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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


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



                                    FORM 10-Q


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



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

                For the quarterly period ended September 30, 2008


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



                         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


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



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

Yes  |X|          No  |_|

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated filer, or a non-accelerated filer.

Large accelerated filer |_|  Accelerated filer |_|   Non-accelerated filer |X|

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

Yes  |_|          No  |X|


--------------------------------------------------------------------------------
<PAGE>

                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                               INDEX TO FORM 10-Q

                    FOR THE QUARTER ENDED SEPTEMBER 30, 2008



                                                                         Page
                                                                         ----
Part I - FINANCIAL INFORMATION

Item 1.  Financial Statements

         Consolidated Balance Sheets
           - September 30, 2008 and December 31, 2007....................   1

         Consolidated Statements of Operations and Accumulated Losses
           - for the three and nine months ended
             September 30, 2008 and 2007.................................   2

         Consolidated Statements of Cash Flows
           - for the nine months ended September 30, 2008 and 2007.......   3

         Notes to Consolidated Financial Statements
           - September 30, 2008 and 2007.................................   4

Item 2.  Management's Discussion and Analysis of Financial Condition
           and Results of Operations.....................................  14

Item 4.  Controls and Procedures.........................................  18


PART II - OTHER INFORMATION

Item 3.  Defaults Upon Senior Securities.................................  18

Item 5.  Other Information...............................................  19

Item 6.  Exhibits........................................................  19

Signature................................................................  20

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


                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                           CONSOLIDATED BALANCE SHEETS


                                     ASSETS

<TABLE>
<CAPTION>
                                                                                      September 30,    December 31,
                                                                                          2008            2007
                                                                                      -------------   -------------
                                                                                       (Unaudited)
<S>                                                                                   <C>             <C>
Investments in partnerships .......................................................   $  5,721,011    $  5,709,149
Investment in partnerships held for sale or transfer ..............................         47,471          93,459
Cash and cash equivalents .........................................................      8,052,629       8,046,599
Acquisition fees, principally paid to related parties,
  net of accumulated amortization of $102,428 and $101,561, respectively ..........         68,826          73,928
Property purchase costs,
  net of accumulated amortization of $92,414 and $97,084, respectively ............         54,751          63,580
Other assets ......................................................................         16,335          32,230
                                                                                      ------------    ------------

      Total assets ................................................................   $ 13,961,023    $ 14,018,945
                                                                                      ============    ============



                                                  LIABILITIES AND PARTNERS' DEFICIT


Due on investments in partnerships ................................................   $  5,885,000    $  9,317,081
Accrued interest payable ..........................................................     19,306,242      42,594,387
Accounts payable and accrued expenses .............................................        143,098         192,387
                                                                                      ------------    ------------

      Total liabilities ...........................................................     25,334,340      52,103,855
                                                                                      ------------    ------------

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 .........................................    (19,161,217)    (19,161,217)
    Offering costs ................................................................     (7,562,894)     (7,562,894)
    Accumulated losses ............................................................    (58,152,706)    (84,864,299)
                                                                                      ------------    ------------

      Total partners' deficit .....................................................    (11,373,317)    (38,084,910)
                                                                                      ------------    ------------

      Total liabilities and partners' deficit .....................................   $ 13,961,023    $ 14,018,945
                                                                                      ============    ============
</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)

<TABLE>
<CAPTION>
                                             For the three months ended      For the nine months ended
                                                   September 30,                   September 30,
                                           -----------------------------   ----------------------------
                                                2008           2007            2008            2007
                                           -------------   -------------   -------------   ------------
<S>                                        <C>             <C>             <C>             <C>
Share of (loss) income from partnerships   $   (109,244)   $     (3,973)   $    503,875    $    283,023
                                           ------------    ------------    ------------    ------------

Other revenue and  expenses:

  Revenue:
    Interest ...........................         51,095         102,473         183,754         306,745
    Gain from extinguishment of debt ...     28,168,263            --        28,168,263      17,498,567
                                           ------------    ------------    ------------    ------------

