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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q







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

For the quarterly period ended March 31, 2010

OR



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

Commission file number: 0-14207





RANCON REALTY
FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP

(Exact name of registrant as specified in its charter)







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

(650)
343-9300

(Registrants telephone number, including area code)





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

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

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



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

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









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INDEX

RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP



|                             |  |                                                                                          |  |         
|---------------------------- |  | ---------------------------------------------------------------------------------------- |  | --------
|                             |  |                                                                                          |  | Page No.
|PART I FINANCIAL INFORMATION
|                             |  |                                                                                         
|Item 1.                      |  | Consolidated Financial Statements of Rancon Realty Fund IV (Unaudited):                  |  | 3       
|                             |  |                                                                                         
|                             |  | Consolidated Balance Sheets as of March 31, 2010 and December 31, 2009                   |  | 3       
|                             |  |                                                                                         
|                             |  | Consolidated Statements of Operations for the three months ended March 31, 2010 and
2009 |  | 4       
|                             |  |                                                                                         
|                             |  | Consolidated Statement of Partners Equity for the three months ended March 31,
2010     |  | 5       
|                             |  |                                                                                         
|                             |  | Consolidated Statements of Cash Flows for the three months ended March 31, 2010 and
2009 |  | 6       
|                             |  |                                                                                         
|                             |  | Notes to Consolidated Financial Statements                                               |  | 7-13    
|                             |  |                                                                                         
|Item 2.                      |  | Managements Discussion and Analysis of Financial Condition and Results of Operations    |  | 14-17   
|                             |  |                                                                                         
|Item 3.                      |  | Qualitative and Quantitative Disclosures About Market Risk                               |  | 18      
|                             |  |                                                                                         
|Item 4.                      |  | Controls and Procedures                                                                  |  | 18      
|                             |  |                                                                                         
|Item 4T.                     |  | Controls and Procedures                                                                  |  | 18      
|                            
|PART II OTHER INFORMATION   
|                             |  |                                                                                         
|Item 1.                      |  | Legal Proceedings                                                                        |  | 19      
|                             |  |                                                                                         
|Item 1A.                     |  | Risk Factors                                                                             |  | 19      
|                             |  |                                                                                         
|Item 2.                      |  | Unregistered Sales of Equity Securities and Use of Proceeds                              |  | 19      
|                             |  |                                                                                         
|Item 3.                      |  | Defaults Upon Senior Securities                                                          |  | 19      
|                             |  |                                                                                         
|Item 4.                      |  | [Removed and Reserved]                                                                   |  | 19      
|                             |  |                                                                                         
|Item 5.                      |  | Other Information                                                                        |  | 19      
|                             |  |                                                                                         
|Item 6.                      |  | Exhibits                                                                                 |  | 19      
|                             | 
|SIGNATURES                   |  | 20                                                                                      



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PART I. FINANCIAL INFORMATION



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

RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP

Consolidated Balance Sheets

(in thousands, except units outstanding)

(Unaudited)



|                                                                                                                              |  |               |         |   |                  |   |         |  
|----------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                              |  | March 31,2010 |         |   | December 31,2009 |  
|Assets                                                                                                                        |  |               |         |   |                  |   |         |  
|Investments in real estate:                                                                                                   |  |               |         |   |                  |   |         |  
|Rental properties                                                                                                             |  | $             | 65,556  |   |                  | $ | 65,407  |  
|Accumulated depreciation                                                                                                      |  |               | (19,050 | ) |                  |   | (18,310 | )
|                                                                                                                              |  |               |         |   |                  |   |         |  
|Rental properties, net                                                                                                        |  |               | 46,506  |   |                  |   | 47,097  |  
|                                                                                                                              |  |              
|Cash and cash equivalents                                                                                                     |  |               | 1,494   |   |                  |   | 1,916   |  
|Accounts receivable, net                                                                                                      |  |               | 119     |   |                  |   | 4       |  
|Deferred costs, net of accumulated amortization of $1,548 and $1,419 as of March 31, 2010 and December 31, 2009,
respectively |  |               | 2,143   |   |                  |   | 2,033   |  
|Prepaid expenses and other assets                                                                                             |  |               | 1,658   |   |                  |   | 1,295   |  
|                                                                                                                              |  |               |         |   |                  |   |         |  
|Total assets                                                                                                                  |  | $             | 51,920  |   |                  | $ | 52,345  |  
|                                                                                                                              |  |               |         |   |                  |   |         |  
|Liabilities and Partners Equity (Deficit)                                                                                    |  |               |         |   |                  |   |         |  
|Liabilities:                                                                                                                  |  |               |         |   |                  |   |         |  
|Note payable and line of credit                                                                                               |  | $             | 28,657  |   |                  | $ | 28,756  |  
|Accounts payable and other liabilities                                                                                        |  |               | 422     |   |                  |   | 415     |  
|Tenant and building improvements payable                                                                                      |  |               | 1,583   |   |                  |   | 1,707   |  
|Prepaid rent                                                                                                                  |  |               | 236     |   |                  |   | 204     |  
|                                                                                                                              |  |               |         |   |                  |   |         |  
|Total liabilities                                                                                                             |  |               | 30,898  |   |                  |   | 31,082  |  
|                                                                                                                              |  |               |         |   |                  |   |         |  
|Commitments and contingent liabilities (Note 7)                                                                               |  |               |         |   |                  |   |         |  
|                                                                                                                              |  |              
|Partners Equity (Deficit):                                                                                                   |  |               |         |   |                  |   |         |  
|General Partner                                                                                                               |  |               | (845    | ) |                  |   | (843    | )
|Limited partners, 65,819 limited partnership units outstanding as of March 31, 2010 and December 31,
2009                     |  |               | 21,867  |   |                  |   | 22,106  |  
|                                                                                                                              |  |               |         |   |                  |   |         |  
|Total partners equity                                                                                                        |  |               | 21,022  |   |                  |   | 21,263  |  
|                                                                                                                              |  |               |         |   |                  |   |         |  
|Total liabilities and partners equity                                                                                        |  | $             | 51,920  |   |                  | $ | 52,345  |  
|                                                                                                                              |  |               |         |   |                  |   |         |  

