SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

                For the quarterly period ended September 30, 1998

                                       OR

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


                         Commission file number: 0-14207


                             RANCON REALTY FUND IV,
                        A CALIFORNIA LIMITED PARTNERSHIP
             (Exact name of registrant as specified in its charter)


                California                                   33-0061355
     (State or other jurisdiction of                      (I.R.S. Employer
     incorporation or organization)                     Identification  No.)

    400 South El Camino Real, Suite 1100
            San Mateo, California                              94402
            (Address of principal                           (Zip Code)
             executive offices)

                                 (650) 343-9300
              (Registrant's telephone number, including area code)

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

                                 Yes ___X___    No _____

       Total number of units outstanding as of September 30, 1998: 76,767





                                  Page 1 of 17
<PAGE>




  PART 1.  FINANCIAL INFORMATION

  Item 1.  Financial Statements
<TABLE>
<CAPTION>

                             RANCON REALTY FUND IV,
                        A CALIFORNIA LIMITED PARTNERSHIP

                           Consolidated Balance Sheets
                    (in thousands, except units outstanding)
                                   (Unaudited)

                                                         September 30,     December 31,
                                                             1998              1997




<S>                                                       <C>              <C>
Assets
Investments in real estate:
  Rental property, net of accumulated depreciation
    of $12,391 and $11,474 at September 30, 1998
    and December 31, 1997, respectively                   $     32,109     $     32,659
  Land held for development                                      3,483            4,666
  Rental property held for sale, net                                --           10,179
  Land held for sale                                             3,994            2,310
                                                          ------------     ------------

    Total real estate investments                               39,586           49,814

Cash and cash equivalents                                        9,969              788
Restricted cash                                                    369              369
Accounts and interest receivable                                   164              286
Deferred financing costs and other fees, net of
 accumulated amortization of $1,129 and $1,039
 at September 30, 1998 and December 31, 1997,
  respectively                                                   1,344            1,373
Prepaid expenses and other assets                                  988              771
                                                          ------------     ------------

    Total assets                                          $     52,420     $     53,401
                                                          ============     ============









                           - continued -

                                  Page 2 of 17
<PAGE>




                      RANCON REALTY FUND IV,
                 A CALIFORNIA LIMITED PARTNERSHIP

              Consolidated Balance Sheets - continued
             (in thousands, except units outstanding)
                            (Unaudited)

                                                         September 30,     December 31,
                                                             1998             1997
Liabilities and Partners' Equity (Deficit)
  Liabilities:
  Notes payable                                           $     16,044     $     22,004
  Accounts payable and accrued expenses                            806              565
  Interest payable                                                  64               66
                                                          ------------     ------------

    Total liabilities                                           16,914           22,635
                                                          ------------     ------------

Commitments and contingent liabilities (see Note 4)

Partners' equity (deficit):
  General partners                                                (618)            (891)
  Limited partners, 76,767 and 77,054 limited
    partnership units outstanding at September 30,
    1998 and December 31, 1997, respectively                    36,124           31,657
                                                          ------------     ------------

    Total partners' equity                                      35,506           30,766
                                                          ------------     ------------

    Total liabilities and partners' equity                $     52,420     $     53,401
                                                          ============     ============
</TABLE>

















                 See accompanying notes to financial statements.




                                  Page 3 of 17
<PAGE>



<TABLE>
<CAPTION>

                             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         Nine months ended
                                                 September 30,             September 30,
                                           ----------------------     ----------------------
                                              1998         1997          1998        1997
                                           ---------    ---------     ---------    ---------
<S>                                        <C>          <C>           <C>          <C>
Revenue:
 Rental income                             $   1,490    $   1,767     $   5,184    $   5,054
 Interest and other income                       129            6           152           17
 Gain on sale of rental property                  --           --         5,468           --
                                           ---------    ---------     ---------    ---------

    Total revenue                              1,619        1,773        10,804        5,071
                                           ---------    ---------     ---------    ---------

