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


                          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 June 30, 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 June 30, 2004





                                                                           Page

Part I - FINANCIAL INFORMATION

Item 1.  Financial Statements

         Consolidated Balance Sheets
           - June 30, 2004 and December 31, 2003...........................  1

         Consolidated Statements of Operations and Accumulated Losses
           - for the three and six months ended June 30, 2004 and 2003.....  2

         Consolidated Statements of Cash Flows
           - for the six months ended June 30, 2004 and 2003...............  3

         Notes to Consolidated Financial Statements
           - June 30, 2004 and 2003........................................  4

Item 2.  Management's Discussion and Analysis of Financial Condition
           and Results of Operations....................................... 16

Item 3.  Controls and Procedures........................................... 21


PART II - OTHER INFORMATION

Item 3.  Defaults Upon Senior Securities................................... 22

Item 5.  Other Information................................................. 22

Item 6.  Exhibits and Reports on Form 8-K.................................. 23

Signature.................................................................. 24


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


                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                           CONSOLIDATED BALANCE SHEETS


                                     ASSETS

<TABLE>
<CAPTION>
                                                                                        June 30,        December 31,
                                                                                          2004             2003
                                                                                      -------------    -------------
                                                                                       (Unaudited)
<S>                                                                                   <C>              <C>
Investments in partnerships .......................................................   $   6,155,693    $   6,431,282
Investment in partnerships held for sale or transfer ..............................       2,355,107        8,262,869
Investment in partnerships held in escrow .........................................         745,173          829,611
Cash and cash equivalents .........................................................       9,282,955        4,365,068
Acquisition fees, principally paid to related parties,
  net of accumulated amortization of $191,349 and $200,353, respectively ..........         196,617          223,021
Property purchase costs,
  net of accumulated amortization of $186,304 and $196,398, respectively ..........         184,883          219,602
Other assets ......................................................................             215            4,390
                                                                                      -------------    -------------

      Total assets ................................................................   $  18,920,643    $  20,335,843
                                                                                      =============    =============



                        LIABILITIES AND PARTNERS' DEFICIT


Due on investments in partnerships ................................................   $  17,520,081    $  18,160,081
Accrued interest payable ..........................................................      81,737,808       81,028,484
Accounts payable and accrued expenses .............................................         120,341          155,795
                                                                                      -------------    -------------

      Total liabilities ...........................................................      99,378,230       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 .........................................     (15,027,227)      (9,746,963)
    Offering costs ................................................................      (7,562,894)      (7,562,894)
    Accumulated losses ............................................................    (131,370,966)    (135,202,160)
                                                                                      -------------    -------------

      Total partners' deficit .....................................................     (80,457,587)     (79,008,517)
                                                                                      -------------    -------------

      Total liabilities and partners' deficit .....................................   $  18,920,643    $  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              For the six months ended
                                                                    June 30,                                June 30,
                                                       ---------------------------------      ---------------------------------
                                                            2004               2003                2004                2003
                                                       -------------       -------------      -------------       -------------
<S>                                                    <C>                 <C>                <C>                 <C>
Share of (loss) income from partnerships               $    (188,882)      $     143,748      $    (262,121)      $     387,269
                                                       -------------       -------------      -------------       -------------

Other revenue and  expenses:

  Revenue:
    Interest                                                  16,875               9,357             23,093              19,043
    Gain from extinguishment of debt                              --                  --          3,779,954          21,844,501
                                                       -------------       -------------      -------------       -------------

                                                              16,875               9,357          3,803,047          21,863,544
                                                       -------------       -------------      -------------       -------------

  Expenses:
    Interest                                               1,927,773           1,842,170          3,885,524           3,684,340
    Management fee                                            93,750              93,750            187,500             187,500
    General and administrative                                69,690              65,422            139,818             160,137
    Professional fees                                         35,000              36,151             70,000              70,301
    Amortization of deferred costs                             4,855               4,817             20,701               9,634
                                                       -------------       -------------      -------------       -------------

                                                           2,131,068           2,042,310          4,303,543           4,111,912
                                                       -------------       -------------      -------------       -------------

      Total other revenue and expenses                    (2,114,193)         (2,032,953)          (500,496)         17,751,632
                                                       -------------       -------------      -------------       -------------

(Loss) income before gain on disposition
  of investment in partnership                            (2,303,075)         (1,889,205)          (762,617)         18,138,901

