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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2006

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 (State or other jurisdiction of incorporation or organization)                           |  | 33-0016355 (I.R.S. Employer Identification No.)
|                                                                                                    | 
|400 South El Camino Real, Suite 1100 San Mateo, California (Address of principal executive offices) |  | 94402-1708 (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 if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act of 1933, as amended.    Yes      No
X

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Act
of 1934, as amended.    Yes      No X

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.    YesX     No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    [X]

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

Large Accelerated Filer      Accelerated Filer 
    Non-accelerated filer X

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

No market for the Limited Partnership units
exists and therefore a market value for such units cannot be determined.

Total number of units outstanding as of May 15, 2006: 66,013



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INDEX

RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP



|           |  |                                                                                          |  |        
|---------- |  | ---------------------------------------------------------------------------------------- |  | -------
|           |  |                                                                                          |  | PageNo.
|PART I     |  | FINANCIAL INFORMATION                                                                    |  |        
|Item 1.    |  | Consolidated Financial Statements of Rancon Realty Fund IV (Unaudited):                  |  |        
|           |  | Consolidated Balance Sheets at March 31, 2006 and December 31, 2005                      |  | 3      
|           |  | Consolidated Statements of Operations for the three months ended March 31, 2006 and 2005 |  | 4      
|           |  | Consolidated Statement of Partners Equity for the three months ended March 31, 2006     |  | 5      
|           |  | Consolidated Statements of Cash Flows for the three months ended March 31, 2006 and 2005 |  | 6      
|           |  | Notes to Consolidated Financial Statements                                               |  | 7-12   
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations    |  | 13-17  
|Item 3.    |  | Qualitative and Quantitative Information About Market Risk                               |  | 17     
|Item 4.    |  | Controls and Procedures                                                                  |  | 17     
|           |  |                                                                                         
|PART II    |  | OTHER INFORMATION                                                                        |  |        
|Item 1.    |  | Legal Proceedings                                                                        |  | 18     
|Item 2.    |  | Unregistered Sales of Equity Securities and use of Proceeds                              |  | 18     
|Item 3.    |  | Defaults Upon Senior Securities                                                          |  | 18     
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                      |  | 18     
|Item 5.    |  | Other Information                                                                        |  | 18     
|Item 6.    |  | Exhibits                                                                                 |  | 18     
|           | 
|SIGNATURES |  | 19                                                                                      



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|PART I. | FINANCIAL INFORMATION
|------- | ---------------------



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

RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP

Consolidated Balance Sheets

(in thousands,
except units outstanding)

(Unaudited)



|                                                                                                                                |  |                |         |   |                   |   |         |  
|------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ------- | - | ----------------- | - | ------- | -
|                                                                                                                                |  | March 31, 2006 |         |   | December 31, 2005 |  
|Assets                                                                                                                          |  |                |         |   |                   |   |         |  
|Investments in real estate:                                                                                                     |  |                |         |   |                   |   |         |  
|Rental properties                                                                                                               |  | $              | 50,322  |   |                   | $ | 49,556  |  
|Accumulated depreciation                                                                                                        |  |                | (11,944 | ) |                   |   | (11,451 | )
|                                                                                                                                |  |                |         |   |                   |   |         |  
|Rental properties, net                                                                                                          |  |                | 38,378  |   |                   |   | 38,105  |  
|Land held for development                                                                                                       |  |                | 654     |   |                   |   | 476     |  
|                                                                                                                                |  |                |         |   |                   |   |         |  
|Total investments in real estate                                                                                                |  |                | 39,032  |   |                   |   | 38,581  |  
|Cash and cash equivalents                                                                                                       |  |                | 4,749   |   |                   |   | 10,019  |  
|Short-term investments                                                                                                          |  |                | 5,000   |   |                   |   |       |  
|Accounts receivable                                                                                                             |  |                | 191     |   |                   |   | 253     |  
|Deferred costs, net of accumulated amortization of $914 and $807 at March 31, 2006 and December 31, 2005,
respectively          |  |                | 2,303   |   |                   |   | 2,211   |  
|Prepaid expenses and other assets                                                                                               |  |                | 1,261   |   |                   |   | 1,211   |  
|                                                                                                                                |  |                |         |   |                   |   |         |  
|Total assets                                                                                                                    |  | $              | 52,536  |   |                   | $ | 52,275  |  
|                                                                                                                                |  |                |         |   |                   |   |         |  
|Liabilities and Partners Equity                                                                                                |  |                |         |   |                   |   |         |  
|Liabilities:                                                                                                                    |  |                |         |   |                   |   |         |  
|Note payable and line of credit                                                                                                 |  | $              | 24,020  |   |                   | $ | 24,100  |  
|Accounts payable and other liabilities                                                                                          |  |                | 850     |   |                   |   | 582     |  
|Prepaid rent                                                                                                                    |  |                | 114     |   |                   |   | 71      |  
|                                                                                                                                |  |                |         |   |                   |   |         |  
|Total liabilities                                                                                                               |  |                | 24,984  |   |                   |   | 24,753  |  
|                                                                                                                                |  |                |         |   |                   |   |         |  
|Commitments and contingent liabilities (Note 6)                                                                                 |  |                |         |   |                   |   |         |  
|Partners Equity:                                                                                                               |  |                |         |   |                   |   |         |  
|General Partner                                                                                                                 |  |                | (474    | ) |                   |   | (504    | )
|Limited partners, 66,230 and 66,892 limited partnership units outstanding at March 31, 2006 and December 31, 2005,
respectively |  |                | 28,026  |   |                   |   | 28,026  |  
|                                                                                                                                |  |                |         |   |                   |   |         |  
|Total partners equity                                                                                                          |  |                | 27,552  |   |                   |   | 27,522  |  
|                                                                                                                                |  |                |         |   |                   |   |         |  
|Total liabilities and partners equity                                                                                          |  | $              | 52,536  |   |                   | $ | 52,275  |  
|                                                                                                                                |  |                |         |   |                   |   |         |  