Expenses:
 Operating                                       605          853         2,161        2,323
 Interest expense                                389          515         1,372        1,376
 Depreciation and amortization                   350          447         1,043        1,267
 Provision for impairment of land
  held for sale                                   --           --            --          378
 Loss on sales of real estate                     --           64            11           64
 Expenses associated with
  undeveloped land                               115          154           395          479
 General and administrative expenses             339          320           987          961
                                           ---------    ---------     ---------    ---------

    Total expenses                             1,798        2,353         5,969        6,848
                                           ---------    ---------     ---------    ---------

Net income (loss)                          $    (179)   $    (580)    $   4,835    $  (1,777)
                                           =========    =========     =========    =========

Net income (loss) per limited
  partnership unit                         $   (2.33)   $   (7.26)    $   59.36    $  (22.25)
                                           =========    =========     =========    =========

Weighted average number of limited
 partnership units outstanding during
 each period used to compute net income
 (loss) per limited partnership unit          76,784       79,846        76,849       79,846
                                           =========    =========     =========    =========
</TABLE>






                     See accompanying notes to financial statements.




                                  Page 4 of 17
<PAGE>



                             RANCON REALTY FUND IV,
                        A CALIFORNIA LIMITED PARTNERSHIP

                       Consolidated Statement of Partners'
                      Equity (Deficit) For the nine months
                            ended September 30, 1998
                                 (in thousands)
                                   (Unaudited)




                                              General       Limited
                                             Partners      Partners       Total

Balance at December 31, 1997               $   (891)   $   31,657    $   30,766

Retirement of limited partnership units          --           (95)          (95)

Net income                                      273         4,562         4,835
                                           --------    ----------    ----------

Balance at September 30, 1998              $   (618)   $   36,124    $   35,506
                                           ========    ==========    ==========
























                     See accompanying notes to financial statements.




                                  Page 5 of 17
<PAGE>


<TABLE>
<CAPTION>

                             RANCON REALTY FUND IV,
                        A CALIFORNIA LIMITED PARTNERSHIP

                      Consolidated Statements of Cash Flows
                                 (in thousands)
                                   (Unaudited)

                                                                        Nine months ended
                                                                           September 30,
                                                                     1998            1997

<S>                                                              <C>             <C>
Cash flows from operating activities:
  Net income (loss)                                              $   4,835       $   (1,777)
  Adjustments to reconcile net income (loss) to net cash
   provided by (used for) operating activities:
    Net (gain) loss on sales of real estate                         (5,457)              64
    Depreciation and amortization                                    1,043            1,267
    Amortization of loan fees, included in interest expense             76               76
    Provision for impairment of land held for sale                      --              378
    Changes in certain assets and liabilities:
      Accounts and interest receivable                                 122              (51)
      Deferred financing costs and other fees                         (173)            (286)
      Prepaid expenses and other assets                               (217)            (336)
      Accounts payable and accrued expenses                            290              129
      Interest payable                                                  (2)              18
                                                                 ---------       ----------

Net cash provided by (used for) operating activities                   517             (518)
                                                                 ---------       ----------

Cash flows from investing activities:
  Net proceeds from sales of real estate                            15,847              699
  Net additions to real estate investments                          (1,128)          (3,687)
                                                                 ---------       ----------

Net cash provided by (used for) investing activities                14,719           (2,988)
                                                                 ---------       ----------

Cash flows from financing activities:
  Net loan proceeds                                                     --            6,500
  Increase in restricted cash                                           --             (269)
  Payment of loan fees                                                  --             (122)
  Notes payable principal payments                                  (5,960)          (1,685)
  Purchase and retirement of limited partnership units                 (95)              --
                                                                 ---------       ----------

Net cash provided by (used for) financing activities                (6,055)           4,424
                                                                 ---------       ----------

Net increase in cash and cash equivalents                            9,181              918

Cash and cash equivalents at beginning of period                       788               97
                                                                 ---------       ----------

Cash and cash equivalents at end of period                       $   9,969       $    1,015
                                                                 =========       ==========
                                  - continued -

