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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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

For the quarterly period ended March 31, 2007

OR



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

Commission file number: 0-14207



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RANCON REALTY FUND IV,

A CALIFORNIA
LIMITED PARTNERSHIP

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|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)



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

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

Large Accelerated Filer ̈Accelerated Filer ̈Non-accelerated filer  x

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



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##### Table of Contents

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, 2007 and December 31, 2006                   |  | 3       
|           |  |                                                                                         
|           |  | Consolidated Statements of Operations for the three months ended March 31, 2007 and 2006 |  | 4       
|           |  |                                                                                         
|           |  | Consolidated Statement of Partners Equity for the three months ended March 31, 2007     |  | 5       
|           |  |                                                                                         
|           |  | Consolidated Statements of Cash Flows for the three months ended March 31, 2007 and 2006 |  | 6       
|           |  |                                                                                         
|           |  | Notes to Consolidated Financial Statements                                               |  | 7-12    
|           |  |                                                                                         
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations    |  | 13-16   
|           |  |                                                                                         
|Item 3.    |  | Qualitative and Quantitative Disclosures About Market Risk                               |  | 16      
|           |  |                                                                                         
|Item 4.    |  | Controls and Procedures                                                                  |  | 16      
|           |  |                                                                                         
|PART II    |  | OTHER INFORMATION                                                                        |  |         
|           |  |                                                                                         
|Item 1.    |  | Legal Proceedings                                                                        |  | 17      
|           |  |                                                                                         
|Item 1A.   |  | Risk Factors                                                                             |  | 17      
|           |  |                                                                                         
|Item 2.    |  | Unregistered Sales of Equity Securities and Use of Proceeds                              |  | 17      
|           |  |                                                                                         
|Item 3.    |  | Defaults Upon Senior Securities                                                          |  | 17      
|           |  |                                                                                         
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                      |  | 17      
|           |  |                                                                                         
|Item 5.    |  | Other Information                                                                        |  | 17      
|           |  |                                                                                         
|Item 6.    |  | Exhibits                                                                                 |  | 17      
|           | 
|SIGNATURES |  | 18                                                                                      



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##### Table of Contents

PART I. FINANCIAL INFORMATION



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

RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP

Consolidated Balance Sheets

(in thousands,
except units outstanding)

(Unaudited)



|                                                                                                                                   |  |               |         |   |                  |   |         |  
|---------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                                   |  | March 31,2007 |         |   | December 31,2006 |  
|Assets                                                                                                                             |  |               |         |   |                  |   |         |  
|Investments in real estate:                                                                                                        |  |               |         |   |                  |   |         |  
|Rental properties                                                                                                                  |  | $             | 51,743  |   |                  | $ | 51,328  |  
|Accumulated depreciation                                                                                                           |  |               | (13,776 | ) |                  |   | (13,207 | )
|                                                                                                                                   |  |               |         |   |                  |   |         |  
|Rental properties, net                                                                                                             |  |               | 37,967  |   |                  |   | 38,121  |  
|                                                                                                                                   |  |              
|Construction in progress                                                                                                           |  |               | 5,312   |   |                  |   | 3,279   |  
|Land held for development                                                                                                          |  |               | 184     |   |                  |   | 180     |  
|                                                                                                                                   |  |               |         |   |                  |   |         |  
|Total investments in real estate                                                                                                   |  |               | 43,463  |   |                  |   | 41,580  |  
|                                                                                                                                   |  |              
|Cash and cash equivalents                                                                                                          |  |               | 4,456   |   |                  |   | 1,584   |  
|Short-term investments                                                                                                             |  |               |        |   |                  |   | 5,075   |  
|Accounts receivable, net                                                                                                           |  |               | 126     |   |                  |   | 299     |  
|Deferred costs, net of accumulated amortization of $1,348 and $1,233 as of March 31, 2007 and December 31, 2006,
respectively      |  |               | 2,109   |   |                  |   | 2,227   |  
|Prepaid expenses and other assets                                                                                                  |  |               | 1,643   |   |                  |   | 1,603   |  
|                                                                                                                                   |  |               |         |   |                  |   |         |  
|Total assets                                                                                                                       |  | $             | 51,797  |   |                  | $ | 52,368  |  
|                                                                                                                                   |  |               |         |   |                  |   |         |  
|                                                                                                                                   |  |              
|Liabilities and Partners Equity                                                                                                   |  |               |         |   |                  |   |         |  
|Liabilities:                                                                                                                       |  |               |         |   |                  |   |         |  
|Note payable and line of credit                                                                                                    |  | $             | 23,689  |   |                  | $ | 23,773  |  
|Accounts payable and other liabilities                                                                                             |  |               | 221     |   |                  |   | 206     |  
|Construction costs payable                                                                                                         |  |               | 962     |   |                  |   | 1,790   |  
|Prepaid rent                                                                                                                       |  |               | 115     |   |                  |   | 111     |  
|                                                                                                                                   |  |               |         |   |                  |   |         |  
|Total liabilities                                                                                                                  |  |               | 24,987  |   |                  |   | 25,880  |  
|                                                                                                                                   |  |               |         |   |                  |   |         |  
|                                                                                                                                   |  |              
|Commitments and contingent liabilities (Notes 4 and 7)                                                                             |  |               |         |   |                  |   |         |  
|                                                                                                                                   |  |              
|Partners Equity (deficit):                                                                                                        |  |               |         |   |                  |   |         |  
|General Partner                                                                                                                    |  |               | (504    | ) |                  |   | (537    | )
|Limited partners, 65,826 and 65,840 limited partnership units outstanding as of March 31, 2007 and December 31, 2006,
respectively |  |               | 27,314  |   |                  |   | 27,025  |  
|                                                                                                                                   |  |               |         |   |                  |   |         |  
|Total partners equity                                                                                                             |  |               | 26,810  |   |                  |   | 26,488  |  
|                                                                                                                                   |  |               |         |   |                  |   |         |  
|Total liabilities and partners equity                                                                                             |  | $             | 51,797  |   |                  | $ | 52,368  |  
|                                                                                                                                   |  |               |         |   |                  |   |         |  

