UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                             -----------------------

                                    FORM 10-Q
                   Quarterly Report Under Section 13 or 15(d)
              of the United States Securities Exchange Act of 1934

                             -----------------------


For Quarter Ended September 30, 1998                Commission File No. 33-18859


                  WELLESLEY LEASE INCOME LIMITED PARTNERSHIP IV
             (Exact name of registrant as specified in its charter)


         Massachusetts                                                04-2985041
(State or other jurisdiction of                                 (I.R.S. Employer
incorporation or organization)                               Identification No.)


    One Financial Center, 21st Floor, Boston, MA                           02111
(Address of principal executive offices)                              (Zip Code)


Registrant's telephone number, including area code                (617) 482-8000

                             -----------------------


                                 Not Applicable
              (Former name, former address and former fiscal year,
                          if changed since last report)

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 ___

                             There are no Exhibits.

                                  Page 1 of 14

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<TABLE>
<CAPTION>

                  WELLESLEY LEASE INCOME LIMITED PARTNERSHIP IV
                      (A Massachusetts Limited Partnership)


                                   INDEX                                                        Page No.

Part I.       FINANCIAL INFORMATION

<S>           <C>                                                                               <C>
              Financial Statements

                    Balance Sheets as of September 30, 1998 and December 31, 1997               3

                    Statements of Operations
                          Quarters Ended September 30, 1998 and 1997 and
                          Nine Months Ended September 30, 1998 and 1997                         4

                    Statements of Cash Flows
                          Nine Months Ended September 30, 1998 and 1997                         5

                    Notes to Financial Statements                                               6 - 7

              Management's Discussion and Analysis of Financial Condition
                    and Results of Operations                                                   8 - 9

              Computer Equipment Portfolio                                                      10

Part II.      OTHER INFORMATION

              Items 1 - 6                                                                       11

              Signature                                                                         12
</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                          PART I. FINANCIAL INFORMATION

                  WELLESLEY LEASE INCOME LIMITED PARTNERSHIP IV
                      (A Massachusetts Limited Partnership)

                                 Balance Sheets

                                     Assets                                          (Unaudited)              (Audited)
                                                                                      9/30/98                 12/31/97
                                                                                 ----------------        ----------------
<S>                                                                              <C>                     <C>             
Investment property, at cost (note 3):
   Computer equipment                                                            $      2,364,561        $      2,974,475
     Less accumulated depreciation                                                      2,150,488               2,341,847
                                                                                 ----------------        ----------------
       Investment property, net                                                           214,073                 632,628

Cash and cash equivalents                                                                  43,339                 166,324
Rents receivable, net (note 2)                                                             20,055                  22,796
Sales receivable, net (note 2)                                                             12,395                       -
Account receivable - affiliates                                                            30,222                   2,456
Other assets                                                                               20,132                  35,622
                                                                                 ----------------        ----------------

     Total assets                                                                $        340,216        $        859,826
                                                                                 ================        ================

                        Liabilities and Partners' Equity
Liabilities:
   Current portion of long-term debt (note 5)                                    $         89,899        $        210,270
   Accounts payable and accrued expenses - affiliates (note 4)                             15,866                  12,017
   Accounts payable and accrued expenses                                                   42,439                  38,799
   Unearned rental revenue                                                                  6,030                   4,978
   Long-term debt, less current portion (note 5)                                                -                  66,109
                                                                                 ----------------        ----------------

     Total liabilities                                                                    154,234                 332,173
                                                                                 ----------------        ----------------

Partners' equity:
   General Partner:
     Capital contribution                                                                   1,000                   1,000
     Cumulative net income                                                                636,265                 625,237
     Cumulative cash distributions                                                       (637,265)               (626,237)
                                                                                 ----------------        ----------------
                                                                                                -                       -
                                                                                 ----------------        ----------------
   Limited Partners (27,226 units):
     Capital contribution, net of offering costs                                       12,148,459              12,148,459
     Cumulative net income                                                                495,412                 564,650
     Cumulative cash distributions                                                    (12,457,889)            (12,185,456)
                                                                                 ----------------        ----------------
                                                                                          185,982                 527,653
                                                                                 ----------------        ----------------
     Total partners' equity                                                               185,982                 527,653
                                                                                 ----------------        ----------------

     Total liabilities and partners' equity                                      $        340,216        $        859,826
                                                                                 ================        ================
</TABLE>

                 See accompanying notes to financial statements.


