--------------------------------------------------------------------------------


                          U. S. SECURITIES AND EXCHANGE
                        COMMISSION Washington, D.C. 20549


                               ------------------



                                   FORM 10-QSB


                               ------------------



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

                  For the quarterly period ended March 31, 2005


                               ------------------



                         Commission file number 0-13523

                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP
             Organized pursuant to the Laws of the State of Maryland


                               ------------------



        Internal Revenue Service - Employer Identification No. 52-1328767

                 11200 Rockville Pike, Rockville, Maryland 20852

                                 (301) 468-9200


                               ------------------


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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>


                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                              INDEX TO FORM 10-QSB

                      FOR THE QUARTER ENDED MARCH 31, 2005


                                                                          Page

Part I - FINANCIAL INFORMATION

Item 1.  Financial Statements

         Consolidated Balance Sheets
           - March 31, 2005 and December 31, 2004........................... 1

         Consolidated Statements of Operations and Accumulated Losses
           - for the three months ended March 31, 2005 and 2004............. 2

         Consolidated Statements of Cash Flows
           - for the three months ended March 31, 2005 and 2004............. 3

         Notes to Consolidated Financial Statements
           - March 31, 2005 and 2004........................................ 4

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

Item 3.  Controls and Procedures............................................ 20


PART II - OTHER INFORMATION

Item 3.  Defaults Upon Senior Securities.................................... 20

Item 5.  Other Information.................................................. 21

Item 6.  Exhibits........................................................... 21

Signature................................................................... 22



<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements


                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                           CONSOLIDATED BALANCE SHEETS


                                     ASSETS

<TABLE>
<CAPTION>

                                                                                        March 31,      December 31,
                                                                                          2005             2004
                                                                                      -------------    -------------
                                                                                       (Unaudited)
<S>                                                                                   <C>              <C>
Investments in partnerships .......................................................   $   4,046,271    $   4,013,428
Investment in partnerships held for sale or transfer ..............................       4,701,412        4,785,900
Investment in partnerships held in escrow .........................................         701,520          721,614
Cash and cash equivalents .........................................................       8,935,770        9,135,499
Acquisition fees, principally paid to related parties,
  net of accumulated amortization of $139,888 and $138,179, respectively ..........         133,415          135,123
Property purchase costs,
  net of accumulated amortization of $160,079 and $158,171, respectively ..........         145,234          147,141
Other assets ......................................................................             584              341
                                                                                      -------------    -------------

      Total assets ................................................................   $  18,664,206    $  18,939,046
                                                                                      =============    =============



                        LIABILITIES AND PARTNERS' DEFICIT


Due on investments in partnerships ................................................   $  16,600,081    $  17,520,081
Accrued interest payable ..........................................................      79,713,018       80,106,150
Accounts payable and accrued expenses .............................................         115,991          159,653
                                                                                      -------------    -------------

      Total liabilities ...........................................................      96,429,090       97,785,884
                                                                                      -------------    -------------

Commitments and contingencies

Partners' deficit:

  Capital paid in:
    General Partners ..............................................................           2,000            2,000
    Limited Partners ..............................................................      73,501,500       73,501,500
                                                                                      -------------    -------------

                                                                                         73,503,500       73,503,500

  Less:
    Accumulated distributions to partners .........................................     (15,027,227)     (15,027,227)
    Offering costs ................................................................      (7,562,894)      (7,562,894)
    Accumulated losses ............................................................    (128,678,263)    (129,760,217)
                                                                                      -------------    -------------

      Total partners' deficit .....................................................     (77,764,884)     (78,846,838)
                                                                                      -------------    -------------

      Total liabilities and partners' deficit .....................................   $  18,664,206    $  18,939,046
                                                                                      =============    =============
</TABLE>

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

                                       -1-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements


                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                             AND ACCUMULATED LOSSES

                                   (Unaudited)


                                            For the three months ended
                                                     March 31,
                                          -------------------------------
                                               2005            2004
                                          -------------    -------------

Share of loss from partnerships .......   $     (39,940)   $     (73,239)
                                          -------------    -------------

Other revenue and  expenses:

  Revenue:
    Gain from extinguishment of debt ..       3,387,767        3,779,954
    Interest ..........................          45,740            6,218
                                          -------------    -------------

                                              3,433,507        3,786,172
                                          -------------    -------------

  Expenses:
    Interest ..........................       2,106,433        1,957,751
    Management fee ....................          93,750           93,750
    General and administrative ........          69,064           70,128
    Professional fees .................          38,750           35,000
    Amortization of deferred costs ....           3,616           15,846
                                          -------------    -------------

                                              2,311,613        2,172,475
                                          -------------    -------------

      Total other revenue and expenses        1,121,894        1,613,697
                                          -------------    -------------

Income before gain on disposition
  of investment in partnership ........       1,081,954        1,540,458

Gain on disposition of investment
  in partnership ......................            --          4,593,810
                                          -------------    -------------

Net income ............................       1,081,954        6,134,268

Accumulated losses, beginning of period    (129,760,217)    (135,202,160)
                                          -------------    -------------

Accumulated losses, end of period .....   $(128,678,263)   $(129,067,892)
                                          =============    =============


Net income allocated
  to General Partners (1.51%) .........   $      16,338    $      92,627
                                          =============    =============

Net income allocated
  to Initial and Special
  Limited Partners (1.49%) ............   $      16,121    $      91,401
                                          =============    =============

Net income allocated
  to Additional Limited Partners (97%)    $   1,049,495    $   5,950,240
                                          =============    =============

Net income per unit of
  Additional Limited Partner Interest,
    based on 73,337 units outstanding .   $       14.31    $       81.14
                                          =============    =============


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

                                       -2-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements


                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                  For the three months ended
                                                                                           March 31,
                                                                                  ----------------------------
                                                                                      2005           2004
                                                                                  ------------   ------------
<S>                                                                               <C>            <C>
Cash flows from operating activities:
  Net income ..................................................................   $ 1,081,954    $ 6,134,268

  Adjustments to reconcile net income to net cash used in operating activities:
    Share of income from partnerships .........................................        39,940         73,239
    Gain from extinguishment of debt ..........................................    (3,387,767)    (3,779,954)
    Amortization of deferred costs ............................................         3,616         15,846
    Gain on disposition of investment in partnership ..........................          --       (4,593,810)

    Changes in assets and liabilities:
      (Increase) decrease in other assets .....................................          (243)         4,320
      Increase in accrued interest payable ....................................     2,106,433      1,957,751
      Decrease in accounts payable and accrued expenses .......................       (43,662)       (46,492)
                                                                                  -----------    -----------

        Net cash used in operating activities .................................      (199,729)      (234,832)
                                                                                  -----------    -----------

Cash flows from investing activities:
  Receipt of distributions from partnerships ..................................          --           51,085
                                                                                  -----------    -----------

        Net cash provided by investing activities .............................          --           51,085
                                                                                  -----------    -----------

Net decrease in cash and cash equivalents .....................................      (199,729)      (183,747)

Cash and cash equivalents, beginning of period ................................     9,135,499      4,365,068
                                                                                  -----------    -----------

Cash and cash equivalents, end of period ......................................   $ 8,935,770    $ 4,181,321
                                                                                  ===========    ===========

</TABLE>

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

                                       -3-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2005 and 2004

                                   (Unaudited)


1.   BASIS OF PRESENTATION

     In the opinion of C.R.I.,  Inc. (CRI), the Managing  General  Partner,  the
accompanying   unaudited   consolidated   financial   statements   reflect   all
adjustments,  consisting  of normal  recurring  accruals,  necessary  for a fair
presentation of the financial  position of Capital Realty  Investors-IV  Limited
Partnership  (the  Partnership)  as of March 31,  2005,  and the  results of its
operations  and its cash flows for the three month  periods ended March 31, 2005
and 2004. The results of operations for the interim period ended March 31, 2005,
are not necessarily indicative of the results to be expected for the full year.