                                  Page 6 of 17
<PAGE>

                             RANCON REALTY FUND IV,
                        A CALIFORNIA LIMITED PARTNERSHIP

                    Consolidated Statements of Cash Flows - continued
                                 (in thousands)
                                   (Unaudited)

                                                                        Nine months ended
                                                                           September 30,
                                                                     1998            1997



Supplemental disclosure of cash flow information:
 Cash paid for interest                                          $   1,298       $    1,282
                                                                 =========        =========


Supplemental disclosure of non-cash refinancing activity:
 New financing $                                                        --       $    7,700
 Original financing paid-off in escrow                                  --           (1,200)
                                                                 ---------       ----------

Net loan proceeds                                                $      --       $    6,500
                                                                 =========       ==========
</TABLE>























                     See accompanying notes to financial statements.




                                  Page 7 of 17
<PAGE>

                             RANCON REALTY FUND IV,
                        A CALIFORNIA LIMITED PARTNERSHIP

                   Notes to Consolidated Financial Statements

                               September 30, 1998
                                   (Unaudited)



Note 1.      THE PARTNERSHIP AND SIGNIFICANT ACCOUNTING POLICIES

In the opinion of Rancon Financial Corporation ("RFC") and Daniel Lee Stephenson
(the "Sponsors" or "General Partner") and Glenborough  Corporation (successor by
merger  with  Glenborough  Inland  Realty  Corporation)   ("Glenborough"),   the
accompanying unaudited financial statements contain all adjustments  (consisting
of only normal accruals)  necessary to present fairly the financial  position of
Rancon Realty Fund IV, A California Limited  Partnership (the  "Partnership") as
of  September  30, 1998 and December 31,  1997,  and the related  statements  of
operations for the three and nine months ended  September 30, 1998 and 1997, and
the changes in  partners'  equity  (deficit)  and cash flows for the nine months
ended September 30, 1998 and 1997.

Allocation of profits,  losses and cash  distributions  from operations and cash
distributions  from sales or  financing  are made  pursuant  to the terms of the
Partnership Agreement.  Generally,  net income and distributions from operations
are allocated 90% to the limited partners and 10% to the general  partners.  Net
losses from  operations are allocated 99% to the limited  partners and 1% to the
general  partners  until  such time as a  partner's  account is reduced to zero.
Additional  losses will be allocated  entirely to those  partners  with positive
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;  (ii) second,  to the limited partners in
proportion  to and to the  extent  of the  amounts  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;  (iii)
third,  to the partners in the minimum  amount  required to first equalize their
capital account in proportion to the number of units owned, and then second,  to
bring the sum of the  balances of the capital  accounts of the limited  partners
and the general partners into the ratio of 4 to 1; and (iv) the balance, if any,
80% to the limited partners and 20% to the general partners.

Effective  January 1, 1995,  RFC  entered  into an  agreement  with  Glenborough
whereby  RFC  sold to  Glenborough  the  contract  to  perform  the  rights  and
responsibilities  under RFC's  agreement with the  Partnership and other related
Partnerships (collectively, the "Rancon Partnerships") to perform or contract on
the Partnership's behalf, for financial, accounting, data processing, marketing,
legal,  investor  relations,  asset and  development  management  and consulting
services for the  Partnership for a period of ten years or until the liquidation
of the  Partnership,  whichever  comes  first.  Effective  January 1, 1998,  the
agreement was amended to eliminate  Glenborough's  responsibility  for providing
investor  relation  services  and  Preferred  Partnership   Services,   Inc.,  a
California Corporation  unaffiliated with the Partnership,  contracted to assume
these services.  Pursuant to the contract,  the Partnership will pay Glenborough
for its services as follows:  (i) a specified asset administration fee, which is
fixed for five years  subject to  reduction  in the year  following  the sale of

                                  Page 8 of 17
<PAGE>

                             RANCON REALTY FUND IV,
                        A CALIFORNIA LIMITED PARTNERSHIP

                   Notes to Consolidated Financial Statements

                               September 30, 1998
                                   (Unaudited)

assets, ($806,000 in 1998); (ii) sales fees of 2% for improved properties and 4%
for land;  (iii) a refinancing fee of 1% and (iv) management fees equal to 5% of
gross  rental  receipts.  As part of this  agreement,  Glenborough  will perform
certain tasks for the General Partner of the Rancon  Partnerships and RFC agreed
to cooperate with Glenborough,  should Glenborough  attempt to obtain a majority
vote of the limited partners to substitute  itself as the General Partner of the
Rancon Partnerships. Glenborough is not an affiliate of RFC or the Partnership.