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



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RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP

Consolidated Statements of Operations

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

(Unaudited)



|                                                                                    |  |                              |        |   |      |   |        |  
|----------------------------------------------------------------------------------- |  | ---------------------------- | ------ | - | ---- | - | ------ | -
|                                                                                    |  | Three months ended March 31, |       
|                                                                                    |  | 2006                         |        |   | 2005 |  
|Operating Revenue Rental income                                                    |  | $                            | 2,249  |   |      | $ | 1,631  |  
|Operating Expenses                                                                  |  |                              |        |   |      |   |        |  
|Property Operating                                                                  |  |                              | 742    |   |      |   | 659    |  
|Depreciation and amortization                                                       |  |                              | 583    |   |      |   | 419    |  
|Expenses associated with undeveloped land                                           |  |                              | 35     |   |      |   | 34     |  
|General and administrative                                                          |  |                              | 247    |   |      |   | 217    |  
|                                                                                    |  |                              |        |   |      |   |        |  
|Total operating expenses Total operating expenses                                   |  |                              | 1,607  |   |      |   | 1,329  |  
|                                                                                    |  |                              |        |   |      |   |        |  
|Operating income                                                                    |  |                              | 642    |   |      |   | 302    |  
|Interest and other income                                                           |  |                              | 9      |   |      |   |       |  
|Interest expense                                                                    |  |                              | (349   | ) |      |   | (35    | )
|                                                                                    |  |                              |        |   |      |   |        |  
|Income from continuing operations                                                   |  |                              | 302    |   |      |   | 267    |  
|Income from discontinued operations                                                 |  |                              |       |   |      |   | 36     |  
|                                                                                    |  |                              |        |   |      |   |        |  
|Net income                                                                          |  | $                            | 302    |   |      | $ | 303    |  
|                                                                                    |  |                              |        |   |      |   |        |  
|Basic and diluted income per limited partnership unit:                              |  |                              |        |   |      |   |        |  
|Continuing operations                                                               |  | $                            | 4.09   |   |      | $ | 3.50   |  
|Discontinued operations                                                             |  |                              |       |   |      |   | 0.47   |  
|                                                                                    |  |                              |        |   |      |   |        |  
|                                                                                    |  | $                            | 4.09   |   |      | $ | 3.97   |  
|                                                                                    |  |                              |        |   |      |   |        |  
|Weighted average number of limited partnership units outstanding during each period |  |                              | 66,524 |   |      |   | 68,714 |  
|                                                                                    |  |                              |        |   |      |   |        |  

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



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RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP

Consolidated Statement of Partners Equity

For the three months ended March 31, 2006

(in thousands)

(Unaudited)



|                                        |  |                 |      |   |                 |   |        |       |  |   |        |  
|--------------------------------------- |  | --------------- | ---- | - | --------------- | - | ------ | ----- |  | - | ------ | -
|                                        |  | General Partner |      |   | LimitedPartners |   |        | Total | 
|Balance (deficit) at December 31, 2005  |  | $               | (504 | ) |                 | $ | 28,026 |       |  | $ | 27,522 |  
|Redemption of limited partnership units |  |                 |     |   |                 |   | (272   | )     |  |   | (272   | )
|Net income                              |  |                 | 30   |   |                 |   | 272    |       |  |   | 302    |  
|                                        |  |                 |      |   |                 |   |        |       |  |   |        |  
|Balance (deficit) at March 31, 2006     |  | $               | (474 | ) |                 | $ | 28,026 |       |  | $ | 27,552 |  
|                                        |  |                 |      |   |                 |   |        |       |  |   |        |  

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



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RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP

Consolidated Statements of Cash Flows

(in
thousands)

(Unaudited)



