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                 September 30, 1998
                               -------------------------------------------------

                                       OR

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

For the transition period from                         to
                               -----------------------    ----------------------

Commission file number                              33-80849
                       ---------------------------------------------------------

                      Capital Preferred Yield Fund-IV, L.P.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           Delaware                                      84-1331690
   -----------------------                  ------------------------------------
   (State of organization)                  (I.R.S. Employer Identification No.)

 7175 West Jefferson Avenue, Suite 4000
           Lakewood, Colorado                              80235        
----------------------------------------                 ----------
(Address of principal executive offices)                 (Zip Code)


        Registrant's telephone number, including area code (303) 980-1000
                                                           --------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by  Sections  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      .
                                       -----    -----

                        Exhibit Index Appears on Page 17

                               Page 1 of 18 Pages



<PAGE>



                      CAPITAL PREFERRED YIELD FUND-IV, L.P.

                          Quarterly Report on Form 10-Q
                              For the Quarter Ended
                               September 30, 1998


                                Table of Contents
                                -----------------



PART I.       FINANCIAL INFORMATION                                       PAGE
                                                                          ----
     Item 1.  Financial Statements (Unaudited)

              Balance Sheets - September 30, 1998 and December 31, 1997     3

              Statements of Income - Three and Nine Months Ended
              September 30, 1998 and 1997                                   4

              Statement of Partners' Capital - Three and Nine Months
              Ended September 30, 1998 and 1997                             5

              Statements of Cash Flows - Nine Months Ended
              September 30, 1998 and 1997                                   6

              Notes to Financial Statements                               7 - 10

     Item 2.  Management's Discussion and Analysis of Financial
              Condition and Results of Operations                        11 - 15


PART II.      OTHER INFORMATION

     Item 1.  Legal Proceedings                                             16

     Item 6.  Exhibits and Reports on Form 8-K                              16

              Exhibit Index                                                 17

              Signature                                                     18

                                        2

<PAGE>



                      CAPITAL PREFERRED YIELD FUND-IV, L.P.

                                 BALANCE SHEETS



                                     ASSETS


                                                      September 30, December 31,
                                                         1998            1997
                                                      -----------   ------------
                                                      (Unaudited)

Cash and cash equivalents                             $ 1,562,460   $ 4,676,747
Accounts receivable                                       571,122       383,407
Receivable from related party                                  45        10,000
Equipment held for sale or re-lease                       270,124             -
Net investment in direct finance leases                 4,297,780     4,602,977
Leased equipment, net                                  50,364,449    46,488,309
                                                      -----------   -----------

Total assets                                          $57,065,980   $56,161,440
                                                      ===========   ===========


                        LIABILITIES AND PARTNERS' CAPITAL

Liabilities:
    Accounts payable and accrued liabilities          $   631,759   $   411,814
    Payables to affiliates                                 44,584        58,722
    Rents received in advance                             969,505       817,900
    Distributions payable to partners                     497,346       433,396
    Discounted lease rentals                           17,325,719    17,633,047
                                                      -----------   -----------

Total liabilities                                      19,468,913    19,354,879
                                                      -----------   -----------

Partners' capital:
    General partner                                             -             -
    Limited partners:
          Class A                                      37,150,531    36,374,010
          Class B                                         446,536       432,551
                                                      -----------   -----------

Total partners' capital                                37,597,067    36,806,561
                                                      -----------   -----------

Total liabilities and partners' capital               $57,065,980   $56,161,440
                                                      ===========   ===========






   The accompanying notes are an integral part of these financial statements.

                                        3

<PAGE>



                      CAPITAL PREFERRED YIELD FUND-IV, L.P.

                              STATEMENTS OF INCOME
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                         Three Months Ended         Nine Months Ended
                                                            September 30,             September 30,           
                                                     -------------------------   -------------------------
                                                          1998         1997         1998           1997      
                                                     -----------   -----------   -----------   -----------
<S>                                                 <C>           <C>           <C>           <C>        
REVENUE:
  Operating lease rentals                            $ 4,763,322   $ 3,287,838   $13,934,122   $ 7,636,203
  Direct finance lease income                             90,779        67,999       226,112       168,281
  Equipment sales margin                                   2,840             -        82,825             -
  Interest income                                         11,546        90,231       102,784       186,038
                                                     -----------   -----------   -----------   -----------
     Total revenue                                     4,868,487     3,446,068    14,345,843     7,990,522
                                                     -----------   -----------   -----------   -----------