     The  accompanying  unaudited  consolidated  financial  statements have been
prepared in conformity  with  accounting  principles  generally  accepted in the
United  States of America (US GAAP) and with the  instructions  to Form  10-QSB.
Certain  information and accounting policies and footnote  disclosures  normally
included in financial  statements  prepared in conformity with US GAAP have been
condensed or omitted pursuant to such instructions. These condensed consolidated
financial  statements  should  be  read in  conjunction  with  the  consolidated
financial  statements  and notes thereto  included in the  Partnership's  annual
report on Form 10-KSB at December 31, 2004. Certain balances in the consolidated
balance sheet at December 31, 2004,  have been  reclassified  to conform them to
the presentation in the consolidated balance sheet at March 31, 2005.

     In December  2003,  the Financial  Accounting  Standards  Board issued FASB
Interpretation  No. 46  (revised  December  2003) (FIN 46-R),  Consolidation  of
Variable  Interest  Entities.  FIN 46-R clarifies the  application of Accounting
Research Bulletin 51, Consolidated  Financial  Statements,  for certain entities
that do not  have  sufficient  equity  at risk for the  entity  to  finance  its
activities without additional  subordinated financial support from other parties
or in which equity  investors do not have the  characteristics  of a controlling
financial interest  ("variable interest  entities").  Variable interest entities
within  the  scope of FIN 46-R  will be  required  to be  consolidated  by their
primary  beneficiary.  The primary  beneficiary of a variable interest entity is
determined  to be the party that  absorbs a majority  of the  entity's  expected
losses,  receives a majority of its  expected  returns,  or both.  The  Managing
General Partner has evaluated the partnerships in which the Partnership invested
and has  determined  that they are not  variable  interest  entities  subject to
consolidation by the Partnership under the provisions of FIN 46-R.


2.   INVESTMENTS IN PARTNERSHIPS

a.   Due on investments in partnerships and accrued interest payable
     ---------------------------------------------------------------

                              Purchase money notes
                              --------------------

     The  Partnership's  obligations  with respect to its  investments  in Local
Partnerships,  in the  form  of  nonrecourse  purchase  money  notes  having  an
aggregate  principal  balance of $16,600,081 plus aggregate  accrued interest of
$79,713,018  as of March 31, 2005, are payable in full upon the earliest of: (i)
sale or refinancing of the respective Local Partnership's rental property;  (ii)
payment in full of the respective Local  Partnership's  permanent loan; or (iii)
maturity.

     The  collateral  that  secured  the  purchase  money  notes  related to the
following properties was transferred to the noteholders during 2004, and through
May 12, 2005.


                                       -4-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2005 and 2004

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

     Property                Principal          Date            Disposition
     --------                ----------     -------------       -----------

     Glenridge Gardens        $640,000      February 2004       Transferred
     Valley View              $920,000      March 2005          Transferred

     The purchase money notes related to the following  properties  have matured
and have not been paid or extended as of May 12, 2005.

     Property                                Principal            Maturity
     --------                               -----------           --------

     Crescent Gardens - Second Note         $  434,000            07/31/99
     Westport Village                          840,000            09/01/99
     Pilgrim Tower East                      1,450,000 (1)        11/30/03
     Pilgrim Tower North                     2,065,000            11/30/03
     Crescent Gardens - First Note             434,000            07/31/04
     Harborview                              3,000,000            08/01/04
     Cedar Point                             1,320,000            08/30/04
     Thornwood House                         1,775,000            08/30/04
     Jewish Federation                       1,350,000            10/31/04

     (1) Remaining principal, after partial payment.

     The  purchase  money  note  related  to  Asbury  Tower  Associates  Limited
Partnership  (Asbury Tower) was due to mature on August 31, 2004.  However,  the
noteholder  has agreed to extend  the  maturity  date on a month to month  basis
until  such  time as the  noteholder  provides  a 30 day  advance  notice to the
Partnership.  As of May 12, 2005, no such notice has been received.  As of March
31, 2005, principal due on the purchase money note was $3,432,081.

     The  remaining  purchase  money note  matures in 2025  ($500,000  principal
balance).

     The purchase money notes,  which are  nonrecourse to the  Partnership,  are
generally  secured  by  the  Partnership's  interest  in  the  respective  Local
Partnerships.  There is no assurance  that the underlying  properties  will have
sufficient appreciation and equity to enable the Partnership to pay the purchase
money notes'  principal and accrued  interest when due. If a purchase money note
is not paid in accordance with its terms,  the  Partnership  will either have to
renegotiate  the terms of repayment or risk losing its  partnership  interest in
the  respective  Local  Partnership.  In the event  that a  purchase  money note
remains unpaid upon maturity,  the noteholder may have the right to foreclose on
the Partnership's interest in the related Local Partnership.

     The  Partnership's  inability  to pay  certain of the  purchase  money note
principal and accrued interest balances when due, and the resulting  uncertainty
regarding the Partnership's  continued  ownership  interest in the related Local
Partnerships,  does not adversely impact the Partnership's  financial  condition
because the  purchase  money  notes are  nonrecourse  and secured  solely by the
Partnership's interest in the related Local Partnerships.  Therefore, should the
investment in any of the Local  Partnerships  with matured or maturing  purchase
money notes not produce  sufficient  value to satisfy the related purchase money
notes, the  Partnership's  exposure to loss is limited because the amount of the
nonrecourse indebtedness of each of the matured or maturing purchase money notes
exceeds the  carrying  amount of the  investment  in each of the  related  Local
Partnerships.  Thus, even a complete loss of the Partnership's interest in these
Local  Partnerships  would not have a material  adverse  impact on the financial
condition of the Partnership.


                                       -5-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2005 and 2004

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

     The Managing General Partner continues to investigate possible alternatives
to reduce the Partnership's debt obligations.  These alternatives include, among
others, retaining the cash available for distribution to meet the purchase money
note  requirements,  paying off certain  purchase  money  notes at a  discounted
price, extending the due dates of certain purchase money notes,  refinancing the
respective  properties'  underlying  debt, or selling the underlying real estate
and using the  Partnership's  share of the  proceeds to pay or buy down  certain
purchase money note  obligations.  Although the Managing General Partner has had
some success applying these strategies in the past, the Managing General Partner
cannot assure that these  strategies  will be  successful in the future.  If the
Managing  General  Partner is unable to negotiate  an  extension  or  discounted
payoff,  in the event that the purchase money notes remain unpaid upon maturity,
the noteholders may have the right to foreclose on the Partnership's interest in
the related Local Partnerships.  In the event of a foreclosure or other transfer
of the Partnership's  interest, the excess of the nonrecourse  indebtedness over
the  carrying  amount  of the  Partnership's  investment  in the  related  Local
Partnership  will result in a taxable gain. This gain will be taxable to Limited
Partners at a federal tax rate of up to 25.0%,  as it will reflect  recapture of
depreciation  deductions claimed in prior years.  Additionally,  the Partnership
would lose its investment in the Local Partnership and,  likewise,  its share of
any future cash  distributed by the Local  Partnership  from rental  operations,
mortgage  debt  refinancings,  or the sale of the real  estate.  Of the18  Local
Partnerships in which the Partnership is invested as of March 31, 2005, the nine
Local Partnerships with associated  purchase money notes which have matured,  or
which mature through March 31, 2006, and which remain unpaid or unextended as of
May 12, 2005,  represented the following  percentages of the Partnership's total
distributions  received from Local  Partnerships  and share of income from Local
Partnerships for the immediately preceding two calendar years.

