##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q

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

For the quarterly period ended March 31, 2003

OR



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

Commission file number: 0-14207

RANCON REALTY FUND IV,
A CALIFORNIA LIMITED PARTNERSHIP




(Exact name of registrant as specified in its charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|California                                                     |  | 33-0016355                          
|                                                               |  |                                     
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)

|                                                           |  |           
|---------------------------------------------------------- |  | ----------
|400 South El Camino Real, Suite 1100
San Mateo, California |  | 94402-1708
|                                                           |  |           
|(Address of principal
executive offices)                   |  | (Zip Code)

(650) 343-9300

---

(Registrants telephone number, including area code)


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

Yes [X] No
[   ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [   ] No [X]

Total number of units outstanding as of May 14, 2003: 71,131

1



---

TABLE OF CONTENTS



|                              |                                                                                               |                                            |  |  |  |  |  | 
|----------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------------ |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION
|                              | Item 1. Financial Statements                                                                 
|                              |                                                                                               | Consolidated Balance Sheets               
|                              |                                                                                               | Consolidated Statements of Income         
|                              |                                                                                               | Consolidated Statement of Partners Equity
|                              |                                                                                               | Consolidated Statements of Cash Flows     
|                              |                                                                                               | Notes to Consolidated Financial Statements
|                              | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                              | Item 3. Qualitative and Quantitative Information About Market Risk                           
|                              | Item 4. Controls and Procedures                                                              
|Part II. OTHER INFORMATION   
|                              | Item 1. Legal Proceedings                                                                    
|                              | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                              | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                   
|EXHIBIT 99                   



---



##### 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 at March 31, 2003 and December 31, 2002                      |  | 3       
|           |  | Consolidated Statements of Income for the three months ended March 31,
2003 and 2002     |  | 4       
|           |  | Consolidated Statement of Partners Equity for the three months ended
March 31, 2003     |  | 5       
|           |  | Consolidated Statements of Cash Flows for the three months ended March
31, 2003 and 2002 |  | 6       
|           |  | Notes to Consolidated Financial Statements                                               |  | 7-13    
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results
of Operations    |  | 14-16   
|Item 3.    |  | Qualitative and Quantitative Information About Market Risk                               |  | 16-17   
|Item 4.    |  | Controls and Procedures                                                                  |  | 17      
|PART II    |  | OTHER INFORMATION                                                                        |  |         
|Item 1.    |  | Legal Proceedings                                                                        |  | 18      
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                      |  | 18      
|Item 6.    |  | Exhibits and Reports on Form 8-K                                                         |  | 18      
|SIGNATURES |  | 19                                                                                      

2



---



##### 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, |        | December 31,
|                                                                                                                                          |                                                                                                                                 |                                        |       | 2003      |        | 2002        
|                                                                                                                                          |                                                                                                                                 |                                        |       |           |        |             
|ASSETS                                                                                                                                    |                                                                                                                                 |                                        |       |           |        |              |       |        
|Investments in real estate:                                                                                                               |                                                                                                                                 |                                        |       |           |        |              |       |        
|                                                                                                                                          | Rental properties, gross                                                                                                        |                                        | $     | 42,638    |        |              | $     | 42,330  |       
|                                                                                                                                          | Accumulated depreciation                                                                                                        |                                        |       | (14,318   | )      |              |       | (14,024 | )     
|                                                                                                                                          |                                                                                                                                 |                                        |       |           |        |              |       |        
|                                                                                                                                          | Rental properties, net                                                                                                          |                                        |       | 28,320    |        |              |       | 28,306  |       
|                                                                                                                                          | Land held for development                                                                                                       |                                        |       | 1,214     |        |              |       | 1,214   |       
|                                                                                                                                          |                                                                                                                                 |                                        |       |           |        |              |       |        
|                                                                                                                                          |                                                                                                                                 | Total investments in real estate       |       |           | 29,534 |              |       |         | 29,520 | 
|Cash and cash equivalents                                                                                                                 |                                                                                                                                 |                                        | 4,295 |           |        |              | 3,764 |        
|Accounts receivable                                                                                                                       |                                                                                                                                 |                                        | 28    |           |        |              | 246   |        
|Deferred costs and other fees, net of
accumulated amortization of $2,112 and $2,045
at March 31, 2003 and December 31, 2002, respectively |                                                                                                                                 |                                        | 949   |           |        |              | 977   |        
|Prepaid expenses and other assets                                                                                                         |                                                                                                                                 |                                        | 995   |           |        |              | 991   |        
|                                                                                                                                          |                                                                                                                                 |                                        |       |           |        |              |       |        
|                                                                                                                                          |                                                                                                                                 | Total assets                           |       | $         | 35,801 |              |       | $       | 35,498 | 
|                                                                                                                                          |                                                                                                                                 |                                        |       |           |        |              |       |         |       
|LIABILITIES AND PARTNERS EQUITY                                                                                                          |                                                                                                                                 |                                        |       |           |        |              |       |        
|Liabilities:                                                                                                                              |                                                                                                                                 |                                        |       |           |        |              |       |        
|                                                                                                                                          | Notes payable                                                                                                                   |                                        | $     | 7,925     |        |              | $     | 7,970   |       
|                                                                                                                                          | Accounts payable and other liabilities                                                                                          |                                        |       | 474       |        |              |       | 460     |       
|                                                                                                                                          | Prepaid rents                                                                                                                   |                                        |       | 272       |        |              |       |        |       
|                                                                                                                                          |                                                                                                                                 |                                        |       |           |        |              |       |        
|                                                                                                                                          |                                                                                                                                 | Total liabilities                      |       |           | 8,671  |              |       |         | 8,430  | 
|                                                                                                                                          |                                                                                                                                 |                                        |       |           |        |              |       |        
|Commitments
and contingent liabilities (Note 5)                                                                                           |                                                                                                                                 |                                        |       |           |        |              |       |        
|Partners Equity:                                                                                                                         |                                                                                                                                 |                                        |       |           |        |              |       |        
|                                                                                                                                          | General partners                                                                                                                |                                        |       | (538      | )      |              |       | (552    | )     
|                                                                                                                                          | Limited partners, 71,341 and 71,546 limited partnership
units outstanding at March 31, 2003 and December 31,
2002, respectively |                                        |       | 27,668    |        |              |       | 27,620  |       
|                                                                                                                                          |                                                                                                                                 |                                        |       |           |        |              |       |        
|                                                                                                                                          |                                                                                                                                 | Total partners equity                 |       |           | 27,130 |              |       |         | 27,068 | 
|                                                                                                                                          |                                                                                                                                 |                                        |       |           |        |              |       |        
|                                                                                                                                          |                                                                                                                                 | Total liabilities and partners equity |       | $         | 35,801 |              |       | $       | 35,498 | 
|                                                                                                                                          |                                                                                                                                 |                                        |       |           |        |              |       |         |       

