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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 September 30, 2009

OR



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

Commission file number: 0-14207





RANCON REALTY
FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP

(Exact name of registrant as specified in its charter)







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



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

(650) 343-9300

(Registrants telephone number, including area code)





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

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

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



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

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









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##### Table of Contents

INDEX

RANCON REALTY FUND IV,

A CALIFORNIA LIMITED
PARTNERSHIP



|           |  |                                                                                                       |  |         
|---------- |  | ----------------------------------------------------------------------------------------------------- |  | --------
|           |  |                                                                                                       |  | Page No.
|           |  | PART I FINANCIAL INFORMATION                                                                          |  |         
|           |  |                                                                                                      
|Item 1.    |  | Consolidated Financial Statements of Rancon Realty Fund IV (Unaudited):                               |  |         
|           |  |                                                                                                      
|           |  | Consolidated Balance Sheets as of September 30, 2009 and December 31, 2008                            |  | 3       
|           |  |                                                                                                      
|           |  | Consolidated Statements of Operations for the three and nine months ended September 30, 2009 and 2008 |  | 4       
|           |  |                                                                                                      
|           |  | Consolidated Statement of Partners Equity for the nine months ended September 30, 2009               |  | 5       
|           |  |                                                                                                      
|           |  | Consolidated Statements of Cash Flows for the nine months ended September 30, 2009 and 2008           |  | 6       
|           |  |                                                                                                      
|           |  | Notes to Consolidated Financial Statements                                                            |  | 7-13    
|           |  |                                                                                                      
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                 |  | 14-18   
|           |  |                                                                                                      
|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.    |  | Submission of Matters to a Vote of Security Holders                                                   |  | 19      
|           |  |                                                                                                      
|Item 5.    |  | Other Information                                                                                     |  | 19      
|           |  |                                                                                                      
|Item 6.    |  | Exhibits                                                                                              |  | 19      
|           | 
|SIGNATURES |  | 20                                                                                                   



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PART I. FINANCIAL INFORMATION



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

RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP

Consolidated Balance Sheets

(in thousands, except
units outstanding)

(Unaudited)



|                                                                                                                                  |  |                   |         |   |                  |   |         |  
|--------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                                  |  | September 30,2009 |         |   | December 31,2008 |  
|Assets                                                                                                                            |  |                   |         |   |                  |   |         |  
|Investments in real estate:                                                                                                       |  |                   |         |   |                  |   |         |  
|Rental properties                                                                                                                 |  | $                 | 62,910  |   |                  | $ | 52,575  |  
|Accumulated depreciation                                                                                                          |  |                   | (17,920 | ) |                  |   | (17,358 | )
|                                                                                                                                  |  |                   |         |   |                  |   |         |  
|Rental properties, net                                                                                                            |  |                   | 44,990  |   |                  |   | 35,217  |  
|                                                                                                                                  |  |                  
|Construction in progress and land held for development                                                                            |  |                   |        |   |                  |   | 11,388  |  
|                                                                                                                                  |  |                   |         |   |                  |   |         |  
|Total investments in real estate                                                                                                  |  |                   | 44,990  |   |                  |   | 46,605  |  
|                                                                                                                                  |  |                  
|Cash and cash equivalents                                                                                                         |  |                   | 2,045   |   |                  |   | 3,039   |  
|Accounts receivable, net                                                                                                          |  |                   | 11      |   |                  |   | 88      |  
|Deferred costs, net of accumulated amortization of $1,566 and $1,665 as of September 30, 2009 and December 31, 2008,
respectively |  |                   | 1,670   |   |                  |   | 1,964   |  
|Prepaid expenses and other assets                                                                                                 |  |                   | 1,312   |   |                  |   | 1,363   |  
|                                                                                                                                  |  |                   |         |   |                  |   |         |  
|Total assets                                                                                                                      |  | $                 | 50,028  |   |                  | $ | 53,059  |  
|                                                                                                                                  |  |                   |         |   |                  |   |         |  
|Liabilities and Partners Equity (Deficit)                                                                                        |  |                   |         |   |                  |   |         |  
|Liabilities:                                                                                                                      |  |                   |         |   |                  |   |         |  
|Note payable and line of credit                                                                                                   |  | $                 | 27,355  |   |                  | $ | 28,642  |  
|Accounts payable and other liabilities                                                                                            |  |                   | 524     |   |                  |   | 485     |  
|Prepaid rent                                                                                                                      |  |                   | 312     |   |                  |   | 281     |  
|                                                                                                                                  |  |                   |         |   |                  |   |         |  
|Total liabilities                                                                                                                 |  |                   | 28,191  |   |                  |   | 29,408  |  
|                                                                                                                                  |  |                   |         |   |                  |   |         |  
|Commitments and contingent liabilities (Note 7)                                                                                   |  |                   |         |   |                  |   |         |  
|                                                                                                                                  |  |                  
|Partners Equity (Deficit):                                                                                                       |  |                   |         |   |                  |   |         |  
|General Partner                                                                                                                   |  |                   | (837    | ) |                  |   | (819    | )
|Limited partners, 65,819 limited partnership units outstanding as of September 30, 2009 and December 31,
2008                     |  |                   | 22,674  |   |                  |   | 24,470  |  
|                                                                                                                                  |  |                   |         |   |                  |   |         |  
|Total partners equity                                                                                                            |  |                   | 21,837  |   |                  |   | 23,651  |  
|                                                                                                                                  |  |                   |         |   |                  |   |         |  
|Total liabilities and partners equity                                                                                            |  | $                 | 50,028  |   |                  | $ | 53,059  |  
|                                                                                                                                  |  |                   |         |   |                  |   |         |  