EXPENSES:
  Depreciation                                         3,927,320     2,666,924    11,352,330     6,164,477
  Direct services from general partner                    38,574        22,646       112,201        64,056
  Management fees to general partner                     115,718        74,992       313,357       165,690
  General and administrative                              47,174        28,373       137,539       100,998
  Provision for losses                                         -             -        25,000             -
  Interest on discounted lease rentals                   346,282       393,580     1,054,688       902,429
                                                     -----------   -----------   -----------   -----------
    Total expenses                                     4,475,068     3,186,515    12,995,115     7,397,650
                                                     -----------   -----------   -----------   -----------

NET INCOME                                           $   393,419   $   259,553   $ 1,350,728   $   592,872
                                                     ===========   ===========   ===========   ===========

NET INCOME ALLOCATED:
  To the general partner                             $    13,310   $    19,375   $    47,155   $    53,848
  To the Class A limited partners                        376,266       237,740     1,290,388       533,542
  To the Class B limited partner                           3,843         2,438        13,185         5,482
                                                     -----------   -----------   -----------   -----------
                                                     $   393,419   $   259,553   $ 1,350,728   $   592,872
                                                     ===========   ===========   ===========   ===========

Net income per weighted average Class A
  limited partner unit outstanding                   $      0.76   $       .68   $     2.62    $      1.95
                                                     ===========   ===========   ===========   ===========

Weighted average Class A limited partner
   units outstanding                                     496,957       348,370       493,339       272,953
                                                     ===========   ===========   ===========   ===========

</TABLE>









   The accompanying notes are an integral part of these financial statements.

                                        4

<PAGE>



                      CAPITAL PREFERRED YIELD FUND-IV, L.P.

                         STATEMENT OF PARTNERS' CAPITAL

For the Three Months Ended September 30, 1998 and 1997 (Unaudited)

<TABLE>
<CAPTION>

                                                       Class A
                                                       Limited       Class A        Class B
                                           General     Partners      Limited        Limited
                                           Partner      Units        Partners       Partner        Total
                                           --------    --------    ------------    ---------    ------------

<S>                                       <C>          <C>        <C>             <C>          <C>         
Partners' capital, June 30, 1997           $      -     311,173    $ 25,367,938    $ 296,687    $ 25,664,625

Capital contributions                             -      73,204       7,388,361       70,000       7,458,361
Volume discount                                   -           -          (6,000)           -          (6,000)
Commissions and offering costs on
  sale of Class A limited partner units     (10,501)          -      (1,033,558)           -      (1,044,059)
Redemptions                                       -        (550)        (51,628)           -         (51,628)
Net income                                   19,375           -         237,740        2,438         259,553
Distributions declared to partners           (8,874)          -        (914,074)      (9,363)       (932,311)
                                           --------    --------    ------------    ---------    ------------
Partners' capital, September 30, 1997      $      -     383,827    $ 30,988,779    $ 359,762    $ 31,348,541
                                           ========    ========    ============    =========    ============

Partners' capital, June 30, 1998           $      -     497,204    $ 38,110,797    $ 455,818    $ 38,566,615

Redemptions                                       -        (360)        (32,002)           -         (32,002)
Net income                                   13,310           -         376,266        3,843         393,419
Distributions declared to partners          (13,310)          -      (1,304,530)     (13,125)     (1,330,965)
                                           --------    --------    ------------    ---------    ------------
Partners' capital, September 30, 1998      $      -     496,844    $ 37,150,531    $ 446,536    $ 37,597,067
                                           ========    ========    ============    =========    ============

For the Nine Months Ended September 30, 1998 and 1997 (Unaudited)

Partners' capital, January 1, 1997         $      -     154,503    $ 12,878,374    $ 146,243    $ 13,024,617

Capital contributions                             -     229,954      23,058,428      230,000      23,288,428
Volume discount                                   -           -          (6,000)           -          (6,000)
Commissions and offering costs on
  sale of Class A limited partner units     (33,033)          -      (3,264,169)           -      (3,297,202)
Redemptions                                       -        (630)        (58,902)           -         (58,902)
Net income                                   53,848           -         533,542        5,482         592,872
Distributions declared to partners          (20,815)          -      (2,152,494)     (21,963)     (2,195,272)
                                           --------    --------    ------------    ---------    ------------
Partners' capital, September 30, 1997      $      -     383,827    $ 30,988,779    $ 359,762    $ 31,348,541
                                           ========    ========    ============    =========    ============

Partners' capital, January 1, 1998         $      -     455,953    $ 36,374,010    $ 432,551    $ 36,806,561

Capital contributions                             -      43,367       4,336,754       40,000       4,376,754
Volume discount                                   -           -         (68,895)           -         (68,895)
Commissions and offering costs on
  sale of Class A limited partner units      (7,517)          -        (675,261)           -        (682,778)
Redemptions                                       -      (2,476)       (222,436)           -        (222,436)
Net income                                   47,155           -       1,290,388       13,185       1,350,728
Distributions declared to partners          (39,638)          -      (3,884,029)     (39,200)     (3,962,867)
                                           --------    --------    ------------    ---------    ------------
Partners' capital, September 30, 1998      $      -     496,844    $ 37,150,531    $ 446,536    $ 37,597,067
                                           ========    ========    ============    =========    ============

</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                        5

<PAGE>



                      CAPITAL PREFERRED YIELD FUND-IV, L.P.