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

3



---



##### Table of Contents



RANCON REALTY FUND IV,
A CALIFORNIA LIMITED PARTNERSHIP




Consolidated Statements of Income
(in thousands, except per unit amounts and units outstanding)
(Unaudited)

|                                                                                    |                                           |                                                                                |        |                    |       |      |        |       |       |  
|----------------------------------------------------------------------------------- | ----------------------------------------- | ------------------------------------------------------------------------------ | ------ | ------------------ | ----- | ---- | ------ | ----- | ----- | -
|                                                                                    |                                           |                                                                                |        | Three months ended
|                                                                                    |                                           |                                                                                |        | March 31,         
|                                                                                    |                                           |                                                                                |        |                   
|                                                                                    |                                           |                                                                                |        | 2003               |       | 2002
|                                                                                    |                                           |                                                                                |        |                    |       |     
|REVENUE                                                                             |                                           |                                                                                |        |                    |       |      |        |      
|                                                                                    | Rental income                             |                                                                                | $      | 1,639              |       |      | $      | 1,472 |      
|                                                                                    | Interest and other income                 |                                                                                |        | 12                 |       |      |        | 4     |      
|                                                                                    |                                           |                                                                                |        |                    |       |      |        |      
|                                                                                    |                                           | Total revenue                                                                  |        |                    | 1,651 |      |        |       | 1,476 |  
|                                                                                    |                                           |                                                                                |        |                    |       |      |        |      
|EXPENSES                                                                            |                                           |                                                                                |        |                    |       |      |        |      
|                                                                                    | Operating                                 |                                                                                |        | 632                |       |      |        | 577   |      
|                                                                                    | Interest expense                          |                                                                                |        | 201                |       |      |        | 248   |      
|                                                                                    | Depreciation and amortization             |                                                                                |        | 335                |       |      |        | 348   |      
|                                                                                    | Expenses associated with undeveloped land |                                                                                |        | 77                 |       |      |        | 109   |      
|                                                                                    | General and administrative                |                                                                                |        | 267                |       |      |        | 234   |      
|                                                                                    |                                           |                                                                                |        |                    |       |      |        |      
|                                                                                    |                                           | Total expenses                                                                 |        |                    | 1,512 |      |        |       | 1,516 |  
|                                                                                    |                                           |                                                                                |        |                    |       |      |        |      
|                                                                                    |                                           | Income (loss) from operations                                                  |        |                    | 139   |      |        |       | (40   | )
|                                                                                    |                                           |                                                                                |        |                    |       |      |        |      
|                                                                                    |                                           | Income from discontinued operations
(including gain on sale of $5,120 in 2002) |        |                    |      |      |        |       | 5,192 |  
|                                                                                    |                                           |                                                                                |        |                    |       |      |        |      
|Net income                                                                          |                                           | $                                                                              | 139    |                    |       | $    | 5,152  |      
|                                                                                    |                                           |                                                                                |        |                    |       |      |        |       |      
|Basic and diluted net income per limited partnership unit                           |                                           | $                                                                              | 1.75   |                    |       | $    | 66.13  |      
|                                                                                    |                                           |                                                                                |        |                    |       |      |        |       |      
|Distributions per limited partnership unit:                                         |                                           |                                                                                |        |                    |       |      |        |      
|                                                                                    | From net income                           |                                                                                | $      |                   |       |      | $      |      |      
|                                                                                    | Representing return of capital            |                                                                                |        |                   |       |      |        |      |      
|                                                                                    |                                           |                                                                                |        |                    |       |      |        |      
|                                                                                    |                                           | Total distributions per limited partnership unit                               |        | $                  |      |      |        | $     |      |  
|                                                                                    |                                           |                                                                                |        |                    |       |      |        |       |      
|Weighted average number of limited partnership units
outstanding during each period |                                           |                                                                                | 71,402 |                    |       |      | 73,991 |      
|                                                                                    |                                           |                                                                                |        |                    |       |      |        |      

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

4



---



##### Table of Contents



RANCON REALTY FUND IV,
A CALIFORNIA LIMITED PARTNERSHIP




Consolidated Statement of Partners Equity
For the three months ended March 31, 2003
(in thousands)
(Unaudited)

|                                        |  |          |      |          |  |       |        |   |  |   |        |  
|--------------------------------------- |  | -------- | ---- | -------- |  | ----- | ------ | - |  | - | ------ | -
|                                        |  | General  |      | Limited  |  |       |        |  
|                                        |  | Partners |      | Partners |  | Total
|                                        |  |          |      |          |  |      
|Balance at December 31, 2002            |  | $        | (552 | )        |  | $     | 27,620 |   |  | $ | 27,068 |  
|Redemption of limited partnership units |  |          |     |          |  |       | (77    | ) |  |   | (77    | )
|Net income                              |  |          | 14   |          |  |       | 125    |   |  |   | 139    |  
|                                        |  |          |      |          |  |       |        |   |  |   |        |  
|Balance at March 31, 2003               |  | $        | (538 | )        |  | $     | 27,668 |   |  | $ | 27,130 |  
|                                        |  |          |      |          |  |       |        |   |  |   |        |  