                                             28,219,358         102,473      28,352,017      17,805,312
                                           ------------    ------------    ------------    ------------

  Expenses:
    Interest ...........................        433,472         821,515       1,501,764       3,328,904
    Management fee .....................         93,750          93,750         281,250         281,250
    General and administrative .........         62,068          76,123         238,492         246,191
    Professional fees ..................         11,766          51,063         116,601         143,188
    Amortization of deferred costs .....          1,990           1,371           6,192          16,836
                                           ------------    ------------    ------------    ------------

                                                603,046       1,043,822       2,144,299       4,016,369
                                           ------------    ------------    ------------    ------------

      Total other revenue and expenses .     27,616,312        (941,349)     26,207,718      13,788,943
                                           ------------    ------------    ------------    ------------

Net income (loss) ......................     27,507,068        (945,322)     26,711,593      14,071,966

Accumulated losses, beginning of period     (85,659,774)    (83,377,218)    (84,864,299)    (98,394,506)
                                           ------------    ------------    ------------    ------------

Accumulated losses, end of period ......   $(58,152,706)   $(84,322,540)   $(58,152,706)   $(84,322,540)
                                           ============    ============    ============    ============


Net income (loss) allocated
  to General Partners (1.51%) ..........   $    415,357    $    (14,274)   $    403,345    $    212,487
                                           ============    ============    ============    ============

Net income (loss) allocated
  to Initial and Special
  Limited Partners (1.49%) .............   $    409,855    $    (14,085)   $    398,003    $    209,672
                                           ============    ============    ============    ============

Net income (loss) allocated
  to Additional Limited Partners (97%) .   $ 26,681,856    $   (916,963)   $ 25,910,245    $ 13,649,807
                                           ============    ============    ============    ============

Net income (loss) per unit of
  Additional Limited Partner Interest,
    based on 73,337 units outstanding ..   $     363.83    $     (12.50)   $     353.30    $     186.12
                                           ============    ============    ============    ============
</TABLE>


                   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 nine months ended
                                                                                          September 30,
                                                                                  ----------------------------
                                                                                      2008            2007
                                                                                  ------------    ------------
<S>                                                                               <C>             <C>
Cash flows from operating activities:
  Net income ..................................................................   $ 26,711,593    $ 14,071,966

  Adjustments to reconcile net income to net cash used in operating activities:
    Share of income from partnerships .........................................       (503,875)       (283,023)
    Gain from extinguishment of debt ..........................................    (28,168,263)    (17,498,567)
    Amortization of deferred costs ............................................          6,192          16,836

    Changes in assets and liabilities:
      Decrease (increase) in other assets .....................................         15,895           2,630
      Increase in accrued interest payable ....................................      1,501,764       3,328,904
      (Decrease) increase in accounts payable and accrued expenses ............        (49,289)          9,361
                                                                                  ------------    ------------

        Net cash used in operating activities .................................       (485,983)       (351,893)
                                                                                  ------------    ------------

Cash flows from investing activities:
  Receipt of distributions from partnerships ..................................        492,013         104,014
  Collection of sale proceeds receivable ......................................           --            27,245
                                                                                  ------------    ------------

        Net cash provided by investing activities .............................        492,013         131,259
                                                                                  ------------    ------------

Cash flows from financing activities:
  Distribution to Limited Partners ............................................           --               100
                                                                                  ------------    ------------

Net increase (decrease) in cash and cash equivalents ..........................          6,030        (220,534)

Cash and cash equivalents, beginning of period ................................      8,046,599       8,079,400
                                                                                  ------------    ------------

Cash and cash equivalents, end of period ......................................   $  8,052,629    $  7,858,866
                                                                                  ============    ============
</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

                           September 30, 2008 and 2007

                                   (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 September 30, 2008, and the results of its
operations  for the three and nine month  periods  ended  September 30, 2008 and
2007, and its cash flows and partners'  deficit for the nine month periods ended
September 30, 2008 and 2007. The results of operations  for the interim  periods
ended  September 30, 2008, 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-Q.
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 2007 annual
report on Form 10-KSB.