<PAGE>

<TABLE>
<CAPTION>

                  WELLESLEY LEASE INCOME LIMITED PARTNERSHIP IV
                      (A Massachusetts Limited Partnership)

                            Statements of Operations
                                   (Unaudited)

                                                     Quarters Ended                         Nine Months Ended
                                                      September 30,                           September 30,
                                           --------------------------------       ----------------------------------
                                                 1998              1997                1998                1997
                                           --------------------------------       ----------------------------------

<S>                                        <C>               <C>                  <C>                <C>            
Revenue:
   Rental income                           $     148,832     $      228,436       $      485,197     $       833,123
   Other income                                        -             14,123                    -              51,800
   Interest income                                   688              3,233                2,540               6,885
   Net gain on sale
     of equipment                                  8,827            (18,666)              11,001              82,964
   Net loss on sale of
     marketable securities                             -                  -                    -                (117)
                                           -------------     --------------       --------------     ---------------

       Total revenue                             158,347            227,126              498,738             974,655
                                           -------------     --------------       --------------     ---------------

Costs and expenses:
   Depreciation                                  128,065             50,408              389,496             400,027
   Interest                                        2,562              8,488               11,907              29,920
   Related party expenses (note 4):
     Management fees                              10,720             27,361               37,049              92,577
     General and administrative                   41,781             21,688              117,965              74,050
   Provision for (reversal of)
     doubtful accounts                               285            (16,612)                 529             (36,729)
                                           -------------     --------------       --------------     ---------------

       Total costs and expenses                  183,413             91,333              556,946             559,845
                                           -------------     --------------       --------------     ---------------

Net income (loss)                          $     (25,066)    $      135,793       $      (58,208)    $       414,810
                                           =============     ==============       ==============     ===============

Net income (loss) per Limited
   Partnership Unit                        $       (1.03)    $         6.25       $        (2.54)    $         16.13
                                           =============     ==============       ==============     ===============

</TABLE>
                 See accompanying notes to financial statements.


<PAGE>

<TABLE>
<CAPTION>

                  WELLESLEY LEASE INCOME LIMITED PARTNERSHIP IV
                      (A Massachusetts Limited Partnership)

                            Statements of Cash Flows
                  Nine Months Ended September 30, 1998 and 1997
                                   (Unaudited)

                                                                                           1998                      1997
                                                                                           ----                      ----

<S>                                                                                  <C>                      <C>            
Cash flows from operating activities:
   Net income (loss)                                                                 $      (58,208)          $       414,810
                                                                                     --------------           ---------------

   Adjustments  to  reconcile  net  income  to net cash  provided
     by  operating activities:
       Depreciation                                                                         389,496                   400,027
       Provision for doubtful accounts                                                          529                   (36,729)
       Net gain on sale of equipment                                                        (11,001)                  (82,964)
       Net loss on sale of marketable securities                                                  -                       117
       Net decrease (increase) in current assets                                            (22,461)                   22,826
       Net increase (decrease) in current liabilities                                         8,541                  (130,751)
                                                                                     --------------           ---------------

         Total adjustments                                                                  365,104                   172,526
                                                                                     --------------           ---------------

         Net cash provided by operating activities                                          306,896                   587,336
                                                                                     --------------           ---------------

Cash flows from investing activities:
   Proceeds from sale of marketable securities                                                    -                       633
   Proceeds from sales of investment property                                                40,060                   219,427
                                                                                     --------------           ---------------

         Net cash used in investing activities                                               40,060                   220,060
                                                                                     --------------           ---------------

Cash flows from financing activities:
   Proceeds from borrowing on long-term debt                                                      -                   230,336
   Principal payments on long-term debt                                                    (186,480)                 (472,709)
   Cash distributions to partners                                                          (283,461)                 (385,847)
                                                                                     --------------           ---------------

         Net cash used in financing activities                                             (469,941)                 (628,220)
                                                                                     --------------           ---------------

Net decrease in cash and cash equivalents                                                  (122,985)                  179,176

Cash and cash equivalents at beginning of period                                            166,324                    36,022
                                                                                     --------------           ---------------

Cash and cash equivalents at end of period                                           $       43,339           $       215,198
                                                                                     ==============           ===============

Supplemental cash flow information:
   Interest paid during the period                                                   $       11,907           $        29,920
                                                                                     ==============           ===============

</TABLE>
                 See accompanying notes to financial statements.