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                          Nine Months Ended
                                                                  -------------------------------
                                                                  September 30,     September 30,
                                                                       1998              1997        
                                                                  -------------     -------------

<S>                                                              <C>               <C>          
NET CASH PROVIDED BY OPERATING ACTIVITIES                         $  14,383,574     $   7,378,591
                                                                  -------------     -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of equipment on operating leases from affiliate         (13,287,282)      (19,513,857)
  Investment in direct finance leases, acquired from affiliate         (952,964)       (1,961,774)
                                                                  -------------     -------------
Net cash used in investing activities                               (14,240,246)      (21,475,631)
                                                                  -------------     -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from Class A capital contributions                         4,336,754        23,058,428
  Proceeds from Class B capital contributions                            40,000           230,000
  Proceeds from discounted lease rentals                              3,994,817         3,695,735
  Principal payments on discounted lease rentals                     (6,756,160)       (3,951,135)
  Redemptions of Class A limited partner units                         (222,436)          (58,902)
  Sales commissions paid to affiliate in connection
    with the sale of Class A limited partner units                     (434,326)       (2,305,844)
  Non-accountable organization and offering expenses
    reimbursed to the general partner in connection
    with the sale of Class A limited partner units                     (317,347)       (1,010,258)
  Distributions to partners                                          (3,898,917)       (1,961,455)
                                                                  -------------     -------------

Net cash (used in) provided by financing activities                  (3,257,615)       17,696,569
                                                                  -------------     -------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                 (3,114,287)        3,599,529

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                      4,676,747         3,286,072
                                                                  -------------     -------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                        $   1,562,460     $   6,885,601
                                                                  =============     =============

Supplemental disclosure of cash flow information - Interest paid
  on discounted lease rentals                                     $   1,054,688     $     902,429
Supplemental disclosure of noncash investing and financing
  activities - Discounted lease rentals assumed in equipment
  acquisitions                                                        2,454,015        16,946,684

</TABLE>




   The accompanying notes are an integral part of these financial statements.

                                        6

<PAGE>



                      CAPITAL PREFERRED YIELD FUND-IV, L.P.

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

1.   Basis of Presentation
     ---------------------

     The  accompanying  unaudited  financial  statements  have been  prepared in
     accordance  with  generally  accepted  accounting  principles  for  interim
     financial  information and the  instructions to Form 10-Q and Rule 10-01 of
     Regulation S-X. Accordingly, they do not include all of the information and
     disclosures required by generally accepted accounting principles for annual
     financial   statements.   In  the  opinion  of  the  general  partner,  all
     adjustments   (consisting  of  normal  recurring  adjustments)   considered
     necessary for a fair presentation have been included.  The balance sheet at
     December  31,  1997 was  derived  from  the  audited  financial  statements
     included in the  Partnership's  1997 Form 10-K.  For  further  information,
     refer to the financial statements of Capital Preferred Yield Fund-IV,  L.P.
     (the "Partnership"),  and the related notes,  included in the Partnership's
     Annual Report on Form 10-K for the year ended  December 31, 1997 (the "1997
     Form 10-K"), previously filed with the Securities and Exchange Commission.

     RECENTLY ISSUED FINANCIAL ACCOUNTING STANDARDS

     In June 1997, the Financial  Accounting Standards Board issued Statement of
     Financial  Accounting  Standards No. 130,  Reporting  Comprehensive  Income
     ("Statement  130"),  which  requires  comprehensive  income to be displayed
     prominently  within  the  financial  statements.  Comprehensive  income  is
     defined  as  all  recognized   changes  in  equity  during  a  period  from
     transactions and other events and circumstances except those resulting from
     investments  by owners and  distributions  to owners.  Net income and items
     that  previously  have been  recorded  directly  in equity are  included in
     comprehensive  income.   Statement  130  affects  only  the  reporting  and
     disclosure  of  comprehensive  income  but does not affect  recognition  or
     measurement  of  income.  Statement  130  is  effective  for  fiscal  years
     beginning after December 15, 1997, with earlier application permitted.  The
     Partnership  adopted  Statement  130 in the  first  quarter  of  1998.  The
     adoption did not have an impact on its financial reporting.