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



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RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP

Consolidated Statements of Operations

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

(Unaudited)



|                                                                                    |  |                              |        |   |      |   |        |  
|----------------------------------------------------------------------------------- |  | ---------------------------- | ------ | - | ---- | - | ------ | -
|                                                                                    |  | Three months ended March 31, |       
|                                                                                    |  | 2007                         |        |   | 2006 |  
|Operating Revenue                                                                   |  | $                            | 2,415  |   |      | $ | 2,249  |  
|                                                                                    |  |                             
|Operating Expenses                                                                  |  |                              |        |   |      |   |        |  
|Property operating                                                                  |  |                              | 851    |   |      |   | 742    |  
|Depreciation and amortization                                                       |  |                              | 681    |   |      |   | 583    |  
|Expenses associated with undeveloped land                                           |  |                              | 24     |   |      |   | 35     |  
|General and administrative                                                          |  |                              | 240    |   |      |   | 247    |  
|                                                                                    |  |                              |        |   |      |   |        |  
|Total operating expenses                                                            |  |                              | 1,796  |   |      |   | 1,607  |  
|                                                                                    |  |                              |        |   |      |   |        |  
|                                                                                    |  |                             
|Operating income                                                                    |  |                              | 619    |   |      |   | 642    |  
|                                                                                    |  |                             
|Interest and other income                                                           |  |                              | 16     |   |      |   | 9      |  
|Interest expense                                                                    |  |                              | (302   | ) |      |   | (349   | )
|                                                                                    |  |                              |        |   |      |   |        |  
|Net income                                                                          |  | $                            | 333    |   |      | $ | 302    |  
|                                                                                    |  |                              |        |   |      |   |        |  
|                                                                                    |  |                             
|Basic and diluted income per limited partnership unit:                              |  |                              |        |   |      |   |        |  
|                                                                                    |  |                              |        |   |      |   |        |  
|Net income                                                                          |  | $                            | 4.56   |   |      | $ | 4.09   |  
|                                                                                    |  |                              |        |   |      |   |        |  
|                                                                                    |  |                             
|Weighted average number of limited partnership units outstanding during each period |  |                              | 65,829 |   |      |   | 66,524 |  
|                                                                                    |  |                              |        |   |      |   |        |  

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



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RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP

Consolidated Statement of Partners Equity

For the three months ended March 31, 2007

(in thousands)