Gain on disposition of investment
  in partnership                                                  --                  --          4,593,811                  --
                                                       -------------       -------------      -------------       -------------

Net (loss) income                                         (2,303,075)         (1,889,205)         3,831,194          18,138,901

Accumulated losses, beginning of period                 (129,067,891)       (129,538,282)      (135,202,160)       (149,566,388)
                                                       -------------       -------------      -------------       -------------

Accumulated losses, end of period                      $(131,370,966)      $(131,427,487)     $(131,370,966)      $(131,427,487)
                                                       =============       =============      =============       =============


Net (loss) income allocated
  to General Partners (1.51%)                          $     (34,776)      $     (28,527)     $      57,851       $     273,897
                                                       =============       =============      =============       =============

Net (loss) income allocated
  to Initial and Special
  Limited Partners (1.49%)                             $     (34,316)      $     (28,149)     $      57,085       $     270,270
                                                       =============       =============      =============       =============

Net (loss) income allocated
  to Additional Limited Partners (97%)                 $  (2,233,983)      $  (1,832,529)     $   3,716,258       $  17,594,734
                                                       =============       =============      =============       =============

Net (loss) income per unit of
  Additional Limited Partner Interest,
    based on 73,337 and 73,342 units
    outstanding at June 30, 2004 and
    December 31, 2003, respectively                    $      (30.46)      $      (24.99)     $       50.67       $      239.90
                                                       =============       =============      =============       =============
</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 six months ended
                                                                                             June 30,
                                                                                  ----------------------------
                                                                                      2004            2003
                                                                                  ------------    ------------
<S>                                                                               <C>             <C>
Cash flows from operating activities:
  Net income ..................................................................   $  3,831,194    $ 18,138,901

  Adjustments to reconcile net income to net cash used in operating activities:
    Share of loss (income) from partnerships ..................................        262,121        (387,269)
    Gain from extinguishment of debt ..........................................     (3,779,954)    (21,844,501)
    Amortization of deferred costs ............................................         20,701           9,634
    Gain on disposition of investment in partnership ..........................     (4,593,811)             --

    Changes in assets and liabilities:
      Decrease in other assets ................................................          4,175              38
      Increase in accrued interest payable ....................................      3,885,524       3,684,340
      Payment of purchase money note interest .................................             --         (17,502)
      Decrease in accounts payable and accrued expenses .......................        (35,454)        (30,173)
                                                                                  ------------    ------------

        Net cash used in operating activities .................................       (405,504)       (446,532)
                                                                                  ------------    ------------

Cash flows from investing activities:
  Proceeds from disposition of investment in partnership,
    net of disposition fee of $500,000 paid to related party ..................     10,431,774              --
  Receipt of distributions from partnerships ..................................        171,881         280,868
                                                                                  ------------    ------------

        Net cash provided by investing activities .............................     10,603,655         280,868
                                                                                  ------------    ------------

Cash flows from financing activities:
  Distribution to Limited Partners ............................................     (5,280,264)             --
  Payment of purchase money note principal ....................................             --        (100,000)
                                                                                  ------------    ------------

        Net cash used in financing activities .................................     (5,280,264)       (100,000)
                                                                                  ------------    ------------

Net increase (decrease) in cash and cash equivalents ..........................      4,917,887        (265,664)

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

Cash and cash equivalents, end of period ......................................   $  9,282,955    $  4,597,205
                                                                                  ============    ============

</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

                             June 30, 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 June 30,  2004,  and the  results  of its
operations for the three and six month periods ended June 30, 2004 and 2003, and
its cash  flows for the six month  periods  ended  June 30,  2004 and 2003.  The
results of  operations  for the interim  periods  ended June 30,  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 June 30, 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
partnerships  (Local  Partnerships),   and  has  complied  with  the  disclosure
requirements of FIN 46-R in these financial statements. As of June 30, 2004, the
Partnership's  maximum loss exposure  related to its investments in partnerships
is limited to the remaining balance of $9,255,973.


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
$81,737,808  as of June 30, 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.

                                       -4-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             June 30, 2004 and 2003

                                   (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 August 12, 2004.

