interest                               (95,807)        49,025        92,263        41,801
Minority interest                                                              
 in loss of subsidiary                                                         
 partnerships                             2,401              0         3,232             0
                                      ---------      ---------     ---------     ---------
Net income (loss)                      $(93,406)      $ 49,025     $  95,495     $  41,801
                                      =========      =========     =========     =========
Net income (loss) -                                                            
 limited partners                      $(92,472)     $ 48,535      $  94,540     $  41,383
                                      =========      =========     =========     =========
Weighted average                                                               
 number of BACs                                                                
 outstanding                             45,844         10,335        39,024         3,500
                                      =========      =========     =========     =========
Net income (loss)                                                              
 per weighted                                                                  
 average BAC                          $   (2.02)     $    4.70     $    2.42     $   11.82
                                      =========      =========     =========     =========
</TABLE>

           See Accompanying Notes to Consolidated Financial Statements
 
                                        3
                                                                             
<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
             Consolidated Statement of Changes in Partners' Capital
                                   (Unaudited)

                                  ============================================
                                                    Limited         General
                                      Total         Partners        Partner
                                  --------------------------------------------
Partners' capital -
 April 1, 1996                    $ 24,538,767    $ 24,536,153    $      2,614
Capital contributions               18,511,000      18,511,000               0
Offering costs                      (2,035,085)     (2,035,085)              0
Net income                              95,495          94,540             955
                                  ------------    ------------    ------------
Partners' capital -
 December 31, 1996                $ 41,110,177    $ 41,106,608    $      3,569
                                  ============    ============    ============














           See Accompanying Notes to Consolidated Financial Statements

                                       4
<PAGE>


                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                (Decrease) Increase in Cash and Cash Equivalents
                                   (Unaudited)

                                            =============================
                                                  Nine Months Ended
                                                    December 31,
                                            -----------------------------
                                                  1996           1995
                                            -----------------------------
Cash flows from operating activities:

   Net income                                $     95,495    $     41,801
                                             ------------    ------------
   Adjustments to reconcile net
    income to net cash
    provided by operating
    activities:
   Depreciation and amortization                  200,456           2,560
   Minority interest in loss of
    subsidiary properties                          (3,232)              0
   Increase in cash held in escrow                (16,428)              0
   Increase in other assets                       (61,761)              0
   Increase (decrease) in accounts
    payable and other liabilities               1,759,794         (46,753)
   Increase in due to local general
    partners and affiliates                        13,776               0
   Increase in due to general partner
    and affiliates                                133,758          22,206
                                             ------------    ------------

    Total adjustments                           2,026,363         (21,987)
                                             ------------    ------------

   Net cash provided by
    operating activities                        2,121,858          19,814
                                             ------------    ------------
Cash flows used in investing activities:

   Acquisition of property and
    equipment                                 (12,801,331)        (75,759)
   Increase in construction in progress        (3,136,474)              0
   Increase in cash held in escrow               (457,698)              0
   Increase in accounts payable and
    other liabilities                             680,996               0
   Decrease in due to local general
    partners and affiliates                       (63,281)              0
   Increase in investments available
    for sale                                  (13,397,588)     (6,450,000)
   Increase in deferred costs                  (1,133,549)     (1,045,031)
                                             ------------    ------------
   Net cash used in investing
    activities                                (30,308,925)     (7,570,790)
                                             ------------    ------------



           See Accompanying Notes to Consolidated Financial Statements

                                       5

<PAGE>
                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                (Decrease) Increase in Cash and Cash Equivalents
                                   (continued)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                            =============================
                                                                   Nine Months Ended
                                                                      December 31,
                                                            -----------------------------
                                                                 1996           1995
                                                            -----------------------------
<S>                                                         <C>             <C>          

Cash flows provided by financing activities:

   Proceeds from mortgage notes                                9,247,947               0
   Repayments of mortgage notes                                  (12,298)              0
   Proceeds from construction loans                              331,642               0
   Increase in offering costs                                 (2,035,085)     (1,867,379)
   (Decrease) increase in due to
    general partner and affiliates                              (273,330)        447,454
   Capital contributions received                             18,511,000      18,517,000
   Distributions paid                                                  0             (10)
   Increase in deferred costs                                   (198,862)              0
   Increase in capitalization of
    consolidated subsidiaries
     attributable to minority interest                           622,538               0
                                                            ------------    ------------
Net cash provided by financing
   activities                                                 26,193,552      17,097,065
                                                            ------------    ------------
Net (decrease) increase in cash and
   cash equivalents                                           (1,993,515)      9,546,089