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 $5,885,000 plus aggregate  accrued  interest of
$19,306,242  as of September 30, 2008, 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 note related to Crescent
Gardens  was sold to the  respective  noteholders  during 2007 and the other two
listed  purchase  money notes were paid off at a discount  from  proceeds of the
sales of the properties  owned by the indicated  Local  Partnerships in 2007 and
2008.

<TABLE>
<CAPTION>

     Property                            Principal         Date       Disposition
     --------                           -----------    -----------    -----------
     <S>                                <C>            <C>            <C>
     Asbury Tower                       $3,432,081     August 2008    Sale
     Crescent Gardens - Second Note        434,000     June 2007      Sale of Interest
     Jewish Federation                   1,350,000     June 2007      Sale

</TABLE>
                                       -4-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           September 30, 2008 and 2007

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

     The purchase money notes related to the following  properties  have matured
and have not been paid or extended as of November 12, 2008.

<TABLE>
<CAPTION>
                                                  Accrued Interest
                                                       As of
     Property                   Principal        September 30, 2008        Maturity
     --------                  -----------       ------------------      -----------
     <S>                       <C>               <C>                     <C>
     Westport Village (1)      $  840,000            $2,672,005            09/01/99
     Pilgrim Tower East         1,450,000 (2)         4,638,239            11/30/03
     Cedar Point                1,320,000             3,861,859            08/30/04
     Thornwood House            1,775,000             5,010,111            08/30/04

</TABLE>

     (1)  In receivership.
     (2)  Remaining principal, after partial payment.


     The remaining  purchase  money note related to  Northridge  Park matures in
2025. As of September 30, 2008,  principal  and accrued  interest  balances were
$500,000 and $3,124,028, respectively.

     As  of  September  30,  2008,  Westport  Village  is in  receivership.  The
Partnership's  non- recourse  purchase money notes and accrued  interest totaled
$840,000 and $2,672,005,  respectively at September 30, 2008. The Partnership is
not  anticipating  any loss resulting from the  anticipated  change in ownership
upon foreclosure.

     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.

     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


                                       -5-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           September 30, 2008 and 2007

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

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 35.0%.  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  sale of the  real  estate.  Of the ten  Local
Partnerships  in which the Partnership is invested as of September 30, 2008, the
four Local Partnerships with associated purchase money notes which have matured,
or which  mature  through  September  30,  2009,  and  which  remain  unpaid  or
unextended as of November 12, 2008, 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           Income from
     For the Year Ending    from Local Partnerships       Local Partnerships
     -------------------    -----------------------     ----------------------

     December 31, 2007                 0%                    $ 69,448
     December 31, 2006                 0%                    $539,623


     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
and nine month periods ended  September 30, 2008,  was $433,472 and  $1,501,764,
respectively,  and $821,515 and  $3,328,904 for the three and nine month periods
ended  September 30, 2007,  respectively.  The accrued  interest  payable on the
purchase money notes of $19,306,242 and $42,594,387 as of September 30, 2008 and
December  31,  2007,  respectively,  is due 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.

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

     The  Partnership  defaulted  on its  purchase  money  note  secured  by its
interest in 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 November 12,
2008, principal and accrued interest of $1,320,000 and $3,882,878, respectively,
were due.  The  Partnership  had agreed in  principle  to assign its interest in
Cedar Point to the noteholders in satisfaction  of the nonrecourse  note.  There
has been no communication with the noteholders since 2006. Therefore,  effective


                                       -6-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           September 30, 2008 and 2007

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

December 31, 2007, the Partnership's basis in Cedar Point, along with associated
acquisition  fees and property  purchase  costs which had been  reclassified  to
investment  in  partnerships  held for sale or transfer,  were returned to their
respective operating accounts.

                                 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
November 12,  2008,  the note has not been  canceled  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.

