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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



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

For the quarterly period ended March 31, 2009

OR



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

Commission file number: 0-14207

RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP

(Exact name of registrant as specified in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|California                                                     |  | 33-0016355                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|400 South El Camino Real, Suite 1100                           |  |                                     
|San Mateo, California                                          |  | 94402-1708                          
|(Address of principal executive offices)                       |  | (Zip Code)                          

(650) 343-9300

(Registrants telephone number, including area code)

Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.    Yes  x    No   ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    Yes   ̈    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of accelerated filer, large accelerated filer and
smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer   ̈            Accelerated Filer   ̈            Non-accelerated filer   ̈            Smaller reporting company  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes   ̈    No  x









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INDEX

RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP



|           |  |                                                                                          |  |         
|---------- |  | ---------------------------------------------------------------------------------------- |  | --------
|           |  |                                                                                          |  | Page No.
|PART I     |  | FINANCIAL INFORMATION                                                                    |  |         
|           |  |                                                                                         
|Item 1.    |  | Consolidated Financial Statements of Rancon Realty Fund IV (Unaudited):                  |  |         
|           |  |                                                                                         
|           |  | Consolidated Balance Sheets as of March 31, 2009 and December 31, 2008                   |  | 3       
|           |  |                                                                                         
|           |  | Consolidated Statements of Operations for the three months ended March 31, 2009 and 2008 |  | 4       
|           |  |                                                                                         
|           |  | Consolidated Statement of Partners Equity for the three months ended March 31, 2009     |  | 5       
|           |  |                                                                                         
|           |  | Consolidated Statements of Cash Flows for the three months ended March 31, 2009 and 2008 |  | 6       
|           |  |                                                                                         
|           |  | Notes to Consolidated Financial Statements                                               |  | 7-13    
|           |  |                                                                                         
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations    |  | 14-17   
|           |  |                                                                                         
|Item 3.    |  | Qualitative and Quantitative Disclosures About Market Risk                               |  | 17      
|           |  |                                                                                         
|Item 4.    |  | Controls and Procedures                                                                  |  | 18      
|           |  |                                                                                         
|Item 4T.   |  | Controls and Procedures                                                                  |  | 18      
|           |  |                                                                                         
|PART II    |  | OTHER INFORMATION                                                                        |  |         
|           |  |                                                                                         
|Item 1.    |  | Legal Proceedings                                                                        |  | 19      
|           |  |                                                                                         
|Item 1A.   |  | Risk Factors                                                                             |  | 19      
|           |  |                                                                                         
|Item 2.    |  | Unregistered Sales of Equity Securities and Use of Proceeds                              |  | 19      
|           |  |                                                                                         
|Item 3.    |  | Defaults Upon Senior Securities                                                          |  | 19      
|           |  |                                                                                         
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                      |  | 19      
|           |  |                                                                                         
|Item 5.    |  | Other Information                                                                        |  | 19      
|           |  |                                                                                         
|Item 6.    |  | Exhibits                                                                                 |  | 19      
|           | 
|SIGNATURES |  | 20                                                                                      



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PART I. FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP, and SUBSIDIARIES

Consolidated Balance Sheets

(in thousands,
except units outstanding)

(Unaudited)



|                                                                                                                              |  |               |         |   |                  |   |         |  
|----------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                              |  | March 31,2009 |         |   | December 31,2008 |  
|Assets                                                                                                                        |  |               |         |   |                  |   |         |  
|Investments in real estate:                                                                                                   |  |               |         |   |                  |   |         |  
|Rental properties                                                                                                             |  | $             | 62,096  |   |                  | $ | 52,575  |  
|Accumulated depreciation                                                                                                      |  |               | (16,952 | ) |                  |   | (17,358 | )
|                                                                                                                              |  |               |         |   |                  |   |         |  
|Rental properties, net                                                                                                        |  |               | 45,144  |   |                  |   | 35,217  |  
|Construction in progress and land held for development                                                                        |  |               |        |   |                  |   | 11,388  |  
|                                                                                                                              |  |               |         |   |                  |   |         |  
|Total investments in real estate                                                                                              |  |               | 45,144  |   |                  |   | 46,605  |  
|Cash and cash equivalents                                                                                                     |  |               | 3,374   |   |                  |   | 3,039   |  
|Accounts receivable, net                                                                                                      |  |               | 18      |   |                  |   | 88      |  
|Deferred costs, net of accumulated amortization of $1,790 and $1,665 as of March 31, 2009 and December 31, 2008,
respectively |  |               | 1,898   |   |                  |   | 1,964   |  
|Prepaid expenses and other assets                                                                                             |  |               | 1,463   |   |                  |   | 1,363   |  
|                                                                                                                              |  |               |         |   |                  |   |         |  
|Total assets                                                                                                                  |  | $             | 51,897  |   |                  | $ | 53,059  |  
|                                                                                                                              |  |               |         |   |                  |   |         |  
|Liabilities and Partners Equity (Deficit)                                                                                    |  |               |         |   |                  |   |         |  
|Liabilities:                                                                                                                  |  |               |         |   |                  |   |         |  
|Note payable and line of credit                                                                                               |  | $             | 28,547  |   |                  | $ | 28,642  |  
|Accounts payable and other liabilities                                                                                        |  |               | 357     |   |                  |   | 485     |  
|Prepaid rent                                                                                                                  |  |               | 394     |   |                  |   | 281     |  
|                                                                                                                              |  |               |         |   |                  |   |         |  
|Total liabilities                                                                                                             |  |               | 29,298  |   |                  |   | 29,408  |  
|                                                                                                                              |  |               |         |   |                  |   |         |  
|Commitments and contingent liabilities (Note 7)                                                                               |  |               |         |   |                  |   |         |  
|Partners Equity (Deficit):                                                                                                   |  |               |         |   |                  |   |         |  
|General Partner                                                                                                               |  |               | (830    | ) |                  |   | (819    | )
|Limited partners, 65,819 limited partnership units outstanding as of March 31, 2009 and December 31, 2008                     |  |               | 23,429  |   |                  |   | 24,470  |  
|                                                                                                                              |  |               |         |   |                  |   |         |  
|Total partners equity                                                                                                        |  |               | 22,599  |   |                  |   | 23,651  |  
|                                                                                                                              |  |               |         |   |                  |   |         |  
|Total liabilities and partners equity                                                                                        |  | $             | 51,897  |   |                  | $ | 53,059  |  
|                                                                                                                              |  |               |         |   |                  |   |         |  

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



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RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP, and SUBSIDIARIES

Consolidated Statements of Operations

(in thousands, except per unit amounts and units outstanding)