Cash and cash equivalents at
   beginning of period                                         8,484,832           1,010
                                                            ------------    ------------
Cash and cash equivalents at
   end of period                                            $  6,491,317    $  9,547,099
                                                            ============    ============
Supplemental disclosures of noncash investing activities:
    Capitalization of deferred
      acquisition costs                                          804,197               0

</TABLE>


           See Accompanying Notes to Consolidated Financial Statements

                                       6

<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
                          Notes to Financial Statements
                                December 31, 1996
                                   (Unaudited)
Note 1 - General

Independence  Tax Credit  Plus L.P.  IV (a Delaware  limited  partnership)  (the
"Partnership")  was  organized on February 22, 1995,  and  commenced  the public
offering on July 6, 1995.  The  general  partner of the  Partnership  is Related
Independence   L.L.C.,  a  Delaware  limited  liability  company  (the  "General
Partner").

The  Partnership's   business  is  to  invest  in  other  partnerships   ("Local
Partnerships",  "subsidiaries"  or "subsidiary  partnerships")  owning apartment
complexes that are eligible for the low-income  housing tax credit ("Housing Tax
Credit") enacted in the Tax Reform Act of 1986, some of which complexes may also
be eligible for the historic  rehabilitation  tax credit ("Historic Tax Credit";
together with Housing Tax Credits, "Tax Credits").

As of December  31, 1996,  the  Partnership  has acquired a limited  partnership
interest  in  six  subsidiary  partnerships,   three  of  which  have  not  been
consolidated  and are shown on the  balance  sheet,  at cost,  as  property  and
equipment and anticipates acquiring a limited partnership interest in additional
subsidiary  partnerships  in the future.  Through the rights of the  Partnership
and/or an affiliate of the General  Partner,  which  affiliate has a contractual
obligation to act on behalf of the Partnership, to remove the general partner of
the subsidiary  local  partnerships  and to approve  certain major operating and
financial decisions, the Partnership has a controlling financial interest in the
subsidiary local partnerships.

The  Partnership  is  authorized  to  issue a total  of  100,000  ($100,000,000)
Beneficial Assignment  Certificates ("BACs") which have been registered with the
Securities and Exchange  Commission for sale to the public.  Each BAC represents
all of the economic and virtually all of the ownership rights  attributable to a
limited partnership interest.  The solicitation for the subscription of BACs was
terminated as of May 22, 1996 and the final closing occurred on August 15, 1996.
As of December  31, 1996 and March 31,  1996 the  Partnership  raised a total of
$45,844,000 and $27,333,000 representing 45,844 and 27,333 BACs, respectively.

The terms of the Amended and Restated  Agreement of Limited  Partnership  of the
Partnership  ("Partnership  Agreement")  provide,  among other things, that, net
profits or losses and distributions of cash flow are, in general,  allocated 99%
to the limited partners and BACs holders and 1% to the General Partner.

                                       7

<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
                          Notes to Financial Statements
                                December 31, 1996
                                   (Unaudited)

Note 1  General (continued)

The Partnership's  fiscal quarter ends December 31. All subsidiaries have fiscal
quarters ending  September 30. Accounts of the  subsidiaries  have been adjusted
for intercompany transactions from October 1 through December 31.

All intercompany accounts and transactions with the subsidiary partnerships have
been eliminated in consolidation.

Increases  (decreases)  in  the  capitalization  of  consolidated   subsidiaries
attributable  to  minority  interest  arises  from cash  contributions  and cash
distributions to the minority interest partners.

Losses  attributable to minority  interest which exceed the minority  interests'
investment  in a subsidiary  have been charged to the  Partnership.  Such losses
aggregated  $16 and $38 for the three and nine months  ended  December 31, 1996.
The  Partnership's  investment  in each  subsidiary  is equal to the  respective
subsidiary's  partners'  equity  less  minority  interest  capital,  if any.  In
consolidation,   all   subsidiary   partnership   losses  are  included  in  the
Partnership's  capital account except for losses allocated to minority  interest
capital.