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



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RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP

Consolidated Statements of Operations

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

(Unaudited)



|                                                                 |  |                             |        |   |      |   |        |  
|---------------------------------------------------------------- |  | --------------------------- | ------ | - | ---- | - | ------ | -
|                                                                 |  | Three Months EndedMarch 31, |       
|                                                                 |  | 2010                        |        |   | 2009 |  
|Operating revenue                                                |  |                             |        |   |      |   |        |  
|Rental revenue and other                                         |  | $                           | 1,959  |   |      | $ | 2,014  |  
|Tenant reimbursements                                            |  |                             | 258    |   |      |   | 306    |  
|                                                                 |  |                             |        |   |      |   |        |  
|Total operating revenue                                          |  |                             | 2,217  |   |      |   | 2,320  |  
|                                                                 |  |                             |        |   |      |   |        |  
|Operating expenses                                               |  |                             |        |   |      |   |        |  
|Property operating expenses                                      |  |                             | 1,003  |   |      |   | 960    |  
|Depreciation and amortization                                    |  |                             | 852    |   |      |   | 1,720  |  
|General and administrative                                       |  |                             | 234    |   |      |   | 256    |  
|                                                                 |  |                             |        |   |      |   |        |  
|Total operating expenses                                         |  |                             | 2,089  |   |      |   | 2,936  |  
|                                                                 |  |                             |        |   |      |   |        |  
|Operating income (loss)                                          |  |                             | 128    |   |      |   | (616   | )
|                                                                 |  |                            
|Interest and other income                                        |  |                             |       |   |      |   | 1      |  
|Interest expense (including amortization of loan fees)           |  |                             | (369   | ) |      |   | (437   | )
|                                                                 |  |                             |        |   |      |   |        |  
|Net loss                                                         |  | $                           | (241   | ) |      | $ | (1,052 | )
|                                                                 |  |                             |        |   |      |   |        |  
|Basic and diluted net loss per limited partnership unit          |  | $                           | (3.63  | ) |      | $ | (15.82 | )
|                                                                 |  |                             |        |   |      |   |        |  
|Weighted average number of limited partnership units outstanding |  |                             | 65,819 |   |      |   | 65,819 |  
|                                                                 |  |                             |        |   |      |   |        |  

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



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RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP

Consolidated Statement of Partners Equity

For the three months ended March 31, 2010

(in thousands)

(Unaudited)



|                                       |  |                |      |   |                 |   |        |       |  |   |        |  
|-------------------------------------- |  | -------------- | ---- | - | --------------- | - | ------ | ----- |  | - | ------ | -
|                                       |  | GeneralPartner |      |   | LimitedPartners |   |        | Total | 
|Balance (deficit) at December 31, 2009 |  | $              | (843 | ) |                 | $ | 22,106 |       |  | $ | 21,263 |  
|                                       |  |                |     
|Net loss                               |  |                | (2   | ) |                 |   | (239   | )     |  |   | (241   | )
|                                       |  |                |      |   |                 |   |        |       |  |   |        |  
|Balance (deficit) at March 31, 2010    |  | $              | (845 | ) |                 | $ | 21,867 |       |  | $ | 21,022 |  
|                                       |  |                |      |   |                 |   |        |       |  |   |        |  

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



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RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)