|                                                                                                                       |  |                             |        |   |      |   |      |  
|---------------------------------------------------------------------------------------------------------------------- |  | --------------------------- | ------ | - | ---- | - | ---- | -
|                                                                                                                       |  | Three monthsended March 31, |       
|                                                                                                                       |  | 2006                        |        |   | 2005 |  
|Cash flows from operating activities:                                                                                  |  |                             |        |   |      |   |      |  
|Net income                                                                                                             |  | $                           | 302    |   |      | $ | 303  |  
|Adjustments to reconcile net income to net cash provided by operating activities:                                      |  |                             |        |   |      |   |      |  
|Depreciation and amortization (including discontinued operations)                                                      |  |                             | 583    |   |      |   | 438  |  
|Amortization of loan fees, included in interest expense (including discontinued operations)                            |  |                             | 20     |   |      |   | 27   |  
|Changes in certain assets and liabilities:                                                                             |  |                             |        |   |      |   |      |  
|Accounts receivable                                                                                                    |  |                             | 62     |   |      |   | 23   |  
|Deferred costs                                                                                                         |  |                             | (194   | ) |      |   | (442 | )
|Prepaid expenses and other assets                                                                                      |  |                             | (146   | ) |      |   | (109 | )
|Accounts payable and other liabilities                                                                                 |  |                             | 248    |   |      |   | 163  |  
|Prepaid rent                                                                                                           |  |                             | 43     |   |      |   | 95   |  
|                                                                                                                       |  |                             |        |   |      |   |      |  
|Net cash provided by operating activities                                                                              |  |                             | 918    |   |      |   | 498  |  
|                                                                                                                       |  |                             |        |   |      |   |      |  
|Cash flows from investing activities:                                                                                  |  |                             |        |   |      |   |      |  
|Purchase of short-term investments                                                                                     |  |                             | (5,000 | ) |      |   |     |  
|Additions to real estate investments                                                                                   |  |                             | (773   | ) |      |   | (962 | )
|                                                                                                                       |  |                             |        |   |      |   |      |  
|Net cash used for investing activities                                                                                 |  |                             | (5,773 | ) |      |   | (962 | )
|                                                                                                                       |  |                             |        |   |      |   |      |  
|Cash flows from financing activities:                                                                                  |  |                             |        |   |      |   |      |  
|Line of credit draws                                                                                                   |  |                             |       |   |      |   | 450  |  
|Note payable principal payments                                                                                        |  |                             | (80    | ) |      |   | (39  | )
|Refund of loan application fee, net                                                                                    |  |                             | 88     |   |      |   |     |  
|Redemption of limited partnership units                                                                                |  |                             | (266   | ) |      |   | (167 | )
|Distributions to General Partner                                                                                       |  |                             | (157   | ) |      |   | (113 | )
|                                                                                                                       |  |                             |        |   |      |   |      |  
|Net cash (used for) provided by financing activities                                                                   |  |                             | (415   | ) |      |   | 131  |  
|                                                                                                                       |  |                             |        |   |      |   |      |  
|Net decrease in cash and cash equivalents                                                                              |  |                             | (5,270 | ) |      |   | (333 | )
|Cash and cash equivalents at beginning of period                                                                       |  |                             | 10,019 |   |      |   | 701  |  
|                                                                                                                       |  |                             |        |   |      |   |      |  
|Cash and cash equivalents at end of period                                                                             |  | $                           | 4,749  |   |      | $ | 368  |  
|                                                                                                                       |  |                             |        |   |      |   |      |  
|Supplemental disclosure of cash flow information:                                                                      |  |                             |        |   |      |   |      |  
|Cash paid for interest (net of capitalized interest of $0 and $161 at March 31, 2006 and March 31, 2005,
respectively) |  | $                           | 329    |   |      | $ | 67   |  
|                                                                                                                       |  |                             |        |   |      |   |      |  
|Supplemental disclosure of non-cash financing activities:                                                              |  |                             |        |   |      |   |      |  
|Redemption of limited partnership units                                                                                |  | $                           | 199    |   |      | $ | 87   |  
|Redemption payable                                                                                                     |  |                             | (199   | ) |      |   | (87  | )
|                                                                                                                       |  |                             |        |   |      |   |      |  
|                                                                                                                       |  | $                           |       |   |      | $ |     |  
|                                                                                                                       |  |                             |        |   |      |   |      |  
|Premium paid on redemption of limited partnership units                                                                |  | $                           | 171    |   |      | $ |     |  
|Premium paid on redemption of limited partnership units                                                                |  |                             | (171   | ) |      |   |     |  
|                                                                                                                       |  |                             |        |   |      |   |      |  
|                                                                                                                       |  | $                           |       |   |      | $ |     |  
|                                                                                                                       |  |                             |        |   |      |   |      |  

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 selling 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 (DLS) and Rancon Financial Corporation (RFC), hereinafter collectively referred to as the
General Partner. RFC is wholly owned by DLS. The Partnership has no employees.

During the three months ended March 31, 2006, a total of
662 units of limited partnership interest (Units) were redeemed at an average price of $670. As of March 31, 2006, there were 66,230 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

Allocations of net
income and net losses are made pursuant to the terms of the Partnership Agreement. Generally, net income from operations is allocated 90% to the limited partners and 10% to the General Partner. Net losses from operations are allocated 99% to the
limited partners and 1% to the General Partner until such time as a partners capital account is reduced to zero. Additional losses will be allocated entirely to those partners with positive capital account balances until such balances are
reduced to zero.

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

Net losses other than net losses from operations are 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 deficit that may exist in its capital account after allocation of gains and losses from the sale of the final property owned by the Partnership, but prior to any
liquidating distributions being made to the partners.

Distribution of Cash

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

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

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



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RANCON REALTY FUND IV

A California Limited Partnership

Notes to Consolidated Financial
Statements(Continued)

(Unaudited)



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

Management Agreement

In July 2004, the Partnership extended its management relationship with Glenborough Properties L.P. (Glenborough). Commencing on January 1, 2005 and set to expire on December 31, 2006, the Partnership engaged
Glenborough to perform services for the following fees: (i) a property management fee of 3% of gross rental revenue; (ii) a construction services fee per certain schedules ($0 and $6,500 in the first quarter of 2006 and 2005,
respectively); (iii) a specified asset and Partnership management fee of $300,000 per year with reimbursements of certain expenses and consulting service fees ($75,000 and $73,000 in first quarter of 2006 and 2005, respectively); (iv) a
leasing services fee ($171,000 and $0 in the first quarter of 2006 and 2005, respectively); (v) a sales fee of 2% for improved properties and 4% for unimproved properties; (vi) a financing services fee of 1% of gross loan amount; and
(vii) a development fee equal to 5% of the hard costs of the development project ($69,000 and $51,000 in the first quarter of 2006 and 2005, respectively). The hard costs exclude 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 project.

The new management agreement has resulted in
reduced asset and Partnership services fee from 2004 to 2005, as well as a reduction of 2% in the property management fee from 5% to 3%.