(Unaudited)



|                                        |  |                 |      |   |                 |   |        |       |  |   |        |  
|--------------------------------------- |  | --------------- | ---- | - | --------------- | - | ------ | ----- |  | - | ------ | -
|                                        |  | General Partner |      |   | LimitedPartners |   |        | Total | 
|Balance (deficit) at December 31, 2006  |  | $               | (537 | ) |                 | $ | 27,025 |       |  | $ | 26,488 |  
|Redemption of limited partnership units |  |                 |     |   |                 |   | (11    | )     |  |   | (11    | )
|Net income                              |  |                 | 33   |   |                 |   | 300    |       |  |   | 333    |  
|                                        |  |                 |      |   |                 |   |        |       |  |   |        |  
|Balance (deficit) at March 31, 2007     |  | $               | (504 | ) |                 | $ | 27,314 |       |  | $ | 26,810 |  
|                                        |  |                 |      |   |                 |   |        |       |  |   |        |  

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



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RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP

Consolidated Statements of Cash Flows

(in
thousands)

(Unaudited)



|                                                                                                                          |  |                              |        |   |      |   |        |  
|------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ------ | - | ---- | - | ------ | -
|                                                                                                                          |  | Three months ended March 31, |       
|                                                                                                                          |  | 2007                         |        |   | 2006 |  
|Cash flows from operating activities:                                                                                     |  |                              |        |   |      |   |        |  
|Net income                                                                                                                |  | $                            | 333    |   |      | $ | 302    |  
|Adjustments to reconcile net income to net cash provided by operating activities:                                         |  |                              |        |   |      |   |        |  
|Depreciation and amortization                                                                                             |  |                              | 681    |   |      |   | 583    |  
|Amortization of loan fees, included in interest expense                                                                   |  |                              | 28     |   |      |   | 20     |  
|Changes in certain assets and liabilities:                                                                                |  |                              |        |   |      |   |        |  
|Accounts receivable                                                                                                       |  |                              | 173    |   |      |   | 62     |  
|Deferred costs                                                                                                            |  |                              | (11    | ) |      |   | (194   | )
|Prepaid expenses and other assets                                                                                         |  |                              | (40    | ) |      |   | (146   | )
|Accounts payable and other liabilities                                                                                    |  |                              | 15     |   |      |   | 248    |  
|Prepaid rent                                                                                                              |  |                              | 4      |   |      |   | 43     |  
|                                                                                                                          |  |                              |        |   |      |   |        |  
|Net cash provided by operating activities                                                                                 |  |                              | 1,183  |   |      |   | 918    |  
|                                                                                                                          |  |                              |        |   |      |   |        |  
|                                                                                                                          |  |                             
|Cash flows from investing activities:                                                                                     |  |                              |        |   |      |   |        |  
|Proceeds from maturity of short-term investment                                                                           |  |                              | 5,075  |   |      |   |       |  
|Purchase of short-term investments                                                                                        |  |                              |       |   |      |   | (5,000 | )
|Additions to real estate investments                                                                                      |  |                              | (3,291 | ) |      |   | (773   | )
|                                                                                                                          |  |                              |        |   |      |   |        |  
|Net cash provided by (used in) investing activities                                                                       |  |                              | 1,784  |   |      |   | (5,773 | )
|                                                                                                                          |  |                              |        |   |      |   |        |  
|                                                                                                                          |  |                             
|Cash flows from financing activities:                                                                                     |  |                              |        |   |      |   |        |  
|Note payable principal payments                                                                                           |  |                              | (84    | ) |      |   | (80    | )
|Refund of loan application fee, net                                                                                       |  |                              |       |   |      |   | 88     |  
|Redemption of limited partnership units                                                                                   |  |                              | (11    | ) |      |   | (266   | )
|Distributions to General Partner                                                                                          |  |                              |       |   |      |   | (157   | )
|                                                                                                                          |  |                              |        |   |      |   |        |  
|Net cash used in financing activities                                                                                     |  |                              | (95    | ) |      |   | (415   | )
|                                                                                                                          |  |                              |        |   |      |   |        |  
|                                                                                                                          |  |                             
|Net increase (decrease) in cash and cash equivalents                                                                      |  |                              | 2,872  |   |      |   | (5,270 | )
|Cash and cash equivalents at beginning of period                                                                          |  |                              | 1,584  |   |      |   | 10,019 |  
|                                                                                                                          |  |                              |        |   |      |   |        |  
|Cash and cash equivalents at end of period                                                                                |  | $                            | 4,456  |   |      | $ | 4,749  |  
|                                                                                                                          |  |                              |        |   |      |   |        |  
|                                                                                                                          |  |                             
|Supplemental disclosure of cash flow information:                                                                         |  |                              |        |   |      |   |        |  
|Cash paid for interest (net of capitalized interest of $51,000 and $0 at March 31, 2007 and March 31, 2006,
respectively) |  | $                            | 274    |   |      | $ | 329    |  
|                                                                                                                          |  |                              |        |   |      |   |        |  
|                                                                                                                          |  |                             
|Supplemental disclosure of non-cash investing activities:                                                                 |  |                              |        |   |      |   |        |  
|Construction costs                                                                                                        |  | $                            | 962    |   |      | $ |       |  
|Construction costs payable                                                                                                |  |                              | (962   | ) |      |   |       |  
|                                                                                                                          |  |                              |        |   |      |   |        |  
|                                                                                                                          |  | $                            |       |   |      | $ |       |  
|                                                                                                                          |  |                              |        |   |      |   |        |  
|                                                                                                                          |  |                             
|Supplemental disclosure of non-cash financing activities:                                                                 |  |                              |        |   |      |   |        |  
|Redemption of limited partnership units                                                                                   |  | $                            | 3      |   |      | $ | 199    |  
|Redemption payable                                                                                                        |  |                              | (3     | ) |      |   | (199   | )
|                                                                                                                          |  |                              |        |   |      |   |        |  
|                                                                                                                          |  | $                            |       |   |      | $ |       |  
|                                                                                                                          |  |                              |        |   |      |   |        |  