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

     The  Partnership  defaulted  on its  purchase  money  note  secured  by its
interest in Pilgrim Tower East  Associates  (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
November 12, 2008,  principal and accrued interest of $1,450,000 and $4,663,705,
respectively, were due. The Partnership and the noteholders 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
noteholders failed to obtain required  regulatory consent to the sale within the
required time frame and the contract for the sale of the Partnership's  interest
expired in November  2003.  Under the terms of the note and the  Assignment  and
Security  Agreement,  the  noteholders  have the right to enforce their security
interests in the Local  Partnership  subject to approval by  California  Housing
Finance  Agency and all other  government  agencies with  jurisdiction  over the
property.  The Partnership  has been informed by the  noteholders  that they are
working  to obtain  regulatory  consent  to the  transfer  of the  Partnership's
interest. There is no assurance that a transfer of the Partnership's interest in
Pilgrim Tower East will occur.

     Due to the  impending  transfer  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  September  30, 2008 and December  31,  2007,  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  secured  by its
interest in Thornwood  House  Associates  (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 November
12,  2008,   principal  and  accrued  interest  of  $1,775,000  and  $5,038,102,
respectively,  were due. The  Partnership  had agreed in principle to assign its
interest to the noteholder in satisfaction of the  nonrecourse  note.  There has
been no  communication  with the noteholders  since 2006.  Therefore,  effective


                                       -7-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           September 30, 2008 and 2007

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

December 31,  2007,  the  Partnership's  basis in  Thornwood  House,  along with
associated   acquisition  fees  and  property  purchase  costs  which  had  been
reclassified  to  investment  in  partnerships  held for sale or transfer,  were
returned to their respective operating accounts.

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

     The  Partnership  defaulted  on its  purchase  money  notes  secured by its
interest in 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 November 12, 2008,  principal and
accrued  interest  of  $840,000  and  $2,685,512,  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 response from the noteholders concerning implementing the settlement
since 2000.  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.

     The  loan  encumbering  the  property  associated  with  the  Partnership's
investment in Westport  Village is in default.  The Managing  General Partner of
the Local Partnership was unable to reach an agreement with the Illinois Housing
Development  Authority (IHDA) to a mortgage  restructuring.  As of September 30,
2008, Westport Village is in receivership.  The Partnership is working with IHDA
for  a  sale  of  the  property  in  lieu  of  foreclosure.   The  Partnership's
non-recourse  purchase money notes and accrued  interest  thereon total $840,000
and $2,672,005,  respectively,  at September 30, 2008 relating to this property.
The  Partnership  is not  anticipating  any loss  resulting  from the  change in
ownership.

     As Westport  Village is in  receivership,  the  Partnership's  basis in the
Local Partnership, along with the net unamortized amount of acquisition fees and
property  purchased  costs,  which  totaled $0 at both  September  30,  2008 and
December 31, 2007, has been  reclassified to investment in partnerships held for
sale or transfer in the accompanying consolidated balance sheets.

b.   Completed sales
     ----------------

                                  Asbury Tower
                                  ------------

     The  purchase  money note secured by the  Partnership's  interest in Asbury
Tower Associates Limited  Partnership (Asbury Tower) was due to mature on August
31, 2004. However, the noteholder orally 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.  Effective  January  1, 2008 the  interest  rate was
reduced to 4 percent.  On August 28, 2008,  the property  owned by Asbury Towers
was sold to an affiliate of the Local Managing  General  Partner.  Proceeds from
the sale were used to payoff the purchase money note at a discount. As of August


                                       -8-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           September 30, 2008 and 2007

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

28, 2008,  the  principal and accrued  interest  balances  were  $3,432,081  and
$24,789,908,  respectively.  The sale resulted in gain on extinguishment of debt
for  financial  statement  purposes  of  $28,168,263  in 2008 and total  gain of
approximately $29.5 million for federal tax purposes.

     Due to the  impending  sale of the  property  owned by  Asbury  Tower,  the
Partnership's  basis in the Local  Partnership,  along with the net  unamortized
amount of acquisition fees and property purchase costs, which totaled $53,727 at
December 31, 2007, had been  reclassified to investment in partnerships held for
sale or transfer in the accompanying consolidated balance sheet at that date.