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

     Crescent Gardens - Second Note     $  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
     Crescent Gardens - First Note         434,000     07/31/04
     Harborview                          3,000,000     08/01/04

     The  collateral  that  secured  the  purchase  money  notes  related to the
following properties was transferred to the noteholders during 2003, and through
August 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 2004 subsequent to August 12,
2004 ($7,877,081  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.

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

                                       -5-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             June 30, 2004 and 2003

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

     The Managing General Partner continues to investigate possible alternatives
to reduce the Partnership's debt obligations.  These alternatives include, among
others, retaining the cash available for distribution to meet the purchase money
note  requirements,  paying off certain  purchase  money  notes at a  discounted
price, extending the due dates of certain purchase money notes,  refinancing the
respective  properties'  underlying  debt, or selling the underlying real estate
and using the  Partnership's  share of the  proceeds to pay or buy down  certain
purchase money note  obligations.  Although the Managing General Partner has had
some success applying these strategies in the past, the Managing General Partner
cannot assure that these  strategies  will be  successful in the future.  If the
Managing  General  Partner is unable to negotiate  an  extension  or  discounted
payoff,  in the event that the purchase money notes remain unpaid upon maturity,
the noteholders may have the right to foreclose on the Partnership's interest in
the related Local Partnerships.  In the event of a foreclosure or other transfer
of the Partnership's  interest, the excess of the nonrecourse  indebtedness over
the  carrying  amount  of the  Partnership's  investment  in the  related  Local
Partnership  will result in a taxable gain. This gain will be taxable to Limited
Partners at a federal tax rate of up to 25.0%,  as it will reflect  recapture of
depreciation  deductions claimed in prior years.  Additionally,  the Partnership
would lose its investment in the Local Partnership and,  likewise,  its share of
any future cash  distributed by the Local  Partnership  from rental  operations,
mortgage  debt  refinancings,  or the sale of the real  estate.  Of the 19 Local
Partnerships  in which the  Partnership is invested as of June 30, 2004, the ten
Local  Partnerships  with associated  purchase money notes which have matured or
which mature  through June 30, 2005, and which remain unpaid or unextended as of
August 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 Ending     from Local Partnerships      Local Partnerships
     -------------------     -----------------------    ----------------------

     December 31, 2003               10.1%                   $(442,314)
     December 31, 2002                2.9%                   $(82,378)

     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 six month  periods  ended June 30,  2004,  was  $1,927,773  and  $3,885,524,
respectively,  and $1,842,170 and $3,684,340 for the three and six month periods
ended June 30, 2003, respectively.  The accrued interest payable on the purchase
money notes of $81,737,808  and $81,028,484 as of June 30, 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.

                                       -6-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             June 30, 2004 and 2003

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

                 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 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 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 extended the maturity
date to July 31, 2004, subject to semi-annual interest payments, and reduced the
interest  rate of the First  Crescent  Note.  The  Partnership  did not make the
semi-annual  interest  payment  due in January  2004,  and is  currently  in the
process of transferring  the collateral for the First Crescent Note (one-half of
the  Partnership's  limited  partner  interest in the Local  Partnership) to its
current  noteholder in satisfaction  of that note.  There is no assurance that a
transfer of the  Partnership's  interest in Crescent  Gardens to the  noteholder
will occur. The Partnership has been contacted by only one of the holders of the
other note (Second  Crescent  Note) and thus cannot predict the course of action
with regard to the Second  Crescent  Note. As of August 12, 2004,  principal and
accrued interest of $434,000 and $865,916,  respectively,  were due on the First
Crescent Note. As of August 12, 2004, principal and accrued interest of $434,000
and $1,446,643,  respectively,  were due on the Second  Crescent Note.  Crescent
Gardens completed mortgage  restructuring under the Mark-to-Market  program last
year, 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.

                                       -7-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             June 30, 2004 and 2003

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

     Due to the impending transfer of one-half of the Partnership's  interest in
Crescent  Gardens to the noteholder of the First Crescent Note,  one-half of the
net unamortized  amount of acquisition fees and property  purchase costs,  which
totaled  $8,625  at June  30,  2004,  has been  reclassified  to  investment  in
partnerships held for sale or transfer in the accompanying  consolidated balance
sheet.

                                 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
August  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 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.