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.

During the three months ended March 31, 2007, a
total of 14 units of limited partnership interest (Units) were redeemed at an average price of $805. As of March 31, 2007, there were 65,826 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 Unitholder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



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RANCON REALTY FUND IV

A California Limited Partnership

Notes to Consolidated Financial Statements

(Unaudited)



of such limited partner; (for limited partners admitted to the Partnership before March 31, 1985, there are additional cumulative 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, 2007 and December 31,
2006, and the consolidated results of operations and cash flows of the Partnership and its subsidiaries for the three months ended March 31, 2007 and 2006. 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, 2007 and December 31, 2006, the related consolidated statements of operations for the three months ended
March 31, 2007 and 2006, partners equity for the three months ended March 31, 2007, and cash flows for the three months ended March 31, 2007 and 2006.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP 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 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 amount 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 asset
|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 for further development. 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 equivalents.

Short-term Investments

The Partnership considers certificates
of deposit with original maturities of more than three months and less than one year when purchased to be short-term investments. The short-term investments are held to maturity and recorded at cost on the consolidated balance sheets. Interest
income is recognized when earned.

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 its 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 are recognized as revenue in the period the expenses are incurred. 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.

Sales of Real Estate

The Partnership recognizes sales of real
estate when a contract is in place, a closing has taken place, the buyers investment is adequate to demonstrate a commitment to pay for the property and the Partnership does not have a substantial continuing involvement in the property. Each
property is considered a separately identifiable component of the Partnership and is reported in discontinued operations when the operations and cash flows of the property have been (or will be) eliminated from the ongoing operations of the
Partnership as a result of the disposal transaction and the property will not have any significant continuing involvement in the operations of the Partnership after the disposal transaction.

Net Income Per Limited Partnership Unit

Net income per
limited partnership unit is calculated using the weighted average number of limited partnership units outstanding during the period and the limited partners allocable share of the net income.

Income per limited partnership unit is as follows (in thousands, except for weighted average shares and per share amounts):



|                                                                                    |  |                                           |    |                                           |   |                |  |                 |    |  |   |       
|----------------------------------------------------------------------------------- |  | ----------------------------------------- | -- | ----------------------------------------- | - | -------------- |  | --------------- | -- |  | - | ------
|                                                                                    |  | For the three months ended
March 31, 2007 |    | For the three months ended
March 31, 2006
|Income allocation:                                                                  |  | GeneralPartner                            |    | LimitedPartners                           |   | GeneralPartner |  | LimitedPartners
|Net income                                                                          |  | $                                         | 33 |                                           | $ | 300            |  | $               | 30 |  | $ | 272   
|Weighted average number of limited partnership units outstanding during each period |  |                                           |    |                                           |   | 65,829         |  |                 |    |  |   | 66,524
|Basic and diluted income per limited partnership unit:                              |  |                                           |    |                                           |   |                |  |                 |    |  |   |       
|Net income                                                                          |  |                                           |    |                                           | $ | 4.56           |  |                 |    |  | $ | 4.09  



9



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##### Table of Contents

RANCON REALTY FUND IV

A California Limited Partnership

Notes to Consolidated Financial Statements

(Unaudited)



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.