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

5



---



##### Table of Contents



RANCON REALTY FUND IV,
A CALIFORNIA LIMITED PARTNERSHIP




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

|                                                  |                                                                                   |                        |                                                         |                                                      |     |                    |       |        |     |        |        |  
|------------------------------------------------- | --------------------------------------------------------------------------------- | ---------------------- | ------------------------------------------------------- | ---------------------------------------------------- | --- | ------------------ | ----- | ------ | --- | ------ | ------ | -
|                                                  |                                                                                   |                        |                                                         |                                                      |     | Three months ended
|                                                  |                                                                                   |                        |                                                         |                                                      |     | March 31,         
|                                                  |                                                                                   |                        |                                                         |                                                      |     |                   
|                                                  |                                                                                   |                        |                                                         |                                                      |     | 2003               |       | 2002  
|                                                  |                                                                                   |                        |                                                         |                                                      |     |                    |       |       
|CASH FLOWS FROM OPERATING ACTIVITIES:             |                                                                                   |                        |                                                         |                                                      |     |                    |       |       
|                                                  | Net income                                                                        |                        | $                                                       | 139                                                  |     |                    | $     | 5,152  |    
|                                                  | Adjustments to reconcile net income
to net cash provided by operating activities: |                        |                                                         |                                                      |     |                    |       |        |    
|                                                  |                                                                                   |                        | Gain on sale of real estate                             |                                                      |     |                   |       |        |     | (5,120 | )     
|                                                  |                                                                                   |                        | Depreciation and amortization                           |                                                      |     | 335                |       |        |     | 424    |       
|                                                  |                                                                                   |                        | Amortization of loan fees, included in
interest expense |                                                      |     | 26                 |       |        |     | 26     |       
|                                                  |                                                                                   |                        | Changes in certain assets and liabilities:              |                                                      |     |                    |       |        |     |        |       
|                                                  |                                                                                   |                        |                                                         | Accounts receivable                                  |     |                    | 218   |        |     |        | (5     | )
|                                                  |                                                                                   |                        |                                                         | Deferred financing costs and other fees              |     |                    | (39   | )      |     |        | (6     | )
|                                                  |                                                                                   |                        |                                                         | Prepaid expenses and other assets                    |     |                    | (4    | )      |     |        | (56    | )
|                                                  |                                                                                   |                        |                                                         | Accounts payable and other liabilities               |     |                    | 14    |        |     |        | (231   | )
|                                                  |                                                                                   |                        |                                                         | Prepaid rents                                        |     |                    | 272   |        |     |        |       |  
|                                                  |                                                                                   |                        |                                                         |                                                      |     |                    |       |       
|                                                  |                                                                                   |                        |                                                         | Net cash provided by operating activities            |     |                    | 961   |        |     |        | 184    |  
|                                                  |                                                                                   |                        |                                                         |                                                      |     |                    |       |       
|CASH FLOWS FROM INVESTING ACTIVITIES:             |                                                                                   |                        |                                                         |                                                      |     |                    |       |       
|                                                  | Net proceeds from sales of real estate                                            |                        |                                                         |                                                     |     |                    |       | 8,382  |    
|                                                  | Net additions to real estate investments                                          |                        |                                                         | (308                                                 | )   |                    |       | (219   | )  
|                                                  |                                                                                   |                        |                                                         |                                                      |     |                    |       |       
|                                                  |                                                                                   |                        |                                                         | Net cash (used for) provided by investing activities |     |                    | (308  | )      |     |        | 8,163  |  
|                                                  |                                                                                   |                        |                                                         |                                                      |     |                    |       |       
|CASH FLOWS FROM FINANCING ACTIVITIES:             |                                                                                   |                        |                                                         |                                                      |     |                    |       |       
|                                                  | Notes payable principal payments                                                  |                        |                                                         | (45                                                  | )   |                    |       | (4,241 | )  
|                                                  | Redemption of limited partnership units                                           |                        |                                                         | (77                                                  | )   |                    |       | (17    | )  
|                                                  |                                                                                   |                        |                                                         |                                                      |     |                    |       |       
|                                                  |                                                                                   |                        |                                                         | Net cash used for financing activities               |     |                    | (122  | )      |     |        | (4,258 | )
|                                                  |                                                                                   |                        |                                                         |                                                      |     |                    |       |       
|Net increase in cash and cash equivalents         |                                                                                   |                        | 531                                                     |                                                      |     |                    | 4,089 |       
|Cash and cash equivalents at beginning of period  |                                                                                   |                        | 3,764                                                   |                                                      |     |                    | 1,462 |       
|                                                  |                                                                                   |                        |                                                         |                                                      |     |                    |       |       
|Cash and cash equivalents at end of period        |                                                                                   | $                      | 4,295                                                   |                                                      |     | $                  | 5,551 |       
|                                                  |                                                                                   |                        |                                                         |                                                      |     |                    |       |        |    
|Supplemental disclosure of cash flow information: |                                                                                   |                        |                                                         |                                                      |     |                    |       |       
|                                                  |                                                                                   | Cash paid for interest |                                                         | $                                                    | 191 |                    |       | $      | 241 |       
|                                                  |                                                                                   |                        |                                                         |                                                      |     |                    |       |        |    

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

6



---



##### Table of Contents



RANCON REALTY FUND IV
A California Limited Partnership




Notes to Consolidated Financial Statements

March 31, 2003
(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 general partners of the Partnership are Daniel
L. Stephenson and Rancon Financial Corporation (RFC), hereinafter referred to
as the Sponsor or the General Partner. RFC is wholly-owned by Daniel L.
Stephenson. The Partnership reached final funding in July 1987.

During the three months ended March 31, 2003, a total of 205 units of limited
partnership interest (Units) were redeemed at an average price of $375. As
of March 31, 2003, there were 71,341 Units outstanding.

In the opinion of RFC, the General Partner and Glenborough Realty Trust
Incorporated (Glenborough), the Partnerships asset and property manager, 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, 2003 and
December 31, 2002, and the related consolidated statements of operations and
cash flows for the three months ended March 31, 2003 and 2002.

Allocation of Net Income and Net Loss

Allocation of net income and net losses are 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 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 account 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 shall
be allocated 99% to the limited partners and 1% to the General Partner.

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 interest of the Partnership;
and (ii) all distributions are subject to the payments of partnership expenses
and maintenance of reasonable reserves for debt service, alterations
improvements, maintenance, replacement of furniture and fixtures, working
capital and contingent liabilities.

All excess cash from operations shall be distributed 90 percent to the limited
partners and 10 percent 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 percent to the
General Partner and 99 percent 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 percent to the General Partner and 99 percent 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 percent 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

7



---



##### Table of Contents



RANCON REALTY FUND IV
A California Limited Partnership

Notes to Consolidated Financial Statements

March 31, 2003
(Unaudited)

Partnership and following the admission of such limited
partner; (for limited partners admitted to the Partnership before March
31, 1985, there are additional cumulative non-compounded returns of 9 percent,
6 percent, or 3 percent depending on purchase date, through October 31, 1985);
(iii) third, 99 percent to the General Partner and 1 percent to the limited
partners, until the General Partner has received an amount equal to 20 percent
of all distributions of cash from sales or refinancing; and (iv) the balance,
80 percent to the limited partners, pro rata in proportion to the number of
Units held by each, and 20 percent to the General Partner.