(Unaudited)



|                                                                 |  |                             |        |   |      |   |        |  
|---------------------------------------------------------------- |  | --------------------------- | ------ | - | ---- | - | ------ | -
|                                                                 |  | Three months endedMarch 31, |       
|                                                                 |  | 2009                        |        |   | 2008 |  
|Operating Revenue                                                |  |                             |        |   |      |   |        |  
|Rental revenue and other                                         |  | $                           | 2,014  |   |      | $ | 2,218  |  
|Tenant reimbursements                                            |  |                             | 306    |   |      |   | 302    |  
|                                                                 |  |                             |        |   |      |   |        |  
|Total operating revenue                                          |  |                             | 2,320  |   |      |   | 2,520  |  
|Operating Expenses                                               |  |                             |        |   |      |   |        |  
|Property operating                                               |  |                             | 960    |   |      |   | 889    |  
|Depreciation and amortization                                    |  |                             | 1,720  |   |      |   | 758    |  
|General and administrative                                       |  |                             | 256    |   |      |   | 232    |  
|                                                                 |  |                             |        |   |      |   |        |  
|Total operating expenses                                         |  |                             | 2,936  |   |      |   | 1,879  |  
|                                                                 |  |                             |        |   |      |   |        |  
|Operating (loss) income                                          |  |                             | (616   | ) |      |   | 641    |  
|Interest and other income                                        |  |                             | 1      |   |      |   | 1      |  
|Interest expense (including amortization of loan fees)           |  |                             | (437   | ) |      |   | (380   | )
|                                                                 |  |                             |        |   |      |   |        |  
|Net (loss) income                                                |  | $                           | (1,052 | ) |      | $ | 262    |  
|                                                                 |  |                             |        |   |      |   |        |  
|Basic and diluted net (loss) income per limited partnership unit |  | $                           | (15.82 | ) |      | $ | 3.59   |  
|                                                                 |  |                             |        |   |      |   |        |  
|Weighted average number of limited partnership units outstanding |  |                             | 65,819 |   |      |   | 65,819 |  
|                                                                 |  |                             |        |   |      |   |        |  

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



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RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP, and SUBSIDIARIES

Consolidated Statement of Partners Equity

For the three months ended March 31, 2009

(in thousands)

(Unaudited)



|                                       |  |                |      |   |                 |   |        |       |  |   |        |  
|-------------------------------------- |  | -------------- | ---- | - | --------------- | - | ------ | ----- |  | - | ------ | -
|                                       |  | GeneralPartner |      |   | LimitedPartners |   |        | Total | 
|Balance (deficit) at December 31, 2008 |  | $              | (819 | ) |                 | $ | 24,470 |       |  | $ | 23,651 |  
|Net loss                               |  |                | (11  | ) |                 |   | (1,041 | )     |  |   | (1,052 | )
|                                       |  |                |      |   |                 |   |        |       |  |   |        |  
|Balance (deficit) at March 31, 2009    |  | $              | (830 | ) |                 | $ | 23,429 |       |  | $ | 22,599 |  
|                                       |  |                |      |   |                 |   |        |       |  |   |        |  

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



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RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP, and SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)



|                                                                                         |  |                             |        |   |      |   |        |  
|---------------------------------------------------------------------------------------- |  | --------------------------- | ------ | - | ---- | - | ------ | -
|                                                                                         |  | Three months endedMarch 31, |       
|                                                                                         |  | 2009                        |        |   | 2008 |  
|Cash flows from operating activities:                                                    |  |                             |        |   |      |   |        |  
|Net (loss) income                                                                        |  | $                           | (1,052 | ) |      | $ | 262    |  
|Adjustments to reconcile net (loss) income to net cash provided by operating activities: |  |                             |        |   |      |   |        |  
|Depreciation and amortization                                                            |  |                             | 1,720  |   |      |   | 758    |  
|Amortization of loan fees, included in interest expense                                  |  |                             | 78     |   |      |   | 18     |  
|Changes in certain assets and liabilities:                                               |  |                             |        |   |      |   |        |  
|Accounts receivable                                                                      |  |                             | 70     |   |      |   | 16     |  
|Deferred costs                                                                           |  |                             | (153   | ) |      |   | (132   | )
|Prepaid expenses and other assets                                                        |  |                             | (100   | ) |      |   | (97    | )
|Accounts payable and other liabilities                                                   |  |                             | (128   | ) |      |   | 6      |  
|Prepaid rent                                                                             |  |                             | 113    |   |      |   | 91     |  
|                                                                                         |  |                             |        |   |      |   |        |  
|Net cash provided by operating activities                                                |  |                             | 548    |   |      |   | 922    |  
|                                                                                         |  |                             |        |   |      |   |        |  
|Cash flows from investing activities:                                                    |  |                             |        |   |      |   |        |  
|Additions to real estate investments                                                     |  |                             | (115   | ) |      |   | (1,153 | )
|                                                                                         |  |                             |        |   |      |   |        |  
|Net cash used in investing activities                                                    |  |                             | (115   | ) |      |   | (1,153 | )
|                                                                                         |  |                             |        |   |      |   |        |  
|Cash flows from financing activities:                                                    |  |                             |        |   |      |   |        |  
|Note payable principal payments                                                          |  |                             | (95    | ) |      |   | (90    | )
|Payment of deferred loan fees                                                            |  |                             | (3     | ) |      |   |       |  
|                                                                                         |  |                             |        |   |      |   |        |  
|Net cash used in financing activities                                                    |  |                             | (98    | ) |      |   | (90    | )
|                                                                                         |  |                             |        |   |      |   |        |  
|Net increase (decrease) in cash and cash equivalents                                     |  |                             | 335    |   |      |   | (321   | )
|Cash and cash equivalents at beginning of period                                         |  |                             | 3,039  |   |      |   | 1,881  |  
|                                                                                         |  |                             |        |   |      |   |        |  
|Cash and cash equivalents at end of period                                               |  | $                           | 3,374  |   |      | $ | 1,560  |  
|                                                                                         |  |                             |        |   |      |   |        |  
|Supplemental disclosure of cash flow information:                                        |  |                             |        |   |      |   |        |  
|Cash paid for interest                                                                   |  | $                           | 359    |   |      | $ | 362    |  
|                                                                                         |  |                             |        |   |      |   |        |  
|Supplemental disclosure of non-cash operating activities:                                |  |                             |        |   |      |   |        |  
|Write-off of fully depreciated rental property assets                                    |  | $                           | 1,982  |   |      | $ | 9      |  
|                                                                                         |  |                             |        |   |      |   |        |  
|Write-off of fully amortized deferred costs                                              |  | $                           | 97     |   |      | $ | 8      |  
|                                                                                         |  |                             |        |   |      |   |        |  

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



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RANCON REALTY FUND IV,

A California Limited Partnership

Notes
to Consolidated Financial Statements

(Unaudited)

NOTE 1.     ORGANIZATION

Rancon Realty Fund IV, a California Limited Partnership (the Partnership), was
organized in accordance with the provisions of the California Uniform Limited Partnership Act for the purpose of acquiring, developing, operating and disposing of real property. The Partnership was organized in 1984 and reached final funding in July
1987. The general partners of the Partnership are Daniel L. Stephenson and Rancon Financial Corporation (RFC), hereinafter collectively referred to as the General Partner. RFC is wholly-owned by Daniel L. Stephenson. The Partnership has
no employees.

As of March 31, 2009, there were 65,819 Units (Units) outstanding.

The Partnership commenced on April 3, 1984 and shall continue until December 31, 2015, unless previously terminated in accordance with the provisions of the
Partnership Agreement.

Allocation of Net Income and Net Loss

Allocation of net income and net loss is made pursuant to the terms of the Partnership Agreement. Generally, net income from operations is allocated 90% to the limited partners and 10% to the General Partner. Net
losses from operations are allocated 99% to the limited partners and 1% to the General Partner until such time as a partners capital account is reduced to zero. Additional losses will be allocated entirely to those partners with positive
capital account balances until such balances are reduced to zero.