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

     The  Partnership  defaulted on its two purchase  money notes secured by its
interest in Crescent  Gardens  Associates  (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.  In  June  2005,   one-half  of  the
Partnership's  limited partner interest in the Local Partnership was transferred
to a designee  of its  current  noteholder  in  satisfaction  of that note.  The
transfer of one-half of the Partnership's  interest in Crescent Gardens resulted
in gain  from  extinguishment  of  debt  for  financial  statement  purposes  of
$1,348,879 in 2005,  and in total gain of $1,840,362 for federal tax purposes in
2005. On June 7, 2007, the remaining half of the  Partnership's  Limited Partner
interest in the Local Partnership was sold,  subject to the right of the holders
of the Second  Crescent  Note.  As of June 7, 2007,  the  principal  and accrued
interest balances were $434,000 and $1,687,481,  respectively. The sale resulted
in gain  from  extinguishment  of  debt  for  financial  statement  purposes  of
$2,114,046 in 2007 and $2,881,618 for federal tax purposes.

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

     The  Partnership  defaulted  on its  purchase  money  note  secured  by its
interest in 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.  On June 29, 2007,  the property  owned by Jewish  Federation  was
sold.  The  Partnership's  share of the sale proceeds was applied to the pay off
the purchase  money note at a discount.  As of June 29, 2007,  the principal and
accrued  interest  balances were $1,350,000 and $14,066,427,  respectively.  The
sale resulted in gain on extinguishment of debt for financial statement purposes
of $15,384,520 in 2007 and $14,087,237 for federal tax purposes.

c.   Assets held for sale or transfer
     --------------------------------

                                   Hale Ohana
                                   ----------

     The Partnership  has been informed that the Local Managing  General Partner
signed a contract  to sell the  property  related to Lihue II  Associates  (Hale


                                       -9-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           September 30, 2008 and 2007

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

Ohana).  Due to the impending sale of the property,  the Partnership's  basis in
the Local Partnership, along with the net unamortized amount of acquisition fees
and property  purchase  costs,  which totaled  $7,739 at September 30, 2008, has
been reclassified to investment in partnerships held for sale or transfer in the
accompanying consolidated balance sheet at that date. There is no assurance that
a sale will occur.

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

     On May 7, 2007,  the Local  Managing  General  Partner signed a contract to
sell the property related to Madison Square,  Ltd.  Dividend Housing  Associates
(Madison  Square) to a  non-profit.  Due to the  impending  sale of the property
owned by Madison Square, the Partnership's basis in the Local Partnership, which
totaled  $0 at  both  September  30,  2008  and  December  31,  2007,  has  been
reclassified to asset held for sale or transfer in the accompanying consolidated
balance sheets.  Net capitalized  acquisition  fees and property  purchase costs
were reduced to zero at September  30, 2007.  There is no assurance  that a sale
will occur.

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

     See Note 2.a., above.

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

     See Note 2.a., above.

d.   Summarized financial information
     --------------------------------

     Combined statements of operations for the ten and eleven Local Partnerships
in which  the  Partnership  was  invested  as of  September  30,  2008 and 2007,
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.

                                      -10-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           September 30, 2008 and 2007

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

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

                                                                  For the three months ended
                                                                         September 30,
                                                  ------------------------------------------------------------
                                                             2008                              2007
                                                  --------------------------       ---------------------------
                                                    Equity                           Equity
                                                    Method        Suspended          Method         Suspended
                                                  ----------      ----------       ----------       ----------
         <S>                                      <C>             <C>              <C>              <C>
         Number of Local Partnerships                  4              6                4                7
                                                       =              =                =                =
         Revenue:
           Rental                                 $  846,588      $1,744,027       $  840,894       $2,298,996
           Other                                       8,272          97,277           48,726          156,262
                                                  ----------      ----------       ----------       ----------
             Total revenue                           854,860       1,841,304          889,620        2,455,258
                                                  ----------      ----------       ----------       ----------