All cash from a sale or disposition of substantially all of the assets (as
defined in the Partnership Agreement ) and any cash, other than cash from
operations, available for distribution to partners during the dissolution and
termination of the Partnership, shall be distributed to the partners: (i)
first, in proportion to and to the extent of the positive balances of their
capital accounts; and (ii) the remaining balance, if any, in accordance with
distributions of cash from sales or refinancing above.

The terms of the Partnership agreement call for the General Partner to restore
any deficit 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.

Management Agreement

Effective January 1, 1995, Glenborough Corporation (GC) entered into an
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 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
GCs responsibility for providing investor relation services and Preferred
Partnership Services, Inc., a California corporation unaffiliated with the
Partnership, contracted to assume the investor relations service. In October
2000, GC merged into Glenborough. The agreement expires upon the dissolution of
the Partnership.

The Partnership will pay Glenborough for its services as follows: (i) a
specified asset administration fee ($148,000 and $175,000 in the first quarter
of 2003 and 2002, respectively); (ii) sales fees of 2% for improved properties
and 4% for land ($175,000 in the first quarter of 2002); (iii) a refinancing
fee of 1% and (iv) a management fee of 5% of gross rental receipts. As part of
this agreement, Glenborough will perform certain duties for the General Partner
of the Rancon Partnerships. RFC agreed to cooperate with Glenborough, should
Glenborough attempt to obtain a majority vote of the limited partners to
substitute itself as the Sponsor for the Rancon Partnerships. Glenborough is
not an affiliate of RFC or the Partnership.

Risks and Uncertainties

The Partnerships ability to (i) achieve positive cash flow from operations,
(ii) meet its debt obligations, (iii) provide distributions either from
operations or the ultimate disposition of the Partnerships properties or (iv)
continue as a going concern, may be impacted by changes in interest rates,
property values, local and regional economic conditions, or the entry of other
competitors into the market. The accompanying consolidated financial
statements do not provide for adjustments with regard to these uncertainties.

Note 2.     SIGNIFICANT ACCOUNTING POLICES

Basis of Accounting

The accompanying consolidated financial statements have been prepared on the
accrual basis of accounting in accordance with accounting principles generally
accepted in the United States. They include the accounts of certain wholly
owned subsidiaries. All significant intercompany transactions and balances have
been eliminated in consolidation.

Consolidation

In April 1996, the Partnership formed Rancon Realty Fund IV Tri-City Limited
Partnership, a Delaware limited partnership (RRF IV Tri-City). The limited
partner of RRF IV Tri-City is the Partnership and the General Partner is Rancon
Realty Fund IV, Inc. (RRF IV, Inc.), a corporation wholly owned by the
Partnership. Since the Partnership owns 100% of RRF IV, Inc. and indirectly
owns 100% of RRF IV Tri-City, the financial statements of RRF IV, Inc. and RRF
IV Tri-City have been consolidated with those of the Partnership. All
intercompany balances and transactions have been eliminated in the
consolidation.

8



---



##### Table of Contents



RANCON REALTY FUND IV
A California Limited Partnership

Notes to Consolidated Financial Statements

March 31, 2003
(Unaudited)

Use of Estimates

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States 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.

New Accounting Pronouncements

In June 2001, the FASB approved for issuance SFAS 143, Accounting for Asset
Retirement Obligations. SFAS 143 requires that the fair value of a liability
for an asset retirement obligation be recognized in the period in which it is
incurred and that the associated asset retirement costs be capitalized as part
of the carrying value of the related long-lived asset. SFAS 143 was adopted by
the Partnership on January 1, 2003. This standard did not have a material
impact on the Partnerships consolidated financial position or results of
operations.

In May 2002, the FASB approved for issuance SFAS 145, Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections. SFAS 145 requires gains and losses from extinguishment of debt
to be classified as an extraordinary item only if the criteria in APB No. 30
has been met. Further, lease modifications with economic effects similar to
sale-leaseback transactions must be accounted for in the same manner as
sale-leaseback transactions. While the technical corrections to existing
pronouncements are not substantive in nature, in some instances they may change
accounting practice. SFAS 145 was adopted by the Partnership on January 1,
2003 for the Partnership. This standard did not have a material impact on the
Partnerships consolidated financial position and results of operations.

In June 2002, the FASB approved for issuance SFAS 146, Accounting for Costs
Associated with Exit or Disposal Activities. SFAS 146 addresses accounting
and reporting for costs associated with exit and disposal activities and
supercedes Emerging Issues Task Force Issue No. 94-3 (EITF 94-3), Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit
an Activity (including Certain Costs Incurred in a Restructuring). SFAS 146
requires that a liability for a cost associated with an exit or disposal
activity be recognized when the liability is incurred, as defined by the
Statement. Under EITF 94-3, an exit cost was recognized at the date an entity
committed to an exit plan. Additionally, SFAS 146 provides that exit and
disposal costs should be measured at fair value and that the associated
liability will be adjusted for changes in estimated cash flows. The provisions
of SFAS 146 are effective for exit and disposal activities that are initiated
after December 31, 2002. This standard did not have a material impact on the
Partnerships consolidated financial position and results of operations since
there have been no exit or disposal activities since January 1, 2003.

In November 2002, the FASB approved for issuance FASB Interpretation 45 (FIN
45), Guarantors Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others. FIN 45 elaborates on
the disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued.
It also clarifies that a guarantor is required to recognize, at the inception
of a guarantee, a liability for the fair value of the obligation undertaken in
issuing the guarantee. The initial recognition and initial measurement
provisions of FIN 45 are applicable on a prospective basis to guarantees issued
or modified after December 31, 2002. The disclosure requirements are effective
for financial statements of interim and annual periods ending after December
15, 2002. The Partnership does not provide for any guarantees, therefore, the
pronouncement did not have any impact on the Partnerships financial position
or results of operations.

Rental Properties

Rental properties, including the related land, are stated at cost unless events
or circumstances indicate that cost 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 multiplied by annualized
rental 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.

Depreciation is provided using the straight line method over useful lives
ranging from five to forty years for the respective assets.

9



---



##### Table of Contents



RANCON REALTY FUND IV
A California Limited Partnership

Notes to Consolidated Financial Statements

March 31, 2003
(Unaudited)

Land Held for Development

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

Interest and property taxes related to property constructed by the Partnership
are capitalized during periods of construction.

Cash and Cash Equivalents

The Partnership considers short-term investments (including certificates of
deposit and money market funds) with a maturity of less than ninety days when
purchased at the time of investment to be cash equivalents.