Net income other than net income from operations shall be allocated as follows:
(i) first, to the partners who have a deficit balance in their capital account, provided that, in no event, shall the General Partner be allocated more than 5% of the net income other than net income from operations until the earlier of sale or
disposition of substantially all of the assets or the distribution of cash (other than cash from operations) equal to the Unit holders original invested capital; (ii) second, to the limited partners in proportion to and to the extent of
the amounts required to increase their capital accounts to an amount equal to the sum of the adjusted invested capital of their units plus an additional cumulative non-compounded 6% return per annum (plus additional amounts depending on the date
Units were purchased); (iii) third, to the partners in the minimum amount required to first equalize their capital accounts in proportion to the number of units owned, and then, to bring the sum of the balances of the capital accounts of the
limited partners and the General Partner into the ratio of 4 to 1; and (iv) the balance, if any, 80% to the limited partners and 20% to the General Partner. In no event shall the General Partner be allocated less than 1% of the net income other
than net income from operations for any period.

Net loss other than net loss from operations is allocated 99% to the limited partners and 1% to the
General Partner. Such net losses will be allocated among limited partners as necessary to equalize their capital accounts in proportion to their Units, and thereafter will be allocated in proportion to their Units.

The terms of the Partnership Agreement call for the General Partner to restore any deficits that may exist in its capital account after allocation of gains and losses
from the sale of the final property owned by the Partnership, but prior to any liquidating distributions being made to the partners.

Distribution of
Cash

The Partnership shall make annual or more frequent distributions of substantially all cash available to be distributed to partners as
determined by the General Partner, subject to the following: (i) distributions may be restricted or suspended for limited periods when the General Partner determines in its absolute discretion that it is in the best interests of the
Partnership; and (ii) all distributions are subject to the payment of Partnership expenses and maintenance of reasonable reserves for debt service, alterations and improvements, maintenance, replacement of furniture and fixtures, working
capital and contingent liabilities.

All excess cash from operations shall be distributed 90% to the limited partners and 10% to the General Partner.

All cash from sales or refinancing and any other cash determined by the General Partner to be available for distribution other than cash from operations
shall be distributed in the following order of priority: (i) first, 1% to the General Partner and 99% to the limited partners in proportion to the outstanding positive amounts of Adjusted Invested Capital (as defined in the Partnership
Agreement) for each of their Units until Adjusted Invested Capital (as defined in the Partnership Agreement) for each Unit is reduced to zero; (ii) second, 1% to the General Partner and 99% to the limited partners until each of the limited
partners has received an amount which, including cash from operations previously distributed to the limited partners, equals a 12% annual cumulative non-compounded return on the Adjusted Invested Capital (as defined in the Partnership Agreement) of
their Units plus such limited partners Limited Incremental Preferential Return (as defined in the Partnership Agreement), if any, with respect to each such Unit, on the Adjusted Investment Capital (as defined in the Partnership Agreement) of
such Units for the twelve month period following the date upon which such Unit was purchased from the Partnership and following the admission of such limited partner; (for limited partners admitted to the Partnership before March 31, 1985,
there are additional cumulative



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RANCON REALTY FUND IV,

A California Limited Partnership

Notes to Consolidated Financial Statements

(Unaudited)



non-compounded returns of 9%, 6%, or 3% depending on purchase date, through October 31, 1985); (iii) third, 99% to the General Partner and 1% to
the limited partners, until the General Partner has received an amount equal to 20% of all distributions of cash from sales or refinancing; and (iv) the balance, 80% to the limited partners, pro rata in proportion to the number of Units held by
each, and 20% to the General Partner.

NOTE 2.     SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements
present the consolidated financial position of the Partnership and its subsidiaries as of March 31, 2009 and December 31, 2008, and the consolidated results of operations and of cash flows of the Partnership and its subsidiaries for the
three months ended March 31, 2009 and 2008. All significant intercompany transactions, receivables and payables have been eliminated in consolidation.

In the opinion of the General Partner, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal accruals) necessary to present fairly the consolidated financial position of the
Partnership as of March 31, 2009 and December 31, 2008, and the related consolidated statements of operations and of cash flows for the three months ended March 31, 2009 and 2008, and the consolidated statement of partners
equity for the three months ended March 31, 2009.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported results of operations during the reporting period. Actual results could differ from those estimates.

Rental Properties

Rental properties, including
the related land, are stated at depreciated cost unless events or circumstances indicate that such amounts cannot be recovered, in which case, the carrying value of the property is reduced to its estimated fair value. Estimated fair value:
(i) is based upon the Partnerships plans for the continued operations of each property; and (ii) is computed using estimated sales price, as determined by prevailing market values for comparable properties and/or the use of
capitalization rates applied to annualized net operating income based upon the age, construction and use of the building. The fulfillment of the Partnerships plans related to each of its properties is dependent upon, among other things, the
presence of economic conditions which will enable the Partnership to continue to hold and operate the properties prior to their eventual sale. Due to uncertainties inherent in the valuation process and in the economy, it is reasonably possible that
the actual results of operating and disposing of the Partnerships properties could be materially different than current expectations. Rental properties are reviewed for impairment whenever there is a triggering event and at least annually.

Depreciation is provided using the straight-line method over the useful lives of the respective assets. The useful lives are as follows:



|                          |  |                                                                                                  
|------------------------- |  | -------------------------------------------------------------------------------------------------
|Building and improvements |  | 5 to 40 years                                                                                    
|Tenant improvements       |  | Lesser of the initial term of the related lease, or the estimated useful life of the improvements
|Furniture and equipment   |  | 5 to 7 years                                                                                     

Construction In Progress and Land Held for Development

Construction in progress and land held for development are stated at cost unless events or circumstances indicate that cost cannot be recovered, in which case, the
carrying value is reduced to estimated fair value. Estimated fair value: (i) is based on the Partnerships plans for the development of each property; (ii) is computed using estimated sales price, based upon market values for
comparable properties; and (iii) considers the cost to complete and the estimated fair value of the completed project. The fulfillment of the Partnerships plans related to each of its properties is dependent upon, among other things, the
presence of economic conditions which will enable the Partnership to either hold the properties for eventual sale or obtain financing to further develop the properties. Construction in progress and land held for development are reviewed for
impairment whenever there is a triggering event and at least annually.

The pre-development costs for a new project are capitalized and include survey fees
and consulting fees. Interest, property taxes and insurance related to the new project are capitalized during periods when activities that are necessary to get the project ready for its intended use are in progress. The capitalization ends when the
construction is substantially completed and the project is ready for its intended use.



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RANCON REALTY FUND IV,

A California Limited Partnership

Notes to Consolidated Financial Statements

(Unaudited)



Cash and Cash Equivalents

The Partnership considers money market funds and certificates of deposit with original maturities of less than ninety days when purchased to be cash and cash equivalents.

Deferred Costs

Deferred loan fees are capitalized and
amortized on a straight-line basis, which approximates the effective interest method, over the life of the related loan. Deferred lease commissions are capitalized and amortized on a straight-line basis over the initial fixed term of the related
lease agreements.