|                                                                                          |  |                             |       |   |      |   |        |  
|----------------------------------------------------------------------------------------- |  | --------------------------- | ----- | - | ---- | - | ------ | -
|                                                                                          |  | Three Months EndedMarch 31, |      
|                                                                                          |  | 2010                        |       |   | 2009 |  
|Cash flows from operating activities:                                                     |  |                             |       |   |      |   |        |  
|Net loss                                                                                  |  | $                           | (241  | ) |      | $ | (1,052 | )
|Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |  |                             |       |   |      |   |        |  
|Depreciation and amortization                                                             |  |                             | 852   |   |      |   | 1,720  |  
|Amortization of loan fees, included in interest expense                                   |  |                             | 16    |   |      |   | 78     |  
|Changes in certain assets and liabilities:                                                |  |                             |       |   |      |   |        |  
|Accounts receivable                                                                       |  |                             | (115  | ) |      |   | 70     |  
|Deferred costs                                                                            |  |                             | (238  | ) |      |   | (153   | )
|Prepaid expenses and other assets                                                         |  |                             | (363  | ) |      |   | (100   | )
|Accounts payable and other liabilities                                                    |  |                             | 7     |   |      |   | (128   | )
|Prepaid rent                                                                              |  |                             | 32    |   |      |   | 113    |  
|                                                                                          |  |                             |       |   |      |   |        |  
|Net cash (used in) provided by operating activities                                       |  |                             | (50   | ) |      |   | 548    |  
|                                                                                          |  |                             |       |   |      |   |        |  
|Cash flows from investing activities:                                                     |  |                             |       |   |      |   |        |  
|Additions to real estate investments                                                      |  |                             | (273  | ) |      |   | (115   | )
|                                                                                          |  |                             |       |   |      |   |        |  
|Net cash used in investing activities                                                     |  |                             | (273  | ) |      |   | (115   | )
|                                                                                          |  |                             |       |   |      |   |        |  
|Cash flows from financing activities:                                                     |  |                             |       |   |      |   |        |  
|Note payable principal payments                                                           |  |                             | (99   | ) |      |   | (95    | )
|Payment of deferred loan fees                                                             |  |                             |      |   |      |   | (3     | )
|                                                                                          |  |                             |       |   |      |   |        |  
|Net cash used in financing activities                                                     |  |                             | (99   | ) |      |   | (98    | )
|                                                                                          |  |                             |       |   |      |   |        |  
|Net (decrease) increase in cash and cash equivalents                                      |  |                             | (422  | ) |      |   | 335    |  
|                                                                                          |  |                            
|Cash and cash equivalents at beginning of period                                          |  |                             | 1,916 |   |      |   | 3,039  |  
|                                                                                          |  |                             |       |   |      |   |        |  
|Cash and cash equivalents at end of period                                                |  | $                           | 1,494 |   |      | $ | 3,374  |  
|                                                                                          |  |                             |       |   |      |   |        |  
|Supplemental disclosure of cash flow information:                                         |  |                             |       |   |      |   |        |  
|Cash paid for interest                                                                    |  | $                           | 355   |   |      | $ | 359    |  
|                                                                                          |  |                             |       |   |      |   |        |  
|Supplemental disclosure of non-cash operating activities:                                 |  |                             |       |   |      |   |        |  
|Write-off of fully depreciated rental property assets                                     |  | $                           |      |   |      | $ | 1,982  |  
|                                                                                          |  |                             |       |   |      |   |        |  
|Write-off of fully amortized deferred costs                                               |  | $                           |      |   |      | $ | 97     |  
|                                                                                          |  |                             |       |   |      |   |        |  

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



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RANCON REALTY FUND IV,

A California Limited Partnership

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 1.
ORGANIZATION

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

As of March 31, 2010, there were 65,819 Units (Units) outstanding.

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

Allocation of Net Income and Net Loss

Allocation of net income and net loss is made pursuant to the terms of the Partnership Agreement. Generally, net income from operations is allocated 90%
to the limited partners and 10% to the General Partner. Net losses from operations are allocated 99% to the limited partners and 1% to the General Partner; however, if the limited partners and the General Partner have, as a result of an allocation
of net loss, a deficit balance in their capital accounts, net loss shall not be allocated to the limited partners and General Partner in excess of the positive balance until the balances of the limited partners and General Partners
capital accounts are reduced to zero. Capital accounts shall be determined after taking into account the other allocations and distributions for the fiscal year.

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

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

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

Distribution of Cash

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

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

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



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RANCON REALTY FUND IV,

A California Limited Partnership

Notes to Consolidated Financial Statements(Continued)

(Unaudited)



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

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements present the consolidated financial position of the Partnership and its subsidiaries as of March 31, 2010 and
December 31, 2009, and the consolidated results of operations of the Partnership and its subsidiaries for the three months ended March 31, 2010 and 2009 and cash flows of the Partnership for the three months ended March 31, 2010 and
2009. All significant intercompany transactions, receivables and payables have been eliminated in consolidation.

In the opinion of the
General Partner, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal accruals) necessary to present fairly the consolidated financial position of the Partnership as of March 31, 2010
and December 31, 2009, and the related consolidated statements of operations for the three months ended March 31, 2010 and 2009, the consolidated statement of partners equity for the three months ended March 31, 2010 and the
consolidated statement of cash flows for the three months ended March 31, 2010 and 2009.

Use of Estimates

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

Rental Properties

Rental properties, including the related land, are stated at depreciated cost unless events or circumstances indicate that such amounts cannot
be recovered, in which case, the carrying value of the property is reduced to its estimated fair value. Estimated fair value is computed using estimated sales price, as determined by prevailing market values for comparable properties and/or the use
of capitalization rates applied to annualized net operating income based upon the age, construction and use of the building. Due to uncertainties inherent in the valuation process and in the economy, it is reasonably possible that the actual results
of operating and disposing of the Partnerships properties could be materially different than current expectations. Rental properties are reviewed for impairment whenever there is a triggering event and at least annually.

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



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

Construction in
Progress and Land Held for Development

Construction in progress and land held for development are stated at cost
unless events or circumstances indicate that cost cannot be recovered, in which case, the carrying value is reduced to estimated fair value. Estimated fair value is computed using estimated sales price, based upon market values for comparable
properties and considers the cost to complete and the estimated fair value of the completed project. Construction in progress and land held for development are reviewed for impairment whenever there is a triggering event and at least annually.