Deferred Costs

Deferred loan fees are amortized on a straight-line basis over the life of the
related loan and deferred lease commissions are amortized over the initial
fixed term of the related lease agreement.

Revenue

The Partnership recognizes rental revenue on a straight-line basis at amounts
that it believes it will collect on a tenant by tenant basis. The estimation
process may result in higher or lower levels from period to period as the
Partnerships collection experience and the credit quality of the Partnerships
tenants changes. 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.

The Partnerships portfolio of leases turns over continuously, with the number
and value of expiring leases varying from year to year. The Partnerships
ability to re-lease the space to existing or new tenants at rates equal to or
greater than those realized historically is impacted by, among other things,
the economic conditions of the market in which a property is located, the
availability of competing space, and the level of improvements which may be
required at the property. No assurance can be given that the rental rates that
the Partnership will obtain in the future will be equal to or greater than
those obtained under existing contractual commitments.

Reimbursements from tenants for real estate taxes and other recoverable
operating expenses are recognized as revenue in the period the applicable
expenses are incurred. Differences between estimated and actual amounts are
recognized in the subsequent year.

Sales of Real Estate

The Partnership recognizes sales of real estate when there is a signed
contract, a closing has taken place, the buyers initial and continuing
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 as a result of
the disposal transaction.

Net Income/Loss Per Limited Partnership Unit

Net income or loss 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 or loss.

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 (loss) and partners equity (deficit) for financial reporting purposes
will differ from the Partnership income tax return because of different
accounting methods

10



---



##### Table of Contents



RANCON REALTY FUND IV
A California Limited Partnership

Notes to Consolidated Financial Statements

March 31, 2003
(Unaudited)

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

One tenant represented 21% of rental income for the three months ended March
31, 2003 and 2002, respectively.

Reference to 2002 audited consolidated financial statements

These unaudited consolidated financial statements should be read in conjunction
with the notes to consolidated financial statements included in the December
31, 2002 audited consolidated financial statements on Form 10-K.

Note 3.     INVESTMENTS IN REAL ESTATE

Rental properties consisted of the following at March 31, 2003 and December 31,
2002 (in thousands):

|                                 |  |      |         |      |  |   |         |  
|-------------------------------- |  | ---- | ------- | ---- |  | - | ------- | -
|                                 |  | 2003 |         | 2002
|                                 |  |      |         |     
|Land                             |  | $    | 4,236   |      |  | $ | 4,236   |  
|Buildings                        |  |      | 28,369  |      |  |   | 28,369  |  
|Leasehold and other improvements |  |      | 10,033  |      |  |   | 9,725   |  
|                                 |  |      |         |      |  |   |         |  
|                                 |  |      | 42,638  |      |  |   | 42,330  |  
|Less: accumulated depreciation   |  |      | (14,318 | )    |  |   | (14,024 | )
|                                 |  |      |         |      |  |   |         |  
|Total rental properties, net     |  | $    | 28,320  |      |  | $ | 28,306  |  
|                                 |  |      |         |      |  |   |         |  

At March 31, 2003, the Partnerships rental properties included seven retail
and four office/R & D projects at the Tri-City Corporate Centre in San
Bernardino, California.

On March 20, 2002, the Partnership sold the Two Vanderbilt property to an
anchor tenant, Inland Empire Health Plan, who occupied 78% of the property for
a sales price of $8,750,000. The sale generated net proceeds of approximately
$8,382,000 and a gain on sale of approximately $5,120,000. The Partnership
made a pay down on the line of credit of $4,200,000 from the sales proceeds and
added the remaining cash to its cash reserves.

In accordance with SFAS 144 Accounting for the Impairment or Disposal of Long
Lived Assets, effective for financial statements issued for fiscal years
beginning after December 15, 2001, net income and gain or loss on sales of real
estate for properties sold or classified as held for sale subsequent to
December 31, 2001 are reflected in the consolidated statements of operations as
Discontinued operations for all periods presented.

Below is a summary of the results of operations of Two Vanderbilt as of March
31, 2002 (in thousands):

|                                               |  |      |       | 
|---------------------------------------------- |  | ---- | ----- | 
|                                               |  | 2002
|                                               |  |     
|Rental income                                  |  | $    | 324   | 
|Operating expenses                             |  |      | 176   | 
|Depreciation and amortization                  |  |      | 76    | 
|                                               |  |      |       | 
|Total expenses                                 |  |      | 252   | 
|                                               |  |      |       | 
|Income before net gain on sales of real estate |  |      | 72    | 
|Net gain on sales of real estate               |  |      | 5,120 | 
|                                               |  |      |       | 
|Discontinued operations                        |  | $    | 5,192 | 
|                                               |  |      |       | 

11



---



##### Table of Contents



RANCON REALTY FUND IV
A California Limited Partnership

Notes to Consolidated Financial Statements

March 31, 2003
(Unaudited)

Land held for development consisted of the following at March 31, 2003 and
December 31, 2002 (in thousands):

|                                                            |  |      |       |      |  |   |       | 
|----------------------------------------------------------- |  | ---- | ----- | ---- |  | - | ----- | 
|                                                            |  | 2003 |       | 2002
|                                                            |  |      |       |     
|22.5 acres at Tri-City Corporate Centre,
San Bernardino, CA |  | $    | 1,214 |      |  | $ | 1,214 | 
|                                                            |  |      |       |     

Note 4.     NOTES PAYABLE

Notes payable as of March 31, 2003 and December 31, 2002 were as follows (in
thousands):

|                                                                                                                                                                                                                                                                                                                                                                                                   |                     |   |       |       |      |   |       |       | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------- | - | ----- | ----- | ---- | - | ----- | ----- | 
|                                                                                                                                                                                                                                                                                                                                                                                                   |                     |   | 2003  |       | 2002
|                                                                                                                                                                                                                                                                                                                                                                                                   |                     |   |       |       |     
|Note payable secured by first deeds of trust
on Service Retail Center, Promotional Retail
Center and Carnegie Business Center I. The
note, which matures May 1, 2006, is a 10-year,
8.744% fixed rate loan with a 25-year
amortization requiring monthly payments of
principal and interest totaling $53                                                                                           |                     | $ | 5,824 |       |      | $ | 5,857 |      
|Note payable secured by first deed of trust on
the One Vanderbilt building. The note bears a
fixed interest rate of 9%. Monthly payments of
principal and interest totaling $20 are due
until the maturity date of January 1, 2005                                                                                                                                                                 |                     |   | 2,101 |       |      |   | 2,113 |      
|Line of credit with a total availability of
$7.2 million secured by first deeds of trust
on IRC building, Circuit City and TGI Fridays
with a variable interest rate of lenders
Prime Rate (4.25% as of March 31, 2003),
monthly interest-only payments, and a maturity
date of April 15, 2004. The balance of this
line of credit was paid down in March 2002 (as
discussed in Note 3 above). |                     |   |      |       |      |   |      |      
|                                                                                                                                                                                                                                                                                                                                                                                                   |                     |   |       |       |      |   |       |      
|                                                                                                                                                                                                                                                                                                                                                                                                   | Total notes payable |   | $     | 7,925 |      |   | $     | 7,970 | 
|                                                                                                                                                                                                                                                                                                                                                                                                   |                     |   |       |       |      |   |       |      