     In June 1997, the Financial  Accounting Standards Board issued Statement of
     Financial  Accounting  Standards No. 131,  Disclosures about Segments of an
     Enterprise  and  Related  Information   ("Statement  131").  Statement  131
     provides  guidance for reporting  information  about operating  segments in
     annual financial  statements and requires reporting of selected information
     about operating  segments in interim financial reports of public companies.
     An operating  segment is defined as a component of a business  that engages
     in business activities from which it may earn revenue and incur expenses, a
     component whose operating  results are regularly  reviewed by the company's
     chief  operating  decision  maker,  and  a  component  for  which  discrete
     financial information is available.  Statement 131 establishes quantitative
     thresholds for determining  operating segments of a company.  Statement 131
     is  effective  for fiscal years  beginning  after  December 15, 1997,  with
     earlier application permitted. The Partnership adopted Statement 131 in the
     first quarter of 1998. The adoption did not have an impact on its financial
     reporting.

2.   Transactions With the General Partner and Affiliates
     ----------------------------------------------------

     SALES COMMISSIONS AND OFFERING COSTS

     Under the terms of the Partnership  Agreement,  an affiliate of the general
     partner is entitled to receive sales commissions and wholesaling fees equal
     to 10% of the Class A limited partners' capital contributions,  up to 9% of
     which is paid to participating broker-dealers. During the nine months ended
     September 30, 1998 the Partnership  incurred sales commissions of $433,676,
     including $362,775 that were paid to participating broker-dealers.

                                        7

<PAGE>


                      CAPITAL PREFERRED YIELD FUND-IV, L.P.

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)


2.   Transactions With the General Partner and Affiliates, continued
     ----------------------------------------------------

     SALES COMMISSIONS AND OFFERING COSTS, continued

     As provided  in the  Partnership  Agreement,  the  general  partner  earned
     $249,101 as  reimbursement  for  offering  costs  incurred  during the nine
     months ended September 30, 1998 in connection with the  organization of the
     Partnership and the offering of Class A limited partner units, all of which
     were paid in the nine months ended September 30, 1998.

     As  provided  in the  Prospectus,  a volume  discount  equal to 1.0% of the
     purchase  price per unit for all  purchases of $500,000 or more was granted
     during the nine months ended September 30, 1998 totaling $68,895.


     DIRECT SERVICES FROM GENERAL PARTNER

     The  General  Partner  and  an  affiliate  provide   accounting,   investor
     relations,  billing, collecting, asset management, and other administrative
     services to the Partnership. The Partnership reimburses the General Partner
     for these services  performed on its behalf as permitted under the terms of
     the Partnership  Agreement.  As of September 30, 1998, $12,000 was included
     in payables to affiliates.


     MANAGEMENT FEES PAID TO GENERAL PARTNER

     In accordance with the Partnership  Agreement,  the General Partner earns a
     management  fee  in  connection  with  its  management  of  the  equipment,
     calculated as a percentage of the monthly gross rentals received,  and paid
     monthly in arrears.  As of  September  30,  1998,  $32,584 was  included in
     payables to affiliates.


     GENERAL AND ADMINISTRATIVE EXPENSES

     The General  Partner and an affiliate are reimbursed for the actual cost of
     administrative  expenses paid on behalf of Partnership per the terms of the
     Partnership Agreement.


     RECEIVABLE FROM RELATED PARTY

     The General  Partner  collects and applies rental  payments to the lessee's
     account with the  Partnership,  for those lessees who remit directly to the
     General   Partner.   The  rental  payments  are  then  transferred  to  the
     Partnership,  eliminating the receivable from related party balance. At the
     end of September  1998,  $45 in rents were  applied by the General  Partner
     that were transferred to the Partnership in October 1998.


                                        8

<PAGE>


                      CAPITAL PREFERRED YIELD FUND-IV, L.P.

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)


2.   Transactions With the General Partner and Affiliates, continued
     ----------------------------------------------------

     EQUIPMENT PURCHASES

     During the nine months ended September 30, 1998, the  Partnership  acquired
     the equipment described below from Capital Associates International, Inc.:

<TABLE>
<CAPTION>

                                                                                                                        Total
                                                                                                     Acquisition       Equipment
                                                                                        Cost of        Fees and        Purchase
              Lessee                              Equipment Description                Equipment    Reimbursements      Price     
      ----------------------------        ------------------------------------------ ------------   --------------   ------------