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



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RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP

Consolidated Statements of Operations

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

(Unaudited)



|                                                                 |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|---------------------------------------------------------------- |  | ------------------------------- | ------ | - | ------------------------------ | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                 |  | Three Months EndedSeptember 30, |        |   | Nine Months EndedSeptember 30, |  
|                                                                 |  | 2009                            |        |   | 2008                           |   |        | 2009 |  |   | 2008   |  
|Operating revenue                                                |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Rental revenue and other                                         |  | $                               | 1,929  |   |                                | $ | 2,110  |      |  | $ | 5,894  |   |  | $ | 6,506  |  
|Tenant reimbursements                                            |  |                                 | 292    |   |                                |   | 300    |      |  |   | 889    |   |  |   | 927    |  
|                                                                 |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Total operating revenue                                          |  |                                 | 2,221  |   |                                |   | 2,410  |      |  |   | 6,783  |   |  |   | 7,433  |  
|                                                                 |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Operating expenses                                               |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Property operating expenses                                      |  |                                 | 1,191  |   |                                |   | 1,060  |      |  |   | 3,204  |   |  |   | 2,876  |  
|Depreciation and amortization                                    |  |                                 | 825    |   |                                |   | 754    |      |  |   | 3,379  |   |  |   | 2,271  |  
|General and administrative                                       |  |                                 | 215    |   |                                |   | 209    |      |  |   | 716    |   |  |   | 734    |  
|                                                                 |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Total operating expenses                                         |  |                                 | 2,231  |   |                                |   | 2,023  |      |  |   | 7,299  |   |  |   | 5,881  |  
|                                                                 |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Operating income (loss)                                          |  |                                 | (10    | ) |                                |   | 387    |      |  |   | (516   | ) |  |   | 1,552  |  
|                                                                 |  |                                 |        |  
|Interest and other income                                        |  |                                 | 1      |   |                                |   | 16     |      |  |   | 3      |   |  |   | 19     |  
|Interest expense (including amortization of loan fees)           |  |                                 | (429   | ) |                                |   | (412   | )    |  |   | (1,301 | ) |  |   | (1,173 | )
|                                                                 |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Net (loss) income                                                |  | $                               | (438   | ) |                                | $ | (9     | )    |  | $ | (1,814 | ) |  | $ | 398    |  
|                                                                 |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Basic and diluted net (loss) income per limited partnership unit |  | $                               | (6.59  | ) |                                | $ | (0.12  | )    |  | $ | (27.28 | ) |  | $ | 4.41   |  
|                                                                 |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Weighted average number of limited partnership units outstanding |  |                                 | 65,819 |   |                                |   | 65,819 |      |  |   | 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 six months ended
September 30, 2009

(in thousands)

(Unaudited)



|                                        |  |                |      |   |                 |   |        |       |  |   |        |  
|--------------------------------------- |  | -------------- | ---- | - | --------------- | - | ------ | ----- |  | - | ------ | -
|                                        |  | GeneralPartner |      |   | LimitedPartners |   |        | Total | 
|Balance (deficit) at December 31, 2008  |  | $              | (819 | ) |                 | $ | 24,470 |       |  | $ | 23,651 |  
|                                        |  |                |     
|Net loss                                |  |                | (18  | ) |                 |   | (1,796 | )     |  |   | (1,814 | )
|                                        |  |                |      |   |                 |   |        |       |  |   |        |  
|Balance (deficit) at September 30, 2009 |  | $              | (837 | ) |                 | $ | 22,674 |       |  | $ | 21,837 |  
|                                        |  |                |      |   |                 |   |        |       |  |   |        |  