The annual maturities of the Partnerships notes payable subsequent to March
31, 2003 are as follows (in thousands):

|             |  |   |       | 
|------------ |  | - | ----- | 
|Years ended  |  |   |       | 
|December 31, |  |   |       | 
|             |  |   |       | 
|2003         |  | $ | 143   | 
|2004         |  |   | 205   | 
|2005         |  |   | 2,160 | 
|2006         |  |   | 5,417 | 
|             |  |   |       | 
|Total        |  | $ | 7,925 | 
|             |  |   |       | 

Note 5.     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 results of
operations and cash flows.

Approximately 15 acres of the Tri-City Corporate Centre land owned by the
Partnership was part of a landfill operated by the City of San Bernardino (the
City) from approximately 1950 to 1960. There are no records of which the
Partnership is aware disclosing that hazardous wastes exist at the landfill.
The City is responsible for the landfill and the gas-monitoring program as
prescribed by the Santa Ana Region of the California Water Quality Control
Board (WQCB). The monitoring will be handled directly by the City as of May
1, 2003. Also, the City has presented a draft plan for closure of the landfill
to the WQCB. Most likely, this plan will commence in 2003. There is no
current requirement to conduct clean closure of the site, and the Partnership
will work directly with the City on the details of their plan with the WQCB.
However, no assurance can be made that circumstances will not arise which could
impact the Partnerships responsibility related to the land.

12



---



##### Table of Contents



RANCON REALTY FUND IV
A California Limited Partnership

Notes to Consolidated Financial Statements

March 31, 2003
(Unaudited)

General Uninsured Losses

The Partnership carries comprehensive liability, fire, flood, extended coverage
and rental loss insurance with policy specifications, limits and deductibles
customarily carried for similar properties. There are, however, certain types
of extraordinary losses, which may be either uninsurable, or not economically
insurable. Further, certain of the properties are located in areas that are
subject to earthquake activity. Should a property sustain damage as a result
of an earthquake, the Partnership may incur losses due to insurance
deductibles, co-payments on insured losses or uninsured losses. Should an
uninsured loss occur, the Partnership could lose its investment in, and
anticipated profits and cash flows from, a property.

Other Matters

The Partnership is contingently liable for subordinated real estate commissions
payable to the Sponsors in the aggregate amount of $643,000 at March 31, 2003,
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 6% per annum on their adjusted invested capital. Since
the circumstances under which these commissions would be payable are limited,
the liability has not been recognized in the accompanying consolidated
financial statements; however, the amount will be recorded when and if it
becomes payable.

13



---



##### Table of Contents






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

Results of Operations

Comparison of the three months ended March 31, 2003 to the three months ended
March 31, 2002.

Revenue

Rental income for the three months ended March 31, 2003 increased $167,000,
compared to the three months ended March 31, 2002, primarily due to an increase
in occupancy at One Vanderbilt and Palm Court Retail #1.

Occupancy rates at the Partnerships Tri-City properties as of March 31, 2003
and 2002 were as follows:

|                           |  |      |     |      |  |  |     |  
|-------------------------- |  | ---- | --- | ---- |  |  | --- | -
|                           |  | 2003 |     | 2002
|                           |  |      |     |     
|One Vanderbilt             |  |      | 99  | %    |  |  | 87  | %
|Service Retail Center      |  |      | 93  | %    |  |  | 93  | %
|Carnegie Business Center I |  |      | 100 | %    |  |  | 97  | %
|Promotional Retail Center  |  |      | 100 | %    |  |  | 100 | %
|Inland Regional Center     |  |      | 100 | %    |  |  | 100 | %
|TGI Fridays               |  |      | 100 | %    |  |  | 100 | %
|Circuit City               |  |      | 100 | %    |  |  | 100 | %
|Office Max                 |  |      | 100 | %    |  |  | 100 | %
|Mimis Café                |  |      | 100 | %    |  |  | 100 | %
|Palm Court Retail #1       |  |      | 100 | %    |  |  | 60  | %
|Palm Court Retail #2       |  |      | 100 | %    |  |  | 100 | %
|Weighted average occupancy |  |      | 99  | %    |  |  | 96  | %

As of March 31, 2003, tenants at Tri-City occupying substantial portions of
leased rental space included: (i) CompUSA with a lease through August 2003
(Tenant has a 5-year renewal option, and lease is currently being negotiated
between the tenant and the management. Management anticipates a renewal lease
to be signed within a short period of time.); (ii) ITT Educational Services
with a lease through December 2004; (iii) PetsMart with a lease through January
2009; (iv) Inland Regional Center with a lease through July 2009; (v) The
University of Phoenix, Inc. with a lease through August 2009; (vi) Office Max
with a lease through October 2013; and (vii) Circuit City with a lease through
January 2018. These seven tenants, in the aggregate, occupied approximately
254,000 square feet of the 395,000 total leasable square feet at Tri-City and
accounted for approximately 60% of the rental income of the Partnership during
the first quarter of 2003.

The 12% increase in occupancy from March 31, 2002 to March 31, 2003 at One
Vanderbilt was due to the expansion of two existing tenants into
approximately 8,700 square feet of previously vacant space.

The 40% increase in occupancy from March 31, 2002 to March 31, 2003 at Palm
Court Retail #1 was due to leasing 2,000 square feet to a new tenant.

Expenses

Operating expenses increased $55,000, or 9%, for the three months ended March
31, 2003, compared to the three months ended March 31, 2002, primarily due to
an increase in occupancy at One Vanderbilt and Palm Court Retail #1 and an
increase in utility and janitorial costs.

Interest expense decreased $47,000, or 19%, for the three months ended March
31, 2003, compared to the three months ended March 31, 2002, primarily due to a
pay down on the line of credit in March 2002.