         Expenses:
           Operating                                 809,683       1,114,397          729,422        1,670,150
           Interest                                  (10,596)        411,690             (186)         456,372
           Depreciation and amortization             170,505         350,660          164,399          529,972
                                                  ----------      ----------       ----------       ----------
             Total expenses                          969,592       1,876,747          893,635        2,656,494
                                                  ----------      ----------       ----------       ----------

         Net loss                                 $ (114,732)     $  (35,443)      $   (4,015)      $ (201,236)
                                                  ==========      ==========       ==========       ==========
         Cash distributions recorded
           as income                                      --           4,330               --               --

         Partnership's share of Local
           Partnership net loss                     (113,574)             --           (3,973)              --
                                                  --------------------------       ---------------------------
         Share of loss from
           partnerships                                   $(109,244)                          $(3,973)
                                                          =========                           =======
</TABLE>


                                      -11-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           September 30, 2008 and 2007

                                   (Unaudited)


2. INVESTMENTS IN PARTNERSHIPS - Continued

<TABLE>
<CAPTION>

                                                                For the nine months ended
                                                                        September 30,
                                                  -----------------------------------------------------------
                                                            2008                              2007
                                                  -------------------------        --------------------------
                                                    Equity                           Equity
                                                    Method        Suspended          Method         Suspended
                                                  ----------      ----------       ----------       ----------
         <S>                                      <C>             <C>              <C>              <C>
         Number of Local Partnerships                 4               6                 4               7
                                                      =               =                 =               =
         Revenue:
           Rental                                 $2,558,394      $5,232,080       $2,494,611       $6,896,988
           Other                                     177,111         291,832          152,757          468,786
                                                  ----------      ----------       ----------       ----------
             Total revenue                         2,735,505       5,523,912        2,647,368        7,365,774
                                                  ----------      ----------       ----------       ----------

         Expenses:
           Operating                               2,243,796       3,343,190        1,973,894        5,010,450
           Interest                                  (31,788)      1,235,069             (557)       1,369,115
           Depreciation and amortization             511,514       1,051,980          493,196        1,589,915
                                                  ----------      ----------       ----------       ----------
             Total expenses                        2,723,522       5,630,239        2,466,533        7,969,480
                                                  ----------      ----------       ----------       ----------

         Net income (loss)                        $   11,983      $ (106,327)      $  180,835       $ (603,706)
                                                  ==========      ==========       ==========       ==========
         Cash distributions                       $       --      $  492,013       $       --       $  104,014
                                                  ==========      ==========       ==========       ==========

         Cash distributions recorded
           as income                              $       --      $  492,013       $       --       $  104,014

         Partnership's share of Local
           Partnership net income (loss)              11,862              --          179,009              --
                                                  --------------------------       ---------------------------
         Share of income from
           partnerships                                     $503,875                         $283,023
                                                            ========                         ========
</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 September 30, 2008
and 2007, the  Partnership's  share of cumulative  losses to date for six of the
ten and for seven of the eleven Local Partnerships,  respectively,  exceeded the
amount  of  the  Partnership's   investments  in  those  Local  Partnerships  by
$6,765,998 and  $11,650,802,  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.

                                      -12-

<PAGE>


                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           September 30, 2008 and 2007

                                   (Unaudited)


3.   RELATED PARTY TRANSACTIONS

     In accordance with the terms of the Partnership Agreement,  the Partnership
is obligated to reimburse the Managing  General  Partner or its  affiliates  for
direct  expenses in connection  with managing the  Partnership.  The Partnership
paid $40,983 and $178,802 for the three and nine month periods  ended  September
30,  2008,  respectively,  and $56,967 and $182,338 for the three and nine month
periods ended  September 30, 2007,  respectively.  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  September 30, 2008 and 2007 and $281,250
for each of the nine month periods ended September 30, 2008 and 2007.

     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.

Cash concentration risk
-----------------------

     Financial   instruments  that   potentially   subject  the  Partnership  to
concentrations of risk consist primarily of cash. The Partnership  maintains two
cash  accounts  with the same bank.  As of  September  30, 2008,  the  uninsured
portion of the cash balances was $8,236,778.