Revenues

The Partnership
recognizes rental revenue on a straight-line basis over the term of the leases. Actual amounts collected could be lower or higher than the amounts recognized on a straight-line basis if specific tenants are unable to pay rent that the Partnership
has previously recognized as revenue. For tenants with percentage rent, the Partnership recognizes revenue when the tenants specified sales targets have been met. The reimbursements from tenants for real estate taxes and other recoverable
operating expenses are recognized as revenue on an estimated basis, and the differences between estimated and actual amounts are recognized as revenue in the subsequent year when the amounts are collected. However, where actual expenses are
significantly different from estimates, the Partnership will accrue the differences in the same period. The Partnership periodically evaluates the collectability of amounts due from tenants and maintains an allowance for doubtful accounts for
estimated losses resulting from the inability of tenants to make required payments under the lease agreements.

Net (Loss) Income Per Limited
Partnership Unit

Net (loss) income per Unit is calculated using the weighted average number of Units outstanding during the period and the limited
partners allocable share of the net (loss) income.

Net (loss) income per Unit is as follows (in thousands, except for weighted average units and per
unit amounts):



|                                                                                    |  |                            |     |   |                 |   |        |                |  |                 |    |  |   |       
|----------------------------------------------------------------------------------- |  | -------------------------- | --- | - | --------------- | - | ------ | -------------- |  | --------------- | -- |  | - | ------
|                                                                                    |  | For the three months ended
|                                                                                    |  | March 31, 2009             |     |   | March 31, 2008 
|                                                                                    |  | GeneralPartner             |     |   | LimitedPartners |   |        | GeneralPartner |  | LimitedPartners
|(Loss)                                                                              |  |                            |     |   |                 |   |        |                |  |                 |    |  |   |       
|Income allocation:                                                                  |  |                            |     |   |                 |   |        |                |  |                 |    |  |   |       
|Net (loss) income                                                                   |  | $                          | (11 | ) |                 | $ | (1,041 | )              |  | $               | 26 |  | $ | 236   
|Weighted average number of limited partnership units outstanding during each period |  |                            |     |   |                 |   | 65,819 |                |  |                 |    |  |   | 65,819
|Basic and diluted (loss) income per limited partnership unit                        |  |                            |     |   |                 | $ | (15.82 | )              |  |                 |    |  | $ | 3.59  

Income Taxes

No provision for income taxes is included in the accompanying consolidated financial statements as the Partnerships results of operations are allocated to the partners for inclusion in their respective income tax returns. Net income
and partners equity (deficit) for financial reporting purposes will differ from the Partnerships income tax return because of different accounting methods used for certain items, including depreciation expense, provisions for impairment
of investments in real estate, capitalization of development period interest and rental income and loss recognition.



9



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##### Table of Contents

RANCON REALTY FUND IV,

A California Limited Partnership

Notes to Consolidated Financial Statements

(Unaudited)



Concentration Risk

Three tenants (Inland Counties Regional Center, University of Phoenix and Art Institute of California) represented a combined 45% of operating revenue for the three months ended March 31, 2009.

Reclassifications

Certain prior quarter balances have been
reclassified to conform to the current quarter presentation, with no effect on consolidated results of operations.

Recently Issued Accounting
Literature

In October 2008, the FASB issued FASB Staff Position FAS 157-3, Determining the Fair Value of a Financial Asset When the Market
for That Asset Is Not Active (FSP 157-3). FSP 157-3 clarified the application of Statement No.157, Fair Value Measurements. FSP 157-3 clarified how the fair value of a financial asset is determined when the
market for that financial asset is inactive. FSP 157-3 was effective upon issuance, including prior periods for which financial statements had not been issued. The implementation of this standard did not have an impact on the Partnerships
financial position, results of operations or cash flows.

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (SFAS
No. 141(R)), which improves the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. This Statement is
effective for fiscal years beginning after December 15, 2008. The adoption of SFAS No. 141(R) did not have a material impact on the Partnerships financial position, results of operations or cash flows, except that transaction
costs will be expensed when and as incurred.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial
Statements an Amendment of ARB No. 51, (SFAS No. 160), which clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated
financial statements. This Statement is effective for fiscal years beginning after December 15, 2008. The implementation of this standard did not have a material impact on the Partnerships financial position, results of operations or
cash flows.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities - an amendment of FASB
Statement No. 133(SFAS No. 161), which requires companies to provide additional disclosures about their objectives and strategies for using derivative instruments, how the derivative instruments and related hedged items
are accounted for under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, and related interpretations, and how the derivative instruments and related hedged items affect their financial statements. SFAS
No. 161 also requires companies to disclose information about credit risk-related contingent features in their hedged positions. SFAS No. 161 is effective for fiscal years and interim periods beginning after November 15, 2008. The
adoption of SFAS No. 161 did not have a material impact on the Partnerships financial condition or operating results.

Reference to 2008
audited consolidated financial statements

These unaudited consolidated financial statements should be read in conjunction with the notes to audited
consolidated financial statements included in the Partnerships December 31, 2008 audited consolidated financial statements on Form 10-K.



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##### Table of Contents

RANCON REALTY FUND IV,

A California Limited Partnership

Notes to Consolidated Financial Statements

(Unaudited)



NOTE 3.     INVESTMENTS IN REAL ESTATE

Rental properties consist of the following (in thousands):



|                                 |  |               |         |   |                  |   |         |  
|-------------------------------- |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                                 |  | March 31,2009 |         |   | December 31,2008 |  
|Land                             |  | $             | 4,690   |   |                  | $ | 4,471   |  
|Buildings                        |  |               | 48,410  |   |                  |   | 37,268  |  
|Building and tenant improvements |  |               | 8,996   |   |                  |   | 10,836  |  
|                                 |  |               |         |   |                  |   |         |  
|                                 |  |               | 62,096  |   |                  |   | 52,575  |  
|Less: accumulated depreciation   |  |               | (16,952 | ) |                  |   | (17,358 | )
|                                 |  |               |         |   |                  |   |         |  
|Total rental properties, net     |  | $             | 45,144  |   |                  | $ | 35,217  |  
|                                 |  |               |         |   |                  |   |         |  

As of March 31, 2009, the Partnerships rental properties included five office properties and seven
retail properties.

NOTE 4.     CONSTRUCTION IN PROGRESS AND LAND HELD FOR DEVELOPMENT

Construction in progress consists of the following (in thousands):



|                                                                                                                                                                                                                                   |  |               |   |                  |   |       
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | - | ---------------- | - | ------
|                                                                                                                                                                                                                                   |  | March 31,2009 |   | December 31,2008
|14.7 acres of undeveloped land as of March 31, 2009 and December 31, 2008, plus a three-story multi-tenant 72,000 square-foot office
building on approximately 1.6 acres of land with a cost basis of $219 as of December 31, 2008 |  | $             |  |                  | $ | 11,388
|                                                                                                                                                                                                                                   |  |               |   |                  |   |       

During the third quarter of 2006, the Partnership began developing North River Place, a three-story multi-tenant
72,000 square-foot office building on an approximate 1.6 acre land parcel, plus completion of the balance of the 4.5 acre parking parcel. As a result, the land, pre-development costs and construction costs of North River Place were reclassified from
land held for development to construction in progress. The building shell was substantially completed in the first quarter of 2008, and building improvements completed during the second and third quarters. The project was placed into service in the
first quarter of 2009.