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



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RANCON REALTY FUND IV,

A California Limited Partnership

Notes to Consolidated Financial Statements(Continued)

(Unaudited)



Fair Value of Investments

The Partnership adopted policies related to the accounting for fair value measurements effective January 1, 2008. There was no material impact on the
Partnerships financial position, results of operations and cash flows as a result of such adoption.

The guidance related to accounting
for fair value measurements defines fair value and establishes a framework for measuring fair value in order to meet disclosure requirements for fair value measurements. Fair value is defined as the exchange price that would be received for an asset
or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This guidance also establishes a fair value
hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. This hierarchy describes three levels of inputs that may be used to measure fair value.

Financial assets and liabilities recorded at fair value on the consolidated balance sheets are categorized based on the inputs to the valuation
techniques as follows:

Level 1. Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include
debt and equity securities and derivative contracts that are traded in an active exchange market.

Level 2. Observable inputs other than Level
1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or
liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are
observable in the market or can be derived principally from or corroborated by observable market data.

Level 3. Unobservable inputs that are
supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow
methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation using unobservable inputs. This category generally includes long-term derivative contracts,
real estate and unconsolidated joint ventures.

Cash and Cash Equivalents

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

Deferred Costs

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

Revenues

The
Partnership recognizes rental revenue on a straight-line basis over the term of the leases. Actual amounts collected could be lower or higher than the amounts recognized on a straight-line basis if specific tenants are unable to pay rent that the
Partnership has previously recognized as revenue. For tenants with percentage rent, the Partnership recognizes revenue when the tenants specified sales targets have been met. The reimbursements from tenants for real estate taxes and other
recoverable operating expenses are recognized as revenue on an estimated basis during the current year. The Partnership develops a revised estimate of the amount recoverable from tenants based on updated expenses for the year and amounts to be
recovered and records adjustments to income in the current year financial statement accounts. Any final changes in estimate based on lease-by-lease reconciliations and tenant negotiations and collection are recorded in the period those negotiations
are settled.

Net (Loss) Income Per Limited Partnership Unit

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

Effective January 1, 2009, the Partnership adopted guidance which improves the comparability of earnings
per unit calculations for master limited partnerships (MLPs) with incentive distribution rights (IDRs). As such, the distributions should impact the calculation of earnings per unit (EPU) using the two-class method.



9



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##### Table of Contents

RANCON REALTY FUND IV,

A California Limited Partnership

Notes to Consolidated Financial Statements(Continued)

(Unaudited)



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



|                                                                                    |  |                            |    |   |                 |   |        |                |  |   |                 |   |  |   |        |  
|----------------------------------------------------------------------------------- |  | -------------------------- | -- | - | --------------- | - | ------ | -------------- |  | - | --------------- | - |  | - | ------ | -
|                                                                                    |  | For the three months ended |   
|                                                                                    |  | March 31, 2010             |    |   | March 31, 2009  |  
|                                                                                    |  | GeneralPartner             |    |   | LimitedPartners |   |        | GeneralPartner |  |   | LimitedPartners |  
|Loss allocation:                                                                    |  |                            |    |   |                 |   |        |                |  |   |                 |   |  |   |        |  
|                                                                                    |  |                            |    |  
|Net loss                                                                            |  | $                          | (2 | ) |                 | $ | (239   | )              |  | $ | (11             | ) |  | $ | (1,041 | )
|                                                                                    |  |                            |    |  
|Weighted average number of limited partnership units outstanding during each period |  |                            |    |   |                 |   | 65,819 |                |  |   |                 |   |  |   | 65,819 |  
|                                                                                    |  |                            |    |  
|Basic and diluted loss per limited partnership unit                                 |  |                            |    |   |                 | $ | (3.63  | )              |  |   |                 |   |  | $ | (15.82 | )

The calculation of net (loss) income per
Unit assumes that the income (loss) otherwise allocable to the limited partners is first used to fund distributions to the General Partner. As discussed in Note 1, because distributions of available cash have exceeded cumulative earnings and the
General Partner has a deficit, the General Partner would restore that deficit in liquidation. The calculation of net (loss) income per unit does not assume a liquidation in the periods presented and therefore the net (loss) income per limited
partner Unit may be less than what would be realized in a liquidation due to the requirement for the General Partner to restore deficits.

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 (loss) income and
partners equity (deficit) for financial reporting purposes will differ from the Partnerships income tax return because of different accounting methods used for certain items, including depreciation expense, provisions for impairment of
investments in real estate, capitalization of development period interest and rental income and loss recognition.

Concentration Risk

Two tenants (University of Phoenix and Art Institute of California) represented a combined 29% of rental revenue for the three months ended March 31,
2010. For the three months ended March 31, 2009 three tenants (Inland Counties Regional Center, University of Phoenix and Art Institute of California) represented a combined 45% of operating revenue. Inland Counties Regional Center Inc., the
tenant who occupied all of Northcourt Plaza, vacated the building in September 2009, at the end of its lease.

Recently
Issued Accounting Literature

In May 2009, the Financial Accounting Standards Board (the FASB) issued guidance related to
disclosures of subsequent events which involves accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. This adoption did not have any impact on the
Partnerships financial statements.

In June 2009, the FASB issued the FASB Accounting Standards Codification (Codification) which
identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of an entitys financial statements that are presented in conformity with GAAP. Effective September 30, 2009, the
Partnership adopted the Codification, which did not have any impact on the Partnerships financial statements.