During  the  nine  months  ended  September  30,1998,  a  total  of 287  limited
partnership  units were repurchased and retired as a result of the Partnership's
offer to redeem the partners  limited  partnership  units.  As of September  30,
1998, there were 76,767 limited partnership units outstanding.

Consolidation  - In  order  to  satisfy  certain  lender  requirements  for  the
Partnership's  1996 loan secured by Service  Retail Center,  Promotional  Retail
Center,  and Carnegie  Business Center I, Rancon Realty Fund IV Tri-City Limited
Partnership,  a Delaware limited  partnership  ("RRF IV Tri-City") was formed in
April 1996. The three  properties  securing the loan were  contributed to RRF IV
Tri-City  by the  Partnership.  The  limited  partner of RRF IV  Tri-City is the
Partnership and the general partner is RRF IV, Inc., a corporation  wholly owned
by the  Partnership.  Since  the  Partnership  indirectly  owns  100%  of RRF IV
Tri-City,  the financial  statements  of RRF IV Tri-City have been  consolidated
with  those  of the  Partnership.  All  intercompany  transactions  and  account
balances have been eliminated in consolidation.

Note 2.      REFERENCE TO 1997 AUDITED FINANCIAL STATEMENTS

These  unaudited  financial  statements  should be read in conjunction  with the
Notes  to  Financial  Statements  included  in the  December  31,  1997  audited
financial statements.

Note 3.      INVESTMENTS IN REAL ESTATE

On January 27, 1998, the Partnership  sold one of the three Rancon Towne Village
lots in  Temecula,  California  to an  unaffiliated  entity  for  $270,000.  The
Partnership  recognized an $11,000 loss on the sale and realized net proceeds of
$241,000.

On June 4, 1998,  the  Partnership  sold the  Shadowridge  Woodbend  Apartments,
("Shadowridge")  a 240-unit  complex in Vista,  California,  to an  unaffiliated
entity for  $16,075,000.  The  Partnership  recognized a gain on the sale of the
rental  property of  $5,468,000  and realized net proceeds of  $9,806,000  after
paying off the secured debt.

                                  Page 9 of 17
<PAGE>
                             RANCON REALTY FUND IV,
                        A CALIFORNIA LIMITED PARTNERSHIP

                   Notes to Consolidated Financial Statements

                               September 30, 1998
                                   (Unaudited)


Note 4.      COMMITMENTS AND CONTINGENT LIABILITIES

The Partnership is contingently  liable for subordinated real estate commissions
payable to the  Sponsors  in the amount of $643,000  at  September  30, 1998 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 six  percent  per  annum on their  adjusted  invested
capital.

Note 5.      SUBSEQUENT EVENT

Due to an increase in the cash balance  resulting from the sale of  Shadowridge,
the  Partnership  will make a  distribution  to its  partners  in the  amount of
$4,000,000. The distribution will be paid before the end of the year.




                                 Page 10 of 17
<PAGE>



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

LIQUIDITY  AND CAPITAL RESOURCES

At September 30, 1998,  the  Partnership  had cash of  $9,969,000  (exclusive of
restricted cash). The remainder of the Partnership's assets consist primarily of
its real estate investments,  totaling approximately $39,586,000, which includes
$32,109,000 of rental  properties,  $3,483,000 of land held for  development and
$3,994,000 of land held for sale.

The  Partnership's  primary  source of funds consists of cash provided by rental
activities.  Other sources of funds may include  permanent  financing,  property
sales and interest income on certificates of deposit and other deposits of funds
invested temporarily, pending their use in the development of properties.