                                      # # #

                                      -13-

<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, 2007.
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 six Local  Partnerships which have cumulative losses in excess of the amount
of the Partnership's investments in those Local Partnerships.

                                     General
                                     -------

     Some of the rental properties owned by the Local  Partnerships are financed
by state and federal 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.

     The U. S. Department of Housing and Urban  Development  (HUD) subsidies are
provided principally under Sections 8 and 236 of the National Housing Act. Under
Section 8, the  government  pays to the  applicable  apartment  partnership  the
difference between market rental rates (determined in accordance with government
procedures)  and the rate the  government  deems  residents  can  afford.  Under
Section  236,  the  government  provides  interest  subsidies  directly  to  the
applicable apartment  partnership through a reduction in the property's mortgage
interest rate. In turn, the partnership  provides a  corresponding  reduction in
resident rental rates.  In compliance with the  requirements of Section 8 and of
Section  236,  residents  are  screened for  eligibility  under HUD  guidelines.
Subsidies are provided under  contracts  between the federal  government and the
apartment partnerships.

     Subsidy contracts for the investment  apartment properties are scheduled to
expire through 2019.  The Local  Partnerships  seek renewal of expiring  subsidy
contracts, when appropriate,  for their properties. HUD has in the past approved
new subsidy  contracts on an annual basis  subject to annual  appropriations  by
Congress. The initial HUD contract renewal process currently provides owners six
options for renewing  their section 8 contract  depending upon whether the owner
can meet the eligibility criteria. Historically, the Local Partnerships in which
the  Partnership  is invested  have met the  criteria  necessary  to renew their
respective Section 8 contracts.

                                      -14-

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


     As of  September  30,  2008,  the  carrying  amount  of  the  Partnership's
investment in the Local Partnership with Section 8 HAP contracts expiring in the
next 12 months and which was not sold on or before November 12, 2008, was $0.

     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 $8,052,629
as of September 30, 2008, 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  November  12,  2008,  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 $5,885,000 plus aggregate  accrued  interest of
$19,306,242  as of September 30, 2008, 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 note related to Crescent
Gardens  was sold to the  respective  noteholders  during 2007 and the other two
listed  purchase  money notes were paid off at a discount  from  proceeds of the
sales of the properties  owned by the indicated  Local  Partnerships in 2007 and
2008.

<TABLE>
<CAPTION>

     Property                           Principal        Date         Disposition
     --------                          -----------     -----------    -----------
     <C>                               <C>             <C>            <C>
     Asbury Tower                      $3,432,081      August 2008    Sale
     Crescent Gardens - Second Note       434,000      June 2007      Sale of Interest
     Jewish Federation                  1,350,000      June 2007      Sale

</TABLE>

     The purchase money notes related to the following  properties  have matured
and have not been paid or extended as of November 12, 2008.

<TABLE>
<CAPTION>
                                                             Accrued Interest
                                                         As of
     Property                   Principal          September 30, 2008         Maturity
     --------                  -----------         ------------------       -----------
     <S>                       <C>                 <C>                      <C>
     Westport Village (1)      $  840,000             $2,672,005              09/01/99
     Pilgrim Tower East         1,450,000 (2)          4,638,239              11/30/03
     Cedar Point                1,320,000              3,861,859              08/30/04
     Thornwood House            1,775,000              5,010,111              08/30/04

</TABLE>

     (1)  In receivership.
     (2)  Remaining principal, after partial payment.


     The remaining  purchase  money note related to  Northridge  Park matures in
2025. As of September 30, 2008,  principal  and accrued  interest  balances were
$500,000 and $3,124,028, respectively.

                                      -15-

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


     As  of  September  30,  2008,  Westport  Village  is in  receivership.  The
Partnership's  non- recourse  purchase money notes and accrued  interest totaled
$840,000 and $2,672,005,  respectively at September 30, 2008. The Partnership is
not  anticipating  any loss resulting from the  anticipated  change in ownership
upon foreclosure.