In  March  1995,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting  Standards ("SFAS") No. 121,  "Accounting for
the Impairment of Long-Lived Asset and for Long-Lived Assets to Be Disposed Of".
Under SFAS No. 121, the Partnership is required to review  long-lived assets and
certain  identifiable  intangibles for impairment  whenever events or changes in
circumstances  indicate that the book value of an asset may not be  recoverable.
An impairment loss should be recognized  whenever the review  demonstrates  that
the book value of a  long-lived  asset is not  recoverable.  Effective  April 1,
1996,  the  Partnership  adopted  SFAS No.  121,  consistent  with the  required
adoption period.

Property and equipment are carried at the lower of depreciated cost or estimated
amounts  recoverable  through future operations and ultimate  disposition of the
property.  Cost includes the purchase price,  acquisition fees and expenses, and
any other costs incurred in acquiring the properties. As required by SFAS 121, a
provision for loss on impairment  of assets is recorded when  estimated  amounts
recoverable   through  future   operations  and  sale  of  the  property  on  an
undiscounted  basis are  below  depreciated  cost.  However,  depreciated  cost,
adjusted  for such  reductions  in value,  if any,  may be greater than the fair
value. Property investments

                                       8

<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
                          Notes to Financial Statements
                                December 31, 1996
                                   (Unaudited)
Note 1 - General (continued)

themselves are reduced to estimated fair value  (generally using discounted cash
flows) when the property is considered to be impaired and the  depreciated  cost
exceeds estimated fair value. Through December 31, 1996, the Partnership has not
recorded  any  provisions  for loss on  impairment  of  assets or  reduction  to
estimated fair value.

Certain   information  and  note  disclosure   normally  included  in  financial
statements prepared in accordance with generally accepted accounting  principles
have been omitted or condensed.  These condensed financial  statements should be
read in conjunction with the financial  statements and notes thereto included in
the Partnership's  Annual Report on Form 10-K/A-1 for the period ended March 31,
1996.

The books and records of the  Partnership are maintained on the accrual basis of
accounting in accordance with generally accepted accounting  principles.  In the
opinion of the General Partner of the Partnership,  the  accompanying  unaudited
financial  statements  contain  all  adjustments   (consisting  only  of  normal
recurring adjustments) necessary to present fairly the financial position of the
Partnership as of December 31, 1996, the results of operations for the three and
nine months ended  December 31, 1996 and 1995, and the changes in cash flows for
the nine months ended December 31, 1996 and 1995. However, the operating results
for the nine months ended December 31, 1996 may not be indicative of the results
for the year.

Note 2 - Related Party Transactions

An affiliate  of the General  Partner has a .01%  interest as a special  limited
partner, in each of the Local Partnerships.

The General Partner and its affiliates perform services for the Partnership. The
costs incurred are as follows:

A)  Acquisition Fees and Expenses
The General Partner is entitled to a consulting and monitoring fee equal to 6.0%
of the gross  proceeds of the  offering  paid upon  investor  closings,  for its
services in  connection  with  assisting  the Local  Partnerships  in  acquiring
apartment complexes and supervising the construction of the complexes. Such fees
will be  capitalized  as a cost of the  investments  upon closing of  subsidiary
partnership acquisitions. As of December 31, 1996 and March 31, 1996, $2,750,640
and $1,639,980, respectively, of such costs have

                                       9

<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
                          Notes to Financial Statements
                                December 31, 1996
                                   (Unaudited)

Note 2- Related Party Transactions (continued) 

been incurred, of which $874,501 and $70,304 have been capitalized.

B)  Public Offering Costs
Costs  incurred to organize the  Partnership  and certain  costs of offering the
BACs including but not limited to legal,  accounting and  registration  fees are
considered   organization   and  offering   expenses.   These  costs  have  been
capitalized. Related Equities Corporation (the "Dealer Manger") is entitled to a
non-accountable  organization  and offering  expense  allowance equal to 2.5% of
Gross  Proceeds,  in  consideration  of  which it is  obligated  to pay all such
expenses up to the amount of such allowance. The Partnership is obligated to pay
all such expenses that are in excess of 2.5% of Gross Proceeds and up to 3.5% of
Gross  Proceeds,  and the Dealer Manager is responsible for all such expenses in
excess of 3.5% of Gross  Proceeds.  As of December  31, 1996 and March 31, 1996,
offering costs totalled  $1,554,540 and $906,655,  respectively,  and along with
selling  commissions  (see Note 2C) are charged  directly  to limited  partners'
capital.