The  Partnership's  improved  cash  position at September  30, 1998  compared to
December  31,  1997  is  largely  due to the  net  proceeds  from  the  sale  of
Shadowridge.  Management and the General Partner concluded their analysis of the
Partnership's   cash  flow  requirements  and  determined  that  there  will  be
sufficient  cash  reserves to fund  continued  operations  and  planned  capital
improvements  as well as make a $4,000,000  distribution  to its  partners.  The
Partnership expects to make the $4,000,000  distribution prior to the end of the
year.

A majority of the  Partnership's  assets are located within the Inland Empire, a
submarket of Southern  California,  which,  despite recent economic growth,  has
been affected by recent business  mergers and completion of new buildings within
the neighboring area.  Management  believes that, while these external pressures
exist,  demand for  office and  industrial  space in the  Inland  Empire  should
improve  due  to  less  expensive  labor,  lower  cost  of  living  and  a  good
transportation and distribution infrastructure.

Tri-City

The  Partnership  currently  owns  the  following  properties  in  the  Tri-City
Corporate  Center  area  within  the Inland  Empire  submarket  of the  Southern
California region:

         Property                            Type                  Square Feet
----------------------------   ----------------------------------  -----------
One Vanderbilt                 Four story office building               73,730
Two Vanderbilt                 Four story office building               69,046
Carnegie Business Center I     Two R&D buildings                        62,539
Service Retail Center          Two retail buildings                     20,780
Promotional Retail Center      Four strip center retail buildings       66,265
Inland Regional Center         Two story office building                81,079
TGI Friday's                   Restaurant                                9,386
Circuit City                   Retail building                          39,123

In addition,  the  construction  of a 23,500  square foot  build-to-suit  retail
building,  referred  to as Office Max,  was  completed  in October  1998 and the
tenant's lease commenced on October 15, 1998.

                                 Page 11 of 17
<PAGE>

The  Partnership  also owns  approximately  26 acres of  unimproved  land in the
Tri-City area.

The Partnership's  General Partner is currently in the process of evaluating the
fair market value of the Tri-City assets. The General Partner and management are
evaluating  appraisals  prepared  by CB  Commercial  as  well  as  other  market
information  in an effort to determine the optimal time to dispose of its assets
and realize maximum value.

Lake Elsinore

The  Partnership  owns  24.8  acres of  undeveloped  land  (referred  to as Lake
Elsinore)  commercially  zoned in Lake Elsinore,  Riverside County,  California.
During the first quarter of 1998, the Partnership  began marketing this land for
sale. On April 24, 1998,  the  Partnership  entered into a contract with a third
party buyer for the sale of the land for $4,500,000;  however, the sale fell out
of  contract  in October  1998.  The  Partnership  will  continue  to market the
property for sale.

Perris

The Partnership  owns 17.14 acres of unimproved land near Perris Lake in Perris,
Riverside  County,  California  (referred  to as  Perris).  There  has  been  no
development  of the Perris  property to date. The property is being marketed for
sale to retail users and interested developers.

Temecula

The  Partnership  owns two parcels of unimproved  land in Temecula,  California,
which are being marketed for sale.

General Matters

The  $10,179,000  decrease in rental  property held for sale and the  $9,181,000
increase in cash at September  30, 1998 from December 31, 1997 are primarily due
to the sale of the Shadowridge Woodbend Apartments ("Shadowridge"). In addition,
the  $5,960,000  decrease  in notes  payable is largely due to the payoff of the
note secured by Shadowridge.

The  $1,183,000  decrease in land held for  development  at  September  30, 1998
compared  to  December  31,  1997  is due to the  reclassification  of the  Lake
Elsinore land to land held for sale.  This decrease was offset by an increase of
$753,000  due to the  construction  of  Office  Max  and  Mimi's  Restaurant  (a
build-to-suit adjacent to Office Max).

The $122,000 decrease in accounts and interest  receivable at September 30, 1998
compared to  December  31, 1997 is due to the  collection  of December  31, 1997
tenant receivables and the reimbursement from a tenant for tenant improvements.