                              Percentage of Total       Partnership's Share of
                             Distributions Received           Loss from
     For the Year Ending     from Local Partnerships      Local Partnerships
     -------------------     -----------------------    ----------------------

     December 31, 2004                0.0%                   $(297,024)
     December 31, 2003               10.1%                   $(442,314)

     The  Managing  General  Partner  continues  to  address  the  maturity  and
impending  maturity of the Partnership's  debt obligations and to seek solutions
that will provide the most favorable outcome to the Limited  Partners.  However,
there can be no assurance that these strategies will be successful.

     Interest  expense on the  Partnership's  purchase money notes for the three
month  periods  ended March 31, 2005 and 2004,  was  $2,106,433  and  1,957,751,
respectively.  The  accrued  interest  payable on the  purchase  money  notes of
$79,713,018  and  $80,106,150  as of March  31,  2005  and  December  31,  2004,
respectively,  is due on the  respective  maturity  dates of the purchase  money
notes or earlier, in some instances, if (and to the extent of a portion thereof)
the related Local Partnership has distributable net cash flow, as defined in the
relevant Local Partnership agreement.

                                   Cedar Point
                                   -----------

     The  Partnership  defaulted on its purchase money note related to Southwest
Development  Company (Cedar Point) on August 30, 2004, when the note matured and
was not paid.  The default  amount  included  principal and accrued  interest of
$1,320,000  and  $3,122,592,  respectively.  As of May 12, 2005,  principal  and
accrued  interest of  $1,320,000  and  $3,248,551,  respectively,  were due. The
Partnership has agreed in principle to assign its interest in Cedar Point to the
noteholder  in  satisfaction  of the  nonrecourse  note.  However,  there  is no
assurance  that a transfer  of the  Partnership's  interest  in Cedar Point will
occur.

                                       -6-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2005 and 2004

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

     Due to the impending transfer of the Partnership's  interest in Cedar Point
to the noteholder, the Partnership's basis in the Local Partnership,  along with
the net  unamortized  amount of acquisition  fees and property  purchase  costs,
which totaled $1,761,556 and $1,741,465 at March 31, 2005 and December 31, 2004,
respectively,  has been reclassified to investment in partnerships held for sale
or transfer in the accompanying consolidated balance sheets.

                                Crescent Gardens
                                ----------------

     The  Partnership  defaulted  on its two  purchase  money  notes  related to
Crescent Gardens Associates Limited  Partnership  (Crescent Gardens) on July 31,
1999,  when the notes  matured and were not paid.  The default  amount  included
aggregate   principal   and  accrued   interest  of  $868,000  and   $2,033,388,
respectively. The Partnership successfully negotiated an agreement to extend the
maturity date of one of the purchase  money notes (First  Crescent  Note) in the
original principal amount of $434,000,  effective October 15, 1999.  Pursuant to
the extension  agreement,  the Partnership made payments to the noteholder to be
applied against accrued but unpaid interest. The agreement extended the maturity
date to July 31, 2004, subject to semi-annual interest payments, and reduced the
interest  rate of the First  Crescent  Note.  The  Partnership  did not make the
semi-annual  interest  payment  due in January  2004,  and is  currently  in the
process of transferring  the collateral for the First Crescent Note (one-half of
the  Partnership's  limited  partner  interest in the Local  Partnership) to its
current  noteholder in satisfaction  of that note.  There is no assurance that a
transfer of the  Partnership's  interest in Crescent  Gardens to the  noteholder
will occur. The Partnership has been contacted by only one of the holders of the
other note (Second  Crescent  Note) and thus cannot predict the course of action
with regard to the Second  Crescent  Note.  As of May 12,  2005,  principal  and
accrued interest of $434,000 and $919,738,  respectively,  were due on the First
Crescent  Note. As of May 12, 2005,  principal and accrued  interest of $434,000
and $1,510,540,  respectively,  were due on the Second  Crescent Note.  Crescent
Gardens completed mortgage restructuring under the Mark-to-Market program during
2003, and the associated loan restructuring  requirement will likely inhibit the
local  managing  general  partner's  ability  to  sell  this  property.   It  is
anticipated  that the property will now operate at a break-even  level, and that
future cash distributions are highly unlikely.

     Due to the impending transfer of one-half of the Partnership's  interest in
Crescent  Gardens to the noteholder of the First Crescent Note,  one-half of the
Partnership's  basis in the Local  Partnership  along with  one-half  of the net
unamortized  amount of  acquisition  fees and  property  purchase  costs,  which
totaled  $8,625  at both  March  31,  2005  and  December  31,  2004,  has  been
reclassified  to  investment  in  partnerships  held for sale or transfer in the
accompanying consolidated balance sheets.

                                       -7-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2005 and 2004

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

                                 DeAngelis Manor
                                 ---------------

     On March 19,  2002,  DeAngelis  Manor was sold.  Proceeds  received  by the
Partnership  from the sale of the property  were used to pay off, at a discount,
the remaining  purchase money note related to DeAngelis Manor,  although,  as of
May 12,  2005,  the  note  has not  been  cancelled  pending  final  receipt  of
accumulated cash from the property's  previous operations and payment thereof to
the purchase money noteholder.  The final  cancellation of the note will have no
financial impact to the Partnership.

                                Glenridge Gardens
                                -----------------

     The  Partnership  defaulted on its purchase money note related to Glenridge
Development Company (Glenridge Gardens) on August 1, 1999, when the note matured
and was not paid. The default amount included  principal and accrued interest of
$740,000 and  $1,928,809,  respectively.  As of February 4, 2004,  principal and
accrued interest of $640,000 and $3,176,201, respectively, were due. On February
4, 2004, the Partnership's  interest in Glenridge Gardens was transferred to the
purchase  money  noteholder.  The  transfer  of the  Partnership's  interest  in
Glenridge  Gardens  resulted in gain from  extinguishment  of debt for financial
statement  purposes  of  $3,779,954  in 2004,  and in total gain for federal tax
purposes of $5,208,679 in 2004.

                              Harborview Apartments
                              ---------------------

     The Partnership defaulted on its purchase money notes related to Harborview
Apartments Associates Limited Partnership  (Harborview  Apartments) on August 1,
1999,  when the notes  matured and were not paid.  The default  amount  included
aggregate   principal  and  accrued   interest  of  $3,000,000  and  $5,342,321,
respectively.  On October 31, 2000, the Partnership  and  noteholders  agreed to
extend the maturity date of the purchase  money notes to August 1, 2004, and the
Partnership  placed an assignment of its interest in Harborview  Apartments into
escrow.  As of May 12, 2005, the notes were again in default,  and principal and
accrued  interest of  $3,000,000  and  $7,478,933,  respectively,  were due. The
noteholders are attempting to finalize regulatory  authority for the transfer of
interests in satisfaction of the  outstanding  principal and interest  balances.
There  is no  assurance  that  a  transfer  of  the  Partnership's  interest  in
Harborview to the noteholders will occur.

     Due to the impending  transfer of the Partnership's  interest in Harborview
Apartments to the noteholder,  the Partnership's basis in the Local Partnership,
along with the net unamortized  amount of acquisition fees and property purchase
costs,  which  totaled  $692,895 and $712,989 at March 31, 2005 and December 31,
2004, respectively,  has been reclassified to investment in partnerships held in
escrow in the accompanying consolidated balance sheets.

                                Highland Village
                                ----------------

     The  Partnership  defaulted on its purchase money notes related to Highland
Village  Associates  (Highland  Village)  on October  31,  1999,  when the notes
matured and were not paid.  The default  amount  included  principal and accrued
interest of $1,100,000  and  $4,123,565,  respectively.  In February  2001,  the
Partnership  and the  noteholder  agreed  to  extend  the  maturity  date of the
purchase money notes to October 31, 2004, provided that the maturity date of the
notes may be accelerated to any earlier date  designated by the noteholder  upon
not less than six months' notice to the  Partnership  from the  noteholder  (the
"Restructuring Agreement").

