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

                          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, 2004


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



                         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, 2004



                                                                           Page

Part I - FINANCIAL INFORMATION

Item 1.  Financial Statements

         Consolidated Balance Sheets
           - March 31, 2004 and December 31, 2003........................... 1

         Consolidated Statements of Operations and Accumulated Losses
           - for the three months ended March 31, 2004 and 2003............. 2

         Consolidated Statements of Cash Flows
           - for the three months ended March 31, 2004 and 2003............. 3

         Notes to Consolidated Financial Statements
           - March 31, 2004 and 2003........................................ 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.................................................. 20

Item 6.  Exhibits and Reports on Form 8-K................................... 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,
                                                                                          2004             2003
                                                                                      -------------    -------------
                                                                                       (Unaudited)
<S>                                                                                   <C>              <C>
Investments in partnerships .......................................................   $   6,385,520    $   6,431,282
Investment in partnerships held for sale or transfer ..............................       2,376,135        8,262,869
Investment in partnerships held in escrow .........................................         763,572          829,611
Cash and cash equivalents .........................................................       4,181,321        4,365,068
Sales proceeds receivable .........................................................      10,931,774               --
Acquisition fees, principally paid to related parties,
  net of accumulated amortization of $206,418 and $200,353, respectively ..........         216,957          223,021
Property purchase costs,
  net of accumulated amortization of $206,179 and $196,398, respectively ..........         209,821          219,602
Other assets ......................................................................              70            4,390
                                                                                      -------------    -------------

      Total assets ................................................................   $  25,065,170    $  20,335,843
                                                                                      =============    =============



                        LIABILITIES AND PARTNERS' DEFICIT


Due on investments in partnerships ................................................   $  17,520,081    $  18,160,081
Accrued interest payable ..........................................................      79,810,035       81,028,484
Disposition fee payable to related party ..........................................         500,000               --
Accounts payable and accrued expenses .............................................         109,303          155,795
                                                                                      -------------    -------------

      Total liabilities ...........................................................      97,939,419       99,344,360
                                                                                      -------------    -------------

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 .........................................      (9,746,963)      (9,746,963)
    Offering costs ................................................................      (7,562,894)      (7,562,894)
    Accumulated losses ............................................................    (129,067,892)    (135,202,160)
                                                                                      -------------    -------------

      Total partners' deficit .....................................................     (72,874,249)     (79,008,517)
                                                                                      -------------    -------------

      Total liabilities and partners' deficit .....................................   $  25,065,170    $  20,335,843
                                                                                      =============    =============

</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
                                                                                  March 31,
                                                                       ------------------------------
                                                                            2004            2003
                                                                       -------------    -------------
<S>                                                                    <C>              <C>
Share of (loss) income from partnerships ...........................   $     (73,239)   $     243,521
                                                                       -------------    -------------

Other revenue and  expenses:

  Revenue:
    Gain from extinguishment of debt ...............................       3,779,954       21,844,501
    Interest .......................................................           6,218            9,686
                                                                       -------------    -------------

                                                                           3,786,172       21,854,187

  Expenses:
    Interest .......................................................       1,957,751        1,842,170
    Management fee .................................................          93,750           93,750
    General and administrative .....................................          70,128           94,715
    Professional fees ..............................................          35,000           34,150
    Amortization of deferred costs .................................          15,846            4,817
                                                                       -------------    -------------

                                                                           2,172,475        2,069,602
                                                                       -------------    -------------

      Total other revenue and expenses .............................       1,613,697       19,784,585
                                                                       -------------    -------------

Income before gain on disposition of investment in partnership .....       1,540,458       20,028,106

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

Net income .........................................................       6,134,268       20,028,106

Accumulated losses, beginning of period ............................    (135,202,160)    (149,566,388)
                                                                       -------------    -------------

Accumulated losses, end of period ..................................   $(129,067,892)   $(129,538,282)
                                                                       =============    =============


Net income allocated to General Partners (1.51%) ...................   $      92,627    $     302,424
                                                                       =============    =============