Risks and
Uncertainties

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



|Note 2. | SIGNIFICANT ACCOUNTING POLICES
|------- | ------------------------------

Basis of Accounting

The accompanying consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Principles in the United
States of America (U.S. GAAP). They include the accounts of wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.

In the opinion of RFC, the General Partner, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal accruals) necessary to present fairly the consolidated
financial position of the Partnership as of March 31, 2006 and December 31, 2005, the related consolidated statements of operations for the three months ended March 31, 2006 and 2005, partners equity for the three months ended
March 31, 2006, and cash flows for the three months ended March 31, 2006 and 2005.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the results of operations during the reporting period. Actual results could differ from those estimates.

Consolidation

In April 1996, the Partnership formed RRF IV
Tri-City Limited Partnership, a Delaware limited partnership (RRF IV Tri-City). The limited partner of RRF IV Tri-City is the Partnership and the general partner is RRF IV, Inc. (RRF IV, Inc.), a corporation wholly-owned by
the Partnership. Since the Partnership owns 100% of RRF IV, Inc. and indirectly owns 100% of RRF IV Tri-City, the financial statements of RRF IV, Inc. and RRF IV Tri-City have been consolidated with those of the Partnership. In November 2005, the
Partnership formed Rancon Realty Fund IV Subsidiary LLC, a Delaware limited liability company (RRF IV SUB) which is wholly owned by the Partnership. Since RRF IV SUB is wholly owned by the Partnership, the financial statements of RRF IV
SUB have been consolidated with those of the Partnership. All intercompany balances and transactions have been eliminated in the consolidation.



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RANCON REALTY FUND IV

A California Limited Partnership

Notes to Consolidated Financial
Statements(Continued)

(Unaudited)



Rental Properties

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

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



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

Land Held for Development

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

Cash and Cash Equivalents

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

Short-term Investments

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

Fair Value of Financial Instruments

For certain financial instruments, including cash and cash equivalents, short-term investments, accounts receivable, accounts payable and other liabilities and line of
credit payable, recorded amounts approximate fair value due to the relatively short maturity period. Based on interest rates available to the Partnership for debt with comparable maturities and other terms, the estimated fair value of the
Partnerships collateralized fixed rate note payable as of March 31, 2006 and December 31, 2005 was approximately $23,124,000 and $24,272,000, respectively.

Deferred Costs

Deferred loan fees are capitalized and amortized on a straight-line basis over the life of the
related loan and 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. The reimbursements from tenants for real estate taxes are recognized
as revenue in the period the expenses are incurred. Other recoverable operating expenses are recognized as revenue on an estimated basis, and the



9



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##### Table of Contents

RANCON REALTY FUND IV

A California Limited Partnership

Notes to Consolidated Financial
Statements(Continued)

(Unaudited)



differences between estimated and actual amounts are recognized as revenue in the subsequent year when the amounts are collected.

Sales of Real Estate

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

Net Income/(Loss) Per Limited Partnership Unit

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

Income Taxes

No provision for income taxes is included in the
accompanying consolidated financial statements as the Partnerships results of operations are allocated to the partners for inclusion in their respective income tax returns. Net income (loss) and partners equity (deficit) for financial
reporting purposes will differ from the Partnership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

One tenant represented 16% and 20% of rental income as of March 31, 2006 and 2005, respectively.

Reclassifications

Certain prior year balances have been
reclassified to conform to the current year presentation, with no effect on consolidated net income.

Reference to 2005 audited consolidated
financial statements

These unaudited consolidated financial statements should be read in conjunction with the notes to consolidated financial
statements included in the December 31, 2005 audited consolidated financial statements on Form 10-K.



|Note 3. | INVESTMENTS IN REAL ESTATE
|------- | --------------------------

Rental properties consisted of the
following at March 31, 2006 and December 31, 2005 (in thousands):



|                               |  |               |         |   |                  |   |         |  
|------------------------------ |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                               |  | March 31,2006 |         |   | December 31,2005 |  
|Land                           |  | $             | 4,471   |   |                  | $ | 4,471   |  
|Buildings                      |  |               | 37,208  |   |                  |   | 36,995  |  
|Tenant improvements            |  |               | 8,643   |   |                  |   | 8,090   |  
|                               |  |               |         |   |                  |   |         |  
|                               |  |               | 50,322  |   |                  |   | 49,556  |  
|Less: accumulated depreciation |  |               | (11,944 | ) |                  |   | (11,451 | )
|                               |  |               |         |   |                  |   |         |  
|Total rental properties, net   |  | $             | 38,378  |   |                  | $ | 38,105  |  
|                               |  |               |         |   |                  |   |         |  

As of March 31, 2006, the Partnerships rental properties included four office buildings and seven
retail buildings. During the first quarter of 2006, the tenant improvements increased primarily due to increases in occupancy at Vanderbilt Plaza and Carnegie Business Center I.