C)  Selling Commissions and Fees
The  Partnership  has paid up to 7.5% of the  aggregate  purchase  price of BACs
sold, without regard to quantity discounts, to Related Equities Corporation.  To
the extent  other  broker/dealers  sold the  interests  such  amounts were fully
reallowed  to the other  broker/dealers.  As of December  31, 1996 and March 31,
1996, $3,437,175 and $2,049,975,  respectively,  was paid or incurred to Related
Equities   Corporation   and  then  fully   reallowed   to  other   unaffiliated
broker/dealers.

D)  Other Related Party Expenses
The costs  incurred  to  related  parties  for the three and nine  months  ended
December 31, 1996 and 1995 were as follows:

                       Three Months Ended     Nine Months Ended
                          December 31,           December 31,
                       ------------------    ------------------
                         1996        1995      1996       1995
                       ------------------    ------------------
Partnership
 management
 fees (a)              $ 86,155   $  9,548   $123,052   $ 9,548
Expense
 reimburse-
 ment (b)                21,057      3,647     98,248     8,659
Property manage-
 ment fees (c)           17,468          0     27,680         0
Local administrative
 fee (d)                  1,250          0      3,750         0
                       --------   --------   --------   -------
                       $125,930   $ 13,195   $252,730   $18,207
                       ========   ========   ========   =======


                                       10

<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
                          Notes to Financial Statements
                                December 31, 1996
                                   (Unaudited)

Note 2 - Related Party Transactions (continued)

(a) The General  Partner is entitled to receive a  partnership  management  fee,
after payment of all Partnership expenses,  which together with the annual local
administrative  fees  will not  exceed a maximum  of 0.5% per annum of  invested
assets (as defined in the Partnership Agreement),  for administering the affairs
of  the  Partnership.  Subject  to the  foregoing  limitation,  the  partnership
management fee will be determined by the General  Partner in its sole discretion
based  upon its  review of the  Partnership's  investments.  Unpaid  partnership
management  fees for any  year  will be  accrued  without  interest  and will be
payable from working capital  reserves or to the extent of available funds after
the  Partnership  has made  distributions  to the  limited  partners  of sale or
refinancing  proceeds equal to their original capital  contributions  plus a 10%
priority return thereon (to the extent not theretofore paid out of cash flow).

(b) The Partnership reimburses the General Partner and its affiliates for actual
Partnership   operating  expenses  incurred  by  the  General  Partner  and  its
affiliates on the  Partnership's  behalf.  The amount of reimbursement  from the
Partnership is limited by the provisions of the Partnership  Agreement.  Another
affiliate of the General Partner  performs asset monitoring for the Partnership.
These  service   include  site  visits  and   evaluations   of  the   subsidiary
partnerships' performance.

(c) Property management fees incurred by Local Partnerships  amounted to $17,468
and $27,680 for the three and nine months ended  December 31, 1996, all of which
was incurred to affiliates of the subsidiary partnerships' general partner.

(d)  Independence  SLP IV L.P.,  a special  limited  partner  of the  subsidiary
partnerships is entitled to receive a local  administrative  fee of up to $5,000
per year.


                                       11

<PAGE>

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

Liquidity and Capital Resources

The Partnership's primary source of funds is the proceeds of its offering. Other
sources of funds include interest earned on such proceeds which will be invested
in tax-exempt money market instruments pending acquisition of Local Partnerships
and a working  capital  reserve in the  original  amount of 2.5% of gross equity
raised.  The  solicitation for the subscription of BACs was terminated as of May
22, 1996 and the final closing  occurred on August 15, 1996. The Partnership has
received  $45,844,000 in gross proceeds for BACs pursuant to a public  offering,
resulting in net proceeds available for investment of approximately  $36,446,000
after  volume  discounts,  payment of sales  commissions,  acquisition  fees and
expenses,  organization  and offering  expenses and  establishment  of a working
capital reserve.