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)



|                                                                                         |  |                                |        |   |      |   |        |  
|---------------------------------------------------------------------------------------- |  | ------------------------------ | ------ | - | ---- | - | ------ | -
|                                                                                         |  | Nine Months EndedSeptember 30, |       
|                                                                                         |  | 2009                           |        |   | 2008 |  
|Cash flows from operating activities:                                                    |  |                                |        |   |      |   |        |  
|Net (loss) income                                                                        |  | $                              | (1,814 | ) |      | $ | 398    |  
|Adjustments to reconcile net (loss) income to net cash provided by operating activities: |  |                                |        |   |      |   |        |  
|Depreciation and amortization                                                            |  |                                | 3,379  |   |      |   | 2,271  |  
|Amortization of loan fees, included in interest expense                                  |  |                                | 234    |   |      |   | 53     |  
|Changes in certain assets and liabilities:                                               |  |                                |        |   |      |   |        |  
|Accounts receivable                                                                      |  |                                | 77     |   |      |   | 19     |  
|Deferred costs                                                                           |  |                                | (289   | ) |      |   | (235   | )
|Prepaid expenses and other assets                                                        |  |                                | 51     |   |      |   | 26     |  
|Accounts payable and other liabilities                                                   |  |                                | 39     |   |      |   | 293    |  
|Prepaid rent                                                                             |  |                                | 31     |   |      |   | 143    |  
|                                                                                         |  |                                |        |   |      |   |        |  
|Net cash provided by operating activities                                                |  |                                | 1,708  |   |      |   | 2,968  |  
|                                                                                         |  |                                |        |   |      |   |        |  
|Cash flows from investing activities:                                                    |  |                                |        |   |      |   |        |  
|Additions to real estate investments                                                     |  |                                | (1,412 | ) |      |   | (2,114 | )
|                                                                                         |  |                                |        |   |      |   |        |  
|Net cash used in investing activities                                                    |  |                                | (1,412 | ) |      |   | (2,114 | )
|                                                                                         |  |                                |        |   |      |   |        |  
|Cash flows from financing activities:                                                    |  |                                |        |   |      |   |        |  
|Note payable principal payments                                                          |  |                                | (287   | ) |      |   | (272   | )
|Draws on line of credit                                                                  |  |                                |       |   |      |   | 2,845  |  
|Repayments on line of credit                                                             |  |                                | (1,000 | ) |      |   |       |  
|Payment of deferred loan fees                                                            |  |                                | (3     | ) |      |   |       |  
|Distributions to limited partners                                                        |  |                                |       |   |      |   | (1,045 | )
|Distributions to General Partner                                                         |  |                                |       |   |      |   | (116   | )
|                                                                                         |  |                                |        |   |      |   |        |  
|Net cash (used in) provided by financing activities                                      |  |                                | (1,290 | ) |      |   | 1,412  |  
|                                                                                         |  |                                |        |   |      |   |        |  
|Net (decrease) increase in cash and cash equivalents                                     |  |                                | (994   | ) |      |   | 2,266  |  
|                                                                                         |  |                               
|Cash and cash equivalents at beginning of period                                         |  |                                | 3,039  |   |      |   | 1,881  |  
|                                                                                         |  |                                |        |   |      |   |        |  
|Cash and cash equivalents at end of period                                               |  | $                              | 2,045  |   |      | $ | 4,147  |  
|                                                                                         |  |                                |        |   |      |   |        |  
|Supplemental disclosure of cash flow information:                                        |  |                                |        |   |      |   |        |  
|Cash paid for interest                                                                   |  | $                              | 1,067  |   |      | $ | 1,112  |  
|                                                                                         |  |                                |        |   |      |   |        |  
|Supplemental disclosure of non-cash operating activities:                                |  |                                |        |   |      |   |        |  
|Write-off of fully depreciated rental property assets                                    |  | $                              | 2,465  |   |      | $ | 668    |  
|                                                                                         |  |                                |        |   |      |   |        |  
|Write-off of fully amortized deferred costs                                              |  | $                              | 685    |   |      | $ | 289    |  
|                                                                                         |  |                                |        |   |      |   |        |  

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 September 30, 2009, there were
65,819 Units (Units) outstanding.

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

Allocation of Net
Income and Net Loss

Allocation of net income and net loss is made pursuant to the terms of the Partnership Agreement. Generally, net
income from operations is allocated 90% to the limited partners and 10% to the General Partner. Net losses from operations are allocated 99% to the limited partners and 1% to the General Partner; 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 twelve month period following the date upon which such Unit was purchased from the Partnership and following the admission



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RANCON REALTY FUND IV,

A California Limited Partnership

Notes to
Consolidated Financial Statements(Continued)

(Unaudited)



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

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements present the consolidated financial position of the Partnership and its subsidiaries as of September 30, 2009 and
December 31, 2008, and the consolidated results of operations of the Partnership and its subsidiaries for the three and nine months ended September 30, 2009 and 2008 and cash flows of the Partnership for the nine months ended
September 30, 2009 and 2008. All significant intercompany transactions, receivables and payables have been eliminated in consolidation.

In the opinion of the General Partner, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal accruals) necessary to present fairly the consolidated financial position of the
Partnership as of September 30, 2009 and December 31, 2008, and the related consolidated statements of operations for the three and nine months ended September 30, 2009 and 2008, the consolidated statement of partners equity for
the nine months ended September 30, 2009 and the consolidated statement of cash flows for the nine months ended September 30, 2009 and 2008.