                                       -8-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2005 and 2004

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

     On April 26, 2002, the property  related to Highland  Village was sold to a
limited  partnership  whose general  partner is also the local managing  general
partner of Highland  Village.  In accordance with the terms of the Restructuring
Agreement,  the Partnership's share of the proceeds was distributed  directly to
the  noteholder,  and was applied  first to principal  until all  principal  was
repaid ($1,100,000), and thereafter to interest ($186,870).

     However,  as of September  30, 2004,  the  noteholder  had not provided the
required six months' notice to the  Partnership of  acceleration of the maturity
date of the notes,  and the  Partnership  did not remove  the  remaining  unpaid
accrued  interest balance of $5,486,253 from its books at that date, even though
the  nonrecourse  notes are  essentially  worthless  because the collateral that
secures them (the Partnership's interest in Highland Village) has no value since
Highland  Village sold its only assets.  As a result,  the  Partnership  stopped
accruing interest on the notes effective the date of the sale of the property on
April 26,  2002.  As of the October  31, 2004  maturity  date,  the  Partnership
removed the remaining  unpaid accrued  interest  balance of $5,486,253  from its
books.  Gain from  extinguishment  of debt,  in the  amount of  $5,486,253,  was
recognized by the  Partnership  during the fourth quarter of 2004.  There was no
tax gain or loss relating to this in 2004.

                                Jewish Federation
                                -----------------

     The  Partnership  defaulted  on its  purchase  money note related to Jewish
Federation  Apartments  Associates (Jewish Federation) on October 31, 2004, when
the note matured and was not paid.  The default  amount  included  principal and
accrued  interest of $1,350,000  and  $10,185,885,  respectively.  As of May 12,
2005,   principal   and  accrued   interest  of  $1,350,000   and   $10,872,882,
respectively,  were due. The  Partnership  has agreed in principle to assign its
interest  in  Jewish  Federation  to  the  noteholder  in  satisfaction  of  the
nonrecourse  note.  However,  there  is no  assurance  that  a  transfer  of the
Partnership's interest in Jewish Federation will occur.

     Due to the  impending  transfer  of the  Partnership's  interest  in Jewish
Federation to the noteholder,  the Partnership's basis in the Local Partnership,
along with the net unamortized  amount of acquisition fees and property purchase
costs,  which  totaled  $31,907 and $74,783 at March 31, 2005 and  December  31,
2004, respectively, has been reclassified to investment in partnerships held for
sale or transfer in the accompanying consolidated balance sheets.

                               Pilgrim Tower East
                               ------------------

     The  Partnership  defaulted on its  purchase  money note related to Pilgrim
Tower East on December  1, 1999,  when the note  matured  and was not paid.  The
default  amount  included  principal  and  accrued  interest of  $1,650,000  and
$2,719,372,  respectively. As of May 12, 2005, principal and accrued interest of
$1,450,000  and  $3,895,159,  respectively,  were due. The  Partnership  and the
noteholder signed a contract to sell the Partnership's interest in Pilgrim Tower
East to the  noteholder  in exchange for the  outstanding  principal and accrued
interest on the purchase  money note and two  $100,000  payments on the purchase
money note, one of which was paid in February 2002, and one of which was paid in
January 2003. The contract for the sale of the Partnership's interest expired in
November 2003,  however,  the parties are currently  negotiating an extension to
provide for a closing  scheduled for August 2005.  There is no assurance  that a
sale of the Partnership's interest in Pilgrim Tower East will occur.

                                       -9-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2005 and 2004

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

     Due to the impending  sale of the  Partnership's  interest in Pilgrim Tower
East,  the  Partnership's  basis in the Local  Partnership,  along  with the net
unamortized  amount of  acquisition  fees and  property  purchase  costs,  which
totaled  $39,732  at both  March  31,  2005  and  December  31,  2004,  has been
reclassified  to  investment  in  partnerships  held for sale or transfer in the
accompanying consolidated balance sheets.

                               Pilgrim Tower North
                               -------------------

     The  Partnership  defaulted on its  purchase  money note related to Pilgrim
Tower  North on April 30,  2000,  when the note  matured  and was not paid.  The
default  amount  included  principal  and  accrued  interest of  $2,165,000  and
$18,922,763, respectively. As of May 12, 2005, principal and accrued interest of
$2,065,000 and  $25,474,582,  respectively,  were due. The local general partner
entered  into a contract  with the  noteholder  which allows the  noteholder  to
purchase  the  property  in exchange  for the  principal  and  accrued  interest
outstanding  on the purchase  money note and  assumption  or  prepayment  by the
noteholder of the mortgage note, the flexible  subsidy note and all related debt
associated  with the  property.  In addition,  in exchange for the  noteholder's
forbearance  to January 31,  2005,  the  Partnership  made a  principal  payment
applied  to the  note  in  January  2002.  The  local  general  partner  and the
noteholder  have  negotiated  an  extension  of the closing  date of the sale to
August 2005. There is no assurance that a sale of the property will occur.

     Due to the  impending  sale of the  property  related to the  Partnership's
investment in Pilgrim Tower North to the noteholder,  the Partnership's basis in
the Local Partnership, along with the net unamortized amount of acquisition fees
and property  purchase costs,  which totaled  $2,210,371 and $2,237,772 at March
31,  2005  and  December  31,  2004,  respectively,  has  been  reclassified  to
investment  in  partnerships  held  for  sale or  transfer  in the  accompanying
consolidated balance sheets.

                                 Thornwood House
                                 ---------------

     The  Partnership  defaulted on its purchase money note related to Thornwood
House on August 30, 2004,  when the note  matured and was not paid.  The default
amount  included  principal and accrued  interest of $1,775,000 and  $4,025,568,
respectively.  As of May 12, 2005,  principal and accrued interest of $1,775,000
and $4,193,317,  respectively, were due. The Partnership has agreed in principle
to assign its interest to the  noteholder  in  satisfaction  of the  nonrecourse
note.  However,  there is no  assurance  that a  transfer  of the  Partnership's
interest in Thornwood House will occur.

     Due to the  impending  transfer of the  Partnerships  interest in Thornwood
House to the noteholder the Partnership's basis in the Local Partnership,  along
with the net unamortized amount of acquisition fees and property purchase costs,
which totaled $657,847 and $660,352 at March 31, 2005 and December 31, 2004, has
been reclassified to investment in partnerships held for sale or transfer in the
accompanying consolidated balance sheets.

                                      -10-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2005 and 2004

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

                                   Valley View
                                   -----------

     The  Partnership  defaulted on its purchase  money notes  related to Valley
View on September 1, 1999, when the notes matured and were not paid. The default
amount  included  aggregate  principal  and accrued  interest  of  $920,000  and
$1,788,829,  respectively. The Partnership was sued by the noteholders but there
has not been any legal action since 2000. The  Partnership  and the  noteholders
had agreed in principle that the  Partnership  would deposit  assignments of its
interests in Valley View in escrow,  together with an option agreement  pursuant
to which the noteholders  could purchase the interests for the outstanding  debt
if the  property  were not sold  and/or  the notes were not repaid by January 8,
2001. At that time, the Partnership's  basis in the Local Partnership along with
the net  unamortized  amount of acquisition  fees and property  purchase  costs,
which totaled $37,315,  was  reclassified to investment in partnerships  held in
escrow.  There had been no communication  with the noteholders  between 2000 and
June 2004.  Therefore,  effective  December 31, 2003, the  acquisition  fees and
property   purchase  costs  which  had  been   reclassified   to  investment  in
partnerships held in escrow were returned to their respective accounts. However,
in June 2004, the Partnership was notified that the noteholders  were seeking to
implement  the  transfer  of the  Partnership's  interest  in Valley View to the
noteholders.  The  Partnership's  interest in Valley View was transferred to the
noteholders March 18, 2005. The transfer of the Partnership's interest in Valley
View  resulted  in gain from  extinguishment  of debt for  financial  statements
purposes of  $3,387,767  in 2005,  and in total gain for federal tax purposes of
$4,282,396 in 2005.