Reference to 2009 audited consolidated financial statements

These unaudited consolidated financial statements should be read in conjunction with the notes to audited consolidated financial statements included in
the Partnerships December 31, 2009 audited consolidated financial statements on Form 10-K.



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##### Table of Contents

RANCON REALTY FUND IV,

A California Limited Partnership

Notes to Consolidated Financial Statements(Continued)

(Unaudited)



NOTE 3. INVESTMENTS IN REAL ESTATE

Rental properties consist of the following (in thousands):



|                                 |  |               |         |   |                  |   |         |  
|-------------------------------- |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                                 |  | March 31,2010 |         |   | December 31,2009 |  
|Land                             |  | $             | 4,690   |   |                  | $ | 4,690   |  
|Buildings                        |  |               | 49,692  |   |                  |   | 49,692  |  
|Building and tenant improvements |  |               | 11,174  |   |                  |   | 11,025  |  
|                                 |  |               |         |   |                  |   |         |  
|                                 |  |               | 65,556  |   |                  |   | 65,407  |  
|Less: accumulated depreciation   |  |               | (19,050 | ) |                  |   | (18,310 | )
|                                 |  |               |         |   |                  |   |         |  
|Total rental properties, net     |  | $             | 46,506  |   |                  | $ | 47,097  |  
|                                 |  |               |         |   |                  |   |         |  

As of March 31, 2010, the Partnerships rental properties included five office properties and seven retail
properties.

NOTE 4. LAND HELD FOR DEVELOPMENT

As of March 31, 2010, the Partnership owned approximately 14.7 acres of undeveloped land which is part of a landfill-monitoring program managed by
the City of San Bernardino (as discussed in Note 7). On an annual basis the partnership conducts a comprehensive review of all real estate assets in accordance with the guidance related to impairment of long lived assets, which indicates that asset
values should be analyzed whenever events or changes in circumstances indicate that the carrying value of a property may not be fully recoverable. Based on such analyses the Partnership concluded that this asset was impaired and accordingly the
asset was written down to net realizable value of zero, in 2008.

NOTE 5. NOTE PAYABLE AND LINE OF CREDIT

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



|                                                                                                                                                                                                                                                                            |  |                |        |                  |   |       
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ------ | ---------------- | - | ------
|                                                                                                                                                                                                                                                                            |  | March 
31,2010 |        | December 31,2009
|                                                                                                                                                                                                                                                                            | 
|Note payable collateralized by first deeds of trust on eight properties (discussed below). The note has a fixed interest rate of
5.46%, a maturity date of January 1, 2016, with a 30-year amortization requiring monthly payments of principal and interest totaling $136. |  | $              | 22,579 |                  | $ | 22,678
|Line of credit                                                                                                                                                                                                                                                              |  |                | 6,078  |                  |   | 6,078 
|                                                                                                                                                                                                                                                                            |  |                |        |                  |   |       
|Total note payable and line of credit                                                                                                                                                                                                                                       |  | $              | 28,657 |                  | $ | 28,756
|                                                                                                                                                                                                                                                                            |  |                |        |                  |   |       

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

The line of credit is collateralized by Carnegie Business Center and Vanderbilt Plaza and has a total availability of $10,000,000. The line of credit
requires monthly interest-only payments and bears variable interest at the 30-day LIBOR plus 2.75% (3.00% at March 31, 2010). The line of credit had an original maturity date of December 19, 2009, with two one year extension options, the
first of which was exercised so that the line now matures on December 19, 2010. As of March 31, 2010, $6,078,000 was outstanding under the line of credit.

The required principal payments on the Partnerships note payable for the next five years and thereafter, as of March 31, 2010, are as follows
(in thousands).



|           |  |   |       
|---------- |  | - | ------
|2010       |  | $ | 308   
|2011       |  |   | 429   
|2012       |  |   | 453   
|2013       |  |   | 479   
|2014       |  |   | 506   
|Thereafter |  |   | 20,404
|           |  |   |       
|Total      |  | $ | 22,579
|           |  |   |       



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##### Table of Contents

RANCON REALTY FUND IV,

A California Limited Partnership

Notes to Consolidated Financial Statements(Continued)

(Unaudited)