     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  noteholders  agreed to
extend the maturity date of the purchase  money notes to August 1, 2004, and the
Partnership  placed an assignment of its interest in Harborview  Apartments into
escrow.  As of August 12, 2004,  the notes were again in default,  and principal
and accrued interest of $3,000,000 and $7,171,747,  respectively,  were due. The
noteholders are attempting to finalize regulatory  authority for the transfer of
interests in satisfaction of the  outstanding  principal and interest  balances.
There  is no  assurance  that  a  transfer  of  the  Partnership's  interest  in
Harborview to the noteholders will occur.

     Due to the impending  transfer of the Partnership's  interest in Harborview
Apartments to the noteholder,  the Partnership's basis in the Local Partnership,
along with net unamortized  acquisition fees and property purchase costs,  which
totaled  $745,173  and  $793,364  at  June  30,  2004  and  December  31,  2003,
respectively, has been reclassified to investment in partnerships held in escrow
in the accompanying consolidated balance sheets.

                                       -8-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             June 30, 2004 and 2003

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

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

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

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

     However,  as of August  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  remaining  unpaid
accrued  interest  balance  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 or
October 31, 2004,  whichever occurs first, gain from  extinguishment of debt, in
the approximate  amount of $5.4 million,  will be recognized by the Partnership.
There is no assurance that any 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
August 12, 2004,  principal and accrued  interest of $1,450,000 and  $3,731,130,
respectively,  were due. The Partnership and the noteholder signed a contract to
sell the  Partnership's  interest  in Pilgrim  Tower East to the  noteholder  in
exchange  for the  outstanding  principal  and accrued  interest on the purchase
money note and two $100,000  payments on the purchase  money note,  one of which
was paid in  February  2002,  and one of which  was paid in  January  2003.  The
contract for the sale of the  Partnership's  interest  expired in November 2003,
however,  the parties are  currently  negotiating  an extension to provide for a
closing  scheduled for December  2004.  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 June 30, 2004 and December 31, 2003,  has
been reclassified to investment in partnerships held for sale or transfer in the
accompanying consolidated balance sheets.


                                       -9-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             June 30, 2004 and 2003

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

                               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  August  12,  2004,   principal  and  accrued   interest  of  $2,065,000  and
$22,988,757,  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 are  negotiating an extension of the closing date of the sale
to December 2004. There is no assurance that a sale of the property will occur.

     Due to the  impending  sale of the  property  related to the  Partnership's
investment in Pilgrim Tower North to the noteholder,  the Partnership's basis in
the Local Partnership,  along with net unamortized acquisition fees and property
purchase  costs,  which totaled  $2,274,953  and $2,347,376 at June 30, 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 August 12, 2004,  principal  and
accrued  interest  of  $920,000  and  $2,422,924,  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 Valley View in escrow,
together  with an  option  agreement  pursuant  to which the  noteholders  could
purchase the  interests for the  outstanding  debt if the property were not sold
and/or the notes were not  repaid by  January  8,  2001.  At that time,  the net
unamortized  amount of  acquisition  fees and  property  purchase  costs,  which
totaled $37,315,  was reclassified to investment in partnerships held in escrow.
Until June 2004,  there had been no  communication  with the  noteholders  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.  However,  in June 2004, the
Partnership  was notified  that the  noteholders  were seeking to implement  the
transfer of the Partnership's interest in Valley View to the noteholders.  There
can be no  assurance  that a transfer of  Partnership's  interest in Valley View
will occur.

     Due to the impending  transfer of Partnership's  interest in Valley View to
the  noteholders,  the net unamortized  amount of acquisition  fees and property
purchase costs, which totaled $31,797 at June 30, 2004, has been reclassified to
investment  in  partnerships  held  for  sale or  transfer  in the  accompanying
consolidated balance sheet.

                                      -10-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             June 30, 2004 and 2003

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

                                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.

     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.

                                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 August 12, 2004,  principal  and
accrued  interest  of  $840,000  and  $2,190,870,  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 net
unamortized  amount of  acquisition  fees and  property  purchase  costs,  which
totaled $46,989,  was reclassified to investment in partnerships held in escrow.
However,  there  has  been no  communication  with  the  noteholders  concerning
implementing the settlement since 2000. Therefore,  effective December 31, 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.

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 $4,593,811 for financial  statement
purposes and 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.

                                      -11-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             June 30, 2004 and 2003

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

     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 in the  accompanying  consolidated
balance sheet.