Expenses associated with undeveloped land decreased $32,000, or 29%, for the
three months ended March 31, 2003, compared to the three months ended March 31,
2002, primarily due to a decrease in property taxes resulting from early payoff
of an annual assessment levied by the City of San Bernardino in 2002. The City
of San Bernardino issued bonds which were used to fund land infrastructure
costs. The Partnership benefited from these improvements and was responsible
for a portion of the annual bond service costs. In 2002, the bond was repaid
by the City of San Bernardino at a discount which required the Partnership to
incur a larger expense in 2002.

General and administrative expenses increased $33,000, or 14%, for the three
months ended March 31, 2003, compared to the three months ended March 31, 2002,
primarily due to an increase in investor service expenses related to the
redemption of Partnership Units and higher audit and tax preparation fees.

14



---



##### Table of Contents



Income from discontinued operations

Income from discontinued operations totaled $5,192,000, which included
$5,120,000 of gain on sale from the sale of the Two Vanderbilt property (as
discussed below), and $72,000 of net operating income from the Two Vanderbilt
property for the three months ended March 31, 2002.

Liquidity and Capital Resources

The following discussion should be read in conjunction with the Partnerships
December 31, 2002 audited consolidated financial statements and the notes
thereto.

At March 31, 2003, the Partnership had cash of $4,295,000. The remainder of the
Partnerships assets consisted primarily of its net investments in real estate,
totaling approximately $29,534,000, which included $28,320,000 in rental
properties and $1,214,000 in land held for development.

The Partnerships liabilities at March 31, 2003, included notes payable
totaling approximately $7,925,000, which consisted of two secured loans
encumbering properties with an aggregate net book value of approximately
$13,654,000, and with maturity dates ranging from January 1, 2005 through May
1, 2006. These two notes bear fixed interest rates of 8.74% and 9.00%,
respectively, and require monthly principal and interest payments ranging from
$20,000 to $53,000. A $7,200,000 line of credit, which bears interest at the
lenders Prime Rate, has no outstanding balance at March 31, 2003.

On March 20, 2002, the Partnership sold the Two Vanderbilt property to an
anchor tenant, Inland Empire Health Plan, who occupied 78% of the property for
a sales price of $8,750,000. The sale generated net proceeds of approximately
$8,382,000 and a gain on sale of approximately $5,120,000. The Partnership made
a pay down on the line of credit of $4,200,000 from the sales proceeds and
added the remaining cash to its cash reserves.

The Partnership is contingently liable for subordinated real estate commissions
payable to the Sponsors in the aggregate amount of $643,000 at March 31, 2003,
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 6% per annum on their adjusted invested capital. Since
the circumstances under which these commissions would be payable are limited,
the liability has not been recognized in the accompanying consolidated
financial statements; however, the amount will be recorded when and if it
becomes payable.

Operationally, the Partnerships primary source of funds consists of cash
provided by its rental activities. Other sources of funds may include permanent
financing, property sales, interest income on certificates of deposit and other
deposits of funds invested temporarily. Cash generated from property sales is
generally added to the Partnerships cash reserves, pending use in the
development of properties or distribution to the partners.

Management believes that the Partnerships cash balance as of March 31, 2003,
together with cash from operations, sales and financing, will be sufficient to
finance the Partnerships and the properties continued operations and
development plans on a short-term basis and for the reasonably foreseeable
future. There can be no assurance that the Partnerships results of operations
will not fluctuate in the future and at times affect its ability to meet its
operating requirements.

The Partnership knows of no demands, commitments, events or uncertainties which
might effect its capital resources in any material respect. In addition, the
Partnership is not subject to any covenants pursuant to its secured debt that
would constrain its ability to obtain additional capital.

Operating Activities

During the three months ended March 31, 2003, the Partnerships cash provided
by operating activities totaled $961,000.

The $218,000 decrease in accounts receivable at March 31, 2003, compared to
December 31, 2002, was primarily due to collections of rents receivable and the
reimbursement of tenant improvements from the reserve impound account.

The $28,000 decrease in deferred costs and other fees at March 31, 2003,
compared to December 31, 2002, was due to $39,000 of lease commissions paid
for new and renewal leases, offset by $67,000 of amortization expense.

The $14,000 increase in accounts payable and other liabilities at March 31,
2003, compared to December 31, 2002, was primarily due to accruals for property
taxes, offset by payments of accrued building operating expenses and audit and
tax preparation fees.

Investing Activities

During the three months ended March 31, 2003, the Partnerships cash used for
investing activities totaled $308,000, primarily for tenant improvements at the
One Vanderbilt property.

15



---



##### Table of Contents



Financing Activities

During the three months ended March 31, 2003, the Partnerships cash used for
financing activities totaled $122,000, which consisted of $45,000 in principal
payments on the notes payable and $77,000 paid to redeem 205 limited
partnership units (Units).

Critical Accounting Policies

Revenue recognized on a straight-line basis

The Partnership recognizes rental revenue on a straight-line basis at amounts
that it believes it will collect on a tenant by tenant basis. The estimation
process may result in higher or lower levels from period to period as the
Partnerships collection experience and the credit quality of the Partnerships
tenants changes. Actual amounts collected could be lower 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.

Carrying value of rental properties and land held for development

The Partnerships rental properties, including the related land, are stated at
cost unless events or circumstances indicate that cost cannot be recovered, in
which case, the carrying value of the property is reduced to its estimated fair
value. Estimated fair value is based upon (i) 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 multiplied by annualized
rental 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.

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

The actual value of the Partnerships portfolio of properties and land held for
development could be significantly higher or lower than their carrying amounts.

New Accounting Pronouncements

In January 2003, the FASB approved for issuance FASB Interpretation No. 46 (FIN
46), Consolidation of Variable Interest Entities. FIN 46 clarifies the
application of Accounting Research Bulletin No. 51, Consolidated Financial
Statements to certain entities in which equity investors do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. FIN 46 applies immediately
to variable interest entities created after January 31, 2003, and to variable
interest entities in which an enterprise obtains an interest after that date.
It applies in the first fiscal year or interim period beginning after June 15,
2003, to variable interest entities in which an enterprise holds a variable
interest that it acquired before February 1, 2003. FIN 46 may be applied
prospectively with a cumulative-effect adjustment as of the date on which it is
first applied or by restating previously issued financial statements for one or
more years with a cumulative-effect adjustment as of the beginning of the first
year restated. The disclosure requirements of FIN 46 are effective for all
financial statements initially issued after January 31, 2003. Management is
currently assessing the impact of this interpretation on the Partnerships
consolidated financial position and results of operations. The disclosures
provided reflect managements understanding and analysis of FIN 46 based upon
information currently available. The evaluation of the Partnerships various
arrangements is ongoing and is subject to change in the event additional
interpretive guidance is provided by the Financial Accounting Standards Board
or others.