     <S>                                 <C>                                        <C>            <C>              <C>         
      Advanced Micro                      Wafer fabrication equipment                $  2,048,294   $   70,973       $  2,119,267
      Alliant Techsystems, Inc.           Lathes                                          143,867        4,985            148,852
      Alliant Techsystems, Inc.           PBX system                                      711,132       24,641            735,773
      Alliant Techsystems, Inc.           Sweeper/scrubber                                 20,818          721             21,539
      Ball Corporation                    Can inspection system                           113,570        3,935            117,505
      Brown-Strauss Steel Div             Forklift                                         95,526        3,310             98,836
      Busy Beaver Building Centers        Retail furniture, fixtures & equipment          236,536        8,279            244,815
      CH2M Hill, Inc.                     Office furniture, fixtures & equipment          115,119        3,989            119,108
      CMC Industries                      Solder machine                                1,100,000       38,115          1,138,115
      Conair                              Crown lifts                                      47,282        1,638             48,920
      Consolidated Diesel                 Electric PU                                       5,611          195              5,806
      Consolidated Diesel                 Reach trucks                                     12,570          436             13,006
      Consolidated Diesel                 Boom lift                                        33,750        1,169             34,919
      Consolidated Diesel                 Copier                                           53,388        1,850             55,238
      Consolidated Diesel                 Lift truck                                       19,235          666             19,901
      Consolidated Diesel                 Projector                                         6,649          230              6,879
      Darigold, Inc.                      Hyster forklift                                   3,486          121              3,607
      Dupont                              Yard tractor                                     63,756        2,209             65,965
      E-Trade                             Office furniture                                939,273       32,546            971,819
      Fingerhut Corp.                     Proofing system                                  40,000        1,386             41,386
      Furr's SuperMarkets                 Restaurant furniture, fixtures & equipment      406,623       14,232            420,855
      GEICO                               Personal computers                            1,480,185       51,289          1,531,474
      General Motors Corp.                Hyster - walkie                                  19,865          688             20,553
      General Motors Corp.                Lawn mower                                       16,085          557             16,642
      General Motors Corp.                Material handler                                 83,062        2,879             85,941
      General Motors Corp.                Scubber                                         228,127        7,905            236,032
      General Motors Corp.                Sweeper                                          99,203        3,437            102,640
      General Motors Corp.                Sweeper/scrubber                                231,870        8,035            239,905
      General Motors Corp.                Tractor                                          57,844        2,004             59,848
      Georgetown Steel                    Hyster forklift                                  48,867        1,693             50,560
      Glassmaster Company                 Machine tools                                   566,785       19,838            586,623
      ICI Americas, Inc.                  Boom lift                                        72,266        2,504             74,770
      ICI Americas, Inc.                  Dell computers                                   17,300          599             17,899
      ICI Americas, Inc.                  Material handler                                 76,750        2,659             79,409
      ICI Americas, Inc.                  Scissor lift                                      8,300          288              8,588
      ICI Americas, Inc.                  Scrubber                                         29,640        1,027             30,667
      International Paper Company         Boom lift                                        35,934        1,245             37,179
      International Paper Company         Forklift                                         38,784        1,344             40,128
      International Paper Company         Lift truck                                       48,578        1,683             50,261
      New York State Electric             Personal computers/networking                   292,311       10,231            302,542

                                        9

<PAGE>


                      CAPITAL PREFERRED YIELD FUND-IV, L.P.

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)


2.    Transactions With the General Partner and Affiliates, continued
      ----------------------------------------------------

      EQUIPMENT PURCHASES, continued
                                                                                                                        Total
                                                                                                     Acquisition       Equipment
                                                                                        Cost of       Fees and         Purchase
              Lessee                              Equipment Description                Equipment    Reimbursements      Price     
      ----------------------------        ------------------------------------------ ------------   --------------   ------------

      Owens Corning Fiberglass            Personal computers/networking              $  2,150,797   $   75,278       $  2,226,075
      Owens Corning Fiberglass            Peripheral-printers                             104,925        3,672            108,597
      Pharmacia Iovision Inc.             Microscopic equipment                           159,650        5,532            165,182
      Polo Ralph Lauren                   Personal computers                              367,426       12,860            380,286
      Prairie International               Tractor                                         443,220       15,358            458,578
      Red Mountain Mining Inc.            Forklifts                                       422,968       14,804            437,772
      Rohr                                Hyster - forklift                                23,886          828             24,714
      Tasc, Inc.                          Laptops                                         283,504        9,021            292,525
      Teleflex Inc.                       Personal computers/networking                   166,992        5,845            172,837
      Things Remembered                   Point-of-sale equipment                         809,666       28,338            838,004
      Thomson Industries, Inc.            Drilling machine                                324,066       11,229            335,295
      Thomson Industries, Inc.            Machine tools                                   380,840       13,195            394,035
      Thomson Industries, Inc.            Thread grinder                                  251,062        8,699            259,761
      Universal Forest Products           Forklift                                         47,580        1,649             49,229
      Versar                              Personal computers                               84,712        2,935             87,647
      WPM Inc.                            Construction equipment                          444,398       15,554            459,952
                                                                                      -----------   ----------       ------------

                                                                                     $ 16,133,933   $  560,328       $ 16,694,261
                                                                                     ============   ==========       ============

</TABLE>



      As of September 30, 1998, the general partner had identified approximately
      $1  million of  equipment  that  satisfied  the  Partnership's  investment
      criteria and is expected to be acquired during the remainder of 1998.