As of December 31, 1996, the Partnership has invested approximately  $14,674,000
(including   approximately  $1,052,000  classified  as  a  loan  repayable  from
sale/refinancing  proceeds in accordance with the Contribution Agreement and not
including  acquisition  fees of  approximately  $875,000) of net proceeds in six
Local Partnerships of which approximately  $10,761,000 remains to be paid to the
Local Partnerships (including  approximately $3,458,000 being held in escrow) as
certain  benchmarks,  such as  occupancy  level,  must be attained  prior to the
release of the funds.  Five of the Local  Partnerships  were acquired during the
nine  months  ended  December  31,  1996  for  a  combined   purchase  price  of
approximately $13,743,000 (including approximately $150,000 classified as a loan
repayable from  sale/refinancing  proceeds in accordance  with the  Contribution
Agreement and not including acquisition fees of approximately $804,000) of which
approximately  $9,997,000 remains to be paid (including approximately $2,694,000
being held in escrow). The Partnership has approximately  $21,772,000  available
for  future  investments.  During  the nine  months  ended  December  31,  1996,
approximately  $3,913,000  was paid to Local  Partnerships,  including  purchase
price adjustments (of which approximately $168,000 was released from escrow). An
additional  $3,625,000 was placed into escrow for purchase price payments during
the nine months ended  December 31,  1996.  In addition,  during the nine months
ended  December 31, 1996,  $3,000,000  of cash which was held in escrow at March
31, 1996 for the potential acquisition of a subsidiary  partnership was returned
to the Partnership. The Partnership will be acquiring additional properties, and
the  Partnership  may be required to fund potential  purchase price  adjustments
based on tax credit adjustor clauses.

                                       12

<PAGE>

There have been no  purchase  price  adjustments  during the nine  months  ended
December 31, 1996.

During  the  nine  months  ended  December  31,  1996,  the  Partnership  raised
$18,511,000 in capital  contributions,  of which  $14,716,000  was available for
investment  in Local  Partnerships.  These funds were used to acquire five Local
Partnerships  for  a  combined  purchase  price  of  approximately   $13,743,000
(including   approximately   $150,000   classified  as  a  loan  repayable  from
sale/refinancing  proceeds in accordance with the Contribution Agreement and not
including  acquisition  fees of approximately  $804,000) of which  approximately
$9,997,000 (including  approximately $2,694,000 being held in escrow) remains to
be paid. These activities,  together with cash provided by operating  activities
($2,122,000),  an increase in accounts payable and other liabilities relating to
investing activities  ($681,000),  an increase in capitalization of consolidated
subsidiaries  attributable to minority interest ($623,000) and net proceeds from
mortgage and construction  loans  ($9,567,000)  were exceeded by acquisitions of
property and equipment  ($12,801,000),  an increase in  construction in progress
($3,136,000),  an increase in investments  available for sale ($13,398,000),  an
increase in deferred costs  ($1,332,000),  an increase in cash held for purchase
price  payments  ($458,000),  an  increase in offering  costs  ($2,035,000),  an
increase in due to local general  partners and affiliates  relating to investing
activities  ($63,000)  and a decrease in due to general  partner and  affiliates
relating to  financing  activities  ($273,000)  resulting  in a net  decrease of
$1,994,000 in Partnership cash since March 31, 1996. Included in the adjustments
to reconcile  the net income to cash flow from  operations is  depreciation  and
amortization in the amount of approximately $200,000.

A working capital reserve of approximately $1,146,000 (2.5% of gross equity) has
been established from the  Partnership's  funds available for investment,  which
includes amounts which may be required for potential  purchase price adjustments
based on tax credit  adjustor  clauses.  At December 31, 1996 and March 31, 1996
none of this reserve was used. The General Partners believe that these reserves,
plus  any  cash  distributions   received  from  the  operations  of  the  Local
Partnerships will be sufficient to fund the Partnership's ongoing operations for
the  foreseeable  future.  As of  December  31,  1996,  there  have been no cash
distributions  from the Local  Partnerships.  Management  anticipates  receiving
distributions  in the  future,  although  not to a level  sufficient  to  permit
providing cash distributions to the BACs holders.

The property owned by one of the Local Partnerships in which the Partnership has
invested has been in operations and has maintained stable occupancy since 1990.

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<PAGE>

The  Partnership  has negotiated  development  deficit  guarantees with the five
other Local  Partnerships in which it has invested.  The Local General  Partners
and/or their  affiliates have agreed to fund  development  deficits  through the
breakeven dates of each of the five Local Partnerships.