Concentration Risk

Two tenants (Inland Counties Regional Center and University of Phoenix) represented a combined 30% of operating revenue for the three months ended
March 31, 2007.

New Accounting Pronouncements

In
July 2006, the Financial Accounting Standards Board (FASB) issued Financial Interpretation No. 48, Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109 (FIN 48), which is a change
in accounting for income taxes. FIN 48 specifies how tax benefits for uncertain tax positions are to be recognized, measured, and derecognized in financial statements; requires certain disclosures of uncertain tax matters; specifies how reserves for
uncertain tax positions should be classified on the balance sheet; and provides transition and interim-period guidance, among other provisions. FIN 48 is effective for fiscal years beginning after December 15, 2006. The adoption of this
standard on January 1, 2007 did not have a material effect on the consolidated financial statements.

In September 2006, the FASB issued Statement
No. 157, Fair Value Measurements(SFAS No. 157). SFAS No. 157 provides guidance for using fair value to measure assets and liabilities. This statement clarifies the principle that fair value should be based on the
assumptions that market participants would use when pricing the asset or liability. SFAS No. 157 establishes a fair value hierarchy, giving the highest priority to quoted prices in active markets and the lowest priority to unobservable data.
SFAS No. 157 applies whenever other standards require assets or liabilities to be measured at fair value. This statement is effective in fiscal years beginning after November 15, 2007. The Partnership believes that the adoption of this
standard on January 1, 2008 will not have a material effect on the consolidated financial statements.

In February 2007, the FASB issued Statement
No. 159,The Fair Value Option for Financial Assets and Financial Liabilities (SFAS No. 159). SFAS No. 159 expands opportunities to use fair value measurement in financial reporting and permits entities to choose to
measure many financial instruments and certain other items at fair value. This Statement is effective for fiscal years beginning after November 15, 2007. The Partnership is currently evaluating the impact of SFAS No. 159 on the
financial position and results of operations.

Reference to 2006 audited consolidated financial statements

These unaudited consolidated financial statements should be read in conjunction with the notes to consolidated financial statements included in the Partnerships
December 31, 2006 audited consolidated financial statements on Form 10-K.

NOTE 3. INVESTMENTS IN REAL ESTATE

Rental properties consist of the following (in thousands):



|                               |  |                |         |   |                   |   |         |  
|------------------------------ |  | -------------- | ------- | - | ----------------- | - | ------- | -
|                               |  | March 31, 2007 |         |   | December 31, 2006 |  
|Land                           |  | $              | 4,471   |   |                   | $ | 4,471   |  
|Buildings                      |  |                | 37,256  |   |                   |   | 37,006  |  
|Tenant improvements            |  |                | 10,016  |   |                   |   | 9,851   |  
|                               |  |                |         |   |                   |   |         |  
|                               |  |                | 51,743  |   |                   |   | 51,328  |  
|Less: accumulated depreciation |  |                | (13,776 | ) |                   |   | (13,207 | )
|                               |  |                |         |   |                   |   |         |  
|Total rental properties, net   |  | $              | 37,967  |   |                   | $ | 38,121  |  
|                               |  |                |         |   |                   |   |         |  

As of March 31, 2007, the Partnerships rental properties included four office properties and seven
retail properties.

During the three months ended March 31, 2007, fully depreciated building and tenant improvements of $11,000 were removed from the
balances of such accounts.