Net income allocated to Initial and Special Limited Partners (1.49%)   $      91,401    $     298,419
                                                                       =============    =============

Net income allocated to Additional Limited Partners (97%) ..........   $   5,950,240    $  19,427,263
                                                                       =============    =============

Net income per unit of Additional Limited Partner Interest,
  based on 73,337 and 73,342 units outstanding, respectively .......   $       81.14    $      264.89
                                                                       =============    =============

</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 three months ended
                                                                                           March 31,
                                                                                  ----------------------------
                                                                                      2004           2003
                                                                                  ------------    ------------
<S>                                                                               <C>             <C>
Cash flows from operating activities:
  Net income ..................................................................   $  6,134,268    $ 20,028,106

  Adjustments to reconcile net income to net cash used in operating activities:
    Share of loss (income) from partnerships ..................................         73,239        (243,521)
    Gain from extinguishment of debt ..........................................     (3,779,954)    (21,844,501)
    Amortization of deferred costs ............................................         15,846           4,817
    Gain on disposition of investment in partnership ..........................     (4,593,810)             --

    Changes in assets and liabilities:
      Decrease in other assets ................................................          4,320               9
      Increase in accrued interest payable ....................................      1,957,751       1,842,170
      Payment of purchase money note interest .................................             --         (17,502)
      Decrease in accounts payable and accrued expenses .......................        (46,492)        (42,251)
                                                                                  ------------    ------------

        Net cash used in operating activities .................................       (234,832)       (272,673)
                                                                                  ------------    ------------

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

Cash flows from financing activities:
  Payment of purchase money note principal ....................................             --        (100,000)
                                                                                  ------------    ------------


Net decrease in cash and cash equivalents .....................................       (183,747)       (372,673)

Cash and cash equivalents, beginning of period ................................      4,365,068       4,862,869
                                                                                  ------------    ------------

Cash and cash equivalents, end of period ......................................   $  4,181,321    $  4,490,196
                                                                                  ============    ============



Non-cash investing activity:
  Proceeds from disposition of investment in partnership, accrued at March 31,
    2004, collected in April 2004, net of disposition fee payable to related
    party,
    accrued at March 31, 2004, paid in April 2004 .............................   $ 10,431,774    $         --
                                                                                  ============    ============
</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, 2004 and 2003

                                   (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,  2004,  and the  results of its
operations  and its cash flows for the three month  periods ended March 31, 2004
and 2003. The results of operations for the interim period ended March 31, 2004,
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  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  accounting  principles
generally  accepted  in the United  States of  America  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, 2003. Certain balances in the consolidated  balance sheet
at December 31, 2003, have been reclassified to conform them to the presentation
in the consolidated balance sheet at March 31, 2004.

     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 Partnership
must apply the  provisions  of FIN 46-R to all  entities  subject to FIN 46-R no
later than the end of the first  reporting  period that ends after  December 15,
2004 (as of December  31,  2004,  for the  Partnership).  The  Managing  General
Partner is in the process of  determining  what impact,  if any, the adoption of
the provisions of FIN 46-R will have on the  Partnership's  financial  condition
and results of operations  related to the  Partnership's  investments in limited
partnerships  (Local  Partnerships),   and  has  complied  with  the  disclosure
requirements  of FIN 46-R in these financial  statements.  As of March 31, 2004,
the   Partnership's   maximum  loss  exposure  related  to  its  investments  in
partnerships is limited to the remaining balance of $9,525,227.

                                       -4-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2004 and 2003

                                   (Unaudited)


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 $17,520,081 plus aggregate  accrued interest of
$79,810,035  as of March 31, 2004, 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.  However, see the discussion relating to Highland Village,  below, for
information  concerning the outstanding accrued interest balance of the purchase
money notes  related to Highland  Village,  even though the property  related to
Highland Village has been sold.

     The purchase money notes related to the following  properties  have matured
and have not been paid or extended as of May 12, 2004.