10



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##### Table of Contents

RANCON REALTY FUND IV

A California Limited Partnership

Notes to Consolidated Financial
Statements(Continued)

(Unaudited)



|Note 4. | LAND HELD FOR DEVELOPMENT
|------- | -------------------------

Land held for development consisted
of the following at March 31, 2006 and December 31, 2005 (in thousands):



|                                                                                                   |  |               |     |                  |   |    
|-------------------------------------------------------------------------------------------------- |  | ------------- | --- | ---------------- | - | ---
|                                                                                                   |  | March 31,2006 |     | December 31,2005
|Tri-City (approximately 16 acres of land as of March 31, 2006 and December 31, 2005, respectively) |  | $             | 654 |                  | $ | 476
|                                                                                                   |  |               |     |                  |   |    

As of March 31, 2006, the Partnership owned approximately 16 acres of undeveloped land. A conceptual plan for
a building is currently being designed on an approximate one-acre site. The plan includes a three-story multi-tenant building with an estimate of 75,000 gross square feet of office space. The remaining 15 acres are part of a landfill-monitoring
program managed by the City of San Bernardino (as discussed in Note 6 below).



|Note 5. | NOTE PAYABLE AND LINE OF CREDIT
|------- | -------------------------------

Note payable and line of credit
as of March 31, 2006 and December 31, 2005 were as follows (in thousands):



|                                                                                                                                                                                                                                                                                               |  |               |        |                  |   |       
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------ | ---------------- | - | ------
|                                                                                                                                                                                                                                                                                               |  | March 31,2006 |        | December 31,2005
|Note payable collateralized by first deeds of trust on eight properties (discussed below). The note has a fixed interest rate of 5.46%, a
maturity date of January 1, 2016, and a 10-year term with a 30-year amortization requiring monthly payments of principal and interest totaling $136. |  | $             | 24,020 |                  | $ | 24,100
|                                                                                                                                                                                                                                                                                               |  |               |        |                  |   |       

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

The Partnership has a line of credit that was unused as of March 31, 2006 and December 31, 2005, respectively. The line of credit which is collateralized by IRC, has a total availability of $5 million,
monthly interest-only payments, a maturity date of April 15, 2007, and bears interest at the Prime Rate (7.75% and 7.25% as of March 31, 2006 and December 31, 2005, respectively).

The annual maturities of the Partnerships note payable as of March 31, 2006 is as follows (in thousands):



|           |  |   |       
|---------- |  | - | ------
|2006       |  | $ | 247   
|2007       |  |   | 345   
|2008       |  |   | 365   
|2009       |  |   | 385   
|2010       |  |   | 407   
|Thereafter |  |   | 22,271
|           |  |   |       
|Total      |  | $ | 24,020
|           |  |   |       



|Note 6. | 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 15 acres of the Tri-City land owned by the Partnership was part of a landfill operated by the City of San Bernardino (the City) from approximately 1950 to 1960. The City is responsible for
the landfill and the gas-monitoring program as prescribed by the Santa Ana Regional Water Quality Control Board (SARWQCB). Under a Limited Access Agreement with the Partnership, methane monitoring is handled directly by the City.
Although there is no requirement by the SARWQCB or the County of San Bernardino (the County) for Clean Closure, which would include removal of all landfill, the



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##### Table of Contents

RANCON REALTY FUND IV

A California Limited Partnership

Notes to Consolidated Financial
Statements(Continued)

(Unaudited)



City is required to place both a Cover Improvement System and a Gas Extraction System at the site. The City started the installation
of the Cover Improvement System in October 2004. The completion of the Cover Improvement System was completed in the third quarter of 2005. A plan was submitted by the City to the County for review and approval for the Gas Extraction System. In the
last quarter of 2005, the plan was approved and a pilot system to test the viability of the Gas Extraction System was installed. A permanent carbon system is in the process of being reviewed by the City, the County and the SARWQCB. It will take four
months to install the permanent Gas Extraction Systems after it is approved by the City. The City should cap the Gas Extraction System at the site after it is completed. Future development of this site remains uncertain. No assurance can be made
that circumstances will not arise which could impact the Partnerships responsibility related to the land.

General Uninsured Losses

The Partnership carries property and liability insurance with respect to the properties. This coverage has
policy specification and insured limits customarily carried for similar properties. However, certain types of losses (such as from earthquakes and floods) may be either uninsurable or not economically insurable. Should the properties sustain damage
as a result of an earthquake or flood, the Partnership may incur losses due to insurance deductibles, co-payments on insured losses or uninsured losses. Additionally, the Partnership has elected to obtain insurance coverage for certified acts
of terrorism as defined in the Terrorism Risk Insurance Act of 2003; however, our policies of insurance may not provide coverage for other acts of terrorism. Any losses from such other acts of terrorism might be uninsured. Should an uninsured
loss occur, the Partnership could lose some or all of its capital investment, cash flow and anticipated profits related to the properties.

Other
Matters

The Partnership is contingently liable for subordinated real estate commissions payable to the General Partner in the aggregate amount of
$643,000 at March 31, 2006, 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 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.



|Note 7. | SUBSEQUENT EVENTS
|------- | -----------------

On April 25, 2006, Glenborough, the
Partnerships asset and property manager, purchased a total of 2,983 units of limited partnership interest from an unaffiliated third party. As a result of that purchase, Glenborough became a related party of the Partnership.

On April 17, 2006, Mackenzie Patterson Fuller, LP and various other bidders listed therein (the Bidders) filed a Tender Offer Statement with the
Securities and Exchange Commission, relating to an offer to purchase up to 6000 units of limited partnership interest in the Partnership, at a price of $675 per unit. In response, on May 1, 2006, the Partnership filed a
Solicitation/Recommendation Statement on Schedule 14D-9 relating to the Tender Offer Statement, and the Partnership has mailed to its limited partners a letter (the Response Letter) setting forth its statement of position with respect to
the Bidders offer to purchase.

Effective May 1, 2006, the Partnership entered into a Third Amendment to Property Management and Services
Agreement with Glenborough Properties, L.P., whereby the term of the Management Agreement was extended from December 31, 2006 until December 31, 2008. All other terms and conditions remained unchanged.



12



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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 the Partnerships December 31, 2005 audited consolidated financial statements and the notes thereto.

Background

The Partnerships initial acquisition of
property between December 1984 and August 1985 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 (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 the Partnership and Rancon Realty Fund V (Fund V),
a partnership sponsored by the General Partner of the Partnership.