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

     The Local Managing General Partner of Madison Square Ltd.  Dividend Housing
Association  (Madison Square)  requested debt relief effective  October 1, 2001.
The property has depleted its  operating  cash and  replacement  reserve  funds.
Therefore, the Local Managing General Partner requested from the lender that the
debt  payments  be  reduced to  interest  only  payments  until such time as the
property can be sold.  Effective  January 1, 2002, the lender approved  interest
only payments and a reduction in the rate for a period of five years.  The Local
Managing General Partner has been searching for a not-for-profit organization to
purchase the property,  but has received no firm offer as of August 12, 2004. As
of June 30, 2004,  the  Partnership's  remaining  investment in Madison  Square,
which consisted of net unamortized acquisition fees and property purchase costs,
was $14,340.

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

     Combined  statements of operations for the 19 and 21 Local  Partnerships in
which the Partnership  was invested as of June 30, 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  which
have cumulative losses in excess of the amount of the Partnership's  investments
in those  Local  Partnerships  (equity  method  suspended).  Appended  after the
combined statements is information  concerning the Partnership's share of income
from partnerships related to cash distributions  recorded as income, and related
to the Partnership's share of income from Local Partnerships.

                                      -12-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             June 30, 2004 and 2003

                                   (Unaudited)


2. INVESTMENTS IN PARTNERSHIPS - Continued


                                         COMBINED STATEMENTS OF OPERATIONS
                                                    (Unaudited)

<TABLE>
<CAPTION>
                                                                      For the three months ended
                                                                               June 30,
                                                  -----------------------------------------------------------
                                                             2004                             2003
                                                  -----------------------------------------------------------
                                                    Equity                           Equity
                                                    Method        Suspended          Method         Suspended
                                                  ----------      ----------       ----------       ----------
         <c>                                      <C>             <C>              <C>              <C>
         Number of Local Partnerships                  9              10               10               11
                                                       =              ==               ==               ==

         Revenue:
           Rental                                 $2,473,029      $2,650,572       $3,442,886       $2,820,826
           Other                                     104,981         102,616          199,990          127,598
                                                  ----------      ----------       ----------       ----------

             Total revenue                         2,578,010       2,753,188        3,642,876        2,948,424
                                                  ----------      ----------       ----------       ----------

         Expenses:
           Operating                               2,065,660       1,884,808        2,553,520        1,927,589
           Interest                                  307,752         472,018          367,439          546,906
           Depreciation and amortization             482,949         540,163          632,182          557,299
                                                  ----------      ----------       ----------       ----------

             Total expenses                        2,856,361       2,896,989        3,553,141        3,031,794
                                                  ----------      ----------       ----------       ----------

         Net (loss) income                        $ (278,351)     $ (143,801)      $   89,735       $  (83,370)
                                                  ==========      ==========       ==========       ==========

         Cash distributions                       $   33,692      $   87,104       $  225,650       $   55,218
                                                  ==========      ==========       ==========       ==========

         Cash distributions recorded
           as reduction of investments
           in partnerships                        $   33,692      $       --       $  225,650       $       --
                                                  ==========      ==========       ==========       ==========

         Cash distributions recorded
           as income                              $       --      $   87,104       $       --       $   55,218

         Partnership's share of Local
           Partnership net (loss) income            (275,986)             --           88,530               --
                                                  --------------------------       ---------------------------

         Share of (loss) income
           from partnerships                              $(188,882)                          $143,748
                                                          =========                           ========

</TABLE>


                                      -13-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             June 30, 2004 and 2003

                                   (Unaudited)


2.   INVESTMENTS IN PARTNERSHIPS - Continued

<TABLE>
<CAPTION>
                                                                  For the six months ended
                                                                           June 30,
                                                  -----------------------------------------------------------
                                                             2004                             2003
                                                  --------------------------       --------------------------
                                                    Equity                           Equity
                                                    Method        Suspended          Method         Suspended
                                                  ----------      ----------       ----------       ----------
         <S>                                      <C>             <C>              <C>              <C>
         Number of Local Partnerships                  9              10               10               11
                                                       =              ==               ==               ==

         Revenue:
           Rental                                 $5,174,445      $5,301,140       $6,789,948       $5,641,650
           Other                                     247,564         205,227          424,632          255,197
                                                  ----------      ----------       ----------       ----------

             Total revenue                         5,422,009       5,506,367        7,214,580        5,896,847
                                                  ----------      ----------       ----------       ----------