     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.

     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 35.0%.  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  sale of the  real  estate.  Of the ten  Local
Partnerships  in which the Partnership is invested as of September 30, 2008, the
four Local Partnerships with associated purchase money notes which have matured,
or which  mature  through  September  30,  2009,  and  which  remain  unpaid  or
unextended as of November 12, 2008, 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.


                                      -16-

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


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

     December 31, 2007                 0%                    $ 69,448
     December 31, 2006                 0%                    $539,623


     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 nine month period ended September 30, 2008, existing cash resources were
adequate  to support  operating  cash  requirements.  Cash and cash  equivalents
increased  $6,030 during the nine month period ended  September 30, 2008, due to
the receipt of distributions  from  partnerships,  partially offset by operating
expenses paid in cash.

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

     The Partnership's net income for the three month period ended September 30,
2008 increased from the corresponding period in 2007, primarily due to gain from
extinguishment of debt related to the sale of Asbury Towers. Contributing to the
increase  were  decreases in interest  expense,  also  related to Asbury  Tower,
general and administrative  expenses and professional fees,  partially offset by
increased  share of loss  from  partnerships  and  decreased  interest  revenue.
General and administrative  expenses decreased primarily due to lower reimbursed
payroll  costs.  Professional  fees are  lower due to a  reduction  in audit fee
expense  associated  with the timing of  services  provided.  Share of loss from
partnerships  increased  primarily  due  to  higher  operating  expenses  at two
properties. Interest income decreased in 2008 due to lower rates.

     The  Partnership's net income for the nine month period ended September 30,
2008 increased from the corresponding period in 2007, primarily due to increased
gain from extinguishment of debt and decreases in interest expense,  general and
administrative  expenses and  professional  fees,  partially offset by decreased
interest  revenue,  all as discussed  above.  Share of income from  partnerships
increased primarily due to a higher distribution  received from one property and
the timing of the receipt.

     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 and
nine month periods ended  September 30, 2008 did not include  losses of $137,762
and $413,283, respectively, compared to excluded losses of $233,725 and $701,175
for the three and nine month periods ended September 30, 2007, respectively.

     No other  significant  changes in the  Partnership's  operations have taken
place during the three month period ended September 30, 2008.

     Certain  states may assert claims  against the  Partnership  for failure to
withhold and remit state income tax on operating  profit or where the sale(s) of
property in which the Partnership was invested failed to produce sufficient cash
proceeds  with  which to pay the state tax and/or to pay  statutory  partnership
filing fees. The  Partnership is unable to quantify the amount of such potential
claims at this time. The Partnership has consistently  advised its Partners that
they  should  consult  with their tax  advisors  as to the  necessity  of filing
non-resident  returns in such states with  respect to their  proportional  taxes
due.

                                      -17-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 4. Controls and Procedures


     In October 2008,  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 such  evaluation,  our
principal  executive officer and principal financial officer have concluded that
as of September 30, 2008, our disclosure  controls and procedures were effective
to ensure that (i) the information required to be disclosed by us in the reports
filed or submitted by us under the Securities  Exchange Act of 1934, as amended,
was  recorded,  processed,  summarized  or  reported  within  the  time  periods
specified in the SEC's rules and forms and (ii) such information was accumulated
and communicated to management,  including our principal  executive  officer and
principal  financial  officer,  to allow  timely  decisions  regarding  required
disclosure.  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 has materially  affected,  or is
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.


Item 5. Other Information

     There has not been any information  required to be disclosed in a report on
Form 8-K during the quarter ended September 30, 2008, but not reported,  whether
or not otherwise required by this Form 10-Q at September 30, 2008.

     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.


                                      -18-

<PAGE>
Part II. OTHER INFORMATION
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.

                                      -19-

<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



November 12, 2008                 by:  /s/ H. William Willoughby
-----------------                      ------------------------------------
DATE                                   H. William Willoughby,
                                       Director, President, Secretary,
                                         Principal Financial Officer and
                                         Principal Accounting Officer









                                      -20-