Overview

Tri-City Properties

As of March 31, 2006, the Partnerships rental properties include four office
and seven retail buildings, aggregating approximately 486,000 rentable square feet. The Partnership has approximately 331,000 square feet of office space with an average occupancy rate of 90% and approximately 155,000 square feet of retail space
which is fully occupied. Carnegie Business Center I, formerly an industrial flex building, was repositioned to an office building.



|                           |  |                            |  |            
|-------------------------- |  | -------------------------- |  | -----------
|Property                   |  | Type                       |  | Square Feet
|One Vanderbilt             |  | Four-story office building |  | 73,729     
|Carnegie Business Center I |  | Two office buildings       |  | 62,540     
|Service Retail Center      |  | Two retail buildings       |  | 20,780     
|Promotional Retail Center  |  | Four retail buildings      |  | 66,244     
|Inland Regional Center     |  | Two-story office building  |  | 81,079     
|TGI Fridays               |  | Restaurant                 |  | 9,386      
|Circuit City               |  | Retail building            |  | 39,123     
|Mimis Café                |  | Restaurant                 |  | 6,455      
|Palm Court Retail #1       |  | Retail building            |  | 5,022      
|Palm Court Retail #2       |  | Retail building            |  | 7,433      
|Vanderbilt Plaza           |  | Four-story office building |  | 114,170    

As of March 31, 2006, the weighted average occupancy of the eleven rental properties was 93%.

As of March 31, 2006, there were nine tenants at Tri-City occupying substantial portions of leased rental space. These nine tenants, in the aggregate, occupied
approximately 331,000 square feet of the 486,000 total rentable square feet at Tri-City and accounted for approximately 68% of the rental income of the Partnership during the first quarter of 2006.

Tri-City Land

As of March 31, 2006, the Partnership
owned approximately 16 acres of undeveloped land. A conceptual plan for a building is currently being designed on an approximate one-acre parcel of land. The plan includes a three-story multi-tenant building with an estimate of 75,000 gross square
feet of office space. The Partnership intends to develop this one-acre site to generate more operating income for the Partnership. The remaining 15 acres of land was part of a landfill operated by the City of San Bernardino (the City)
from approximately 1950 to 1960. The City is responsible for the landfill and the gas-monitoring program as prescribed by the Santa Ana Regional Water Quality Control Board (SARWQCB). Under a Limited Access Agreement with the
Partnership, methane monitoring is handled directly by the City. Although there is no requirement by the SARWQCB or the County of San Bernardino (the County) for Clean Closure, which would include removal of all landfill, the City is
required to place both a Cover Improvement System and a Gas Extraction System at the site. The City started the installation of the Cover Improvement System in October 2004. The completion of the Cover Improvement System was
completed in the third quarter of 2005. A plan was submitted by the City to the County for review and approval for the Gas Extraction System. In the last quarter of 2005, the plan was approved and a pilot system to test the viability of the Gas
Extraction System was installed. A permanent carbon system is in the process of being reviewed by the City, the County and the SARWQCB. It will take four months to install the permanent Gas Extraction Systems after the City approves it. The City
should cap the Gas Extraction System at the site after it is completed. Future development of this site remains uncertain. No assurance can be made that circumstances will not arise which could impact the Partnerships responsibility related to
the land.



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##### Table of Contents

Financing

The
Partnerships Tri-City Properties are owned by the Partnership, in fee, subject to the following first deeds of trust as of March 31, 2006:



|                    |  |                                  |  |               
|------------------- |  | -------------------------------- |  | --------------
|Collateral          |  | Eight properties (details below) |  | IRC           
|Form of debt        |  | Note payable                     |  | Line of credit
|Availability        |  |                                |  | $5,000,000    
|Outstanding balance |  | $24,020,000                      |  | $0            
|Interest Rate       |  | 5.46%                            |  | Prime rate    
|Monthly payment     |  | $136,000                         |  | Interest only 
|Maturity date       |  | 1/1/16                           |  | 4/15/07       

The note payable is collateralized by Circuit City, Mimis Cafe, Palm Court Retail #1 and #2, Promotional
Retail Center, Service Retail Center, TGI Fridays and One Vanderbilt.

Results of Operations

Comparison of the three months ended March 31, 2006 to the three months ended March 31, 2005.

Revenue

Rental income for the three months ended March 31, 2006
increased $618,000, or 38%, compared to the three months ended March 31, 2005, primarily due to an increase in occupancy at Vanderbilt Plaza, which commenced operations in February 2006, and Carnegie Business Center I.

Expenses

Operating expenses increased $83,000, or 13%, for the three
months ended March 31, 2006, compared to the three months ended March 31, 2005, primarily due to the commencement of operations at Vanderbilt Plaza in February 2006.

Depreciation and amortization increased $164,000, or 39%, for the three months ended March 31, 2006, compared to the three months ended March 31, 2005, primarily due to depreciation commencing at Vanderbilt
Plaza and amortization of additional lease commissions.

General and administrative expenses increased $30,000, or 14%, for the three months ended
March 31, 2006, compared to the three months ended March 31, 2005, primarily due to an increase in investor service expenses related to an increase in correspondence with investors.

Non-operating income / expenses

Interest and other income increased
$9,000, or 100%, for the three months ended March 31, 2006, compared to the three months ended March 31, 2005, primarily due to an increase in average invested cash balance.

Interest expense increased $314,000, or 897%, for the three months ended March 31, 2006, compared to the three months ended March 31, 2005, primarily due to an increase in financing, offset by a decrease in
interest capitalized for Vanderbilt Plaza during the first quarter of 2005.