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

     Crescent Gardens        $  434,000     07/31/99
     Valley View                920,000     09/01/99
     Westport Village           840,000     09/01/99
     Pilgrim Tower East       1,450,000     11/30/03
     Pilgrim Tower North      2,065,000     11/30/03

     The  collateral  that  secured  the  purchase  money  notes  related to the
following properties was transferred to the noteholders during 2003, and through
May 12, 2004.

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

     Canonsburg House        $1,440,000     January 2003         Transferred
     Char House               1,430,000     January 2003         Transferred
     Liberty Tower            1,340,000     January 2003         Transferred
     Wellington Woods           485,000     January 2003         Transferred
     Glenridge Gardens          640,000     February 2004        Transferred

     The  remaining  purchase  money  notes  mature in the  second  half of 2004
($11,311,081  aggregate  principal  balance),  and 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.


                                       -5-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2004 and 2003

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

     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 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  flow  distributed  by  the  Local   Partnership  from  rental
operations,  mortgage debt refinancings,  or the sale of the real estate. Of the
19 Local Partnerships in which the Partnership is invested as of March 31, 2004,
the ten Local  Partnerships  with  associated  purchase  money  notes which have
matured or which  mature  through  March 31, 2005,  and which  remain  unpaid or
unextended  as of May 12, 2004,  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.

<TABLE>
<CAPTION>

                                    Percentage of Total            Partnership's Share of
                                   Distributions Received                Loss from
     For the Year Ending           from Local Partnerships           Local Partnerships
     -------------------           -----------------------         ----------------------
     <S>                           <C>                             <C>
     December 31, 2003                     10.1%                        $(442,314)
     December 31, 2002                      2.9%                        $(82,378)

</TABLE>

                                       -6-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2004 and 2003

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

     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, 2004 and 2003,  was  $1,957,751  and  $1,842,170,
respectively.  The  accrued  interest  payable on the  purchase  money  notes of
$79,810,035  and  $81,028,484  as of March 31,  2004,  and  December  31,  2003,
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.

                 Canonsburg House, Char House, and Liberty Tower
                 -----------------------------------------------

     The  Partnership  defaulted  on its six  purchase  money  notes  related to
Canonsburg Housing Associates Limited Partnership (Canonsburg House), Char House
Highrise  Association  Limited  Partnership  (Char  House),  and  Liberty  Tower
Associates  Limited  Partnership  (Liberty  Tower) on December 1, 1999, when the
notes matured and were not paid. The default amount included aggregate principal
and  accrued   interest  of  $4,510,000  and  $12,951,810,   respectively.   The
Partnership tried to negotiate to extend the maturity date of the purchase money
notes for up to five years.  However,  on  September  8, 2000,  the  Partnership
received  service  of three  suits by the  noteholder  of one of the notes  with
respect to each of the three  partnerships for foreclosure on the  Partnership's
interests.  The Partnership  filed its answers on October 24, 2000,  although it
continued  to  negotiate  with the  plaintiff.  The  Partnership  entered into a
settlement  agreement  on October  22,  2001,  pursuant  to which it obtained an
extension  of the  maturity  date of the three  larger notes to January 2003 and
paid off the three  smaller  notes (to other  noteholders)  at a discount at the
settlement  date.  Under the extension  agreement,  documents  transferring  the
Partnership's interests in Canonsburg House, Char House and Liberty Tower to the
noteholder  were  placed in escrow to be  released  to the  noteholder  upon the
earlier of occurrence  of a future  default by the  Partnership  on the purchase
money notes or January 3, 2003. In January 2003, the Partnership's  interests in
these three Local  Partnerships,  relating to the remaining three purchase money
notes,  were  transferred to the  noteholder.  As of January 6, 2003,  remaining
principal and accrued interest of $4,210,000 and $18,732,176, respectively, were
due.  The  transfer  of  the  Partnership's   interests  in  these  three  Local
Partnerships  resulted  in  gain  from  extinguishment  of  debt  for  financial
statement  purposes of  $18,719,253  in 2003,  and in total gain for federal tax
purposes of $20,642,707 in 2003.