As of March 31, 2009, the Partnership owned approximately 14.7 acres of undeveloped land which is part of a
landfill-monitoring program managed by the City of San Bernardino (as discussed in Note 7). In 2008, the partnership conducted a comprehensive review of all real estate assets in accordance with SFAS No. 144, Accounting for the Impairment or
Disposal of Long Lived Assets, which indicates that asset values should be analyzed whenever events or changes in circumstances indicate that the carrying value of a property may not be fully recoverable. The process entailed the analysis of
each asset for instances where the book value exceeded the estimated fair value. As a result of this analysis the Partnership concluded that this asset was impaired and accordingly the asset was written down to net realizable value and a non-cash
impairment charge of $268,000 was recognized, as management does not believe development or sale of this asset is probable.

NOTE 5.
    NOTE PAYABLE AND LINE OF CREDIT

Note payable and line of credit consist of the following (in thousands):



|                                                                                                                                                                                                                                                                            |  |               |        |                  |   |       
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------ | ---------------- | - | ------
|                                                                                                                                                                                                                                                                            |  | March 31,2009 |        | December 31,2008
|Note payable collateralized by first deeds of trust on eight properties (discussed below). The note has a fixed interest rate of 5.46%, a
maturity date of January 1, 2016, with a 30-year amortization requiring monthly payments of principal and interest totaling $136. |  | $             | 22,968 |                  | $ | 23,063
|Line of credit                                                                                                                                                                                                                                                              |  |               | 5,579  |                  |   | 5,579 
|                                                                                                                                                                                                                                                                            |  |               |        |                  |   |       
|Total note payable and line of credit                                                                                                                                                                                                                                       |  | $             | 28,547 |                  | $ | 28,642
|                                                                                                                                                                                                                                                                            |  |               |        |                  |   |       

The note payable is collateralized by Promotional Retail Center #2 (formerly known as Circuit City), Mimis
Cafe, Palm Court Retail #1 and #2, Promotional Retail Center, Service Retail Center, TGI Fridays and One Vanderbilt. This note provides for a one-time loan assumption and release provisions for individual assets.



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##### Table of Contents

RANCON REALTY FUND IV,

A California Limited Partnership

Notes to Consolidated Financial Statements

(Unaudited)



In the fourth quarter of 2008 the Partnership obtained a new line of credit, which is collateralized by Carnegie
Business Center and Vanderbilt Plaza and has a total availability of $10,000,000. The proceeds from the new line of credit were used to pay off the previous line of credit balance. The line of credit requires monthly interest-only payments, has a
maturity date of December 19, 2009, with two one year extension options and bears variable interest at the 30-day LIBOR plus 2.75% (3.26% at March 31, 2009). As of March 31, 2009, $5,579,000 was outstanding under the line of credit.

The required principal payments on the Partnerships note payable for the next five years and thereafter, as of March 31, 2009, are as follows
(in thousands).



|           |  |   |       
|---------- |  | - | ------
|2009       |  | $ | 291   
|2010       |  |   | 407   
|2011       |  |   | 429   
|2012       |  |   | 453   
|2013       |  |   | 479   
|Thereafter |  |   | 20,909
|           |  |   |       
|Total      |  | $ | 22,968
|           |  |   |       

NOTE 6.     RELATED PARTY TRANSACTIONS

In May 2006, the Partnership extended its then current Property Management and Services Agreement with Glenborough Properties L.P. (Glenborough) through
December 31, 2009. On November 29, 2006, due to the merger of Glenborough and a third party, a new entity, Glenborough LLC was formed and the Partnerships Property Management and Service Agreement was transferred from Glenborough to
Glenborough LLC. All other terms and conditions remained unchanged. Effective March 1, 2009, the Partnership and Glenborough LLC again amended the Agreement, to reduce certain fees (as noted below) charged by Glenborough LLC, and extend the
term of the agreement through December 31, 2015 or, if earlier, until the completion of sale of all the real property assets of the Partnership. The Partnership engaged Glenborough LLC to perform services for the following fees:



|                                                                                                                                                                                                                                                                                                                                                                                                 |  |                    |        |               |   |       
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------ | ------ | ------------- | - | ------
|                                                                                                                                                                                                                                                                                                                                                                                                 |  | Three Months Ended
|                                                                                                                                                                                                                                                                                                                                                                                                 |  | March 31,2009      |        | March 31,2008
|(i)     property management fees of 2.5% effective March 1, 2009, and 3% prior to that, of gross rental revenue
which was included in property operating expenses in the accompanying consolidated statements of operations                                                                                                                                                                      |  | $                  | 69,000 |               | $ | 86,000
|(ii)    a construction services fee which was capitalized and included in rental properties on the accompanying
consolidated balance sheets                                                                                                                                                                                                                                                      |  |                    | 17,000 |               |   | 4,000 
|(iii)  an asset and Partnership management fee which was included in general and administrative expenses in the accompanying
consolidated statements of operations                                                                                                                                                                                                                               |  |                    | 71,000 |               |   | 75,000
|(iv)   a leasing services fee which was included in the deferred costs on the accompanying consolidated balance
sheets                                                                                                                                                                                                                                                                           |  |                    | 49,000 |               |   | 62,000
|(v)    a sales fee of 1% for all properties, as amended and effective March 1, 2009                                                                                                                                                                                                                                                                                                              |  |                    |       |               |   |      
|(vi)   a financing services fee of 1% of the gross loan amount which was included in the deferred costs on the accompanying
consolidated balance sheets                                                                                                                                                                                                                                          |  |                    |       |               |   |      
|(vii)  a development fee equal to 5% of the hard costs of the development project which was included in the construction in progress
and / or rental properties on the accompanying consolidated balance sheets, excluding the cost of the land, the development fee and the general contractors fee shall not exceed 11.5%, in the aggregate, of the hard costs of the development fee
project |  |                    |       |               |   |      
|(viii)  data processing fees which were included in property operating expenses in the accompanying consolidated statements of
operations                                                                                                                                                                                                                                                        |  |                    | 18,000 |               |   | 16,000
|(ix)   engineering fees which were included in property operating expenses in the accompanying consolidated statements of
operations                                                                                                                                                                                                                                                             |  |                    | 4,000  |               |   | 4,000 

As of March 31, 2009, Glenborough Fund XV LLC, an affiliate of Glenborough LLC, held 7,386 or 11.22% of the
Units, all of which were purchased from unaffiliated third parties.



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##### Table of Contents

RANCON REALTY FUND IV,

A California Limited Partnership

Notes to Consolidated Financial Statements

(Unaudited)



NOTE 7.     COMMITMENTS AND CONTINGENT LIABILITIES

Environmental Matters

The Partnership follows a policy of
monitoring its properties for the presence of hazardous or toxic substances. The Partnership is not aware of any environmental liability with respect to the properties that would have a material adverse effect on the Partnerships business,
assets or results of operations. There can be no assurance that such a material environmental liability does not exist. The existence of any such material environmental liability could have an adverse effect on the Partnerships consolidated
results of operations and cash flows.