NOTE 6. RELATED PARTY TRANSACTIONS

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



|                                                                                                                                                                                                                                                                                                                                                                                               |  |                    |        |                |   |       
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ------ | -------------- | - | ------
|                                                                                                                                                                                                                                                                                                                                                                                               |  | Three Months Ended
|                                                                                                                                                                                                                                                                                                                                                                                               |  | March 
31,2010     |        | March 
31,2009
|                                                                                                                                                                                                                                                                                                                                                                                               | 
|(i) property management fees of 2.5% effective March 1, 2009, and 3% prior to that, of gross rental revenue which was
included in property operating expenses in the accompanying consolidated statements of operations                                                                                                                                                                        |  | $                  | 48,000 |                | $ | 69,000
|(ii) a construction services fee which was capitalized and included in rental properties on the accompanying consolidated balance
sheets                                                                                                                                                                                                                                                       |  |                    | 9,000  |                |   | 17,000
|(iii) an asset and Partnership management fee which was included in general and administrative expenses in the accompanying
consolidated statements of operations                                                                                                                                                                                                                              |  |                    | 62,000 |                |   | 71,000
|(iv) a leasing services fee which was included in the deferred costs on the accompanying consolidated balance
sheets                                                                                                                                                                                                                                                                           |  |                    | 18,000 |                |   | 49,000
|(v) a sales fee of 1% for all properties, as amended and effective March 1, 2009                                                                                                                                                                                                                                                                                                               |  |                    |       |                |   |      
|(vi) a financing services fee of 1% of the gross loan amount which was included in the deferred costs on the accompanying
consolidated balance sheets                                                                                                                                                                                                                                          |  |                    |       |                |   |      
|(vii) a development fee equal to 5% of the hard costs of the development project which was included in the construction in
progress and /or rental properties on the accompanying consolidated balance sheets, excluding the cost of the land, the development fee and the general contractors fee shall not exceed 11.5%, in the aggregate, of the hard costs of the
development fee project |  |                    |       |                |   |      
|(viii) data processing fees which were included in property operating expenses in the accompanying consolidated statements of
operations                                                                                                                                                                                                                                                       |  |                    | 20,000 |                |   | 18,000
|(ix) engineering fees which were included in property operating expenses in the accompanying consolidated statements of
operations                                                                                                                                                                                                                                                             |  |                    | 6,000  |                |   | 4,000 

As of March 31, 2010,
Glenborough Fund XV LLC, an affiliate of Glenborough LLC, held 7,388 or 11.22% of the Units, all of which were purchased from unaffiliated third parties.



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##### Table of Contents

RANCON REALTY FUND IV,

A California Limited Partnership

Notes to Consolidated Financial Statements(Continued)

(Unaudited)



NOTE 7. COMMITMENTS AND CONTINGENT LIABILITIES

Environmental Matters

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

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

General Uninsured Losses

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

Other Matters

The Partnership is contingently liable for subordinated real estate commissions payable to the General Partner in the aggregate amount of $643,000 at
March 31, 2010, for sales that were completed in previous years. The subordinated real estate commissions are payable only after the Limited Partners have received distributions equal to their original invested capital plus a cumulative
non-compounded return of 12% per annum on their adjusted invested capital. Since the circumstances under which these commissions would be payable are not met currently, the liability has not been recognized in the accompanying consolidated
financial statements; however, the amount will be recorded when and if it becomes payable.



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##### Table of Contents

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

The following discussion should be read in conjunction with our December 31, 2009 audited consolidated financial statements and the notes thereto
included in our latest Annual Report on Form 10-K.

Background

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

Overview

Tri-City Properties

As of March 31, 2010, our rental properties consist of five office and seven retail properties, aggregating approximately 555,000 rentable square
feet, of which 400,000 square feet are office space, and 155,000 square feet are retail space.



|                                           |  |                             |  |               
|------------------------------------------ |  | --------------------------- |  | --------------
|Property                                   |  | Type                        |  | Square Footage
|One Vanderbilt                             |  | Four-story office building  |  | 73,729        
|Carnegie Business Center I                 |  | Two office buildings        |  | 62,538        
|Service Retail Center                      |  | Two retail buildings        |  | 20,780        
|Promotional Retail Center                  |  | Four retail buildings       |  | 66,244        
|Northcourt Plaza                           |  | Two-story office building   |  | 77,589        
|(formerly known as Inland Regional Center)
|TGI Fridays                               |  | Restaurant                  |  | 9,956         
|Promotional Retail Center #2               |  | Retail building             |  | 39,123        
|Mimis Café                                |  | Restaurant                  |  | 6,455         
|Palm Court Retail #1                       |  | Retail building             |  | 5,053         
|Palm Court Retail #2                       |  | Retail building             |  | 7,433         
|Vanderbilt Plaza                           |  | Four-story office building  |  | 114,707       
|North River Place                          |  |                             |  |               
|(began operations January 2009)            |  | Three-story office building |  | 71,157        
|                                           |  |                             |  |               
|                                           |  |                             |  | 554,764       
|                                           |  |                             |  |               

As of March 31, 2010, the weighted average occupancy of the
twelve properties was 68%.

Promotional Retail Center #2 (formerly known as Circuit City) is currently unoccupied. The former tenant, Circuit
City, which occupied 100% of the Partnerships 39,123 square foot Promotional Retail Center #2, filed for bankruptcy in November 2008 and vacated the building in March 2009. Northcourt Plaza, which was unoccupied as a result of Inland Regional
Center vacating the building at the end of its lease in September 2009, is now 46% occupied due to two new leases signed with a tenant during the first quarter of 2010. North River Place, which was placed into service in January 2009, is 44%
occupied as of March 31, 2010. Management is actively marketing the vacant space in all of the buildings for lease.

Land

As of
March 31, 2010, we owned approximately 14.7 acres of unimproved land.

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



14



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##### Table of Contents

The Partnership conducts a comprehensive review of all real estate assets in accordance with the guidance
related to accounting for impairment, which indicates that asset values should be analyzed whenever events or changes in circumstances indicate that the carrying value of a property may not be fully recoverable. The process entails the analysis of
each asset for instances where the book value exceeds the estimated fair value. As a result of the analyses performed in 2008 the Partnership concluded that this asset was impaired and accordingly, in 2008, the asset was written down to fair value
and a non-cash impairment charge of $268,000 was recognized, as management does not believe development or sale of this asset is probable.