The $217,000 increase in prepaid expenses and other assets at September 30, 1998
compared  to  December  31,  1997 is due to the:  (i)  prepayment  of the fourth

                                 Page 12 of 17
<PAGE>

quarter  investor  relation  services  fee  and  premiums  for  annual  property
liability  insurance  coverage;  and  (ii) an  increase  in the  deferred  asset
relating to rent concessions given to tenants.

The $241,000  increase in accounts payable and accrued expenses at September 30,
1998 from  December  31, 1997 is due  primarily to property tax accruals for the
current year. Property taxes are paid in April and December of each year.

The  Partnership  knows of no unrecorded  demands,  commitments,  or events that
might effect its  liquidity or capital  resources in any material  respect.  The
effect of inflation on the Partnership's  business should be no greater than its
effect on the economy as a whole.

RESULTS OF OPERATIONS

Revenues

Rental income for the nine months ended September 30, 1998 increased $130,000 or
3% compared to the nine months ended  September 30, 1997,  even with the sale of
Shadowridge  in June 1998,  primarily as a result of increased  occupancy at One
Vanderbilt and Promotional Retail Center.

Rental income for the three months ended September 30, 1998 compared to the same
period in 1997  decreased  $277,000 or 16%  primarily  due to the loss of rental
income  resulting  from the sale of  Shadowridge  in the second quarter of 1998.
This was offset by an increase in rental revenue due to the increased  occupancy
at One Vanderbilt and Promotional Retail Center.

Occupancy  rates at the  Partnership's  Tri-City  properties as of September 30,
1998 and 1997 were as follows:
                                                       September 30,
                                                    1998           1997
                                                 ----------     ---------

One Vanderbilt                                        91%             75%
Two Vanderbilt                                        93%             93%
Service Retail Center                                 95%            100%
Carnegie Business Center I                            72%             87%
Promotional Retail Center                             98%             97%
Inland Regional Center                               100%            100%
TGI Friday's                                         100%            100%
Circuit City                                         100%            100%

As of September 30, 1998, tenants at Tri-City occupying  substantial portions of
leased rental space  included:  (i) Inland  Regional Center with a lease through
July 2009;  (ii) Circuit City with a lease through  January  2018;  (iii) Inland
Empire  Health  Plan  with a lease  through  March  2002;  (iv) ITT  Educational
Services with a lease which expires in December  2004;  (v) CompUSA with a lease
through August 2003; and (vi) PetsMart with a lease through January 2009.  These
six tenants, in the aggregate, occupied approximately 238,000 square feet of the
422,000 total leasable square feet at Tri-City and account for 53% of the rental
income  generated  at  Tri-City  and  44% of the  total  rental  income  for the
Partnership during the nine months ended September 30, 1998.

                                 Page 13 of 17
<PAGE>

Interest  income  increased  $135,000 and $123,000 for the nine and three months
ended September 30, 1998 compared to the same period in 1997, respectively,  due
to the interest  earned on the  investment  of the net proceeds from the sale of
Shadowridge.

The net gain on sale of rental property of $5,468,000 for the nine months ended
September 30, 1998 resulted  from the sale of  Shadowridge  for a sales price of
$16,075,000.

Expenses

Operating expenses decreased $162,000 or 7% and $248,000 or 29% for the nine and
three  months  ended  September  30, 1998  compared to the nine and three months
ended  September 30, 1997,  respectively,  primarily due to the  elimination  of
operating  expenses  at  Shadowridge.  The  decrease is  partially  offset by an
increase in property operating expenses  attributable to increased  occupancy in
One Vanderbilt and Promotional Retail Center.

Interest expense decreased  $126,000 or 24% for the three months ended September
30, 1998 compared to the three months ended September 30, 1997 due to the payoff
of the $5,800,000, 7.95% fixed rate loan secured by Shadowridge.