Income from discontinued operations for the three month ended March 31,
2005 reflected the net operating income from the sold property leased to Office Max in June 2005.

Liquidity and Capital Resources

As of March 31, 2006, the Partnership had cash and cash equivalents of $4,749,000.

The Partnerships primary liability at March 31, 2006 is a note payable of approximately $24,020,000, collateralized by properties with an aggregate net book
value of approximately $21,225,495. The note has a 10-year term with a 30-year amortization requiring monthly principal and interest payments of approximately $136,000, bears a fixed interest rate of 5.46%, and has a maturity date of January 1,
2016. The note is collateralized by Circuit City, Mimis Cafe, Palm Court Retail #1 and #2, Promotional Retail Center, Service Retail Center, TGI Fridays and One Vanderbilt. This note also provides a one-time loan assumption and a release
provision for an individual asset.

The remaining line of credit, which is collateralized by IRC, was unused as of March 31, 2006 and
December 31, 2005, respectively. The line of credit has a total availability of $5 million, monthly interest-only payments, a maturity date of April 15, 2007, and bears interest at the Prime Rate (7.75% and 7.25% as of March 31, 2006
and December 31, 2005, respectively).

The Partnership is contingently liable for subordinated real estate commissions payable to the General Partner
in the aggregate



14



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##### Table of Contents

amount of $643,000 at March 31, 2006, 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.

Operationally, the Partnerships primary source of funds consists of cash provided by its 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 the Partnerships cash reserves, pending use in the development of properties or distribution to the
partners.

Contractual Obligations

As of March 31, 2006, the Partnership had contractual obligations as follows (in thousands):



|                            |  |                 |       |              |   |              |  |                  |       |       |   |        |  |   |       
|--------------------------- |  | --------------- | ----- | ------------ | - | ------------ |  | ---------------- | ----- | ----- | - | ------ |  | - | ------
|                            |  | Less than 1year |       | 1 to 3 years |   | 3 to 5 years |  | More than 5years |       | Total
|Secured mortgage loans      |  | $               | 247   |              | $ | 710          |  | $                | 792   |       | $ | 22,271 |  | $ | 24,020
|Interest on indebtedness(1) |  |                 | 979   |              |   | 2,559        |  |                  | 2,478 |       |   | 5,773  |  |   | 11,676
|                            |  |                 |       |              |   |              |  |                  |       |       |   |        |  |   |       
|Total                       |  | $               | 1,226 |              | $ | 3,269        |  | $                | 3,270 |       | $ | 28,044 |  | $ | 35,696
|                            |  |                 |       |              |   |              |  |                  |       |       |   |        |  |   |       

|(1) | Forvariable rate loans, this represents estimated interest expense based on outstanding balances and interest rates at March 31, 2006.
|--- | --------------------------------------------------------------------------------------------------------------------------------------

Management expects that the Partnerships cash and cash equivalents as of March 31, 2006, together with cash from operations, sales and financing, will be
sufficient to finance the Partnerships and the properties continued operations and development plans on a short-term basis and for the reasonably foreseeable future. There can be no assurance that the Partnerships results of
operations will not fluctuate in the future and at times affect its ability to meet its operating requirements.

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

Operating Activities

During the three months ended March 31, 2006, the Partnerships cash provided by operating activities totaled $918,000.

The $62,000
decrease in accounts receivable at March 31, 2006, compared to December 31, 2005, was primarily due to collection of tenant rents receivable, which were outstanding at December 31, 2005, offset by an increase in receivables related to
tenant improvements.

The $194,000 increase in deferred costs at March 31, 2006, compared to December 31, 2005, was primarily due to an increase
in lease commissions paid for a new lease at Carnegie Business Center I.

The $146,000 increase in prepaid expenses and other assets at March 31,
2006, compared to December 31, 2005, was primarily due to increases in straight line rent receivable and prepaid quarterly investor service fees.

The
$248,000 increase in accounts payable and other liabilities at March 31, 2006, compared to December 31, 2005, was primarily due to an increase in accruals for property taxes due in April 2006.

The $43,000 increase in prepaid rents at March 31, 2006, compared to December 31, 2005, was due to the receipt of April 2006 rents in March 2006, offset by
January 2006 rents received in December 2005.

Investing Activities

During the three months ended March 31, 2006, the Partnerships cash used for investing activities totaled $5,773,000, which consisted of $5,000,000 used for the purchase of short-term investments, as well
as a $773,000 increase in net additions to real estate investments primarily due to building and tenant improvements at Vanderbilt Plaza and Carnegie Business Center I.

Financing Activities

During the three months ended March 31, 2006, the Partnerships cash used for
financing activities totaled $415,000, which consisted of $80,000 for principal payments of a note payable, $266,000 for redemption of the limited partnership Units, and $157,000 for payment of distributions to the General Partner, which was accrued
in 2005, partially offset by a refund of $88,000 from loan application fee net of payment of loan related expenses



15



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##### Table of Contents

Cash Flows

During
the three months ended March 31, 2006, cash provided by operating activities was $918,000, as compared to cash provided by operating activities of $498,000 for the same period in 2005. The change was primarily due to an increase in accounts
payable as well as decreases in prepaid expenses and deferred costs. Cash used for investing activities was $5,773,000, as compared to cash used for investing activities of $962,000 for the same period in 2005. The change was primarily due to an
increase in a short-term investment, and an increase in tenant improvement costs for Vanderbilt Plaza and Carnegie Business Center I, offset by a decrease in construction costs at Vanderbilt Plaza, which was completed in February 2005. Cash used for
financing activities was $415,000, as compared to cash provided by financing activities of $131,000 for the same period in 2005. The change was primarily due to a decrease in borrowings from the line of credit, offset by increases in redemptions of
limited partnership units and distributions to General Partner.