Use of Estimates

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

Rental Properties

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

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



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

Construction In Progress and Land Held for Development

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

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



8



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##### Table of Contents

RANCON REALTY FUND IV,

A California Limited Partnership

Notes to
Consolidated Financial Statements(Continued)

(Unaudited)



Cash and Cash Equivalents

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

Deferred Costs

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

Revenues

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

Net (Loss) Income Per Limited Partnership Unit

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

Effective January 1, 2009, the Company adopted the provisions of FASB Staff Position (FSP) No. EITF 07-4, Application of the Two-Class Method under
FASB Statement No. 128 to Master Limited Partnerships, (ASC 260-10), which improves the comparability of earnings per unit (EPU) calculations for master limited partnerships (MLPs) with incentive distribution rights (IDRs) in accordance
with Statement 128 and its related interpretations. As such, the distributions should impact the calculation of earnings per share (EPS) using the two-class method under SFAS No. 128, Earnings per Share. The provisions of FSP No.
EITF 07-4 have been applied retroactively to adjust the computation of EPS for the three and nine months ended September 30, 2008.

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



|                                                                                    |  |                            |    |   |                           |   |        |                    |  |   |                    |   |  |                |        |   |                 |   |     |                |  |   |                 |   |  |   |     |   |  |   |        |  
|----------------------------------------------------------------------------------- |  | -------------------------- | -- | - | ------------------------- | - | ------ | ------------------ |  | - | ------------------ | - |  | -------------- | ------ | - | --------------- | - | --- | -------------- |  | - | --------------- | - |  | - | --- | - |  | - | ------ | -
|                                                                                    |  | For the three months ended |    |   | For the nine months ended |  
|                                                                                    |  | September 30, 2009         |    |   | September 30, 2008        |   |        | September 30, 2009 |  |   | September 30, 2008 |  
|                                                                                    |  | GeneralPartner             |    |   | LimitedPartners           |   |        | GeneralPartner     |  |   | LimitedPartners    |   |  | GeneralPartner |        |   | LimitedPartners |   |     | GeneralPartner |  |   | LimitedPartners |  
|(Loss) Income allocation:                                                           |  |                            |    |   |                           |   |        |                    |  |   |                    |   |  |                |        |   |                 |   |     |                |  |   |                 |   |  |   |     |   |  |   |        |  
|Distributed income                                                                  |  |                            |   |   |                           |   |       |                    |  |   |                   |   |  |                |       |   |                 |   |    |                |  |   |                |   |  | $ | 116 |   |  | $ | 1,045  |  
|Allocation of excess                                                                |  |                            |   |   |                           |   |       |                    |  |   |                   |   |  |                |       |   |                 |   |    |                |  |   |                |   |  |   | (8  | ) |  |   | (755   | )
|                                                                                    |  |                            |    |   |                           |   |        |                   
|Net (loss) income                                                                   |  | $                          | (4 | ) |                           | $ | (434   | )                  |  | $ | (1                 | ) |  | $              | (8     | ) |                 | $ | (18 | )              |  | $ | (1,796          | ) |  | $ | 108 |   |  | $ | 290    |  
|                                                                                    |  |                            |    |   |                           |   |        |                   
|Weighted average number of limited partnership units outstanding during each period |  |                            |    |   |                           |   | 65,819 |                    |  |   |                    |   |  |                | 65,819 |   |                 |   |     |                |  |   | 65,819          |   |  |   |     |   |  |   | 65,819 |  
|                                                                                    |  |                            |    |   |                           |   |        |                   
|Basic and diluted (loss) income per limited partnership unit                        |  |                            |    |   |                           | $ | (6.59  | )                  |  |   |                    |   |  | $              | (0.12  | ) |                 |   |     |                |  | $ | (27.29          | ) |  |   |     |   |  | $ | 4.41   |  

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.



9



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##### Table of Contents

RANCON REALTY FUND IV,

A California Limited Partnership

Notes to
Consolidated Financial Statements(Continued)

(Unaudited)



Income Taxes

No provision for income taxes is included in the accompanying consolidated financial statements as the Partnerships results of operations are allocated to the partners for inclusion in their
respective income tax returns. Net (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

Three tenants (Inland Counties Regional Center, University of
Phoenix and Art Institute of California) represented a combined 45% and 42% of operating revenue for the nine months ended September 30, 2009 and 2008, respectively. 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, which therefore only had a small effect on revenue for the nine month period ended September 30, 2009.

Recently Issued Accounting Literature

In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162
(SFAS No. 168). SFAS 168 establishes the FASB Accounting Standards Codification (Codification or ASC) as the single source of authoritative U.S. generally accepted accounting principles (GAAP) recognized by the FASB to be
applied by nongovernmental entities. GAAP is not intended to be changed as a result of the FASBs Codification project, but it will change the way the guidance is organized and presented. As a result, these changes will have a significant
impact on how companies reference GAAP in their financial statements and in their accounting policies for financial statements issued for interim and annual periods ending after September 15, 2009. Effective September 30, 2009, the
Partnership has adopted the Codification, which did not have a material impact on the Partnerships financial statements.