Approximately 14.7 acres of the Tri-City land owned by the Partnership was part of a 27-acre landfill operated by
the City of San Bernardino (the City) from approximately 1950 to 1960. This landfill incorporates two land parcels and part of a third parcel. In 1996, the Santa Ana Regional Water Quality Control Board (SARWQCB), with
regulatory jurisdiction over the closure and monitoring of landfills, determined that the City was primarily responsible for the landfill. Therefore, the City and the Partnership entered into a Limited Access Easement Agreement, giving the City
access to the site for development, implementation and financial responsibility for a plan for the remediation of the landfill. It was determined that the City was to improve the landfill cover system (The Waterman Landfill Cover Improvement Plans,
April 2002), perform groundwater monitoring and install a permanent gas extraction system (Landfill Gas Collection System). Under the Limited Access Easement Agreement with the Partnership, methane monitoring is handled directly by the City. The
Citys installation of the cover improvement system was completed in the first quarter of 2007 along with the gas extraction system. The system is now operational and working properly to eliminate methane from the landfill. All controlled
wells are in compliance with County standards. Presently, the Partnership does not have any plans to develop or sell this site. No assurance can be made that circumstances will not arise which could impact the Partnerships responsibility
related to the land.

General Uninsured Losses

The Partnership carries property and liability insurance with respect to the properties. This coverage has policy specification and insured limits customarily carried for similar properties. However, certain types of losses (such as from
earthquakes and floods) may be either uninsurable or not economically insurable. Should the properties sustain damage as a result of an earthquake or flood, the Partnership may incur losses due to insurance deductibles, co-payments on insured losses
or uninsured losses. Additionally, the Partnership has elected to obtain insurance coverage for certified acts of terrorism as defined in the Terrorism Risk Insurance Act of 2002, as amended and reauthorized to date; however, our
policies of insurance may not provide coverage for other acts of terrorism. Any losses from such other acts of terrorism might be uninsured. Should an uninsured loss occur, the Partnership could lose some or all of its capital investment, cash flow
and anticipated profits related to the properties.

Other Matters

The Partnership is contingently liable for subordinated real estate commissions payable to the General Partner in the aggregate amount of $643,000 at March 31, 2009, for sales that were completed in previous
years. The subordinated real estate commissions are payable only after the Limited Partners have received distributions equal to their original invested capital plus a cumulative non-compounded return of 12% per annum on their adjusted invested
capital. Since the circumstances under which these commissions would be payable are not met currently, the liability has not been recognized in the accompanying consolidated financial statements; however, the amount will be recorded when and if it
becomes payable.



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##### Table of Contents

|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

The following discussion should be read in conjunction with our December 31, 2008 audited consolidated financial statements and the notes thereto included in our latest Annual Report on Form 10-K.

Background

During 1984 and 1985, our initial acquisition of
property consisted of approximately 76.56 acres of partially developed and unimproved land located in San Bernardino, California. The property is part of a master-planned development of 153 acres known as Tri-City Corporate Centre
(Tri-City) and is zoned for mixed commercial, office, hotel, transportation-related, and light industrial uses and all of the parcels thereof are separately owned by us and Rancon Realty Fund V (Fund V), a partnership
sponsored by the General Partner.

Overview

Tri-City Properties

As of March 31, 2009, our rental properties consist of five office and seven retail properties, aggregating
approximately 558,000 rentable square feet, of which 403,000 square feet are office space, and 155,000 square feet are retail space.



|                                 |  |                             |  |               
|-------------------------------- |  | --------------------------- |  | --------------
|Property                         |  | Type                        |  | Square Footage
|One Vanderbilt                   |  | Four-story office building  |  | 73,729        
|Carnegie Business Center I       |  | Two office buildings        |  | 62,540        
|Service Retail Center            |  | Two retail buildings        |  | 20,780        
|Promotional Retail Center        |  | Four retail buildings       |  | 66,244        
|Inland Regional Center           |  | Two-story office building   |  | 81,079        
|TGI Fridays                     |  | Restaurant                  |  | 9,956         
|Promotional Retail Center #2     |  |                             |  |               
|(formerly known as Circuit City) |  | Retail building             |  | 39,123        
|Mimis Café                      |  | Restaurant                  |  | 6,455         
|Palm Court Retail #1             |  | Retail building             |  | 5,022         
|Palm Court Retail #2             |  | Retail building             |  | 7,433         
|Vanderbilt Plaza                 |  | Four-story office building  |  | 114,291       
|North River Place                |  |                             |  |               
|(began operations January 2009)  |  | Three-story office building |  | 71,157        
|                                 |  |                             |  |               
|                                 |  |                             |  | 557,809       

As of March 31, 2009, the weighted average occupancy of the eleven properties was 70%.

Two properties, Promotional Retail Center #2 (formerly known as Circuit City) and North River Place are currently unoccupied. Circuit City, which occupied 100% of the
Partnerships 39,123 square foot Promotional Retail Center #2, filed for bankruptcy in November 2008 and vacated the building in March 2009. North River Place was placed into service in January 2009 and management is actively marketing the
building for leasing.

Land

As of March 31, 2009,
we owned approximately 14.7 acres of unimproved land.

During the third quarter of 2006, the Partnership began developing North River Place, a three-story
multi-tenant 71,000 square-foot office building on an approximate 1.6 acre land parcel, plus completion of the balance of the 4.5 acre parking parcel. As a result, the land, pre-development costs and construction costs of North River Place were
reclassified from land held for development to construction in progress. Total costs of $11,388,000 as of December 31, 2008 were incurred on the project, which was placed in service in the first quarter of 2009.

Approximately 14.7 acres of the Tri-City land owned by the Partnership was part of a 27-acre landfill operated by the City of San Bernardino (the City) from
approximately 1950 to 1960. This landfill incorporates two land parcels and part of a third parcel. In 1996, the Santa Ana Regional Water Quality Control Board (SARWQCB), with regulatory jurisdiction over the closure and monitoring of
landfills, determined that the City was primarily responsible for the landfill. Therefore, the City and the Partnership entered into a Limited Access Easement Agreement, giving the City access to the site for development, implementation and
financial responsibility for a plan for the remediation of the landfill. It was determined that the City was to improve the landfill cover system (The Waterman Landfill Cover Improvement Plans, April 2002), perform groundwater monitoring and install
a permanent gas extraction system (Landfill Gas Collection System). Under the Limited Access Easement Agreement with the Partnership, methane monitoring is handled directly by the City. The Citys installation of the cover improvement system
was completed in the first quarter of 2007 along with the gas extraction system. The system is now operational and working properly to eliminate methane from the landfill. All controlled wells are in compliance with County standards. Presently,
the Partnership does not have any plans to develop or sell this site. No assurance can be made that circumstances will not arise which could impact the Partnerships responsibility related to the land.



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##### Table of Contents

During the fourth quarter of 2008, the partnership conducted a comprehensive review of all real estate assets in
accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long Lived Assets, which indicates that asset values should be analyzed whenever events or changes in circumstances indicate that the carrying value of a property
may not be fully recoverable. The process entailed the analysis of each asset for instances where the book value exceeded the estimated fair value. As a result of this analysis the Partnership concluded that this asset was impaired and accordingly
the asset was written down to net realizable value and a non-cash impairment charge of $268,000 was recognized, as management does not believe development or sale of this asset is probable.

Results of Operations

Comparison of the three months
ended March 31, 2009 to the three months ended March 31, 2008.

Revenue

Operating revenue decreased $200,000, or 8%, for the three months ended March 31, 2009 compared to the three months ended March 31, 2008, primarily due to lower
rental revenue at One Vanderbilt, resulting from a decline in occupancy from 95% to 75%.