     Included in  investment  in  partnerships  held for sale or transfer in the
accompanying   consolidated   balance   sheet  at  December   31,  2004  is  the
Partnership's  basis in the Local  Partnership,  Valley View, along with the net
unamortized  amount of  acquisition  fees and  property  purchase  costs,  which
totaled $31,798.

                                Westport Village
                                ----------------

     The  Partnership  defaulted on its purchase money notes related to Westport
Associates  (Westport  Village) on September 1, 1999, when the notes matured and
were not paid. The default  amount  included  principal and accrued  interest of
$840,000 and $1,615,644, respectively. As of May 12, 2005, principal and accrued
interest of $840,000 and $2,277,871, respectively, were due. The Partnership was
sued by the  noteholders but there has not been any legal action since 2000. The
Partnership  and the  noteholders  had agreed in principle that the  Partnership
would  deposit  assignments  of its  interests  in  Westport  Village in escrow,
together  with an  option  agreement  pursuant  to which the  noteholders  could
purchase the  interests for the  outstanding  debt if the property were not sold
and/or  the  notes  were not  repaid by  January  8,  2001.  At that  time,  the
Partnership's  basis in the Local  Partnership,  along with the net  unamortized
amount of acquisition fees and property  purchase costs,  which totaled $46,989,
was reclassified to investment in partnerships  held in escrow.  However,  there
has been no  communication  with the  noteholders  concerning  implementing  the
settlement since 2000.  Therefore,  effective December 31, 2004, the acquisition
fees and property  purchase costs which had been  reclassified  to investment in
partnerships held in escrow were returned to their respective accounts.

                                      -11-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2005 and 2004

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

b.   Property matters
     ----------------

                                Campbell Terrace
                                ----------------

     On June 16, 2003, the local managing general partner executed a contract to
sell the property owned by Campbell Terrace Associates  (Campbell  Terrace).  On
March 31,  2004,  Campbell  Terrace  was sold.  Cash  proceeds  received  by the
Partnership  in April 2004  totaled  $10,549,582.  The sale  resulted in gain on
disposition of investment in  partnership of $4,711,617 for financial  statement
purposes  and a total gain of  $13,766,939  for federal  income tax  purposes in
2004. In accordance with the terms of the Partnership  Agreement,  in April 2004
the Managing  General Partner was paid a disposition fee of $500,000  related to
the sale, which was netted against the related gain on disposition of investment
in partnership.

                                 Madison Square
                                 --------------

     The Local Managing General Partner of Madison Square Ltd.  Dividend Housing
Association  (Madison Square)  requested debt relief effective  October 1, 2001.
The property has depleted its  operating  cash and  replacement  reserve  funds.
Therefore, the Local Managing General Partner requested from the lender that the
debt  payments  be  reduced to  interest  only  payments  until such time as the
property can be sold.  Effective  January 1, 2002, the lender approved  interest
only payments and a reduction in the rate for a period of five years.  The Local
Managing General Partner has been searching for a not-for-profit organization to
purchase the property,  but has received no firm offer as of May 12, 2005. As of
March 31, 2005, the Partnership's  remaining investment in Madison Square, which
consisted of net unamortized  acquisition fees and property  purchase costs, was
$13,823.

c.   Summarized financial information
     --------------------------------

     Combined  statements of operations for the 18 and 19 Local  Partnerships in
which the Partnership was invested as of March 31, 2005 and 2004,  respectively,
follow. The combined statements have been compiled from information  supplied by
the management  agents of the properties and are unaudited.  The information for
each of the periods is presented  separately for those Local  Partnerships which
have investment basis (equity method),  and for those Local  Partnerships  which
have cumulative losses in excess of the amount of the Partnership's  investments
in those  Local  Partnerships  (equity  method  suspended).  Appended  after the
combined statements is information  concerning the Partnership's share of income
from partnerships related to cash distributions  recorded as income, and related
to the Partnership's share of income from Local Partnerships.

                                                       -12-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2005 and 2004

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued


                        COMBINED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                             For the three months ended
                                                                      March 31,
                                                         2005                              2004
                                              --------------------------       --------------------------
                                                Equity                           Equity
                                                Method        Suspended          Method         Suspended
                                              ----------      ----------       ----------       ----------
     <S>                                      <C>             <C>              <C>              <C>
     Number of Local Partnerships                  9              9                9                10
                                                   =              =                =                ==

     Revenue:
       Rental                                 $2,632,040      $2,510,358       $2,701,416       $2,650,568
       Other                                     120,961         111,583          142,583          102,611
                                              ----------      ----------       ----------       ----------

         Total revenue                         2,753,001       2,621,941        2,843,999        2,753,179
                                              ----------      ----------       ----------       ----------

     Expenses:
       Operating                               2,158,520       1,724,758        2,127,097        1,884,805
       Interest                                  171,060         502,542          307,750          472,017
       Depreciation and amortization             465,255         518,827          482,947          540,162
                                              ----------      ----------       ----------       ----------

         Total expenses                        2,794,835       2,746,127        2,917,794        2,896,984
                                              ----------      ----------       ----------       ----------

     Net loss                                 $  (41,834)     $ (124,186)      $  (73,795)      $ (143,805)
                                              ==========      ==========       ==========       ==========

     Cash distribution                        $       --      $       --       $   51,085       $       --
                                              ==========      ==========       ==========       ==========

     Cash distribution recorded
       as reduction of investments
       in partnerships                        $       --      $       --       $   51,085       $       --
                                              ==========      ==========       ==========       ==========

     Partnership's share of Local
       Partnership net loss                      (39,940)             --          (73,239)              --
                                              --------------------------       ---------------------------

         Share of income from partnerships                $(39,940)                           $(73,239)
                                                          ========                            ========
</TABLE>

     Cash  distributions  received from Local Partnerships which have investment
basis (equity method) are recorded as a reduction of investments in partnerships
and as  cash  receipts  on the  respective  consolidated  balance  sheets.  Cash
distributions  received from Local  Partnerships which have cumulative losses in
excess  of  the  amount  of  the   Partnership's   investments  in  those  Local
Partnerships  (equity  method  suspended)  are  recorded as share of income from
partnerships on the respective consolidated statements of operations and as cash
receipts on the respective consolidated balance sheets. As of March 31, 2005 and
2004, the  Partnership's  share of cumulative losses to date for 9 and 10 of the
18  and  19  Local  Partnerships,  respectively,  exceeded  the  amount  of  the
Partnership's   investments  in  those  Local  Partnerships  by  $9,852,738  and
$10,262,488,  respectively.  As the  Partnership  has no further  obligation  to
advance  funds or provide  financing  to these  Local  Partnerships,  the excess
losses  have not  been  reflected  in the  accompanying  consolidated  financial
statements.

                                      -13-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2005 and 2004

                                   (Unaudited)


3.   RELATED PARTY TRANSACTIONS

     In accordance with the terms of the Partnership Agreement,  the Partnership
is obligated to reimburse the Managing  General  Partner for its direct expenses
in connection with managing the  Partnership.  The Partnership  paid $54,073 and
$42,174 for the three month periods ended March 31, 2005 and 2004, respectively,
to the Managing General Partner as direct  reimbursement of expenses incurred on
behalf  of  the   Partnership.   Such  expenses  are  included  in  general  and
administrative   expenses  in  the  accompanying   consolidated   statements  of
operations.

     In accordance with the terms of the Partnership Agreement,  the Partnership
is obligated to pay the Managing General Partner an annual incentive  management
fee  (Management  Fee) after all other expenses of the Partnership are paid. The
Partnership  paid the Managing  General  Partner a Management Fee of $93,750 for
each of the three month periods ended March 31, 2005 and 2004.