Effective June
2009, the Company adopted SFAS No. 165, Subsequent Events(SFAS No. 165), (ASC 855-10) which sets forth general standards of 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. Adoption of SFAS No. 165 did not have a material impact on the Companys financial statements.

In October 2008, the FASB issued FASB Staff Position FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active (FSP 157-3) (ASC
820-10-35). FSP 157-3 clarified the application of FAS 157. FSP 157-3 clarified how the fair value of a financial asset is determined when the market for that financial asset is inactive. FSP 157-3 was effective upon issuance,
including prior periods for which financial statements had not been issued. The implementation of this standard did not have an impact on the Partnerships financial position, results of operations and cash flows.

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations(SFAS No. 141(R)) (ASC 805-10 to 50), which improves
the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. This Statement is effective for fiscal years beginning after
December 15, 2008. The adoption of SFAS No. 141(R) by the Partnership did not have a material impact on its financial position, results of operations or cash flows, except that transaction costs will be expensed when and as incurred.

Reference to 2008 audited consolidated financial statements

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



10



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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):



|                                 |  |                   |         |   |                  |   |         |  
|-------------------------------- |  | ----------------- | ------- | - | ---------------- | - | ------- | -
|                                 |  | September 30,2009 |         |   | December 31,2008 |  
|Land                             |  | $                 | 4,690   |   |                  | $ | 4,471   |  
|Buildings                        |  |                   | 48,918  |   |                  |   | 37,268  |  
|Building and tenant improvements |  |                   | 9,302   |   |                  |   | 10,836  |  
|                                 |  |                   |         |   |                  |   |         |  
|                                 |  |                   | 62,910  |   |                  |   | 52,575  |  
|Less: accumulated depreciation   |  |                   | (17,920 | ) |                  |   | (17,358 | )
|                                 |  |                   |         |   |                  |   |         |  
|Total rental properties, net     |  | $                 | 44,990  |   |                  | $ | 35,217  |  
|                                 |  |                   |         |   |                  |   |         |  

As of September 30, 2009, the Partnerships rental properties included five office
properties and seven retail properties.

NOTE 4. CONSTRUCTION IN PROGRESS AND LAND HELD FOR DEVELOPMENT

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



|                                                                                                                                                                                                                                       |  |                   |   |                  |   |       
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | - | ---------------- | - | ------
|                                                                                                                                                                                                                                       |  | September 30,2009 |   | December 31,2008
|14.7 acres of undeveloped land as of September 30, 2009 and December 31, 2008, plus a three-story multi-tenant 72,000
square-foot office building on approximately 1.6 acres of land with a cost basis of $219 as of December 31, 2008 |  | $                 |  |                  | $ | 11,388
|                                                                                                                                                                                                                                       |  |                   |   |                  |   |       

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

As of September 30, 2009, the Partnership owned approximately 14.7
acres of undeveloped land which is part of a landfill-monitoring program managed by the City of San Bernardino (as discussed in Note 7). In 2008, the partnership conducted a comprehensive review of all real estate assets in accordance with SFAS
No. 144, Accounting for the Impairment or Disposal of Long Lived Assets (ASC 360-10), which indicates that asset values should be analyzed whenever events or changes in circumstances indicate that the carrying value of a property may not
be fully recoverable. The process entailed the analysis of each asset for instances where the book value exceeded the estimated fair value. As a result of this analysis the Partnership concluded that this asset was impaired and accordingly the asset
was written down to fair value and a non-cash impairment charge of $268,000 was recognized, as management no longer believes development or sale of this asset is probable.

NOTE 5. NOTE PAYABLE AND LINE OF CREDIT

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



|                                                                                                                                                                                                                                                                            |  |                   |        |                  |   |       
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ------ | ---------------- | - | ------
|                                                                                                                                                                                                                                                                            |  | September 30,2009 |        | December 31,2008
|Note payable collateralized by first deeds of trust on eight properties (discussed below). The note has a fixed interest rate of
5.46%, a maturity date of January 1, 2016, with a 30-year amortization requiring monthly payments of principal and interest totaling $136. |  | $                 | 22,776 |                  | $ | 23,063
|Line of credit                                                                                                                                                                                                                                                              |  |                   | 4,579  |                  |   | 5,579 
|                                                                                                                                                                                                                                                                            |  |                   |        |                  |   |       
|Total note payable and line of credit                                                                                                                                                                                                                                       |  | $                 | 27,355 |                  | $ | 28,642
|                                                                                                                                                                                                                                                                            |  |                   |        |                  |   |       

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



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##### Table of Contents

RANCON REALTY FUND IV,

A California Limited Partnership

Notes to
Consolidated Financial Statements(Continued)

(Unaudited)



In the fourth quarter of 2008 the Partnership obtained a new line of credit, which is collateralized by
Carnegie Business Center and Vanderbilt Plaza and has a total availability of $10,000,000. The proceeds from the new line of credit were used to pay off the previous line of credit balance. The line of credit requires monthly interest-only payments,
has a maturity date of December 19, 2009, with two one-year extension options and bears variable interest at the 30-day LIBOR plus 2.75% (3.00% at September 30, 2009). As of September 30, 2009, $4,579,000 was outstanding under the
line of credit. In order to extend the line of credit the Partnership must be in compliance with the covenants concerning loan constant (prescribed ratio of property results of operations to total availability on the line), minimum net worth, debt
to total assets and loan to value ratio, as well as comply with notification requirements and pay an extension fee. The line of credit agreement contains a maximum availability covenant. The line of credit also contains a debt service coverage ratio
test which if not met, as calculated by the lender, may require the establishment of a lockbox account.