Expense

Property operating expenses increased $71,000, or 8%, for the three months ended March 31, 2009, compared to the three months ended March 31, 2008, due to the
expensing of property operating costs associated with start-up operations at North River Place.

Depreciation and amortization increased $962,000, or 127%,
for the three months ended March 31, 2009, compared to the three months ended March 31, 2008, primarily due to fully amortizing the remaining unamortized tenant improvements and leasing commissions of $880,000 related to Circuit City, and
depreciation of $94,000 associated with North River Place, which was placed into service at the beginning of 2009.

General and administrative expenses
increased $24,000 or 10% primarily due to higher license fees.

Non-operating income / expenses

Interest expense increased $57,000, or 15%, for the three months ended March 31, 2009, compared to the three months ended March 31, 2008, primarily due to the
amortization of loan fees, associated with the new line of credit, obtained in December 2008.

Liquidity and Capital Resources

As of March 31, 2009, we have cash and cash equivalents of $3,374,000.

As of March 31, 2009, our primary liability is a note payable of approximately $22,968,000, collateralized by properties with an aggregate net carrying value of approximately $14,027,000. The note has a 10-year term with a 30-year
amortization requiring monthly principal and interest payments of approximately $136,000, bears a fixed interest rate of 5.46%, and has a maturity date of January 1, 2016. The note is collateralized by Promotional Retail Center #2 (formerly
known as Circuit City), Mimis Cafe, Palm Court Retail #1 and #2, Promotional Retail Center, Service Retail Center, TGI Fridays and One Vanderbilt. This note also provides for a one-time loan assumption and release provisions for
individual assets.

We have a line of credit, which is collateralized by Carnegie Business Center and Vanderbilt Plaza and has a total availability of
$10,000,000. The line of credit requires monthly interest-only payments, has a maturity date of December 19, 2009, with two one year extension options and bears variable interest at the 30-day LIBOR plus 2.75% (3.26% at March 31, 2009). As
of March 31, 2009, $5,579,000 was outstanding under the line of credit. In order to extend the line of credit the Partnership must be in compliance with the covenants concerning loan constant (prescribed ratio of property results of operations
to total availability on the line), minimum net worth, debt to total assets and loan to value ratio, as well as comply with notification requirements and pay an extension fee. The line of credit agreement contains a maximum availability covenant.
The Partnership was in compliance with all covenants as at March 31, 2009.

We are contingently liable for subordinated real estate commissions
payable to the General Partner in the aggregate amount of $643,000 at March 31, 2009, for sales that transpired in previous years. The subordinated real estate commissions are payable only after the limited partners have received distributions
equal to their original invested capital plus a cumulative non-compounded return of 12% per annum on their adjusted invested capital. Since the conditions under which these commissions would be payable are not currently met, the liability has
not been recognized in the accompanying consolidated financial statements; however, the amount will be recorded when and if it becomes payable.



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##### Table of Contents

Cash Flows

For the
three months ended March 31, 2009, cash provided by operating activities was $548,000, as compared to cash provided by operating activities of $922,000 for the same period in 2008. The change was primarily due to a decrease in net income, after
adding back depreciation and amortization, together with a decrease in accounts payable and other liabilities. For the three months ended March 31, 2009, cash used in investing activities was $115,000, as compared to cash used in investing
activities of $1,153,000 for the same period in 2008. The change was due to the absence of any construction costs associated with North River Place in 2009. For the three months ended March 31, 2009, cash used in financing activities was
$98,000, as compared to cash used in financing activities of $90,000 for the same period in 2008. The small change was due to slightly higher principal payments on the note payable, and loan fees.

Our expectation is that cash and cash equivalents as of March 31, 2009, together with cash from operations, sales and financing, will be adequate to meet our
operating requirements and development plans on a short-term basis and for the reasonably foreseeable future. There can be no assurance that our results of operations will not fluctuate in the future and at times affect our ability to meet operating
requirements.

Operationally, our primary source of funds consists of cash provided by rental activities. Other sources of funds may include permanent
financing, draws on the line of credit, property sales and interest income on money market funds. Cash generated from property sales is generally added to our cash reserves, pending use in the development of properties or distribution to the
partners.

Contractual Obligations

As of
March 31, 2009, our contractual obligations consist of the following (in thousands):



|                              |  |                 |       |              |   |              |  |                  |       |       |   |        |  |   |       
|----------------------------- |  | --------------- | ----- | ------------ | - | ------------ |  | ---------------- | ----- | ----- | - | ------ |  | - | ------
|                              |  | Less than 1year |       | 1 to 3 years |   | 3 to 5 years |  | More than 5years |       | Total
|Collateralized mortgage loans |  | $               | 291   |              | $ | 836          |  | $                | 932   |       | $ | 20,909 |  | $ | 22,968
|Interest on indebtedness      |  |                 | 935   |              |   | 2,433        |  |                  | 2,337 |       |   | 2,231  |  |   | 7,936 
|Line of credit                |  |                 | 5,579 |              |   |             |  |                  |      |       |   |       |  |   | 5,579 
|                              |  |                 |       |              |   |              |  |                  |       |       |   |        |  |   |       
|Total                         |  | $               | 6,805 |              | $ | 3,269        |  | $                | 3,269 |       | $ | 23,140 |  | $ | 36,483
|                              |  |                 |       |              |   |              |  |                  |       |       |   |        |  |   |       

We are unaware of any demands, commitments, events or uncertainties, which might affect capital resources in any
material respect. In addition, we are not subject to any covenants pursuant to our collateralized debt that would constrain our ability to obtain additional capital.

Critical Accounting Policies

In the preparation of financial statements, we utilize certain critical
accounting policies. There has been no change to our significant accounting policies included in the notes to our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2008.

Inflation

Leases at the office properties typically provide
for rent adjustment and pass-through of certain operating expenses during the term of the lease. Substantially all of the leases at the office and retail properties provide for pass-through to tenants of certain operating costs, including real
estate taxes, common area maintenance expenses, and insurance. We anticipate that these provisions may permit us to increase rental rates or other charges to tenants in response to rising prices and, therefore, serve to reduce our exposure to the
adverse effects of inflation.