     In accordance  with the terms of the  Partnership  Agreement,  the Managing
General  Partner  and/or its  affiliates  may receive a fee of not more than two
percent  of the  sale  price  of an  investment  in a Local  Partnership  or the
property  it  owns,  payable  under  certain  conditions  upon  the  sale  of an
investment in a Local  Partnership  or the property it owns.  The payment of the
fee is subject to certain  restrictions,  including the achievement of a certain
level of sale  proceeds  and making  certain  minimum  distributions  to limited
partners. In April 2004, the Managing General Partner was paid a disposition fee
of  $500,000  related  to the sale of the  property  owned by  Campbell  Terrace
Associates  on March 31,  2004,  which was netted  against the  related  gain on
disposition of investment in partnership.


4.   CASH DISTRIBUTION

     On May 21, 2004, the Managing  General Partner made a cash  distribution of
$5,280,264  ($72 per Unit) to  Additional  Limited  Partners who were holders of
record as of April 1, 2004. The distribution consisted of proceeds received from
the sale of the property owned by Campbell Terrace.

                                      # # #

                                      -14-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis
          of Financial Condition and Results of Operations


     Capital  Realty  Investors-IV   Limited   Partnership's  (the  Partnership)
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations  section  is  based on the  consolidated  financial  statements,  and
contains   information  that  may  be  considered  forward  looking,   including
statements regarding the effect of governmental regulations.  Actual results may
differ  materially from those  described in the forward  looking  statements and
will be affected by a variety of factors  including  national and local economic
conditions,  the  general  level of  interest  rates,  governmental  regulations
affecting  the  Partnership  and  interpretations  of  those  regulations,   the
competitive  environment in which the Partnership operates, and the availability
of working capital.

                          Critical Accounting Policies
                          ----------------------------

     The  Partnership has disclosed its selection and application of significant
accounting policies in Note 1 of the notes to consolidated  financial statements
included in the Partnership's annual report on Form 10-KSB at December 31, 2004.
The   Partnership   accounts  for  its   investments  in   partnerships   (Local
Partnerships)  by the equity method because the Partnership is a limited partner
in the Local  Partnerships.  As such the  Partnership  has no  control  over the
selection and application of accounting  policies,  or the use of estimates,  by
the  Local  Partnerships.  Environmental  and  operational  trends,  events  and
uncertainties  that might affect the properties owned by the Local  Partnerships
would not necessarily have a significant impact on the Partnership's application
of the equity method of  accounting,  since the equity method has been suspended
for nine Local Partnerships which have cumulative losses in excess of the amount
of the Partnership's investments in those Local Partnerships.

                          New Accounting Pronouncement
                          ----------------------------

     In December  2003,  the Financial  Accounting  Standards  Board issued FASB
Interpretation  No. 46  (revised  December  2003) (FIN 46-R),  Consolidation  of
Variable  Interest  Entities.  FIN 46-R clarifies the  application of Accounting
Research Bulletin 51, Consolidated  Financial  Statements,  for certain entities
that do not  have  sufficient  equity  at risk for the  entity  to  finance  its
activities without additional  subordinated financial support from other parties
or in which equity  investors do not have the  characteristics  of a controlling
financial interest  ("variable interest  entities").  Variable interest entities
within  the  scope of FIN 46-R  will be  required  to be  consolidated  by their
primary  beneficiary.  The primary  beneficiary of a variable interest entity is
determined  to be the party that  absorbs a majority  of the  entity's  expected
losses,  receives a majority of its  expected  returns,  or both.  The  Managing
General Partner has evaluated the partnerships in which the Partnership invested
and has  determined  that they are not  variable  interest  entities  subject to
consolidation by the Partnership under the provisions of FIN 46-R.

                                     General
                                     -------

     Some of the rental properties owned by the Local  Partnerships are financed
by state housing agencies.  The Managing General Partner has sold or refinanced,
and will continue to sell or refinance,  certain properties pursuant to programs
developed by these agencies.  These programs may include opportunities to sell a
property to a qualifying  purchaser  who would agree to maintain the property as
low to  moderate  income  housing,  or to  refinance  a  property,  or to obtain
supplemental  financing.  The  Managing  General  Partner  continues  to monitor
certain state  housing  agency  programs,  and/or  programs  provided by certain
lenders, to ascertain whether the properties would qualify within the parameters
of a given  program and whether  these  programs  would  provide an  appropriate
economic benefit to the Limited Partners of the Partnership.

                                                       -15-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis
          of Financial Condition and Results of Operations - Continued


     Some of the rental properties owned by the Local Partnerships are dependent
on the receipt of  project-based  Section 8 Rental Housing  Assistance  Payments
(HAP)  provided by the U.S.  Department of Housing and Urban  Development  (HUD)
pursuant  to Section 8 HAP  contracts.  Current  legislation  allows all expired
Section 8 HAP contracts  with rents at less than 100% of fair market rents to be
renewed for up to one year.  Expiring  Section 8 HAP  contracts  with rents that
exceed  100% of fair market  rents  could be renewed for up to one year,  but at
rents  reduced  to 100% of fair  market  rents  (Mark-to-Market).  All  expiring
Section 8 HAP  contracts  with rents  exceeding  comparable  market  rents,  and
properties  with mortgage  loans insured by the Federal  Housing  Administration
(FHA), became subject to the Mark-to-Market legislation.

     Mark-to-Market (M2M) implementation will reduce rental income at properties
that are currently  subsidized  at  higher-than-market  rental  rates,  and will
therefore  lower cash flow  available to meet  mortgage  payments and  operating
expenses.  In some instances,  a property will be able to meet its existing debt
service  payments  after the  reduction  in rental  income.  In this  case,  the
property  may enter  the M2M  "Lite"  program,  which  would not  require a debt
restructuring.  In the remaining  instances,  the affected  property may undergo
debt restructuring  according to terms determined by an individual  property and
operations  evaluation.  This would  involve  reducing the first  mortgage  loan
balance to an amount  supportable  by the  property's  operations,  taking  into
account the property's operating expenses and reduced income. The balance of the
amount  written  down from the  first  mortgage  loan  would be  converted  to a
non-performing but accruing (soft) second mortgage loan. When the existing first
mortgage loan is bifurcated  into a first and second  mortgage  loan,  the newly
created second  mortgage loan will accrue  interest at a below-market  rate. The
Internal  Revenue  Service issued a ruling in July 1998, that concluded that the
below-market  rate of interest would not generate  additional  ordinary  income.
Each property subject to M2M will be affected in a different  manner,  and it is
difficult  to  predict  the  exact  form  of  restructuring,  or  potential  tax
liabilities to the Limited Partners, at this time. All properties, upon entering
the M2M program  (excluding  M2M Lite),  are required to enter into an agreement
restricting the property's use to affordable housing for 30 years.

     Finally, under HUD's "Mark-up-to-Market"  program, properties with expiring
Section 8 HAP  contracts  that are located in high-rent  areas as defined by HUD
are eligible for rent increases  which would be necessary to bring Section 8 HAP
contract  rents in line with market rate rents.  For  properties  that enter the
program and have interest rate  subsidized FHA loans,  the rents are adjusted to
take into  account  the  benefits  the  property is already  receiving  from the
below-market  interest rate by means of a HUD-determined  adjustment factor. The
purpose of this program is to provide  incentives to owners of  properties  with
expiring  Section 8 HAP contracts not to convert these properties to market rate
housing.

     In return for  receiving  market  rate rents under  Mark-up-to-Market,  the
property  owner must enter into a five-year  conditional  Section 8 HAP contract
with HUD,  subject  to the  annual  availability  of  funding  by  Congress.  In
addition,  property  owners who enter into the  Mark-up-to-  Market  program may
receive  increased  cash flow,  as the limited  dividend will be increased in an
amount equal to the increase in gross rental revenues.