                                       10

<PAGE>



                      CAPITAL PREFERRED YIELD FUND-IV, L.P.

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

Results of Operations
---------------------

Presented below are schedules  (prepared  solely to facilitate the discussion of
results of  operations  that  follows)  showing  condensed  statements of income
categories and analyses of changes in those  condensed  categories  derived from
the Statements of Income:

<TABLE>
<CAPTION>

                                          Condensed Statements                       Condensed Statements
                                             of Income for         The Effect on         of Income for        The Effect on
                                           the Three Months         Net Income          the Nine Months         Net Income
                                          Ended September 30,       of Changes        Ended September 30,       of Changes
                                      ---------------------------    Between      --------------------------     Between
                                          1998           1997        Periods         1998          1997          Periods
                                      ------------   ------------  -------------  -----------  -------------  -------------

<S>                                   <C>             <C>            <C>          <C>           <C>          <C>         

Leasing margin                         $  580,499      $ 295,333      $ 285,166    $ 1,753,216   $  737,578   $ 1,015,638
Equipment sales margin                      2,840             -           2,840         82,825            -        82,825
Interest income                            11,546         90,231        (78,685)       102,784      186,038       (83,254)
Management fees to general partner       (115,718)       (74,992)       (40,726)      (313,357)    (165,690)     (147,667)
Direct services from general partner      (38,574)       (22,646)       (15,928)      (112,201)     (64,056)      (48,145)
General and administrative                (47,174)       (28,373)       (18,801)      (137,539)    (100,998)      (36,541)
Provision for losses                            -              -              -        (25,000)           -       (25,000)
                                       ----------      ---------      ---------    -----------   ----------   -----------

Net income                             $  393,419      $ 259,553      $ 133,866    $ 1,350,728   $  592,872   $   757,856
                                       ==========      =========      =========    ===========   ==========   ===========

</TABLE>

LEASING MARGIN

Leasing margin consists of the following:

<TABLE>
<CAPTION>

                                                      Three Months Ended                Nine Months Ended
                                                         September 30,                     September 30,
                                                 -----------------------------     -----------------------------
                                                    1998              1997             1998             1997 
                                                 ------------     ------------     ------------     ------------

<S>                                             <C>              <C>              <C>              <C>         
Operating lease rentals                          $  4,763,322     $  3,287,838     $ 13,934,122     $  7,636,203
Direct finance lease income                            90,779           67,999          226,112          168,281
Depreciation                                       (3,927,320)      (2,666,924)     (11,352,330)      (6,164,477)
Interest on discounted lease rentals                 (346,282)        (393,580)      (1,054,688)        (902,429)
                                                 ------------     ------------     ------------     ------------
   Leasing margin                                $    580,499     $    295,333     $  1,753,216     $    737,578
                                                 ============     ============     ============     ============

   Leasing margin ratio                                    12%               9%              12%               9%
                                                 ============     ============     ============     ============

</TABLE>


Operating lease rentals,  depreciation and direct finance lease income increased
for the three and nine months ended  September 30, 1998 ("1998  Quarter and 1998
Period", respectively) compared to the three and nine months ended September 30,
1997  ("1997  Quarter  and 1997  Period",  respectively)  due to  growth  in the
portfolio.  Interest on discounted lease rentals  decreased for the 1998 Quarter
compared to the 1997 Quarter due to a net reduction in  non-recourse  debt.  The
increase for the 1998 Period  compared to the 1997 Period was  primarily  due to
the non-recourse debt added to the portfolio in the first six months of 1998.



                                       11

<PAGE>


                      CAPITAL PREFERRED YIELD FUND-IV, L.P.

Item 2:  Management's Discussion and Analysis of Financial Condition and Results
         of Operations, continued


Results of Operations, continued
---------------------

LEASING MARGIN, continued

Leasing margin ratio  fluctuates based upon (i) the mix of direct finance leases
and operating  leases,  (ii)  remarketing  activities,  (iii) the method used to
finance leases added to the Partnership's lease portfolio, and (iv) the relative
age and types of leases in the portfolio  (operating leases have a lower leasing
margin early in the lease term,  increasing  as the term passes and the majority
of leases added to the Partnership's portfolio have been operating leases).

The  ultimate   profitability  of  the  Partnership's  leasing  transactions  is
dependent in part on interest  rates at the time the leases are  originated,  as
well as future  equipment values and on-going lessee  creditworthiness.  Because
leasing is an alternative  to financing  equipment  purchases  with debt,  lease
rates tend to rise and fall with interest rates  (although  lease rate movements
generally lag interest rate changes in the capital markets).