10



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##### Table of Contents

RANCON REALTY FUND IV

A California Limited Partnership

Notes to Consolidated Financial Statements

(Unaudited)



NOTE 4. CONSTRUCTION IN PROGRESS AND LAND HELD FOR DEVELOPMENT

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



|                                                                                                |  |               |       |                  |   |      
|----------------------------------------------------------------------------------------------- |  | ------------- | ----- | ---------------- | - | -----
|                                                                                                |  | March 31,2007 |       | December 31,2006
|North River Place, San Bernardino, CA Approximately 1.6 acres of land with a cost basis of $219 |  | $             | 5,312 |                  | $ | 3,279
|                                                                                                |  |               |       |                  |   |      

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. As a result, the land, pre-development costs and construction costs of North River Place were reclassed from land held for development to construction in progress. The total
cost to complete the project is approximately $8,900,000. The project is expected to be substantially completed in the second quarter of 2007.

Land
held for development consists of the following (in thousands):



|                                                                                                                 |  |               |     |                  |   |    
|---------------------------------------------------------------------------------------------------------------- |  | ------------- | --- | ---------------- | - | ---
|                                                                                                                 |  | March 31,2007 |     | December 31,2006
|Tri-City Corporate Center, San Bernardino, CA (approximately 14.7 and 16.3 acres in 2006 and 2005, respectively) |  | $             | 184 |                  | $ | 180
|                                                                                                                 |  |               |     |                  |   |    

This undeveloped land is part of a landfill-monitoring program managed by the City of San Bernardino (as discussed
in Note 7).

NOTE 5. NOTE PAYABLE AND LINE OF CREDIT

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



|                                                                                                                                                                                                                                                                                                   |  |               |        |                  |   |       
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------ | ---------------- | - | ------
|                                                                                                                                                                                                                                                                                                   |  | March 31,2007 |        | December 31,2006
|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, and a 10-year term with a 30-year amortization requiring monthly payments of principal and interest totaling $136,000. |  | $             | 23,689 |                  | $ | 23,773
|                                                                                                                                                                                                                                                                                                   |  |               |        |                  |   |       

The note payable is collateralized by 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.

The Partnership has a line of credit collateralized by Inland Regional Center with a borrowing capacity of approximately $5 million. The line of credit has monthly interest only payments, a maturity date of
April 15, 2009 (extended as of April 14, 2007, see Note 8), and bears variable interest at the Prime Rate (8.25% as of March 31, 2007 and December 31, 2006). As of March 31, 2007, no amount under the line of credit was
outstanding.

The annual maturity of the Partnerships note payable as of March 31, 2007 is as follows (in thousands):



|           |  |   |       
|---------- |  | - | ------
|2007       |  | $ | 261   
|2008       |  |   | 365   
|2009       |  |   | 385   
|2010       |  |   | 407   
|2011       |  |   | 429   
|Thereafter |  |   | 21,842
|           |  |   |       
|Total      |  | $ | 23,689
|           |  |   |       

NOTE 6. RELATED PARTY TRANSACTIONS

In May 2006, the Partnership extended the current Property Management and Services Agreement with Glenborough Properties L.P. (Glenborough) through December 31, 2008. On November 29, 2006, due to
the merger of Glenborough and a third party, a new entity, Glenborough LLC was formed and the Partnership Property Management and Service Agreement was transferred from Glenborough to Glenborough LLC. All other terms and conditions remained
unchanged. The Partnership engaged Glenborough LLC to perform services for the following fees: (i) a property management fee of 3% of gross rental revenue which was included in property operating expenses in the consolidated statements of
operations ($77,000 and $63,000 in the first quarter of 2007 and 2006, respectively); (ii) a construction services fee which was included in rental properties on the consolidated



11



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##### Table of Contents

RANCON REALTY FUND IV

A California Limited Partnership

Notes to Consolidated Financial Statements

(Unaudited)



balance sheet ($10,000 and $0 in the first quarter of 2007 and 2006, respectively); (iii) an asset and Partnership management fee which was included in
general and administrative expenses in the consolidated statements of operations ($75,000 and $75,000 in the first quarter of 2007 and 2006, respectively); (iv) a leasing services fee which was included in the deferred costs on the consolidated
balance sheets ($10,000 and $171,000 in the first quarter of 2007 and 2006, respectively); (v) a sales fee of 2% for improved properties and a sales fee of 4% for unimproved properties; (vi) a financing services fee of 1% of the gross loan
amount which was included in the deferred costs on the consolidated balance sheet; and (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 consolidated balance sheet, excluding the cost of the land, and the development fee and the general contractors fee shall not exceed 11.5%, in the aggregate, of the hard costs of the development project ($100,000 and $69,000
in the first quarter of 2007 and 2006, respectively).