                                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 extends the maturity
date up to July 31, 2004, subject to semi-annual interest payments,  and reduces
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  negotiating


                                       -7-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2004 and 2003

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

with  the  noteholder  concerning  possible  transfer  of  its  interests.   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, 2004,  principal and accrued interest
of $434,000 and $1,425,325,  respectively, were due on the Second Crescent Note.
Crescent   Gardens  recently   completed   mortgage   restructuring   under  the
Mark-to-Market  program, 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.

                                 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,  2004,  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.

                                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 $2,863,577, respectively, were due. On June 16,
2000, the Partnership  and noteholder  agreed to extend the maturity date of the
purchase money note to January 2001, in exchange for a payment which was applied
to the purchase money note  principal  balance.  Under the extension  agreement,
documents  transferring the  Partnership's  interest in Glenridge Gardens to the
noteholder  were placed in escrow to be released to the noteholder upon a future
default  by the  Partnership.  The  Partnership  reached an  agreement  with the
noteholder in which the noteholder agreed to forbear from taking any action with
respect to the note through January 3, 2002, in exchange for a payment which was
applied  to  the  purchase  money  note  principal  balance.  During  2002,  the
Partnership  reached another agreement with the noteholder to extend forbearance
through  January 3, 2003.  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.

                                       -8-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2004 and 2003

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

     Due to the subsequent  transfer of the Partnership's  interest in Glenridge
Gardens to the noteholder,  the net unamortized  amount of acquisition  fees and
property  purchase  costs,  which  totaled  $36,247 at December  31,  2003,  was
reclassified  to investment in partnerships  held in escrow in the  accompanying
consolidated balance sheet.

                              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  noteholder  agreed to
extend the maturity date of the purchase  money note to August 1, 2004,  and the
Partnership  placed an assignment of its interest in Harborview  Apartments into
escrow.  The  Partnership  has until August 1, 2004,  to pay the purchase  money
notes in full,  and if not  paid the  noteholder  may  exercise  its  option  to
purchase the notes and the  collateral  securing  them for the then  outstanding
principal and interest balances.

     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 net unamortized  acquisition fees and property purchase costs,  which
totaled  $763,572  and  $793,364  at March  31,  2004  and  December  31,  2003,
respectively, has been reclassified to investment in partnerships held in escrow
in the accompanying consolidated balance sheets.

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

     The  Partnership  defaulted  on its four  purchase  money notes  related to
Highland  Village  Associates  (Highland  Village) on October 31, 1999, when the
notes  matured and were not paid.  The President of the local  managing  general
partner of Highland Village had taken assignment of the four payees' interest in
each of the notes and is the  holder of all of the  notes.  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").

     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.  The sale proceeds to Highland  Village,  after the
purchaser's  assumption of existing mortgage debt,  included $600,000 in cash, a
short term promissory note for $300,000, and a long term purchase money mortgage
note for $400,000. In accordance with the terms of the Restructuring  Agreement,
the  Partnership's  share  of  the  proceeds  was  distributed  directly  to the
noteholder, to be applied first to principal until all principal has been repaid
($1,100,000),  and thereafter to interest  ($186,870) until interest,  including
all accrued but previously unpaid interest, has been paid in full.

                                       -9-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2004 and 2003

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

     As of May 12,  2004,  the  noteholder  has not  provided  the  required six
months' notice to the  Partnership of  acceleration  of the maturity date of the
notes,  and the  Partnership has not removed the unpaid balance in the amount of
$5,486,253  from its books,  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.  Upon  acceleration  and
resulting  cancellation of the notes,  gain from  extinguishment of debt, in the
approximate amount of $5.4 million, will be recognized by the Partnership. There
is no assurance that the acceleration will occur.

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

     The  Partnership  defaulted on its  purchase  money note related to Pilgrim
Tower East Associates  Limited  Partnership  (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, 2004,  principal  and accrued  interest of  $1,450,000  and  $3,676,454,
respectively,  were  due.  The  Partnership  and the  noteholder  have  signed a
contract  to sell  the  Partnership's  interest  in  Pilgrim  Tower  East to the
noteholder in exchange for the principal and accrued interest outstanding 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.
There is no assurance that a sale of the Partnership's interest in Pilgrim Tower
East will occur.