Results of Operations

Comparison of the three months ended March 31, 2010 to the three months ended March 31, 2009.

Revenue

Rental
revenue and other decreased $55,000, or 3%, for the three months ended March 31, 2010 compared to the three months ended March 31, 2009. This decrease was primarily due to the impact in 2010 of the vacancy at Promotional Retail #2 and
lower occupancy at Northcourt Plaza, which contributed $118,000 and $210,000 respectively, to the variance. Circuit City vacated Promotional Retail #2 in March 2009 and the building remains entirely vacant. Occupancy at Northcourt Plaza declined
from 100% during the first quarter of 2009 to 46% in the first quarter of 2010. This decline is the result of the single tenant, Inland Regional Center, vacating the building at the end of its lease in September 2009. Two new leases were executed
during the first quarter of 2010 such that nearly half of the building is now occupied. These decreases were partially offset by $216,000 of revenue received in the first quarter of 2010 from North River Place, which was unoccupied during the first
half of 2009, and $51,000 increased revenue at One Vanderbilt, due to an increase in occupancy from 74% to 86%.

Tenant reimbursements
decreased $48,000, or 16%, the three months ended March 31, 2010 compared to the three months ended March 31, 2009, primarily due to the vacancy at Northcourt Plaza in the first quarter of 2010.

Expenses

Property operating expenses increased $43,000, or 4%, for the three months ended March 31, 2010, compared to the three months ended March 31,
2009. This increase was due to higher property operating costs associated with North River Place and higher property taxes, primarily at Carnegie Business Center I. North River Places operating expenses were higher since nearly half of the
space is now occupied whereas in the first quarter of 2009 it was unoccupied. Property taxes increased at Carnegie Business Center I due to the property being reassessed by the County as a result of a deemed change of ownership. This occurred due to
the creation of a new entity for financing purposes, to meet lender requirements, for the line of credit, which was obtained in December 2008.

Depreciation and amortization decreased $868,000, or 50%, for the three months ended March 31, 2010, compared to the three months ended
March 31, 2009. The decrease was primarily due to the fact that the first quarter of 2009 included expenses associated with fully amortizing the remaining unamortized tenant improvements and leasing commissions of $880,000, related to the early
termination of the Circuit City lease in the first quarter of 2009.

General and administrative expenses decreased by $22,000, or 9%, for the
three months ended March 31, 2010, compared to the three months ended March 31, 2009. The decrease is due to lower tax and license fee payments of $37,000, partially offset by higher investor services expenses of $17,000.

Non-operating income / expenses

Interest expense decreased $68,000, or 16%, for the three months ended March 31, 2010, compared to the three months ended March 31, 2009, due to
higher amortization of loan fees during the first quarter of 2009, associated with the new line of credit, obtained in December 2008.

Liquidity and Capital Resources

As of March 31, 2010, we have cash and cash equivalents of $1,494,000.

As of March 31, 2010, our primary liability is a note payable of approximately $22,579,000, collateralized by properties with an aggregate net
carrying value of approximately $13,901,000. The note has a 10-year term requiring monthly principal and interest payments based on a 30-year amortization of approximately $136,000, bears a fixed interest rate of 5.46%, and has a maturity date of
January 1, 2016. The note is collateralized by Promotional Retail Center #2 (formerly known as Circuit City), Mimis Cafe, Palm Court Retail #1 and #2, Promotional Retail Center, Service Retail Center, TGI Fridays and One Vanderbilt.
This note also provides for a one-time loan assumption and release provisions for individual assets.

We have a line of credit, which is
collateralized by Carnegie Business Center and Vanderbilt Plaza and has a total availability of $10,000,000. The line of credit requires monthly interest-only payments and bears variable interest at the 30-day LIBOR plus 2.75% (3.00% at
March 31, 2010). The line of credit had an original maturity date of December 19, 2009, with two one-year extension options, the first of which was exercised such that the line now matures December 19, 2010. As of March 31, 2010,



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##### Table of Contents

$6,078,000 was outstanding under the line of credit. In order to extend the line of credit the Partnership
must be in compliance with the covenants concerning loan constant (prescribed ratio of property results of operations to total availability on the line), minimum net worth, debt to total assets and loan to value ratio, as well as comply with
notification requirements and pay an extension fee. The line of credit agreement contains a maximum availability covenant. The Partnership was in compliance with all covenants as at March 31, 2010.

We are contingently liable for subordinated real estate commissions payable to the General Partner in the aggregate amount of $643,000 at March 31,
2010, for sales that transpired in previous years. The subordinated real estate commissions are payable only after the limited partners have received distributions equal to their original invested capital plus a cumulative non-compounded return of
12% per annum on their adjusted invested capital. Since the conditions under which these commissions would be payable are not currently met, the liability has not been recognized in the accompanying consolidated financial statements; however,
the amount will be recorded when and if it becomes payable.

Cash Flows

For the three months ended March 31, 2010, cash used in operating activities was $50,000, as compared to cash provided by operating activities of
$548,000 for the same period in 2009. The change was due to changes in cash flows related to certain assets and liabilities. For the three months ended March 31, 2010, cash used in investing activities was $273,000, as compared to cash used in
investing activities of $115,000 for the same period in 2009. The change was due to higher capital expenditures in the first quarter of 2010 compared to the first quarter of 2009, primarily due to building improvements at Northcourt Plaza. For the
three months ended March 31, 2010, cash used in financing activities was $99,000, as compared to cash used in financing activities of $98,000 for the same period in 2009, primarily related to principal payments on the note payable.