As of March 31, 2007, Glenborough Fund XV LLC, an affiliate of Glenborough LLC, held 5,092 or
7.74% of the units of limited partnership interest purchased from unaffiliated third parties.

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 began in October 2004 and the system was completed in the first quarter of 2007 along with the gas extraction system. Future development of this site remains
uncertain. 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 2003; 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, 2007, 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.

NOTE 8. SUBSEQUENT EVENTS

On April 14, 2007, the Partnership extended the maturity date of the line of credit to April 15, 2009.



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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, 2006 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, 2007, our rental properties consist of four office and seven retail properties, aggregating
approximately 486,000 rentable square feet, of which 332,000 square feet are office space, and 154,000 square feet are retail space.



|                           |  |                            |  |            
|-------------------------- |  | -------------------------- |  | -----------
|Property                   |  | Type                       |  | Square Feet
|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                 |  | 9,386      
|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 |  | 114,212    

As of March 31, 2007, the weighted average occupancy of the eleven properties was 94%.

Land

As of March 31, 2007, we owned approximately 1.6 acres of
land under construction, and approximately 14.7 acres of unimproved land.

During 2006, we began developing North River Place, a three-story multi-tenant
72,000 square-foot office building on an approximate 1.6 acre land parcel. The total cost to complete the project is approximately $8,900,000. The project is expected to be substantially completed in the second quarter of 2007.

Approximately 14.7 acres of the Tri-City land owned by us 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, we entered into a Limited Access Easement Agreement with the City, 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, methane monitoring is handled directly by the City. The Citys installation of the cover improvement system began in October 2004 and the system was completed
in the first quarter of 2007 along with the gas extraction system. Future development of this site remains uncertain. No assurance can be made that circumstances will not arise which could impact our responsibility related to the land.



13



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##### Table of Contents

Results of Operations

Comparison of the three months ended March 31, 2007 to the three months ended March 31, 2006.

Revenue

Operating revenue for the three months ended March 31, 2007 increased $166,000, or 7%, compared to the three months ended March 31, 2006, primarily due to
increases in rental rates.

Expenses

Operating
expenses increased $109,000, or 15%, for the three months ended March 31, 2007, compared to the three months ended March 31, 2006, primarily due to an increase in earthquake insurance of $82,000 as well as an increase in utility costs of
$13,000.

Depreciation and amortization increased $98,000, or 17%, for the three months ended March 31, 2007, compared to the three months ended
March 31, 2006, primarily due to the depreciation of capital improvements of approximately $2.5 million spent in the last year.

Non-operating
income / expenses

Interest expense decreased $47,000, or 13%, for the three months ended March 31, 2007, compared to the three months ended
March 31, 2006, primarily due to capitalization of interest of $51,000 for North River Place to construction in progress.

Liquidity and Capital
Resources

As of March 31, 2007, we have cash and cash equivalents of $4,456,000.

As of March 31, 2007, our primary liability is a note payable of approximately $23,689,000, collateralized by properties with an aggregate net carrying value of
approximately $15,676,000. 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 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. In addition, we have a line of credit collateralized by Inland Regional Center with a borrowing capacity of approximately $5 million. The line of credit has monthly interest only payments, a maturity date of
April 15, 2009 (extended as of April 14, 2007), and bears variable interest at the Prime Rate (8.25% as of March 31, 2007 and December 31, 2006). As of March 31, 2007, no amount under the line of credit was outstanding.

We are contingently liable for subordinated real estate commissions payable to the General Partner in the aggregate amount of $643,000 at March 31,
2007, 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.

Cash Flows

During the three months ended March 31, 2007, cash provided by operating activities was $1,183,000, as compared to cash provided by operating activities of $918,000 for the same period in 2006. The change was
primarily due to an increase in accounts receivable as well as decreases in prepaid expenses and deferred costs, partially offset by a decrease in accounts payable. Cash provided by investing activities was $1,784,000, as compared to cash used in
investing activities of $5,773,000 for the same period in 2006. The change was primarily due to an increase in tenant improvement costs for Vanderbilt Plaza and Carnegie Business Center I as well as an increase in construction costs at North River
Place offset by the maturity of a short-term investment purchased in 2006 and change in accrued construction costs. Cash used in financing activities was $95,000, as compared to cash used in financing activities of $415,000 for the same period in
2006. The change was primarily due to less distribution to the General Partner and a decrease in redemptions of limited partnership units in 2007.