     Due to the impending  sale of the  Partnership's  interest in Pilgrim Tower
East,  the net  unamortized  amount of  acquisition  fees and property  purchase
costs,  which totaled  $39,732 at both March 31, 2004 and December 31, 2003, 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 Associates  Limited  Partnership  (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, 2004,  principal and accrued  interest of $2,065,000 and $22,210,589,
respectively,  were due. The  Partnership  signed 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 November 30, 2003, the Partnership
made a principal  payment  applied to the note in January 2002. The  Partnership
and the  noteholder  have agreed to extend the closing  date of the sale to July
2004. There is no assurance that a sale of the property will occur.

                                      -10-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2004 and 2003

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

     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 net unamortized acquisition fees and property
purchase  costs,  which totaled  $2,336,403 and $2,347,376 at March 31, 2004 and
December  31,  2003,  respectively,  has  been  reclassified  to  investment  in
partnerships held for sale or transfer in the accompanying  consolidated balance
sheets.

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

     The  Partnership  defaulted on its purchase  money notes  related to Valley
View  Associates  (Valley View) on September 1, 1999, when the notes matured and
were not paid. The default  amount  included  principal and accrued  interest of
$920,000 and $1,788,829, respectively. As of May 12, 2004, principal and accrued
interest of $920,000 and $2,390,932, respectively, were due. The Partnership was
sued by the  noteholders  but  there has not been any  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  may  purchase the
interests for the outstanding  debt if the property is not sold and/or the notes
were not  repaid  by a  future  date to be  negotiated;  at that  time,  the net
unamortized  amount of  acquisition  fees and  property  purchase  costs,  which
totaled $37,315,  was reclassified to investment in partnerships held in escrow.
However,  there  has been no  communication  with the  noteholders  since  2000.
Therefore,  effective March 31, 2004, the amounts which had been reclassified to
investment  in  partnerships  held in escrow were  returned to their  respective
accounts.

                                Wellington Woods
                                ----------------

     The  Partnership  defaulted on its purchase money notes related to Clarkson
Associates  of  Wellington  Woods  Limited  Partnership  (Wellington  Woods)  on
December 1, 1999,  when the notes matured and were not paid.  The default amount
included  aggregate  principal and accrued  interest of $485,000 and $2,169,679,
respectively. As of January 6, 2003, aggregate principal and accrued interest of
$485,000 and $3,288,849, respectively, were due.

     The  Partnership  attempted to negotiate with the noteholders to extend the
maturity  date of the  purchase  money note for five years,  in  exchange  for a
partial payment.  In August 2000, one of the purchase money noteholders sued the
Partnership  for  damages  and  foreclosure  of the  security  interests  in the
Wellington  Woods  Local  Partnership.  The  Partnership  offered  to tender its
interests in Wellington Woods, but,  subsequently,  the plaintiff and the second
purchase money noteholder filed an amended complaint. Both parties filed motions
for summary  judgment.  In September 2002, the court ruled in the  Partnership's
favor in dismissing the plaintiffs'  damages claims and related attorneys' fees.
On or about January 16, 2003, the  Partnership  tendered the  assignments of its
interest in Wellington Woods to the  noteholders.  Although the noteholders have
not yet accepted the assignments, the Partnership considers its interest to have
been transferred. The transfer of the Partnership's interest in Wellington Woods
resulted in gain from extinguishment of debt for financial statement purposes of
$3,167,610 in 2003,  and in total gain for federal tax purposes of $3,163,537 in
2003.

                                      -11-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2004 and 2003

                                   (Unaudited)


2. INVESTMENTS IN PARTNERSHIPS - Continued

                                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, 2004, principal and accrued
interest of $840,000 and $2,161,870, respectively, were due. The Partnership was
sued by the  noteholders  but  there has not been any  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 may purchase
the  interests for the  outstanding  debt if the property is not sold and/or the
notes were not repaid by a future date to be  negotiated;  at that time, 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  since  2000.
Therefore,  effective March 31, 2004, the amounts which had been reclassified to
investment  in  partnerships  held in escrow were  returned to their  respective
accounts.