The required principal payments on
the Partnerships note payable for the next five years and thereafter, as of September 30, 2009, are as follows (in thousands).



|           |  |   |       
|---------- |  | - | ------
|2009       |  | $ | 99    
|2010       |  |   | 407   
|2011       |  |   | 429   
|2012       |  |   | 453   
|2013       |  |   | 479   
|Thereafter |  |   | 20,909
|           |  |   |       
|           | 
|Total      |  | $ | 22,776
|           |  |   |       

NOTE 6. RELATED PARTY TRANSACTIONS

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



|                                                                                                                                                                                                                                                                                                                                                                                               |  |                   |         |                   |   |        
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ------- | ----------------- | - | -------
|                                                                                                                                                                                                                                                                                                                                                                                               |  | Nine Months Ended
|                                                                                                                                                                                                                                                                                                                                                                                               |  | September 30,2009 |         | September 30,2008
|(i) property management fees of 2.5% effective March 1, 2009, and 3% prior to that, of gross rental revenue which was
included in property operating expenses in the accompanying consolidated statements of operations                                                                                                                                                                        |  | $                 | 180,000 |                   | $ | 235,000
|(ii) a construction services fee which was capitalized and included in rental properties on the accompanying consolidated balance
sheets                                                                                                                                                                                                                                                       |  |                   | 22,000  |                   |   | 13,000 
|(iii) an asset and Partnership management fee which was included in general and administrative expenses in the accompanying
consolidated statements of operations                                                                                                                                                                                                                              |  |                   | 196,000 |                   |   | 225,000
|(iv) a leasing services fee which was included in the deferred costs on the accompanying consolidated balance
sheets                                                                                                                                                                                                                                                                           |  |                   | 90,000  |                   |   | 137,000
|(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                                                                                                                                                                                                                                                       |  |                   | 55,000  |                   |   | 50,000 
|(ix) engineering fees which were included in property operating expenses in the accompanying consolidated statements of
operations                                                                                                                                                                                                                                                             |  |                   | 13,000  |                   |   | 11,000 



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##### Table of Contents

RANCON REALTY FUND IV,

A California Limited Partnership

Notes to
Consolidated Financial Statements(Continued)

(Unaudited)



As of September 30, 2009, Glenborough Fund XV LLC, an affiliate of Glenborough LLC, held 7,386 or
11.22% of the Units, all of which were purchased from unaffiliated third parties.

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 September 30, 2009, for sales that were completed in previous years. The subordinated real estate
commissions are payable only after the Limited Partners have received distributions equal to their original invested capital plus a cumulative non-compounded return of 12% per annum on their adjusted invested capital. Since the circumstances
under which these commissions would be payable are not met currently, the liability has not been recognized in the accompanying consolidated financial statements; however, the amount will be recorded when and if it becomes payable.

NOTE 8. SUBSEQUENT EVENTS

In preparing the
consolidated financial statements, the Partnership evaluated subsequent events occurring through November 16, 2009, the date these financial statements were issued, in accordance with SFAS No. 165 (ASC 855-10), and deemed that no
disclosures were necessary.



13



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##### Table of Contents

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

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

Background

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

Overview

Tri-City Properties

As of September 30, 2009, our rental properties consist of five office and seven retail properties, aggregating approximately 558,000 rentable square
feet, of which 403,000 square feet are office space, and 155,000 square feet are retail space.



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

As of September 30, 2009, the weighted average occupancy of the twelve properties was 59%.

Two properties, Promotional Retail Center #2 (formerly known as Circuit City) and Northcourt Plaza (formerly known as Inland Regional Center)
are currently unoccupied. Circuit City, which occupied 100% of the Partnerships 39,123 square foot Promotional Retail Center #2, filed for bankruptcy in November 2008 and vacated the building in March 2009. Inland Counties Regional Center
Inc., the tenant who occupied all of Northcourt Plaza, vacated the building towards in September 2009, at the end of its lease. In addition, North River Place, which was placed into service in January 2009, was 23% occupied as of September 30,
2009 and a second lease was signed for a further 14,971 square feet to start in November. The first tenant moved in during July and the second tenant moved in during November, bringing the occupancy to 44%. Management is actively marketing the
vacant space in all of the buildings for lease.

Land

As of September 30, 2009, we owned approximately 14.7 acres of unimproved land.