         Expenses:
           Operating                               4,192,757       3,769,613        4,879,226        3,855,175
           Interest                                  615,502         944,035          734,877        1,093,810
           Depreciation and amortization             965,896       1,080,325        1,264,364        1,114,597
                                                  ----------      ----------       ----------       ----------

             Total expenses                        5,774,155       5,793,973        6,878,467        6,063,582
                                                  ----------      ----------       ----------       ----------

         Net (loss) income                        $ (352,146)     $ (287,606)      $  336,113       $ (166,735)
                                                  ==========      ==========       ==========       ==========

         Cash distributions                       $   84,777      $   87,104       $  225,650       $   55,218
                                                  ==========      ==========       ==========       ==========

         Cash distributions recorded
           as reduction of investments
           in partnerships                        $   84,777      $       --       $  225,650       $       --
                                                  ==========      ==========       ==========       ==========

         Cash distributions recorded
           as income                              $       --      $   87,104       $       --       $   55,218

         Partnership's share of Local
           Partnership net (loss) income            (349,225)           --            332,051            --
                                                  ------------------------         ------------------------

         Share of (loss) income from
           partnerships                                    $(262,121)                        $387,269
                                                           =========                         ========
</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 June 30, 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  $10,403,997  and
$9,836,563,  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.

                                      -14-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             June 30, 2004 and 2003

                                   (Unaudited)


3.   RELATED PARTY TRANSACTIONS

     In accordance with the terms of the Partnership Agreement,  the Partnership
is obligated to reimburse the Managing  General  Partner for its direct expenses
in connection with managing the  Partnership.  The Partnership  paid $55,878 and
$98,052 for the three and six month periods  ended June 30, 2004,  respectively,
and  $58,647 and  $116,676  for the three and six month  periods  ended June 30,
2003,  respectively,  to the Managing General Partner as direct reimbursement of
expenses  incurred on behalf of the  Partnership.  Such expenses are included in
general and administrative expenses in the accompanying  consolidated statements
of operations.

     In accordance with the terms of the Partnership Agreement,  the Partnership
is obligated to pay the Managing General Partner an annual incentive  management
fee  (Management  Fee) after all other expenses of the Partnership are paid. The
Partnership  paid the Managing  General  Partner a Management Fee of $93,750 for
each of the three month periods  ended June 30, 2004 and 2003,  and $187,500 for
each of the six month periods ended June 30, 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 May 21, 2004, the Managing  General Partner made a cash  distribution of
$5,280,264  ($72 per Unit) to  Additional  Limited  Partners who were holders of
record as of April 1, 2004. The distribution consisted of proceeds received from
the sale of the property owned by Campbell Terrace.

                                      # # #

                                      -15-

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

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

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

                                      -16-

<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,  although it has two automatic  five-year renewal
terms to 2014. The Section 8 HAP contract  covers 20% of the apartment  units in
Fairway Park. The local managing  general partner is in the process of exploring
refinancing the property's mortgage debt.

                                      -17-

<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.

     Tradewinds West Limited  Dividend  Housing  Association  (Tradewinds) has a
Section 8 HAP contract  which expires April 30, 2005. The Section 8 HAP contract
covers 43% of the apartment  units in  Tradewinds.  It is  anticipated  that the
Local  Partnership  will extend its Section 8 HAP contract for a one-year period
at its expiration.

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

     As of June 30, 2004, the carrying amount of the  Partnership's  investments
in Local  Partnerships  with  Section 8 HAP  contracts  expiring  in the next 12
months was $3,690,920.

     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 $9,282,955
as of June 30, 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 August 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
$81,737,808  as of June 30, 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
remaining  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 August 12, 2004.

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

     Crescent Gardens - Second Note          $  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
     Crescent Gardens - First Note              434,000            07/31/04
     Harborview                               3,000,000            08/01/04



                                      -18-

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


     The  collateral  that  secured  the  purchase  money  notes  related to the
following properties was transferred to the noteholders during 2003, and through
August 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 2004 subsequent to August 12,
2004 ($7,877,081  aggregate principal balance),  and in 2025 ($500,000 principal
balance).