<PAGE>


                  WELLESLEY LEASE INCOME LIMITED PARTNERSHIP IV
                      (A Massachusetts Limited Partnership)

                          Notes to Financial Statements
           Nine Months Ended September 30, 1998 and September 30, 1997
                                   (Unaudited)

(1)   Organization and Partnership Matters

The foregoing financial statements of Wellesley Lease Income Limited Partnership
IV (the  "Partnership")  have been  prepared  in  accordance  with the rules and
regulations of the Securities and Exchange  Commission for Form 10-Q and reflect
all  adjustments  which are, in the opinion of management,  necessary for a fair
presentation of the results for the interim periods presented.  Pursuant to such
rules and  regulations,  certain note  disclosures  which are normally  required
under  generally  accepted  accounting  principles  have  been  omitted.  It  is
recommended  that these  financial  statements be read in  conjunction  with the
Partnership's Annual Report on Form 10-K for the year ended December 31, 1998.

(2)   Significant Accounting Policies

Allowance for Doubtful Accounts

The financial  statements  include allowances for estimated losses on receivable
balances.  The  allowances  for  doubtful  accounts  are based on past write off
experience  and an evaluation  of potential  uncollectible  accounts  within the
current  receivable  balances.  Receivable  balances  which are determined to be
uncollectible  are charged against the allowance and subsequent  recoveries,  if
any, are credited to the allowance. At September 30, 1998 and December 31, 1997,
the allowance for doubtful accounts included in rents receivable was $13,099 and
$25,985,  respectively.  The allowance for doubtful  accounts  included in sales
receivable  was  $0  and  $0 at  September  30,  1998  and  December  31,  1997,
respectively.

(3)   Investment Property

At September 30, 1998,  the  Partnership  owned  computer  equipment with a cost
basis of  $214,073.  All  purchases  of computer  equipment  are subject to a 3%
acquisition fee paid to the General Partner.

(4)   Related Party Transactions

Fees,  commissions  and other expenses paid or accrued by the Partnership to the
General  Partner or affiliates of the General  Partner for the nine months ended
September 30 are as follows:

                                                 1998              1997
                                                 ----              ----

Equipment acquisition fees                   $          -       $     14,756
Management fees                                    37,049             92,577
Reimbursable expenses paid                        108,282            105,609
                                             ------------       ------------

                                             $    145,331       $    212,942
                                             ============       ============



<PAGE>


                  WELLESLEY LEASE INCOME LIMITED PARTNERSHIP IV
                      (A Massachusetts Limited Partnership)

                          Notes to Financial Statements
           Nine Months Ended September 30, 1998 and September 30, 1997
                                   (Unaudited)

Under the terms of the Partnership Agreement, the General Partner is entitled to
an equipment acquisition fee of 3% of the purchase price paid by the Partnership
for the  equipment.  The General  Partner is also  entitled to a management  fee
equal to 7% of the monthly rental  collections.  The Partnership  reimburses the
General  Partner and its  affiliates  for certain  expenses  incurred by them in
connection with the operation of the Partnership.

(5)   Long-term Debt

Long-term  debt at September 30, 1998  consisted of one loan  totaling  $89,899,
bearing interest at 9.00%. The total  outstanding debt balance is collateralized
by equipment  with a net book value of $99,614,  and  assignment  of the related
leases.

The annual maturities of long-term debt for the next three years are as follows:

         Year Ending December 31,

                           1998                      $      23,790
                           1999                             66,109
                                                     -------------

                                                     $      89,899
                                                     =============

(6)   Fair Values of Financial Instruments

Pursuant to Statement of Financial Accounting Standards No. 115, "Accounting for
Certain Investments in Debt and Equity  Securities," which requires  investments
in debt and equity  securities  other than those  accounted for under the equity
method  to be  carried  at fair  value or  amortized  cost  for debt  securities
expected to be held to maturity,  the Partnership has classified its investments
in equity  securities as available  for sale.  Accordingly,  the net  unrealized
gains and losses computed in marking these  securities to market are reported as
a component of partners' equity.