Our
expectation is that cash and cash equivalents as of March 31, 2007, 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.



14



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##### Table of Contents

Contractual Obligations

Contractual obligations consist of the following (in thousands):



|                                    |  |                 |       |              |   |              |  |                  |       |       |   |        |  |   |       
|----------------------------------- |  | --------------- | ----- | ------------ | - | ------------ |  | ---------------- | ----- | ----- | - | ------ |  | - | ------
|                                    |  | Less than 1year |       | 1 to 3 years |   | 3 to 5 years |  | More than 5years |       | Total
|Secured mortgage loans              |  | $               | 261   |              | $ | 750          |  | $                | 836   |       | $ | 21,842 |  | $ | 23,689
|Interest on indebtedness            |  |                 | 965   |              |   | 2,520        |  |                  | 2,434 |       |   | 4,567  |  |   | 10,486
|Construction contract commitment(1) |  |                 | 4,383 |              |   |             |  |                  |      |       |   |       |  |   | 4,383 
|                                    |  |                 |       |              |   |              |  |                  |       |       |   |        |  |   |       
|Total                               |  | $               | 5,609 |              | $ | 3,270        |  | $                | 3,270 |       | $ | 26,409 |  | $ | 38,558
|                                    |  |                 |       |              |   |              |  |                  |       |       |   |        |  |   |       

---

|(1) | During 2006, we began developing North River Place, a three-story multi-tenant 72,000 square-foot office
building on an approximately 1.6 acre land parcel. The total cost to complete the project is approximately $8,900,000. The project is expected to be substantially completed in the second quarter of 2007.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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 secured 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, 2006.

Inflation

Leases at the office properties typically provide for rent adjustment and pass-through of certain operating expenses
during the term of the lease. 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 to make annual or more frequent cash distributions to partners;
|- |  | -------------------------------------------------------------------------------



| |  | Our intent to develop one or more properties to generate more operating income;
|- |  | -------------------------------------------------------------------------------



| |  | 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 belief that properties are competitive within our market;
|- |  | -------------------------------------------------------------



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



| |  | 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;
|- |  | --------------------------------------------------



15



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##### Table of Contents

| |  | 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, 2006. 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%.



|                               |  |                        |     |      |   |      |  |      |     |      |   |            |  |       |     |  |   |        |  |   |       
|------------------------------ |  | ---------------------- | --- | ---- | - | ---- |  | ---- | --- | ---- | - | ---------- |  | ----- | --- |  | - | ------ |  | - | ------
|                               |  | Expected Maturity Date |     |     
|                               |  | 2007                   |     | 2008 |   | 2009 |  | 2010 |     | 2011 |   | Thereafter |  | Total
|                               |  | (in thousands)        
|Collateralized fixed rate debt |  | $                      | 261 |      | $ | 365  |  | $    | 385 |      | $ | 407        |  | $     | 429 |  | $ | 21,842 |  | $ | 23,689

As of March 31, 2007, we had cash equivalents of $4,456,000 invested in an interest-bearing money market
account. Declines in interest rates over time would reduce our interest income.



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

As of the end of the period covered by this report, we carried out an evaluation, under
the supervision of the General Partners Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, the General Partners Chief
Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective in alerting the General Partner on a timely basis to material information required to be included in this report. There has been no
change in our internal control over financial reporting that occurred during our most recent fiscal quarter that has materially affected or is reasonably likely to materially affect our 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 believesthat such claims and lawsuits will not have a
material adverse effect on the Partnerships financial position, cash flow orresults 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 Rancon RealtyFund IV Form 10-K for the fiscal year ended
December 31, 2006.                                                                                      
|         | 
|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                                                                                                                                                                                                                                                                   
|         | 
|         |  | (a)    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.



17



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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 14, 2007 |  |  |  |                                  |  | By: |  | /s/ Daniel L. Stephenson             
|                   |  |  |  |                                  |  |     |  | Daniel L. Stephenson, President      
|                   |  |  |  |                                 
|Date: May 14, 2007 |  |  |  | By:                              |  |     |  | /s/ Daniel L. Stephenson             
|                   |  |  |  |                                  |  |     |  | Daniel L. Stephenson, General Partner



18