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

Approximately 14.7 acres of
the Tri-City land owned by the Partnership was part of a 27-acre landfill operated by the City of San Bernardino (the City) from approximately 1950 to 1960. This landfill incorporates two land parcels and part of a third parcel. In 1996,
the Santa Ana Regional Water Quality Control Board (SARWQCB), with regulatory jurisdiction over the closure and monitoring of landfills, determined that the City was primarily responsible for the landfill. Therefore, the City and the



14



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##### Table of Contents

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.

During the fourth quarter of 2008, the partnership conducted a comprehensive review of all real estate assets in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long Lived Assets (ASC 360-10), which
indicates that asset values should be analyzed whenever events or changes in circumstances indicate that the carrying value of a property may not be fully recoverable. The process entailed the analysis of each asset for instances where the book
value exceeded the estimated fair value. As a result of this analysis the Partnership concluded that this asset was impaired and accordingly the asset was written down to 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 and nine months ended September 30, 2009 to the three and nine months ended September 30, 2008.

Revenue

Rental revenue and other decreased $181,000, or 9% and $612,000 or 9%, for the three and nine months ended September 30, 2009 compared to the three and nine months ended September 30, 2008, respectively. These decreases were
primarily due to lower rental revenue, resulting from a decline in overall occupancy, partially offset by revenue derived from North River Place which began operations at the start of 2009. Occupancy for the same store properties was 65% as compared
to 88% as at September 30, 2009, and 2008, respectively. The largest occupancy declines were at Promotional Retail Center II due to Circuit City vacating the building, following their bankruptcy, and at One Vanderbilt where occupancy averaged
75% compared to over 90% for the nine months ended September 30, 2009 and 2008, respectively. These declines contributed $200,000 and $89,000 to the variance for the quarter and $352,000 and $281,000 for the nine month period ended
September 30 2009 and 2008, respectively. These decreases were partially offset by revenue of $106,000 at North River Place for both the three and nine month periods arising from the move in of the first tenant in July.

Tenant reimbursements decreased $8,000, or 3% and $38,000 or 4%, for the three and nine months ended September 30, 2009 compared to the three and nine
months ended September 30, 2008, respectively, primarily due to lower reimbursements at One Vanderbilt due to the lower occupancy, as noted above.

Expenses

Property operating expenses increased $131,000, or 12%, and $328,000, or 11%, for
the three and nine months ended September 30, 2009, compared to the three and nine months ended September 30, 2008, respectively. These increases were due to the expensing of property operating costs associated with start-up operations at
North River Place, which were previously capitalized, totaling $123,000 and $333,000 for the three and nine months ended September 30, 2009 respectively.

Depreciation and amortization increased $71,000, or 9%, and $1,108,000, or 49%, for the three and nine months ended September 30, 2009, compared to the three and nine months ended September 30,
2008, respectively. The variance for the third quarter was primarily due to depreciation of $113,000 associated with North River Place, which was placed into service at the beginning of 2009. The year-to-date variance was primarily due to fully
amortizing the remaining unamortized tenant improvements and leasing commissions of $880,000 related to the early termination of the Circuit City lease, and depreciation of $302,000 associated with North River Place.

General and administrative expenses increased slightly by $6,000, or 3%, and decreased $18,000, or 2%, for the three and nine months ended
September 30, 2009, compared to the three and nine months ended September 30, 2008, respectively. The increase for the three month period is due to higher audit fees (incurred in conjunction with preparing for the Partnerships
compliance with the SECs internal control audit requirements for smaller companies, prior to the SECs October 2009 announcement of extension of the compliance deadline until 2010), while the decrease for the nine month period is
primarily due to lower investor relations expense and asset management fees, partially offset by the higher audit fees.

Non-operating income / expenses

Interest expense increased $17,000, or 4%, and $128,000, or 11%, for the three and nine months
ended September 30, 2009, compared to the three and nine months ended September 30, 2008, respectively, due to the amortization of loan fees, associated with the new line of credit, obtained in December 2008, partially offset by lower
LIBOR rates, which reduced interest expense on the line of credit.



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##### Table of Contents

Liquidity and Capital Resources

As of September 30, 2009, we have cash and cash equivalents of $2,045,000.

As of September 30, 2009, our primary liability is a note payable of approximately $22,776,000, collateralized by properties with an aggregate net carrying value of approximately $14,001,000. 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, has a maturity date of December 19, 2009, with two one-year extension options and bears variable interest at the 30-day
LIBOR plus 2.75% (3.00% at September 30, 2009). As of September 30, 2009, $4,579,000 was outstanding under the line of credit. In order to extend the line of credit the Partnership must be in compliance with the covenants concerning loan
constant (prescribed ratio of property results of operations to total availability on the line), minimum net worth, debt to total assets and loan to value ratio, as well as comply with notification requirements and pay an extension fee. The line of
credit agreement contains a maximum availability covenant. The Partnership was in compliance with all covenants as at September 30, 2009.