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  $10,931,774.  The sale  resulted in gain on
disposition of investment in  partnership of $4,593,810 for financial  statement
purposes and in a total gain of  approximately  $9.0 million 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.  The fee was accrued at March 31,  2004,  and was
netted  against the related gain on  disposition of investment in partnership at
March 31, 2004.

     Due to the  impending  sale of the  property  related to the  Partnership's
investment  in  Campbell  Terrace,   the   Partnership's   basis  in  the  Local
Partnership,  along with net unamortized  acquisition fees and property purchase
costs,  which  totaled  $5,875,761  at December 31, 2003,  was  reclassified  to
investment  in  partnerships  held  for  sale or  transfer  in the  accompanying
consolidated balance sheet at December 31, 2003.

                                 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 no firm offers as of May 12, 2004. As of March 31,
2004, the Partnership's  remaining investment in Madison Square, which consisted
of net unamortized  acquisition  fees and property  purchase costs, was $15,031.
There is no assurance that a sale of the property will occur.

                                      -12-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2004 and 2003

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

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

     Combined  statements of operations for the 19 and 21 Local  Partnerships in
which the Partnership was invested as of March 31, 2004 and 2003,  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  for
which  the  Partnership's  carrying  value is zero  (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.

<TABLE>
<CAPTION>

                                         COMBINED STATEMENTS OF OPERATIONS
                                                    (Unaudited)


                                                              For the three months ended
                                                                       March 31,
                                                ------------------------------------------------------------
                                                           2004                             2003
                                                --------------------------       ---------------------------
                                                  Equity                           Equity
                                                  Method        Suspended          Method         Suspended
                                                ----------      ----------       ----------       ----------
         <S>                                    <C>             <C>              <C>              <C>
         Number of Local Partnerships                9              10               10               11
                                                     =              ==               ==               ==

         Revenue:
           Rental                               $2,701,416      $2,650,568       $3,347,062       $2,820,824
           Other                                   142,583         102,611          224,642          127,599
                                                ----------      ----------       ----------       ----------

             Total revenue                       2,843,999       2,753,179        3,571,704        2,948,423
                                                ----------      ----------       ----------       ----------

         Expenses:
           Operating                             2,127,097       1,884,805        2,325,706        1,927,586
           Interest                                307,750         472,017          367,438          546,904
           Depreciation and amortization           482,947         540,162          632,182          557,298
                                                ----------      ----------       ----------       ----------

             Total expenses                      2,917,794       2,896,984        3,325,326        3,031,788
                                                ----------      ----------       ----------       ----------

         Net (loss) income                      $  (73,795)     $ (143,805)      $  246,378       $  (83,365)
                                                ==========      ==========       ==========       ==========

         Cash distributions                     $   51,085      $       --       $       --       $       --
                                                ==========      ==========       ==========       ==========

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

         Cash distributions recorded
           as income                            $       --      $       --       $                $       --

         Partnership's share of Local
           Partnership net (loss) income           (73,239)            --           243,521              --
                                                -------------------------        --------------------------


         Share of (loss) income
           from partnerships                            $(73,239                          $243,521
                                                        ========                          ========

</TABLE>

                                      -13-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2004 and 2003

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

     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  for which the  Partnership's
carrying value is zero (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,
2004 and 2003, the  Partnership's  share of cumulative losses to date for 10 and
11 of the 19 and 21 Local Partnerships, respectively, exceeded the amount of the
Partnership's  investments  in  those  Local  Partnerships  by  $10,262,488  and
$9,753,729,  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.


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 $42,174 and
$58,028 for the three month periods ended March 31, 2004 and 2003, respectively,
to the Managing General Partner as direct  reimbursement of expenses incurred on
behalf of the  Partnership.  Such  expenses  are  included  in the  accompanying
consolidated statements of operations as general and administrative expenses.

     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, 2004 and 2003.