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

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

     The  Partnership's  inability  to pay  certain of the  purchase  money note
principal and accrued interest balances when due, and the resulting  uncertainty
regarding the Partnership's  continued  ownership  interest in the related Local
Partnerships,  does not adversely impact the Partnership's  financial  condition
because the  purchase  money  notes are  nonrecourse  and secured  solely by the
Partnership's interest in the related Local Partnerships.  Therefore, should the
investment in any of the Local  Partnerships  with matured or maturing  purchase
money notes not produce  sufficient  value to satisfy the related purchase money
notes, the  Partnership's  exposure to loss is limited because the amount of the
nonrecourse indebtedness of each of the matured or maturing purchase money notes
exceeds the  carrying  amount of the  investment  in each of the  related  Local
Partnerships. Thus, even a complete loss of the Partnership's interest in 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  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 June 30, 2004, the ten
Local  Partnerships  with associated  purchase money notes which have matured or
which mature  through June 30, 2005, and which remain unpaid or unextended as of
August 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.

                                      -19-

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

                              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)


     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 six month period ended June 30, 2004, the receipt of distributions  from
Local  Partnerships  and  existing  cash  resources  were  adequate  to  support
operating cash  requirements.  The primary uses of cash in operating  activities
were to pay management  and  professional  fees, and general and  administrative
expenses.  Cash and cash equivalents  increased  $4,917,887 during the six month
period ended June 30, 2004,  primarily as a result of proceeds received from the
sale of the property owned by Campbell  Terrace  Associates  (Campbell  Terrace)
after distribution of a portion thereof to Additional Limited Partners.  For the
six month period ended June 30, 2004, $87,104 of the distributions received from
Local  Partnerships were from Local Partnerships which have cumulative losses in
excess  of  the  amount  of  the   Partnership's   investments  in  those  Local
Partnerships  (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 May 21, 2004, the Managing  General Partner made a cash  distribution of
$5,280,264  ($72 per Unit) to  Additional  Limited  Partners who were holders of
record as of April 1, 2004. The distribution consisted of proceeds received from
the sale of 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  recognized  net loss of  $2,303,075  for the three  month
period  ended  June  30,  2004,  compared  to net  loss  of  $1,889,205  for the
corresponding  period in 2003,  primarily  due to a decrease  in share of income
from partnerships,  an increase in interest expense due to compounding  interest
on  three   purchase  money  notes,   and  nominal   increases  in  general  and
administrative  expenses and amortization of deferred costs.  These factors were
partially  offset by an increase in interest revenue due to higher cash and cash
equivalent balances and a nominal decrease in professional fees. The decrease in
share of income from  partnerships  was  primarily  due to: (i) the cessation of
recording share of income from one Local  Partnership whose related property was
sold in 2004;  and (ii) a decrease in rental income at the  properties  owned by
two Local Partnerships.


                                      -20-

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


     The  Partnership's net income for the six month period ended June 30, 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 as discussed above, an increase in interest  expense,  as discussed
above, and an increase in amortization of deferred costs.  Partially  offsetting
the decrease in net income were an increase in gain on disposition of investment
in partnership  related to the sale of Campbell  Terrace,  a decrease in general
and  administrative  expenses due to lower reimbursed payroll costs, an increase
in interest  revenue as discussed  above, and a nominal decrease in professional
fees.

     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
six month  periods  ended June 30, 2004 did not include  losses of $260,736  and
$521,475,  respectively,  compared to excluded  losses of $232,903 and $465,803,
for the three and six month periods ended June 30, 2003, respectively.

     No other  significant  changes in the  Partnership's  operations have taken
place during the six month period ended June 30, 2004.


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.

                                      -21-

<PAGE>
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  Partner.  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.

                            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  September 30, 2003.
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 May 21, 2004, the Managing  General Partner made a cash  distribution of
$5,280,264  ($72 per Unit) to  Additional  Limited  Partners who were holders of
record as of April 1, 2004. The distribution consisted of proceeds received from
the sale of the property owned by Campbell Terrace.


                                      -22-

<PAGE>
Part II. OTHER INFORMATION
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 June 30, 2004.

All other Items are not applicable.

                                      -23-

<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




August 12, 2004                        by:  /s/ Michael J. Tuszka
---------------                             ------------------------------------
DATE                                        Michael J. Tuszka
                                              Vice President
                                              and Chief Accounting Officer
                                              (Principal Financial Officer
                                              and Principal Accounting Officer)

                                      -24-