Forward Looking Statements; Factors That May Affect Operating Results

This Report on Form 10-Q contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, including statements regarding our expectations, hopes, intentions, beliefs and strategies regarding the future. These forward looking statements include statements relating to:



| |  |  | Our expectation of making distributions to our partners;
| | - |  | --------------------------------------------------------



| |  |  | Our belief that cash and cash generated by operations, sales and financing will be sufficient to meet our operating requirements in both the short and the
long-term;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our expectation that changes in market interest rates will not have a material impact on the performance or the fair value of our portfolio;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our belief that certain claims and lawsuits which have arisen against us in the normal course of business will not have a material adverse effect on our financial
position, cash flow or results of operations;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our expectation to achieve certain occupancy levels;
| | - |  | ----------------------------------------------------



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| |  |  | Our belief that it is not probable that the 14.7 acres of undeveloped land which is part of the landfill monitoring program will be developed or sold;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our estimation of market strength;
| | - |  | ----------------------------------



| |  |  | Our knowledge of any material environmental matters or issues relating to the landfill property; and
| | - |  | ----------------------------------------------------------------------------------------------------



| |  |  | Our expectation that lease provisions may permit us to increase rental rates or other charges to tenants in response to rising prices, and therefore serve to reduce
exposure to the adverse effects of inflation.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

All forward-looking statements included in this document are based on information
available to us on the date hereof. Because these forward looking statements involve risk and uncertainty, there are important factors that could cause our actual results to differ materially from those stated or implied in the forward-looking
statements. Those important factors include:



| |  |  | market fluctuations in rental rates and occupancy;
| | - |  | --------------------------------------------------



| |  |  | reduced demand for rental space;
| | - |  | --------------------------------



| |  |  | availability and creditworthiness of prospective tenants;
| | - |  | ---------------------------------------------------------



| |  |  | defaults or non-renewal of leases by customers;
| | - |  | -----------------------------------------------



| |  |  | differing interpretations of lease provisions regarding recovery of expenses;
| | - |  | -----------------------------------------------------------------------------



| |  |  | increased operating costs;
| | - |  | --------------------------



| |  |  | changes in interest rates and availability of financing that may render the sale or financing of a property difficult or unattractive;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our failure to obtain necessary outside financing;
| | - |  | --------------------------------------------------



| |  |  | risks and uncertainties affecting property development and construction (including construction delays, cost overruns, our inability to obtain necessary permits and
public opposition to these activities);
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the unpredictability of both the frequency and final outcome of litigation; and
| | - |  | -------------------------------------------------------------------------------



| |  |  | the inability to develop all or any portion of the former landfill site, due to environmental, legal or economic impediments.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------

The forward-looking statements in this Quarterly Report on Form 10-Q are subject to additional risks and uncertainties further discussed under Item 1A. Risk
Factors of our Annual Report on Form 10-K for the year ended December 31, 2008. We assume no obligation to update or supplement any forward looking-statement.

Risks of Litigation

Certain claims and lawsuits have arisen against us in our normal course of business. We believe
that such claims and lawsuits will not have a material adverse effect on our financial position, cash flow or results of operations.



|Item 3. | Qualitative and Quantitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

Interest Rates

We are exposed to changes in interest rates obtainable on our borrowings. Our expectation is that changes in market interest
rates will not have a material impact on the performance or fair value of our portfolio.

For debt obligations, the table below presents principal cash
flows by expected maturity dates of a note payable with a fixed interest rate of 5.46% and the line of credit with a maturity date of December 19, 2009 and variable interest rate of 3.26% as of March 31, 2009.



|                               |  |                        |       |       |   |      |  |      |     |      |   |            |  |   |     |  |   |        |  |   |       
|------------------------------ |  | ---------------------- | ----- | ----- | - | ---- |  | ---- | --- | ---- | - | ---------- |  | - | --- |  | - | ------ |  | - | ------
|                               |  | Expected Maturity Date |       | Total
|                               |  | 2009                   |       | 2010  |   | 2011 |  | 2012 |     | 2013 |   | Thereafter | 
|                               |  | (in thousands)        
|Collateralized fixed rate debt |  | $                      | 291   |       | $ | 407  |  | $    | 429 |      | $ | 453        |  | $ | 479 |  | $ | 20,909 |  | $ | 22,968
|Line of credit                 |  | $                      | 5,579 |       | $ |     |  | $    |    |      | $ |           |  | $ |    |  | $ |       |  | $ | 5,579 

As of March 31, 2009, we had cash and cash equivalents of $3,374,000.



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##### Table of Contents

|Item 4. | Controls and Procedures
|------- | -----------------------

See items 4T.



|Item 4T. | Controls and Procedures
|-------- | -----------------------

The principal executive officer and
principal financial officer of the General Partner have evaluated the disclosure controls and procedures of the Partnership as of the end of the period covered by this quarterly report. As used herein, the term disclosure controls and
procedures has the meaning given to the term by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (Exchange Act), and includes the controls and other procedures of the Partnership that are designed to ensure that
information required to be disclosed by the Partnership in the reports that it files with the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms. Based upon
his evaluation, the principal executive officer and principal financial officer of the General Partner has concluded that the Partnerships disclosure controls and procedures were effective such that the information required to be disclosed by
the Partnership in this quarterly report is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms applicable to the preparation of this report and is accumulated and communicated to the
General Partners management, including the General Partners principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

There have not been any changes in the Partnerships internal control over financial reporting that occurred during the Partnerships fiscal quarter ended
March 31, 2009 that have materially affected, or are reasonably likely to materially affect, the Partnerships internal control over financial reporting.



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##### Table of Contents

PART II. OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

Certain claims and lawsuits have
arisen against the Partnership in its normal course of business. The Partnership believes that such claims and lawsuits will not have a material adverse effect on the Partnerships financial position, cash flow or results of operations.



|Item 1A. | Risk Factors
|-------- | ------------

There are no material changes to any
of the risk factors as previously disclosed in Item 1A. to Part I of the Partnerships Annual Report on Form 10-K for the fiscal year ended December 31, 2008.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

None.



|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

None.



|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

None.



|Item 5. | Other Information
|------- | -----------------

None.



|Item 6. | Exhibits
|------- | --------



|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31 |  | Certification of Daniel L. Stephenson, Chief Executive Officer and Chief Financial Officer of General Partnership Pursuant to Rule 13a-14(a) of the Exchange Act.                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | 
|32 |  | Certification of Daniel L. Stephenson, Chief Executive Officer and Chief Financial Officer of General Partnership Pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. This certification, required by Section 906 of the Sarbanes-Oxley Act of 2002, other than as required by Section 906, is not to be deemed
filed with the Commission or subject to the rules and regulations promulgated by the Commission under the Securities Exchange Act of 1934, as amended, or to the liabilities of Section 18 of said Act.



19



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##### Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, the Partnership has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.



|                   |  |  |  |                                  |  |                          |  |                                              
|------------------ |  |  |  | -------------------------------- |  | ------------------------ |  | ---------------------------------------------
|                   |  |  |  | RANCON REALTY FUND IV,          
|                   |  |  |  | a California limited partnership
|                   |  |  |  |                                 
|                   |  |  |  |                                  |  | By:                      |  | Rancon Financial Corporation                 
|                   |  |  |  |                                  |  |                          |  | a California corporation, its General
Partner
|                   |  |  | 
|Date: May 13, 2009 |  |  |  | By:                              |  | /s/ Daniel L. Stephenson
|                   |  |  |  |                                  |  |                          |  | Daniel L. Stephenson, President              
|                   |  |  | 
|Date: May 13, 2009 |  |  |  | By:                              |  | /s/ Daniel L. Stephenson
|                   |  |  |  |                                  |  |                          |  | Daniel L. Stephenson, General Partner        



20



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##### Table of Contents

EXHIBIT INDEX

RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP



|           |  |                                                                                                                                                                                                                                                                                                                                                                                            
|---------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit 31 |  | Certification of Chief Executive Officer and Chief Financial Officer                                                                                                                                                                                                                                                                                                                       
|           | 
|Exhibit 32 |  | Certification Pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, other than as required by Section 906, is not to be deemed
filed with the Commission or subject to the rules and regulations promulgated by the Commission under the Securities Exchange Act of 1934, as amended, or to the liabilities of Section 18 of said Act.



21