Interest  expense for the nine months ended  September  30, 1998 compared to the
same period in 1997 is stable  because the savings due to  Shadowridge is offset
by  increased  permanent  financing  obtained  for Circuit City and TGI Friday's
placed in service in February and May of 1997.

Depreciation  and  amortization  decreased  $224,000  or 18% for the nine months
ended  September 30, 1998 and $97,000 or 22% for the nine and three months ended
September 30, 1997 primarily due to ceasing  depreciation  on  Shadowridge  upon
classification of the property as rental property held for sale (non-depreciable
property) effective December 31, 1997.

Provision for impairment of land held for sale was recorded in the first quarter
of 1997 in the amount of $378,000 due to the  management's  conclusion  that the
carrying  value  of the  Partnership's  investment  in  land  held  for  sale in
Temecula, California was in excess of its fair value.

The loss on sales of real estate of $11,000 for the nine months ended  September
30, 1998 resulted from the sale of one Rancon Towne Village parcel.  The loss on
sales of real  estate of $64,000 for the nine months  ended  September  30, 1997
resulted from the sales of eight Rancon Towne Village parcels.

Expenses  associated with undeveloped land decreased  $84,000 or 18% and $39,000
or 25% for the nine and three  months  ended  September  30,  1998  compared  to
September  30,  1997,  respectively,  due to the  reduction  of  property  taxes
resulting from the sale of ten parcels in Rancon Towne Village since July 1997.

General and  administrative  expenses  increased $26,000 or 3% and $19,000 or 6%
for the nine months and three months ended  September  30, 1998  compared to the
nine and  three  months  ended  September  30,  1997,  respectively,  due to the

                                 Page 14 of 17
<PAGE>

increase in  professional  fees incurred for  appraisals,  analyses and forecast
services  provided  to the  Partnership  to assist in the  determination  of the
marketing  strategies  for the  properties.  This  increase  was  offset  by the
decrease in asset administration fees resulting from 1997 land sales.

Year 2000 Compliance

The Partnership  utilizes a number of computer  software  programs and operating
systems across its entire organization, including applications used in financial
business systems and various  administrative  functions.  To the extent that the
Partnership's  software  applications  contain  a source  code that is unable to
appropriately interpret the upcoming calendar year "2000" and beyond, some level
of  modification,  or replacement of such  applications  will be necessary.  The
Partnership has completed its  identification  of applications  that are not yet
"Year 2000"  compliant and has commenced  modification  or  replacement  of such
applications,  as necessary.  Given the information known at this time about the
Partnership's  systems that are  non-compliant,  coupled with the  Partnership's
ongoing,  normal  course-of-business  efforts to  upgrade  or  replace  critical
systems,  as necessary,  management does not expect "Year 2000" compliance costs
to have any material  adverse impact on the  Partnership's  liquidity or ongoing
results of  operations.  No  assurance  can be given,  however,  that all of the
Partnership's  systems will be "Year 2000" compliant or that compliance costs or
the  impact of the  Partnership's  failure to achieve  substantial  "Year  2000"
compliance will not have a material adverse effect on the  Partnership's  future
liquidity or results of operations.





                                 Page 15 of 17
<PAGE>




Part II.          OTHER INFORMATION


Item 1.           Legal Proceedings

                  None.

Item 2.           Changes in Securities

                  Not applicable.

Item 3.           Defaults Upon Senior Securities

                  Not applicable.

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

                  None.

Item 5.           Other Information

                  None

Item 6.           Exhibits and Reports on Form 8-K

                  (a) Exhibits:

                  #27 - Financial Data Schedule

                  (b) Reports on Form 8-K:

None.



                                 Page 16 of 17
<PAGE>




                                   SIGNATURES



Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  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
                               (Registrant)




Date: November 13, 1998        By:     /s/ Daniel L. Stephenson
                                       ------------------------
                                       Daniel L. Stephenson
                                       Chief Executive Officer and
                                       Chief Financial Officer of
                                       Rancon Financial Corporation,
                                       General Partner of
                                       Rancon Realty Fund IV,
                                       a California Limited Partnership

                                 Page 17 of 17
<PAGE>