INTEREST INCOME

Interest  income  decreased for the 1998 Quarter and 1998 Period compared to the
1997 Quarter and 1997 Period due to a decrease in invested cash. Interest income
varies  due  to (1)  the  amount  of  cash  available  for  investment  (pending
distribution or equipment  purchases) and (2) the interest rate on such invested
cash.

EXPENSES

Management   fees,   direct  services  from  general  partner  and  general  and
administrative  expenses increased for the 1998 Quarter and 1998 Period compared
to the 1997  Quarter  and 1997 Period due to growth in the  Partnership's  lease
portfolio.

PROVISION FOR LOSSES

The  remarketing  of  equipment  for an amount  greater  than its book  value is
reported as equipment  sales margin (if the equipment is sold) or leasing margin
(if the equipment is re-leased). The realization of less than the carrying value
of equipment (which is typically not known until  remarketing  subsequent to the
initial lease termination has occurred) is recorded as provision for losses.

Residual values are established equal to the estimated value to be received from
the equipment following termination of the lease. In estimating such values, the
Partnership considers all relevant facts regarding the equipment and the lessee,
including,  for  example,  the  likelihood  that the lessee  will  re-lease  the
equipment.  The nature of the  Partnership's  leasing  activities is that it has
credit  exposure and residual value exposure and,  accordingly,  in the ordinary
course of business,  it will incur losses from those exposures.  The Partnership
performs  on-going   quarterly   assessments  of  its  assets  to  identify  any
other-than-temporary  losses in value. The Partnership  recorded a provision for
loss of $25,000 for the nine months ended  September 30, 1998 related  primarily
to lessees returning equipment to the Partnership.


                                       12

<PAGE>


                      CAPITAL PREFERRED YIELD FUND-IV, L.P.

Item 2:  Management's Discussion and Analysis of Financial Condition and Results
         of Operations, continued


Liquidity & Capital Resources
-----------------------------

The  Partnership  reached  its limit of $50 million in unit sales on February 9,
1998.

A  summary  of  the  Partnership's  offering  activities  from  April  16,  1996
(commencement of operations) to September 30, 1998 is presented below:

  Class A limited partnership units sold                                500,000
                                                                   ============

  Gross offering proceeds                                          $ 50,000,000
  Sales commissions                                                  (5,000,000)
  Non-accountable organization and offering expenses reimbursement   (2,000,000)
  Due diligence expenses                                               (304,047)
                                                                   ------------

      Net offering proceeds                                        $ 42,695,953
                                                                   ============

  Class B limited partner (CAII) cash contribution                 $    500,000
                                                                   ============

A summary of the  Partnership's  offering  activities  for the nine months ended
September 30, 1998 is presented below:

  Class A limited partnership units sold                                 43,367
                                                                   ============

  Gross offering proceeds                                          $  4,336,754
  Sales commissions                                                    (433,676)
  Non-accountable organization and offering expenses reimbursement     (173,470)
  Due diligence expenses                                               (144,526)
                                                                   ------------

      Net offering proceeds                                        $  3,585,082
                                                                   ============

  Class B limited partner (CAII) cash contribution                 $     40,000
                                                                   ============

The Partnership funds its operating activities principally with cash from rents,
discounted  lease  rentals  (non-recourse  debt),  interest  income and sales of
off-lease  equipment.  Available cash and cash reserves of the  Partnership  are
invested  in  short-term   government  securities  pending  the  acquisition  of
equipment or distribution to the partners.

During the nine months  ended  September  30,  1998,  the  Partnership  acquired
equipment  subject  to  leases  with  a  total  purchase  price  of  $16,694,261
(including  $2,454,015 of discounted  lease rentals).  As of September 30, 1998,
the  general  partner  had  identified  approximately  $1 million of  additional
equipment that satisfied the Partnership's  acquisition criteria and is expected
to be acquired during the remainder of 1998.



                                       13

<PAGE>


                      CAPITAL PREFERRED YIELD FUND-IV, L.P.

Item 2:  Management's Discussion and Analysis of Financial Condition and Results
         of Operations, continued


Liquidity & Capital Resources, continued
-----------------------------

During the nine months  ended  September  30,  1998,  the  Partnership  declared
distributions to the Class A limited  partners of $3,884,029  ($487,997 of which
was paid in  October  1998).  A  substantial  portion of such  distributions  is
expected to constitute a return of capital.  Distributions  may be characterized
for tax,  accounting and economic  purposes as a return of capital,  a return on
capital  or a  portion  of both.  The  portion  of each cash  distribution  by a
partnership  which  exceeds its net income for the fiscal period may be deemed a
return of capital for accounting  purposes.  However,  the total percentage of a
partnership's  return on capital over its life will only be determined after all
residual  cash flows (which  include  proceeds from the  re-leasing  and sale of
equipment) have been realized at the termination of the Partnership.