The fair value is based on currently  quoted market  prices.  The cost basis and
estimated fair value of the Partnership's marketable securities at September 30,
1998 and December 31, 1997, respectively, are as follows:

<TABLE>
<CAPTION>
                                                                         September 30, 1998             December 31, 1997
                                                                       ----------------------       --------------------------

                                                                       Cost           Fair          Cost               Fair
                                                                       Basis          Value         Basis              Value
                                                                       ----------------------       --------------------------

<S>                                                                    <C>            <C>           <C>                <C>    
Investment in Continental Information
     Systems Corporation Stock                                         $     -        $     -       $ 5,463            $ 4,644
                                                                       =======        =======       =======            =======
</TABLE>



<PAGE>


                     WELLESLEY INCOME LIMITED PARTNERSHIP IV
                      (A Massachusetts Limited Partnership)

                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations
                                   (Unaudited)

Results of Operations

The following discussion relates to the Partnership's operations for the quarter
and nine month periods ended  September 30, 1998 compared to the same periods in
1997.

The  Partnership  realized net  income/(loss)  of $(25,066) and $135,793 for the
three months ended  September  30, 1998 and 1997,  respectively.  Rental  income
decreased  by $79,604 or 35% between the three month  periods.  The  decrease is
primarily due to lower rental rates obtained on equipment  lease  extensions and
remarketings  resulting  after the initial  lease term  expires and due to a net
decrease  in the  overall  size  of the  equipment  portfolio.  Interest  income
decreased $2,545 as result of lower average short-term  investment balances held
during the three month periods. The decrease in net gain on sale of equipment is
primarily due to fewer equipment sales in the third quarter of 1998.

Total  costs and  expenses  increased  $92,080 or 101%  between  the three month
periods.  The increase in costs and  expenses is primarily  the result of higher
depreciation expense. The increase in depreciation expense of $77,657 or 154% is
due to a $200,000  reversal of a provision for estimated  losses on the ultimate
disposition of equipment in 1997.  Interest expense decreased $5,926 between the
three month periods as the Partnership continued to paydown the principal on the
long-term  debt  during  the  current  quarter.  Management  fees  decreased  in
correlation with the decline in rental revenue.

The  Partnership  realized net  income/(loss)  of $(58,208) and $414,810 for the
nine month  periods  ended  September  30, 1998 and 1997,  respectively.  Rental
income  decreased  $347,926 or 42%. As discussed in the quarter  analysis above,
the decrease in rental income is primarily due to lower rental rates obtained on
equipment lease  extensions and  remarketings  and due to a net reduction in the
overall  equipment  portfolio.  Other  income is the result of the  reduction of
overstated  liabilities  recorded in prior periods.  Interest  income  decreased
between the nine month periods as a result of lower average short-term  balances
held during the current nine month  period.  The decrease in net gain on sale of
equipment is attributed to fewer equipment sales in 1998.

Total costs and expenses  decreased $2,899 or 1% between the nine month periods.
Included in depreciation expense for the nine months ended September 30, 1997 is
a $200,000  reversal of a provision  for the  estimated  losses on the  ultimate
disposition  of  equipment.  Interest  expense  decreased  due to the  continued
paydown of its existing  long-term  debt during the current  period.  Management
fees  decreased in correlation  to the decrease in rental  revenue.  General and
administrative expenses increased $43,915 or 59% primarily due to an increase in
the allocable salaries of the partnership  accounting and reporting personnel of
the General Partner.

The  Partnership  recorded net  income/(loss)  per Limited  Partnership  Unit of
$(1.03)  and  $6.25  for  the  quarters  ended  September  30,  1998  and  1997,
respectively,  and a net loss of $(2.54)  and $16.13 for the nine  months  ended
September 30, 1998 and 1997,  respectively.  The  allocation for the nine months
ended  September  30,  1998 and 1997,  respectively,  includes  a cost  recovery
allocation  of profit and loss among the  General  and  Limited  Partners  which
results in an allocation of net loss to the Limited Partners. This cost recovery
allocation  is  required  to  maintain  capital  accounts  consistent  with  the
distribution  provisions of the Partnership  Agreement.  In certain periods, the
cost  recovery of profit and loss may result in an allocation of net loss to the
Limited Partners in instances when the Partnership's  operations were profitable
for the period.


<PAGE>


                     WELLESLEY INCOME LIMITED PARTNERSHIP IV
                      (A Massachusetts Limited Partnership)

                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations
                                   (Unaudited)

Liquidity and Capital Resources

For the nine months ended  September 30, 1998,  rental  revenue  generated  from
operating  leases  was the  primary  source  of funds  for the  Partnership.  As
equipment leases terminate, the General Partner determines if the equipment will
be extended to the same lessee,  remarketed to another lessee,  or if it is less
marketable,  sold.  This  decision is made upon  analyzing  which  options would
generate the most favorable results.