We are contingently liable for subordinated real estate commissions payable to the General Partner in the aggregate amount of $643,000 at September 30, 2009, for sales that transpired in previous years. The subordinated real estate
commissions are payable only after the limited partners have received distributions equal to their original invested capital plus a cumulative non-compounded return of 12% per annum on their adjusted invested capital. Since the conditions under
which these commissions would be payable are not currently met, the liability has not been recognized in the accompanying consolidated financial statements; however, the amount will be recorded when and if it becomes payable.

Cash Flows

For the nine
months ended September 30, 2009, cash provided by operating activities was $1,708,000, as compared to cash provided by operating activities of $2,968,000 for the same period in 2008. The change was primarily due to a decrease in net income,
after adding back depreciation and amortization, together with a smaller increase in accounts payable and other liabilities, compared to prior year. For the nine months ended September 30, 2009, cash used in investing activities was $1,412,000,
as compared to cash used in investing activities of $2,114,000 for the same period in 2008. The change was due to the absence of any construction costs associated with North River Place in 2009. For the nine months ended September 30, 2009,
cash used in financing activities was $1,290,000, as compared to cash provided by financing activities of $1,412,000 for the same period in 2008. The change was primarily due to a $1,000,000 repayment on the line of credit in 2009 compared to
$2,845,000 of draws on the line on credit in 2008, partially offset by distributions to partners totaling $1,161,000, for the nine months ended September 30, 2008.

Our expectation is that cash and cash equivalents as of September 30, 2009, 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 September 30, 2009, our contractual obligations consist of the following (in thousands):



|                              |  |                 |       |             |   |             |  |                  |       |       |   |        |  |   |       
|----------------------------- |  | --------------- | ----- | ----------- | - | ----------- |  | ---------------- | ----- | ----- | - | ------ |  | - | ------
|                              |  | Less than 1year |       | 1 to 3years |   | 3 to 5years |  | More than 5years |       | Total
|Collateralized mortgage loans |  | $               | 99    |             | $ | 836         |  | $                | 932   |       | $ | 20,909 |  | $ | 22,776
|Interest on indebtedness      |  |                 | 310   |             |   | 2,433       |  |                  | 2,337 |       |   | 2,231  |  |   | 7,311 
|Line of credit                |  |                 | 4,579 |             |   |            |  |                  |      |       |   |       |  |   | 4,579 
|                              |  |                 |       |             |   |             |  |                  |       |       |   |        |  |   |       
|Total                         |  | $               | 4,988 |             | $ | 3,269       |  | $                | 3,269 |       | $ | 23,140 |  | $ | 34,666
|                              |  |                 |       |             |   |             |  |                  |       |       |   |        |  |   |       

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.



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##### Table of Contents

Critical Accounting Policies

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

Inflation

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

Forward Looking Statements; Factors That May Affect Operating Results

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



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



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



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



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



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



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



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



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



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

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



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



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



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



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



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



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



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



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



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##### Table of Contents

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



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



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

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

Risks of Litigation

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



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

Interest Rates

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

For debt obligations, the table below presents principal cash flows by expected maturity dates of a note payable with a fixed interest rate of 5.46% and the line of credit with a maturity date of
December 19, 2009 and variable interest rate of 3.00% as of September 30, 2009.



|                               |  |                        |       |      |   |      |  |      |     |      |   |            |  |       |     |  |   |        |  |   |       
|------------------------------ |  | ---------------------- | ----- | ---- | - | ---- |  | ---- | --- | ---- | - | ---------- |  | ----- | --- |  | - | ------ |  | - | ------
|                               |  | Expected Maturity Date |       |     
|                               |  | 2009                   |       | 2010 |   | 2011 |  | 2012 |     | 2013 |   | Thereafter |  | Total
|                               |  | (in thousands)        
|Collateralized fixed rate debt |  | $                      | 99    |      | $ | 407  |  | $    | 429 |      | $ | 453        |  | $     | 479 |  | $ | 20,909 |  | $ | 22,776
|Line of credit                 |  | $                      | 4,579 |      | $ |     |  | $    |    |      | $ |           |  | $     |    |  | $ |       |  | $ | 4,579 

As of September 30, 2009, we had cash and cash equivalents of $2,045,000.



|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 September 30, 2009 that have materially affected, or are reasonably likely to materially affect, the Partnerships internal control over financial reporting.



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##### Table of Contents

PART II. OTHER INFORMATION



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

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



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

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



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

None.



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

None.



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

None.



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

None.



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



|31 | Certification of Daniel L. Stephenson, Chief Executive Officer and Chief Financial Officer of General Partnership Pursuant to Rule 13a-14(a) of the Exchange Act.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



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



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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: November 16, 2009 |  | By:                              |  | /s/    DANIEL L.
STEPHENSON          
|                        |  |                                  |  | Daniel L. Stephenson, President      
|                        |  |                                 
|Date: November 16, 2009 |  | 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                                                                                                                                                                                                                                                                                                                                                                                                      
|           | 
|Exhibit 32 |  | Certification 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