The general partner believes that the Partnership will generate  sufficient cash
flows  from  operations  during  the  remainder  of 1998,  to (1)  meet  current
operating  requirements,  (2) fund  cash  distributions  to both the Class A and
Class B limited  partners at  annualized  rates of 10.5%  (portions of which are
expected to  constitute  returns of  capital),  and (3)  reinvest in  additional
equipment under leases,  provided that suitable  equipment can be identified and
acquired.

YEAR 2000 ISSUES

An affiliate provides accounting and other  administrative  services,  including
data  processing  services to the  Partnership.  The  affiliate  has conducted a
comprehensive  review of its computer  systems to identify systems that could be
affected  by the Year 2000  issue.  The Year 2000 issue  results  from  computer
programs  being  written  using  two  digits  rather  than  four to  define  the
applicable year.  Certain computer programs which have  time-sensitive  software
could  recognize  a date using "00" as the year 1900  rather than the year 2000.
This could result in major system  failures or  miscalculations.  Certain of the
affiliate's  software has already been updated to correctly account for the Year
2000  issue.  In  addition,  the  affiliate  is engaged in a system  conversion,
whereby the affiliate's  primary lease tracking and accounting software is being
replaced  with new systems which will account for the Year 2000  correctly.  The
affiliate  expects that the new system will be fully operational by December 31,
1999,  and therefore will be fully Year 2000  compliant.  The affiliate does not
expect any other changes required for the Year 2000 to have a material effect on
its financial position or results of operations.  As such, the affiliate has not
developed any specific  contingency  plans in the event it fails to complete the
conversion to a new system by December 31, 1999. In addition, the affiliate does
not expect any Year 2000 issues  relating to its customers and vendors to have a
material effect on its financial position or results of operations.


New Accounting Pronouncements
-----------------------------

In June 1998,  the  Financial  Accounting  Standards  Board issued SFAS No. 133,
Accounting for Derivative  Instruments and Hedging Activities ("Statement 133").
Statement 133  establishes  accounting  and reporting  standards for  derivative
instruments and for hedging activities. It requires that an entity recognize all
derivatives  as either  assets or  liabilities  in the  statement  of  financial
position and measure those instruments at fair value. Statement 133 is effective
for  fiscal  years  beginning  after June 15,  1999,  with  earlier  application
permitted.

                                       14

<PAGE>


                      CAPITAL PREFERRED YIELD FUND-IV, L.P.

Item 2:  Management's Discussion and Analysis of Financial Condition and Results
         of Operations, continued


New Accounting Pronouncements, continued
-----------------------------

The  Partnership  will adopt  Statement  133 in the first  quarter of 1999.  The
General  Partner does not expect the adoption to have an impact on its financial
reporting.

"Safe  Harbor"  Statement  Under the Private Securities Litigation Reform Act of
--------------------------------------------------------------------------------
1995
----

The statements  contained in this report which are not  historical  facts may be
deemed to contain  forward-  looking  statements  with  respect  to events,  the
occurrence of which involve risks and uncertainties,  and are subject to factors
that could cause actual future  results to differ both  adversely and materially
from currently anticipated results, including,  without limitation, the level of
lease originations, realization of residual values, the availability and cost of
financing  sources and the ultimate  outcome of any contract  disputes.  Certain
specific risks associated with particular aspects of the Partnership's  business
are  discussed  under  Results of Operations in this report and under Results of
Operations in the 1997 Form 10-K when and where applicable.


                                       15

<PAGE>



                      CAPITAL PREFERRED YIELD FUND-IV, L.P.

                                    PART II.

                                OTHER INFORMATION



Item 1.  Legal Proceedings

         The  Partnership  is not a  party  to any  material  legal  proceedings
         outside the ordinary course of its business.

Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits

         (b)  The  Partnership  did not file any  reports on Form 8-K during the
              quarter ended September 30, 1998.


                                       16

<PAGE>



Item No.                              Exhibit Index
--------                              -------------

27             Financial Data Schedule


  
                                     17
<PAGE>



                      CAPITAL PREFERRED YIELD FUND-IV, L.P.

                                    Signature



Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Partnership  has duly  caused  this  report to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                     CAPITAL PREFERRED YIELD FUND-IV, L.P.

                                     By:  CAI Equipment Leasing V Corp.


Dated:   November 13,  1998          By:  /s/Anthony M. DiPaolo                 
                                          --------------------------------
                                          Anthony M. DiPaolo
                                          Senior Vice President


                                       18