Inflation

Leases at the office properties typically provide for rent adjustment and pass-through of certain operating expenses during the term of the lease. We anticipate that these provisions may permit us to increase rental
rates or other charges to tenants in response to rising prices and therefore, serve to reduce our exposure to the adverse effects of inflation.

Forward Looking Statements; Factors That May Affect Operating Results

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



| |  |  | The Partnerships expectation to make annual or more frequent cash distributions to partners;
| | - |  | ---------------------------------------------------------------------------------------------



| |  |  | The Partnerships intent to develop one or more properties to generate more operating income;
| | - |  | ---------------------------------------------------------------------------------------------



| |  |  | The Partnerships belief that its cash and cash generated by its operations, sales and financing will be sufficient to meet its operating requirements in both the short and the
long-term;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Partnerships expectation that changes in market interest rates will not have a material impact on the performance or the fair value of its portfolio;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Partnerships belief that certain claims and lawsuits which have arisen against it in the normal course of business will not have a material adverse effect on its financial
position, cash flow or results of operations;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Partnerships belief that its properties are competitive within its market;
| | - |  | -------------------------------------------------------------------------------



| |  |  | The Partnerships expectation to achieve certain occupancy levels;
| | - |  | ------------------------------------------------------------------



| |  |  | The Partnerships estimation of market strength;
| | - |  | ------------------------------------------------



| |  |  | The Partnerships knowledge of any material environmental matters or issues relating to the landfill property; and
| | - |  | ------------------------------------------------------------------------------------------------------------------



| |  |  | The Partnerships expectation that lease provisions may permit the Partnership 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 the Partnership 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 credit worthiness of prospective tenants;
| | - |  | ----------------------------------------------------------



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



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



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



16



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##### Table of Contents

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



| |  |  | the Partnerships failure to obtain necessary outside financing;
| | - |  | ----------------------------------------------------------------



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



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



| |  |  | the inability of the Partnership 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 the Partnerships Annual Report on Form 10-K for the year ended December 31, 2005. The Partnership assumes no obligation to update or supplement any forward-looking statement or statements.

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 Information About Market Risk
|------- | ----------------------------------------------------------

Interest Rates

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

For debt obligations, the table below presents required principal payments and related weighted average interest rates by expected maturity dates.



|                               |  |                        |      |   |      |   |      |      |  |   |      |   |  |      |      |   |            |   |      |       |  |   |            |   |  |   |        |   |  |   |       
|------------------------------ |  | ---------------------- | ---- | - | ---- | - | ---- | ---- |  | - | ---- | - |  | ---- | ---- | - | ---------- | - | ---- | ----- |  | - | ---------- | - |  | - | ------ | - |  | - | ------
|                               |  | Expected Maturity Date |      |   |      |   |      |     
|                               |  | 2006                   |      |   | 2007 |   |      | 2008 |  |   | 2009 |   |  | 2010 |      |   | Thereafter |   |      | Total |  |   | Fair Value
|                               |  | (in thousands)         |      |   |      |   |      |     
|Collateralized Fixed Rate Debt |  | $                      | 247  |   |      | $ | 345  |      |  | $ | 365  |   |  | $    | 385  |   |            | $ | 407  |       |  | $ | 22,271     |   |  | $ | 24,020 |   |  | $ | 23,124
|Average interest rate          |  |                        | 5.46 | % |      |   | 5.46 | %    |  |   | 5.46 | % |  |      | 5.46 | % |            |   | 5.46 | %     |  |   | 5.46       | % |  |   | 5.46   | % |  |   |       

As of March 31, 2006, the Partnership had cash equivalents of $4,208,000 in interest-bearing money market
account, and $5,000,000 in short-term investments. Declines in interest rates over time would reduce Partnership interest income. The Partnership does not own any derivative instruments.



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

As of the end of the period covered by
this report, we carried out an evaluation, under the supervision of the General Partners Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on
this evaluation, the General Partners Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective in alerting the General Partner on a timely basis to material information required to
be included in this report. There has been no change in our internal control over financial reporting that occurred during our most recent fiscal quarter that has materially affected or is reasonably likely to materially affect our internal control
over financial reporting.



17



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

None.



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

None.



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

None.



|Item 5. | Other information
|------- | -----------------

None.



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



| | (a) | Exhibits:
| | --- | ---------



| | 31.1 | Section 302 Certification of Daniel L. Stephenson, Chief Executive Officer and Chief Financial Officer of General Partnership.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------



| | 32.1 | Section 906 Certification of Daniel L. Stephenson, Chief Executive Officer and Chief Financial Officer of General Partnership.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

SIGNATURES

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



|                      |  |                                                         |  |                                                                           
|--------------------- |  | ------------------------------------------------------- |  | --------------------------------------------------------------------------
|                      |  | RANCON REALTY FUND IV, a California limited partnership
|                      |  |                                                        
|                      |  | By                                                      |  | Rancon Financial Corporation a California corporation, its General Partner
|                      |  |                                                        
|Date:    May 15, 2006 |  | By:                                                     |  | /s/    Daniel L. Stephenson                                               
|                      |  |                                                         |  | Daniel L. Stephenson, President                                           
|                      |  |                                                        
|Date:    May 15, 2006 |  | By:                                                     |  | /s/    Daniel L. Stephenson                                               
|                      |  |                                                         |  | Daniel L. Stephenson, General Partner                                     



19