                                      -16-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis
          of Financial Condition and Results of Operations - Continued


     Pilgrim Tower North Associates  Limited  Partnership  (Pilgrim Tower North)
has a Section 8 HAP contract  which  expired  February  28,  2005.  The Managing
General  Partner has  requested an extension of the Section 8 HAP contract for a
one-year period. The Section 8 HAP contract covers 79% of the apartment units in
Pilgrim  Tower  North.  See Note  2.a.  of the notes to  consolidated  financial
statements  contained in Part I, Item 1, hereof,  for  information  concerning a
possible sale of the property owned by Pilgrim Tower North.

     Tradewinds West Limited  Dividend  Housing  Association  (Tradewinds) has a
Section 8 HAP contract  which expired April 30, 2005. The Section 8 HAP contract
covers 43% of the apartment  units in Tradewinds.  The Managing  General Partner
has requested an extension of the Section 8 HAP contract for a one-year period.

     Harborview Apartments Associates  (Harborview) has a Section 8 HAP contract
which expires May 31, 2005. The Section 8 HAP contract covers  substantially all
of  the  apartment  units  in  Harborview.  It is  anticipated  that  the  Local
Partnership  will extend its Section 8 HAP contract for a one-year period at its
expiration.

     As of March 31, 2005, the carrying amount of the Partnership's  investments
in Local  Partnerships  with  Section 8 HAP  contracts  expiring  in the next 12
months was $3,526,077.

     The Managing  General  Partner  continues to seek  strategies  to deal with
affordable housing policy. While the Managing General Partner cannot predict the
outcome for any particular  property at this time, the Managing  General Partner
will continue to work with the Local  Partnerships  to develop  strategies  that
maximize the benefits to investors.

                          Financial Condition/Liquidity
                          -----------------------------

     The Partnership's liquidity, with unrestricted cash resources of $8,935,770
as of March 31, 2005,  along with  anticipated  future cash  distributions  from
Local  Partnerships,  is  expected  to be  adequate  to  meet  its  current  and
anticipated  operating  cash needs.  As of May 12, 2005,  there were no material
commitments for capital  expenditures.  The Managing  General Partner  currently
intends to retain all of the Partnership's  remaining undistributed cash pending
resolution of the  Partnership's  outstanding  purchase  money notes and related
accrued interest, and for operating cash reserves.

     The  Partnership's  obligations  with respect to its  investments  in Local
Partnerships,  in the  form  of  nonrecourse  purchase  money  notes  having  an
aggregate  principal  balance of $16,600,081 plus aggregate  accrued interest of
$79,713,018  as of March 31, 2005, are payable in full upon the earliest of: (i)
sale or refinancing of the respective Local Partnership's rental property;  (ii)
payment in full of the respective Local  Partnership's  permanent loan; or (iii)
maturity.

     The  collateral  that  secured  the  purchase  money  notes  related to the
following properties was transferred to the noteholders during 2004, and through
May 12, 2005.

     Property                Principal          Date           Disposition
     --------                ----------     -------------      -----------

     Glenridge Gardens        $640,000      February 2004      Transferred
     Valley View              $920,000      March 2005         Transferred



                                      -17-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis
          of Financial Condition and Results of Operations - Continued


     The purchase money notes related to the following  properties  have matured
and have not been paid or extended as of May 12, 2005.

      Property                               Principal            Maturity
      --------                              -----------           --------

      Crescent Gardens - Second Note        $  434,000            07/31/99
      Westport Village                         840,000            09/01/99
      Pilgrim Tower East                     1,450,000 (1)        11/30/03
      Pilgrim Tower North                    2,065,000            11/30/03
      Crescent Gardens - First Note            434,000            07/31/04
      Harborview                             3,000,000            08/01/04
      Cedar Point                            1,320,000            08/30/04
      Thornwood House                        1,775,000            08/30/04
      Jewish Federation                      1,350,000            10/31/04

      (1) Remaining principal, after partial payment.

     The  purchase  money  note  related  to  Asbury  Tower  Associates  Limited
Partnership  (Asbury Tower) was due to mature on August 31, 2004.  However,  the
noteholder  has agreed to extend  the  maturity  date on a month to month  basis
until  such  time as the  noteholder  provides  a 30 day  advance  notice to the
Partnership.  As of May 12, 2005, no such notice has been received.  As of March
31, 2005, principal due on the purchase money note was $3,432,081.

     The  remaining  purchase  money note  matures in 2025  ($500,000  principal
balance).

     See the notes to  consolidated  financial  statements  contained in Part I,
Item 1, hereof, for additional information concerning purchase money notes.

     The purchase money notes,  which are  nonrecourse to the  Partnership,  are
generally  secured  by  the  Partnership's  interest  in  the  respective  Local
Partnerships.  There is no assurance  that the underlying  properties  will have
sufficient appreciation and equity to enable the Partnership to pay the purchase
money notes'  principal and accrued  interest when due. If a purchase money note
is not paid in accordance with its terms,  the  Partnership  will either have to
renegotiate  the terms of repayment or risk losing its  partnership  interest in
the  respective  Local  Partnership.  In the event  that a  purchase  money note
remains unpaid upon maturity,  the noteholder may have the right to foreclose on
the Partnership's interest in the related Local Partnership.

     The  Partnership's  inability  to pay  certain of the  purchase  money note
principal and accrued interest balances when due, and the resulting  uncertainty
regarding the Partnership's  continued  ownership  interest in the related Local
Partnerships,  does not adversely impact the Partnership's  financial  condition
because the  purchase  money  notes are  nonrecourse  and secured  solely by the
Partnership's interest in the related Local Partnerships.  Therefore, should the
investment in any of the Local  Partnerships  with matured or maturing  purchase
money notes not produce  sufficient  value to satisfy the related purchase money
notes, the  Partnership's  exposure to loss is limited because the amount of the
nonrecourse indebtedness of each of the matured or maturing purchase money notes
exceeds the  carrying  amount of the  investment  in each of the  related  Local
Partnerships.  Thus, even a complete loss of the Partnership's interest in these
Local  Partnerships  would not have a material  adverse  impact on the financial
condition of the Partnership.

                                      -18-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis
          of Financial Condition and Results of Operations - Continued


     The Managing General Partner continues to investigate possible alternatives
to reduce the Partnership's debt obligations.  These alternatives include, among
others, retaining the cash available for distribution to meet the purchase money
note  requirements,  paying off certain  purchase  money  notes at a  discounted
price, extending the due dates of certain purchase money notes,  refinancing the
respective  properties'  underlying  debt, or selling the underlying real estate
and using the  Partnership's  share of the  proceeds to pay or buy down  certain
purchase money note  obligations.  Although the Managing General Partner has had
some success applying these strategies in the past, the Managing General Partner
cannot assure that these  strategies  will be  successful in the future.  If the
Managing  General  Partner is unable to negotiate  an  extension  or  discounted
payoff,  in the event that the purchase money notes remain unpaid upon maturity,
the noteholders may have the right to foreclose on the Partnership's interest in
the related Local Partnerships.  In the event of a foreclosure or other transfer
of the Partnership's  interest, the excess of the nonrecourse  indebtedness over
the  carrying  amount  of the  Partnership's  investment  in the  related  Local
Partnership  will result in a taxable gain. This gain will be taxable to Limited
Partners at a federal tax rate of up to 25.0%,  as it will reflect  recapture of
depreciation  deductions claimed in prior years.  Additionally,  the Partnership
would lose its investment in the Local Partnership and,  likewise,  its share of
any future cash  distributed by the Local  Partnership  from rental  operations,
mortgage  debt  refinancings,  or the sale of the real  estate.  Of the 18 Local
Partnerships in which the Partnership is invested as of March 31, 2005, the nine
Local Partnerships with associated  purchase money notes which have matured,  or
which mature through March 31, 2006, and which remain unpaid or unextended as of
May 12, 2005,  represented the following  percentages of the Partnership's total
distributions  received from Local  Partnerships  and share of income from Local
Partnerships for the immediately preceding two calendar years.