The Partnership has negotiated  Operating  Deficit Guaranty  Agreements with all
Local  Partnerships  by which the  general  partners  of the Local  Partnerships
and/or their  affiliates have agreed to fund operating  deficits for a specified
period of time. The terms of the Operating Deficit Guaranty  Agreements vary for
each of these Local Partnerships, with maximum dollar amounts to be funded for a
specified  period of time,  generally three years,  commencing on the break-even
date.  The  gross  amount  of  the  Operating  Deficit   Guarantees   aggregates
approximately $1,008,000 as of December 31, 1996.

The  Partnership has also negotiated  rent-up  guaranty  agreements in which the
Local  General  Partners  agreed to pay a  liquidated  damage  if  predetermined
occupancy rates are not achieved.

The development  deficit,  operating deficit and the rent-up guaranty agreements
were negotiated to protect the Partnership's  interest in the Local Partnerships
and to provide incentive to the Local General Partners to generate positive cash
flow.

Management is not aware of any trends or events,  commitments or  uncertainties,
which  have not  otherwise  been  disclosed  that  will or are  likely to impact
liquidity in a material way. Manage-

                                       14

<PAGE>

ment believes the only impact would be from laws that have not yet been adopted.
The  partnership has invested or committed for investment  approximately  40% of
the net proceeds  available for investment in six Local  Partnerships,  of which
two have  commenced to generate tax credits which have been allocated to the BAC
holders and four are currently  anticipated  to commence to generate tax credits
in 1996 which will be  allocable to the BAC holders.  The  Partnership  does not
anticipate  that it will  acquire  prior  to the  end of 1996  interests  in any
additional Local  Partnerships  which will be qualified to recognize tax credits
in 1996. As a result,  the Partnership  does not anticipate that it will be able
to allocate to its BAC holders in 1996 the full amount of tax credits  stated in
its  investment  objectives  in the  Prospectus  with respect to the offering of
BACs. Additionally,  due to recent increases in market demand for investments in
properties that are eligible to receive tax credits and limitations on the types
of investments  which may be obtained by the  Partnership the purchase price for
interests  in  Local  Partnerships  which  are  qualified  for  purchase  by the
Partnership have increased.  As a result of these changes in market,  Management
does not  believe  that the  Partnership  will be able to  invest  the  proceeds
available  for  investment  in a manner  which will  enable the  Partnership  to
achieve tax  credits in the range of  $140-150  for each $1,000 BAC each year in
which the  Partnership  is receiving its full  entitlement  of tax credits.  The
portfolio  will be  diversified  by the  location of the  properties  around the
United  States so that if one area of the country is  experiencing  downturns in
the economy,  the remaining  properties  in the  portfolio  may be  experiencing
upswings.  However,  the geographic  diversions of the portfolio may not protect
against a general  downturn in the  national  economy.  The tax credits  will be
attached to the  projects  for a period of ten years,  and will be  transferable
with the  properties  during the remainder of the ten year period.  If trends in
the real estate  market  warranted  the sale of a property,  the  remaining  tax
credits would transfer to the new owner; thereby adding significant value to the
property  on the  market,  which are not  included  in the  financial  statement
carrying amount.

Results of Operations

In  March  1995,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting  Standards ("SFAS") No. 121,  "Accounting for
the Impairment of Long-Lived Asset and for Long-Lived Assets to Be Disposed Of".
Under SFAS No. 121, the Partnership is required to review  long-lived assets and
certain  identifiable  intangibles for impairment  whenever events or changes in
circumstances  indicate that the book value of an asset may not be  recoverable.
An impairment loss should be recognized  whenever the review  demonstrates  that
the book value of a long-lived

                                       15

<PAGE>

asset is not recoverable.  Effective April 1, 1996, the Partnership adopted SFAS
No. 121, consistent with the required adoption period.

Property and equipment are carried at the lower of depreciated cost or estimated
amounts  recoverable  through future operations and ultimate  disposition of the
property.  Cost includes the purchase price,  acquisition fees and expenses, and
any other costs incurred in acquiring the properties. As required by SFAS 121, a
provision for loss on impairment  of assets is recorded when  estimated  amounts
recoverable   through  future   operations  and  sale  of  the  property  on  an
undiscounted  basis are  below  depreciated  cost.  However,  depreciated  cost,
adjusted  for such  reductions  in value,  if any,  may be greater than the fair
value.  Property  investments  themselves  are reduced to  estimated  fair value
(generally  using  discounted  cash flows) when the property is considered to be
impaired and the depreciated cost exceeds estimated fair value. Through December
31, 1996, the Partnership has not recorded any provisions for loss on impairment
of assets or reduction to estimated fair value.