     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.  The fee was accrued at March 31,  2004,  and was
netted  against the related gain on  disposition of investment in partnership at
March 31, 2004.


4.   CASH DISTRIBUTION

     On April 7, 2004, the Managing General Partner approved a cash distribution
of $5,280,264  ($72 per Unit) to be paid on May 21, 2004, 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, 2003.
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 ten Local Partnerships in which the Partnership's  investment  balances have
been reduced to zero.

                          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 Partnership
must apply the  provisions  of FIN 46-R to all  entities  subject to FIN 46-R no
later than the end of the first  reporting  period that ends after  December 15,
2004 (as of December  31,  2004,  for the  Partnership).  The  Managing  General
Partner is in the process of  determining  what impact,  if any, the adoption of
the provisions of FIN 46-R will have on the  Partnership's  financial  condition
and results of operations  related to the  Partnership's  investments in limited
partnerships (Local Partnerships).

                                     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 will
receive  increased  cash flow,  as the limited  dividend will be increased in an
amount equal to the increase in gross rental revenues.

     Naperville  Housing  Partners  (Fairway  Park) has a Section 8 HAP contract
which  expires  January 1, 2005.  The Section 8 HAP  contract  covers 20% of the
apartment  units  in  Fairway  Park.  The  local  managing  general  partner  is
evaluating  what course of action to pursue upon expiration of the Section 8 HAP
contract.

                                      -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, as extended,  expires February 28, 2005. 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.

     As of March 31, 2004, the carrying amount of the Partnership's  investments
in Local  Partnerships  with  Section 8 HAP  contracts  expiring  in the next 12
months was $2,336,403.

     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 $4,181,321
as of March 31, 2004,  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, 2004,  there were no material
commitments for capital expenditures.

     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 $17,520,081 plus aggregate  accrued interest of
$79,810,035  as of March 31, 2004, 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.  However,  see  Note  2.a.  of the  notes  to  consolidated  financial
statements  contained in Part I, Item 1, hereof, for information  concerning the
outstanding  accrued  interest  balance of the purchase  money notes  related to
Highland Village,  even though the property related to Highland Village has been
sold.

     The purchase money notes related to the following  properties  have matured
and have not been paid or extended as of May 12, 2004.

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

     Crescent Gardens        $  434,000     07/31/99
     Valley View                920,000     09/01/99
     Westport Village           840,000     09/01/99
     Pilgrim Tower East       1,450,000     11/30/03
     Pilgrim Tower North      2,065,000     11/30/03

     The  collateral  that  secured  the  purchase  money  notes  related to the
following properties was transferred to the noteholders during 2003, and through
May 12, 2004.

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

     Canonsburg House        $1,440,000     January 2003         Transferred
     Char House               1,430,000     January 2003         Transferred
     Liberty Tower            1,340,000     January 2003         Transferred
     Wellington Woods           485,000     January 2003         Transferred
     Glenridge Gardens          640,000     February 2004        Transferred

     The  remaining  purchase  money  notes  mature in the  second  half of 2004
($11,311,081  aggregate  principal  balance),  and in 2025  ($500,000  principal
balance).


                                      -17-

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


     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 one of
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 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  flow  distributed  by  the  Local   Partnership  from  rental
operations,  mortgage debt refinancings,  or the sale of the real estate. Of the
19 Local Partnerships in which the Partnership is invested as of March 31, 2004,
the five Local  Partnerships  with  associated  purchase  money notes which have
matured or which  mature  through  March 31, 2005,  and which  remain  unpaid or
unextended  as of May 12, 2004,  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, 2003                10.1%                   $(442,314)
     December 31, 2002                 2.9%                   $(82,378)


                                      -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  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,  2004,  the receipt of  distributions
from Local  Partnerships  and existing cash  resources  were adequate to support
operating cash requirements. Cash and cash equivalents decreased $183,747 during
the three month  period  ended  March 31,  2004,  as net cash used in  operating
activities exceeded the receipt of distributions from partnerships.  The primary
uses of cash in operating  activities  were to pay management  and  professional
fees, and general and administrative  expenses. For the three month period ended
March 31, 2004, no distributions were received from Local Partnerships for which
the  Partnership's  carrying  value  is  zero  (equity  method  suspended).  The
Partnership  expects to receive a similar or lower amount of distributions  from
these  Local  Partnerships  in  future  years as more  Section  8 HAP  contracts
approach  expiration,  should the related  properties  enter the  Mark-to-Market
program with the resulting reduction in rental revenues.