Our expectation is that cash and cash equivalents as of March 31, 2010, together with cash from operations, sales and financing, and the line of
credit, will be adequate to meet our operating requirements on a short-term basis and for the reasonably foreseeable future. There can be no assurance that our results of operations will not fluctuate in the future and at times affect our ability to
meet operating requirements.

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

Contractual Obligations

As of March 31, 2010, our contractual obligations consist of the following (in thousands):



|                              |  |                 |       |              |   |              |  |                  |       |       |   |        |  |   |       
|----------------------------- |  | --------------- | ----- | ------------ | - | ------------ |  | ---------------- | ----- | ----- | - | ------ |  | - | ------
|                              |  | Less than 1year |       | 1 to 3 years |   | 3 to 5 years |  | More than 5years |       | Total
|Collateralized mortgage loans |  | $               | 308   |              | $ | 882          |  | $                | 985   |       | $ | 20,404 |  | $ | 22,579
|Interest on indebtedness      |  |                 | 919   |              |   | 2,387        |  |                  | 2,285 |       |   | 1,101  |  |   | 6,692 
|Line of credit                |  |                 | 6,078 |              |   |             |  |                  |      |       |   |       |  |   | 6,078 
|                              |  |                 |       |              |   |              |  |                  |       |       |   |        |  |   |       
|Total                         |  | $               | 7,305 |              | $ | 3,269        |  | $                | 3,270 |       | $ | 21,505 |  | $ | 35,349
|                              |  |                 |       |              |   |              |  |                  |       |       |   |        |  |   |       

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

Critical Accounting Policies

In the preparation of financial statements, we utilize certain critical accounting policies. There has been no change to our significant accounting
policies included in the notes to our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2009.

Inflation

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



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##### Table of Contents

Forward Looking Statements; Factors That May Affect Operating Results

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



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



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



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



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



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



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



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



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

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



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



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



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



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



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



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



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



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



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



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



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

The forward-looking statements in this Quarterly Report on Form 10-Q are subject to additional risks and uncertainties
further discussed under Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2009. We assume no obligation to update or supplement any forward looking-statement.

Risks of Litigation

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



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##### Table of Contents

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

Interest Rates

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

For debt obligations, the table below presents principal cash flows by expected maturity dates of a note payable with a fixed interest rate of 5.46% and
the line of credit with a maturity date of December 19, 2010 and variable interest rate of 3.00% as of March 31, 2010.



|                               |  |                        |       |      |   |      |  |      |     |      |   |            |  |       |     |  |   |        |  |   |       
|------------------------------ |  | ---------------------- | ----- | ---- | - | ---- |  | ---- | --- | ---- | - | ---------- |  | ----- | --- |  | - | ------ |  | - | ------
|                               |  | Expected Maturity Date |       |     
|                               |  | 2010                   |       | 2011 |   | 2012 |  | 2013 |     | 2014 |   | Thereafter |  | Total
|                               |  | (in thousands)        
|Collateralized fixed rate debt |  | $                      | 308   |      | $ | 429  |  | $    | 453 |      | $ | 479        |  | $     | 506 |  | $ | 20,404 |  | $ | 22,579
|Line of credit                 |  | $                      | 6,078 |      | $ |     |  | $    |    |      | $ |           |  | $     |    |  | $ |       |  | $ | 6,078 

As of March 31, 2010, we had
cash and cash equivalents of $1,494,000.



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

See items 4T.



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

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

There have not been any changes in the Partnerships internal control over financial reporting that occurred during the Partnerships fiscal
quarter ended March 31, 2010 that have materially affected, or are reasonably likely to materially affect, the Partnerships internal control over financial reporting.



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##### Table of Contents

PART II. OTHER INFORMATION



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

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



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

There are no material changes to any of the risk factors as previously disclosed in Item 1A. to Part I of the
Partnerships Annual Report on Form 10-K for the fiscal year ended December 31, 2009.



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

None.



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

None.



|Item 4. | [Removed and Reserved]
|------- | ----------------------

None.



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

None.



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



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



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##### Table of Contents

SIGNATURES

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



|      |  |              |  |  |  |                                  |  |                                      
|----- |  | ------------ |  |  |  | -------------------------------- |  | -------------------------------------
|      |  |              |  |  |  | RANCON REALTY FUND IV,          
|      |  |              |  |  |  | a California limited partnership
|      |  |              |  | 
|      |  |              |  |  |  | By:                              |  | Rancon Financial Corporation         
|      |  |              |  |  |  |                                  |  | a California corporation,            
|      |  |              |  |  |  |                                  |  | its General Partner                  
|      |  |              |  | 
|Date: |  | May 14, 2010 |  |  |  | By:                              |  | /s/    DANIEL L.
STEPHENSON          
|      |  |              |  |  |  |                                  |  | Daniel L. Stephenson, President      
|      |  |              |  | 
|Date: |  | May 14, 2010 |  |  |  | By:                              |  | /s/    DANIEL L.
STEPHENSON          
|      |  |              |  |  |  |                                  |  | Daniel L. Stephenson, General Partner



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##### Table of Contents

EXHIBIT INDEX

RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP



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



21