Rental income will continue to decrease due to two factors.  First, lower rental
rates are obtained on the remarketing of existing equipment after the expiration
of the original  leases.  Typically  the  remarketed  rates are lower due to the
decrease in useful  life of the  equipment.  Second,  the  increasing  change of
technology  in the  computer  industry  usually  decreases  the demand for older
equipment,  thus  increasing  the  possibility  of  obsolescence.  Both of these
factors together will cause remarketed rates to be lower than original rates and
will cause certain leases to terminate upon expiration.  This decrease  however,
should  not  affect  the   Partnership's   ability  to  meet  its  future   cash
requirements,  including  its  long-term  debt  obligations.  To the extent that
future cash flows should be  insufficient  to meet the  Partnership's  operating
expenses and liabilities, additional funds could be obtained through the sale of
equipment,  or a  reduction  in the rate of cash  distributions.  Future  rental
revenues amount to $194,952 and are to be received over the next five years.

As of September 30, 1998, the  Partnership's  investing  activities  resulted in
equipment sales with a depreciated cost basis of $70,927,  generating $40,060 in
proceeds.  Associated  with the equipment sales were $41,869 of loss charge offs
against the reserve,  initially set up in prior periods for estimated  losses on
the ultimate  disposition of equipment.  The Partnership has no material capital
expenditure  commitments  and will not  purchase  equipment in the future as the
Partnership has reached the end of its reinvestment period.

The Partnership's financing activities resulted in the paydown on long-term debt
in the amount of $186,480 for the nine months  ended  September  30,  1998.  The
Partnership  will payoff its remaining  long-term debt of $89,899 by 1999. Total
long-term debt assumed by the Partnership  from inception is $14,500,441,  for a
total leverage of 43%.

Cash  distributions  are  currently  at  an  annual  level  of  2%  per  Limited
Partnership Unit or $2.50 per Limited Partnership Unit on a quarterly basis. For
the  quarter  ended  September  30,  1998,  the  Partnership   declared  a  cash
distribution  of $70,931,  of which $2,866 was allocated to the General  Partner
and $68,065 was allocated to the Limited Partners. The distribution will be made
on November 27, 1998. The Partnership expects to continue paying at or near this
level in the future.  The effects of inflation have not been  significant to the
Partnership and are not expected to have any material impact in future periods.



<PAGE>


                  WELLESLEY LEASE INCOME LIMITED PARTNERSHIP IV
                      (A Massachusetts Limited Partnership)

                    Computer Equipment Portfolio (Unaudited)
                               September 30, 1998

Lessee

Carr Separations, Incorporated
Chrysler Corporation
Coulter Corporation
Cybersmith, Incorporated
Elron Software, Incorporated
H.J. Meyer Company, Incorporated
Hughes Aircraft Company, Incorporated
J. Walter Thompson Company
ON Technology Corporation
Sports & Recreation, Incorporated

Equipment Description                       Acquisition Price

Computer peripherals                         $        969,273
Processors & upgrades                                 596,283
Telecommunications                                     89,234
Other                                                 709,771
                                             ----------------

                                             $      2,364,561
                                             ================

<PAGE>


                           PART II. OTHER INFORMATION

                  WELLESLEY LEASE INCOME LIMITED PARTNERSHIP IV
                      (A Massachusetts Limited Partnership)


Item 1.        Legal Proceedings
               Response:  None

Item 2.        Changes in the Rights of the Partnership's Security Holders
               Response:  None

Item 3.        Defaults by the Partnership on its Senior Securities
               Response:  None

Item 4.        Results of Votes of Security Holders
               Response:  None

Item 5.        Other Information
               Response:  None

Item 6.        Exhibits and Reports on Form 8-K
               Response:

               A.  None

               B.  None


<PAGE>


                                    SIGNATURE

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

WELLESLEY LEASE INCOME LIMITED PARTNERSHIP IV
(Registrant)

By:    Wellesley Leasing Partnership,
       its General Partner

By:    TLP Leasing Programs, Inc.,
       one of its Corporate General Partners


Date:  November 12, 1998

By:    Arthur P. Beecher,
       President