As of December 31, 1996 and 1995,  the  Partnership  had acquired an interest in
six and one  Local  Partnerships,  respectively,  three  and zero of which  were
consolidated  at December 31, 1996. The  Partnership  intends to utilize the net
proceeds of the offering to acquire additional interests in Local Partnerships.

The  Partnership's  results of  operations  for the three and nine months  ended
December 31, 1996 and 1995 consisted primarily of (1) approximately $304,000 and
$69,000, and $770,000 and $69,000,  respectively,  of tax-exempt interest income
earned on funds not currently invested in Local Partnerships and (2) the results
of  the  Partnership's   investment  in  three  and  zero   consolidated   Local
Partnerships, respectively.

For the three and nine months ended  December 31, 1996 as compared to 1995,  all
categories of income and expenses  increased  and the results of operations  are
not comparable  due to the continued  acquisition,  construction  and rent up of
properties,  and are not reflective of future  operations of the Partnership due
to uncompleted  property  construction,  rent up of properties and the continued
utilization of the net proceeds of the Offering to invest in Local Partnerships.
In addition, interest income will decrease in future periods since a substantial
portion  of  the  proceeds   from  the  Offering   will  be  invested  in  Local
Partnerships.

For the three months ended  December 31, 1996,  one of the  Partnership's  three
consolidated properties had completed construction

                                       16

<PAGE>

in a previous  fiscal quarter and was in various stages of rent up. In addition,
one of the  properties had completed  construction  and was fully rented up in a
previous fiscal quarter. For the nine months ended December 31, 1996, one of the
Partnership's three consolidated  properties  completed  construction and was in
various  stages of rent up. In addition,  one of the  properties  had  completed
construction  in a previous fiscal year and was in various stages of rent up for
the nine months.  As of the end of the three and nine months ended  December 31,
1996, one of the  Partnership's  three  consolidated  properties was still under
construction and two of the properties had  construction  loans with commitments
for permanent financing as of December 31, 1996.














                                       17


<PAGE>

                           PART II. OTHER INFORMATION


Item 1. Legal Proceedings - None

Item 2. Changes in Securities - None

Item 3. Defaults Upon Senior Securities - None

Item 4. Submission of Matters to a Vote of Security Holders - None

Item 5. Other Information - None

Item 6. Exhibits and Reports on Form 8-K

     (a) Exhibits

          (4) Form of Amended and Restated  Agreement of Limited  Partnership of
the Partnership (attached to the Prospectus as Exhibit A)*

          (10A)Form of  Subscription  Agreement  (attached to the  Prospectus as
Exhibit B)*

          (10B)Form of Escrow  Agreement  between the Partnership and the Escrow
Agent**

          (10C)Form  of  Purchase  and  Sales   Agreement   pertaining   to  the
Partnership's acquisition of Local Partnership Interests**

          (10D)Form of Amended and Restated Agreement of Limited  Partnership of
Local Partnerships**

          (27) Financial Data Schedule (filed herewith)

          *  Incorporated  herein by reference to the final  Prospectus as filed
pursuant to Rule 424 under the Securities Act of 1933.

          ** Filed as an exhibit to the  Registration  Statement on Form S-11 of
the  Partnership  (File No.  33-89968)  and  incorporated  herein  by  reference
thereto.

     (b)  Reports on Form 8-K - No  reports  on Form 8-K were  filed  during the
quarter.

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<PAGE>

                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                  (Registrant)


                    By:  RELATED INDEPENDENCE L.L.C.,
                         a General Partner

Date:  February 13, 1997

                    By:  /s/ Alan P. Hirmes
                         -----------------------------
                         Alan P. Hirmes,
                         Senior Vice President
                         (principal financial officer)

Date:  February 13, 1997

                    By:  /s/ Richard A. Palermo
                         -----------------------------
                         Richard A. Palermo,
                         Treasurer
                         (principal accounting officer)



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