                              Percentage of Total       Partnership's Share of
                             Distributions Received          Loss from
     For the Year Ended      from Local Partnerships      Local Partnerships
     ------------------      -----------------------    ----------------------

     December 31, 2004                 0.0%                   $(297,024)
     December 31, 2003                10.1%                   $(442,314)


     The  Managing  General  Partner  continues  to  address  the  maturity  and
impending  maturity of the Partnership's  debt obligations and to seek solutions
that will provide the most favorable outcome to the Limited  Partners.  However,
there can be no assurance that these strategies will be successful.

     The Partnership closely monitors its cash flow and liquidity position in an
effort to ensure that sufficient  cash is available for operating  requirements.
For the three month period ended March 31, 2005,  existing cash  resources  were
adequate  to support  operating  cash  requirements.  Cash and cash  equivalents
decreased $199,729 during the three month period ended March 31, 2003, primarily
due to operating expenses paid in cash

     On May 21, 2004, the Managing  General Partner made a cash  distribution of
$5,280,264  ($72 per Unit) to  Additional  Limited  Partners who were holders of
record as of April 1, 2004. The distribution consisted of proceeds received from
the sale of the property owned by Campbell Terrace.

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

     The  Partnership's  net income for the three month  period  ended March 31,
2005,  decreased  from  the  corresponding  period  in  2004,  primarily  due to
decreases in gain on  disposition  of  investment in  partnership  and gain from
extinguishment of debt and increases in interest expense and professional  fees,
partially  offset by decreases in share of loss from  partnerships,  general and
administrative  expenses and  amortization  of deferred costs and an increase in
interest revenue.  Interest expense increased due to the compounding of interest
on purchase money notes.  Professional  fees  increased  primarily due to higher
audit costs.  Share of loss from partnerships  decreased  primarily due to lower
operating and interest expenses at one property.  Interest revenue increased due
to  higher  cash  and  cash  equivalent  balances,  and  higher  rates  in 2005.
Amortization  of deferred  costs  decreased in 2005 primarily due to the sale of
Campbell Terrace and transfer of the Partnership's interest in Glenridge Gardens
in 2004.

                                      -19-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis
          of Financial Condition and Results of Operations - Continued


     For financial reporting purposes, the Partnership,  as a limited partner in
the Local  Partnerships,  does not record losses from the Local  Partnerships in
excess of its  investment  to the  extent  that the  Partnership  has no further
obligation to advance funds or provide financing to the Local Partnerships. As a
result, the Partnership's  share of income from partnerships for the three month
periods  ended March 31, 2005 and 2004 did not  include  losses of $216,354  and
$260,739, respectively.

     No other  significant  changes in the  Partnership's  operations have taken
place during the three month period ended March 31, 2005.


Item 3. Controls and Procedures

     In  May  2005,  representatives  of the  Managing  General  Partner  of the
Partnership  carried out an  evaluation of the  effectiveness  of the design and
operation of the Partnership's  disclosure controls and procedures,  pursuant to
Exchange Act Rules  13a-15 and 15d-15.  The  Managing  General  Partner does not
expect that the  Partnership's  disclosure  controls and procedures will prevent
all error and all fraud.  A control  system,  no matter how well  conceived  and
operated,  can provide only  reasonable  assurance  that the  objectives  of the
control system are met. Further, the design of a control system must reflect the
fact that there are resource  constraints,  and the benefits of controls must be
considered relative to their costs.  Because of the inherent  limitations in all
control systems,  no evaluation of controls can provide absolute  assurance that
all control issues have been detected.  These inherent  limitations  include the
realities that judgments in  decision-making  can be faulty, and that breakdowns
can occur  because  of simple  error or  mistake.  The  design of any  system of
controls also is based in part upon certain  assumptions about the likelihood of
future  events,  and there can be no  assurance  that any design will succeed in
achieving its stated goals under all  potential  future  conditions.  Over time,
controls may become inadequate  because of changes in conditions,  or the degree
of compliance  with the policies or procedures may  deteriorate.  Because of the
inherent  limitations in a cost-effective  control system,  misstatements due to
error or fraud may occur and not be detected.  Based on the May 2005 evaluation,
and subject to the  foregoing,  the  Principal  Executive  Officer and Principal
Financial  Officer  concluded  that the  Partnership's  disclosure  controls and
procedures  are effective as of the end of the period  covered by this report to
alert  them in a timely  manner  to any  material  information  relating  to the
Partnership that must be included in the Partnership's periodic SEC filings, and
particularly  during  the  period in which  this  report is being  prepared.  In
addition,  there have been no significant changes in the Partnership's  internal
control over financial  reporting that occurred  during the  Partnership's  most
recent fiscal quarter that have materially affected, or are reasonably likely to
materially affect, the Partnership's internal control over financial reporting.


Part II. OTHER INFORMATION
Item 3. Defaults upon Senior Securities

     See Note 2.a. of the notes to consolidated  financial  statements contained
in Part I, Item 1, hereof, for information concerning the Partnership's defaults
on certain purchase money notes.

                                      -20-

<PAGE>
Part II. OTHER INFORMATION
Item 5. Other Information


     There  is no  established  market  for the  purchase  and  sale of units of
additional limited partner interest (Units) in the Partnership, although various
informal  secondary market services exist. Due to the limited markets,  however,
investors may be unable to sell or otherwise dispose of their Units.

                                Cash Distribution

     On May 21, 2004, the Managing  General Partner made a cash  distribution of
$5,280,264  ($72 per Unit) to  Additional  Limited  Partners who were holders of
record as of April 1, 2004. The distribution consisted of proceeds received from
the sale of the property owned by Campbell Terrace.

     Effective  at close of business  on May 6, 2005,  the  Principal  Financial
Officer and Principal  Accounting Officer (one individual) of C.R.I.,  Inc. (the
Managing  General  Partner  of the  Registrant)  resigned.  The  duties of these
positions have been assumed by H. William  Willoughby.  Mr.  Willoughby has held
the  office of  President  of CRI since  1990 and has also  served as one of its
Directors. He has no employment contract.

     There has not been any information  required to be disclosed in a report on
Form 8-K during the quarter ended March 31, 2005,  but not  reported,  except as
set forth above, because the triggering event occurred within four business days
of the filing of this Form 10-QSB


Item 6. Exhibits

Exhibit No.    Description
-----------    ------------

   31.1        Certification  of  Principal  Executive  Officer,  pursuant to 18
               U.S.C.  Section 1350,  as adopted  pursuant to Section 302 of the
               Sarbanes-Oxley Act of 2002.

   31.2        Certification  of  Principal  Financial  Officer,  pursuant to 18
               U.S.C.  Section 1350,  as adopted  pursuant to Section 302 of the
               Sarbanes-Oxley Act of 2002.

   32          Certification  of  Principal   Executive  Officer  and  Principal
               Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

All other Items are not applicable.

                                      -21-

<PAGE>
                                    SIGNATURE

     In accordance  with the  requirements  of the Exchange Act, the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                  CAPITAL REALTY INVESTORS-IV LIMITED
                                      PARTNERSHIP
                                  ----------------------------------------------
                                  (Registrant)

                                  by:  C.R.I., Inc.
                                       -----------------------------------------
                                       Managing General Partner




May 12, 2005                            by:  /s/ H. William Willoughby
------------                                 -----------------------------------
DATE                                         H. William Willoughby,
                                               Director, President,
                                               and Secretary

                                      -22-

<PAGE>