Item 3.     Qualitative and Quantitative Information About Market Risk

Interest Rates

The Partnerships primary market risk exposure is to changes in interest rates
obtainable on its secured borrowings. The Partnership does not believe that
changes in market interest rates will have a material impact on the performance
or fair value of its portfolio.

16



---



##### Table of Contents



For debt obligations, the table below presents principal cash flows and
interest rates by expected maturity dates.

|                        |  |                        |      |      |  |      |      |      |  |            |       |       |  |            |       |   |  |  |   |  |  |   |       |   |  |   |       | 
|----------------------- |  | ---------------------- | ---- | ---- |  | ---- | ---- | ---- |  | ---------- | ----- | ----- |  | ---------- | ----- | - |  |  | - |  |  | - | ----- | - |  | - | ----- | 
|                        |  | Expected Maturity Date
|                        |  |                       
|                        |  | 2003                   |      | 2004 |  | 2005 |      | 2006 |  | Thereafter |       | Total |  | Fair value
|                        |  |                        |      |      |  |      |      |      |  |            |       |       |  |           
|                        |  | (in thousands)        
|Secured Fixed Rate Debt |  | $                      | 143  |      |  | $    | 205  |      |  | $          | 2,160 |       |  | $          | 5,417 |   |  |  |  |  |  | $ | 7,925 |   |  | $ | 7,925 | 
|Average interest rate   |  |                        | 8.82 | %    |  |      | 8.80 | %    |  |            | 8.98  | %     |  |            | 8.74  | % |  |  |  |  |  |   | 8.81  | % |  |   |       | 

The Partnership believes that the interest rates given in the table for fixed
rate borrowings approximate the rates the Partnership could currently obtain
for instruments of similar terms and maturities and that the fair values of
such instruments approximate carrying value at March 31, 2003.

As of March 31, 2003, the Partnership had cash equivalents of $3,197,000
invested in interest-bearing certificates of deposit. These investments are
subject to interest rate risk due to changes in interest rates upon maturity.
The Partnership does not own any derivative instruments. Declines in interest
rates over time would reduce Partnership interest income.




Item 4.     Controls and Procedures

(a)  Evaluation of disclosure controls and procedures. The Partnerships chief
executive officer and chief financial officer, after evaluating the
effectiveness of the Partnerships disclosure controls and procedures (as
defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15-d-14(c))
as of a date (the Evaluation Date) within 90 days before the filing date of
this quarterly report, has concluded that as of the Evaluation Date, the
Partnerships disclosure controls and procedures were effective and designed to
ensure that material information relating to the Partnership and its
consolidated subsidiaries would be made known to him by others within those
entities.

(b)  Changes in internal controls. There were no significant changes in the
Partnerships internal controls or in other factors that could significantly
affect those controls subsequent to the Evaluation Date.

17



---



##### Table of Contents






|        |  |                  
|------- |  | -----------------
|Part II |  | OTHER INFORMATION
|        |  |                  




|        |  |                                                                                                                                                                                                                                                                              
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item 1. |  | Legal Proceedings                                                                                                                                                                                                                                                            
|        |  |                                                                                                                                                                                                                                                                              
|        |  | Certain claims and lawsuits have arisen against the Partnership in its
normal course of business. The Partnership believes that such claims and
lawsuits will not have a material adverse effect on the Partnerships financial
position, cash flow or results of operations.
|        |  |                                                                                                                                                                                                                                                                              




|        |  |                                                    
|------- |  | ---------------------------------------------------
|Item 4. |  | Submission of Matters to a Vote of Security Holders
|        |  |                                                    
|        |  | None.                                              
|        |  |                                                    




|        |  |                                                                                                                                  
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------
|Item 6. |  | Exhibits and Reports on Form 8-K                                                                                                 
|        |  |                                                                                                                                  
|        |  | (a) Exhibits:                                                                                                                    
|        |  |                                                                                                                                  
|        |  | 99 Section 906 Certification of Daniel L. Stephenson, Chief Executive
Officer and Chief Financial Officer of
General Partnership.
|        |  |                                                                                                                                  
|        |  | (b) Reports on Form 8-K                                                                                                          
|        |  |                                                                                                                                  
|        |  | None                                                                                                                             

18



---



##### 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 Corporationa California corporation,its General Partner


|      |  |              |  |     |  |                                
|----- |  | ------------ |  | --- |  | -------------------------------
|Date: |  | May 14, 2003 |  | By: |  | /s/ DANIEL L. STEPHENSON       
|      |  |              |  |     |  |                                
|      |  |              |  |     |  | Daniel L. Stephenson, President

|      |  |              |  |     |  |                                      
|----- |  | ------------ |  | --- |  | -------------------------------------
|Date: |  | May 14, 2003 |  | By: |  | /s/ DANIEL L. STEPHENSON             
|      |  |              |  |     |  |                                      
|      |  |              |  |     |  | Daniel L. Stephenson, General Partner

19



---



##### Table of Contents



I, DANIEL L. STEPHENSON, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of RANCON REALTY FUND
IV;                                                                                                                                                                                                                                                  
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;                   
|  
|4. |  | I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and I have:                                                                                                                                                      



| | a) |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to me by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report my conclusions about the
effectiveness of the disclosure controls and procedures based on my
evaluation as of the Evaluation Date;                                                                                                                          



|5. |  | I have disclosed, based on my most recent evaluation, to the registrants
auditors and the audit committee of registrants board of directors (or
persons performing the equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have
identified for the registrants auditors any material weaknesses in
internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | I have indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of my most
recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: May 14, 2003

/s/ DANIEL L. STEPHENSON

---

Daniel L. Stephenson
President, Chief Executive Officer
Chief Financial Officer and
General Partner of Rancon Financial Corporation


20



---



##### Table of Contents



EXHIBIT INDEX

|        |  |                                                                                                                               
|------- |  | ------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                               
|Number  |  | Description                                                                                                                   
|        |  |                                                                                                                               
|99      |  | Section 906
Certification of Daniel L. Stephenson, Chief Executive Officer and
Chief Financial Officer of General
Partnership.
|        |  |