     On April 7, 2004, the Managing General Partner approved a cash distribution
of $5,280,264  ($72 per Unit) to be paid on May 21, 2004, to Additional  Limited
Partners  who were  holders  of record  as of April 1,  2004.  The  distribution
consisted of proceeds received from the sale of Campbell  Terrace.  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.

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

     The  Partnership's  net income for the three month  period  ended March 31,
2004,  decreased  from the  corresponding  period  in 2003,  primarily  due to a
decrease in gain from extinguishment of debt, a decrease in share of income from
partnerships,  an increase in interest  expense due to  compounding  interest on
three purchase money notes,  nominal increases in amortization of deferred costs
and professional fees, and a nominal decrease in interest revenue. These factors
were  partially  offset by gain on  disposition  of  investment  in  partnership
recognized  in 2004,  and a decrease  in  general  and  administrative  expenses
related to lower reimbursed  payroll costs. The decrease in share of income from
partnerships  was  primarily  due to: (i) the  cessation of  recording  share of
income from  partnerships  for one property  that was sold in 2004;  and (ii) an
increase in operating expenses at properties owned by three Local Partnerships.

     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, 2004 and 2003, did not include losses of $260,739 and
$232,900, respectively.

     No other  significant  changes in the  Partnership's  operations have taken
place during the three month period ended March 31, 2004.

                                      -19-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 3. Controls and Procedures


     In April  2004,  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  April  2004
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.


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.

                             Registered Tender Offer
                             -----------------------

     On June  17,  2003,  Equity  Resource  Weston  Fund  (Equity)  initiated  a
registered tender offer to purchase up to 11,025 of the outstanding Units in the
Partnership at a price of $40 per Unit. The offer expired July 17, 2003.  Equity
is not affiliated with the  Partnership or the Managing  General  Partners.  The
price  offered was  determined  solely at the  discretion of Equity and does not
necessarily represent the fair market value of each Unit.

     In response to the Equity tender offer, on June 27, 2003, the Managing
General Partner filed a Schedule 14D-9. In that filing, the Managing General
Partner recommended that Limited Partners reject the Equity offer because it
viewed the offer as inadequate.

                                      -20-

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


                            Unregistered Tender Offer
                            -------------------------

     On July 31, 2003, Peachtree Partners (Peachtree)  initiated an unregistered
tender  offer to  purchase  no more  than 4.9% of the  outstanding  Units in the
Partnership  (including  2,857  Units,  or  3.88%,  already  owned by  Peachtree
affiliates)  at a price of $65 per Unit.  The  offer  expired  March  31,  2004.
Peachtree  is not  affiliated  with  the  Partnership  or the  Managing  General
Partner.  The price offered was determined solely at the discretion of Peachtree
and does not necessarily represent the fair market value of each Unit.

     The  Managing  General  Partner did not  express  any opinion and  remained
neutral toward the unregistered tender offer for the purchase of Units described
above.

                                Cash Distribution

     On April 7, 2004, the Managing General Partner approved a cash distribution
of $5,280,264  ($72 per Unit) to be paid on May 21, 2004, 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.


Item 6. Exhibits and Reports on Form 8-K

     a.   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.

     b.   No  Reports  on Form 8-K were  filed  with the  Commission  during the
          quarter ended March 31, 2004.

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, 2004                           by:  /s/ Michael J. Tuszka
------------                                ------------------------------------
DATE                                        Michael J. Tuszka
                                              Vice President
                                              and Chief Accounting Officer
                                              (Principal Financial Officer
                                              and Principal Accounting Officer)

                                      -22-