FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

               For the quarterly period ended September 30, 2004
   --------------------------------------------------------------------------

                                       OR

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

For the transition period from ______________________ to _______________________


                             Commission file number
                                     0-17549
                     ---------------------------------------


                            CNL Income Fund IV, Ltd.
-------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


            Florida                                         59-2854435
--------------------------------                --------------------------------
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                            Identification No.)


       450 South Orange Avenue
          Orlando, Florida                                    32801
----------------------------------------        --------------------------------
(Address of principal executive offices)                   (Zip Code)


Registrant's telephone number
(including area code)                                    (407) 540-2000
                                                --------------------------------


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


Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act): Yes___ No X




<PAGE>


                                    CONTENTS




                                                                           Page
Part I.

     Item 1.      Financial Statements:

                      Condensed Balance Sheets                             1

                      Condensed Statements of Income                       2

                      Condensed Statements of Partners' Capital            3

                      Condensed Statements of Cash Flows                   4

                      Notes to Condensed Financial Statements              5-7

     Item 2.      Management's Discussion and Analysis of Financial
                      Condition and Results of Operations                  8-11

     Item 3.      Quantitative and Qualitative Disclosures About
                      Market Risk                                          11

     Item 4.      Controls and Procedures                                  11


Part II.

     Other Information                                                     12-13





<PAGE>



                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)
                            CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
<S><C>

                                                                          September 30,             December 31,
                                                                              2004                      2003
                                                                        ------------------       -------------------
                             ASSETS

Real estate properties with operating leases, net                       $       9,063,640        $        9,257,733
Net investment in direct financing leases                                         543,459                   580,803
Real estate held for sale                                                              --                 1,078,662
Investment in joint ventures                                                    1,245,035                 1,270,319
Cash and cash equivalents                                                       2,289,321                 1,367,889
Receivables, less allowance for doubtful accounts
    of $3,214 in 2003                                                              12,941                    19,510
Accrued rental income                                                             219,248                   265,471
Other assets                                                                       15,500                    15,048
                                                                        ------------------       -------------------

                                                                        $      13,389,144        $       13,855,435
                                                                        ==================       ===================

               LIABILITIES AND PARTNERS' CAPITAL

Accounts payable and accrued expenses                                   $          57,102        $            6,963
Real estate taxes payable                                                          25,365                    19,419
Distributions payable                                                             510,475                   510,475
Due to related parties                                                            280,204                   259,296
Rents paid in advance and deposits                                                 76,077                    62,018
                                                                        ------------------       -------------------
    Total liabilities                                                             949,223                   858,171

Minority interests                                                                252,027                   622,457

Partners' capital                                                              12,187,894                12,374,807
                                                                        ------------------       -------------------

                                                                        $      13,389,144        $       13,855,435
                                                                        ==================       ===================

</TABLE>
           See accompanying notes to condensed financial statements.

                                        1



<PAGE>


                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)
                         CONDENSED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
<S><C>

                                                                      Quarter Ended                 Nine Months Ended
                                                                      September 30,                   September 30,
                                                                  2004             2003            2004           2003
                                                              -------------    --------------  -------------  -------------
Revenues:
    Rental income from operating leases                       $    312,412     $     340,260   $    939,754   $  1,023,796
    Earned income from direct financing leases                      17,751            19,302         54,460         58,963
    Contingent rental income                                        14,704            18,167         47,402         42,685
    Lease termination income                                            --                --        225,000             --
    Interest and other income                                          114               118          6,840          3,772
                                                              -------------    --------------  -------------  -------------
                                                                   344,981           377,847      1,273,456      1,129,216
                                                              -------------    --------------  -------------  -------------


Expenses:
    General operating and administrative                            85,730            49,719        227,126        169,706
    Property related                                                14,219             4,402         32,080          8,152
    State and other taxes                                               --                --         23,236         22,952
    Depreciation and amortization                                   64,743            65,148        194,094        195,444
    Provision for write-down of assets                                  --                --         25,153             --
                                                              -------------    --------------  -------------  -------------
                                                                   164,692           119,269        501,689        396,254
                                                              -------------    --------------  -------------  -------------

Income before minority interests and equity in earnings
    of unconsolidated joint ventures                               180,289           258,578        771,767        732,962

Minority interests                                                  (2,778)           (7,425)        (9,469)       (22,562)

Equity in earnings of unconsolidated joint ventures                 29,168            28,546         87,213         85,012
                                                              -------------    --------------  -------------  -------------

Income from continuing operations                                  206,679           279,699        849,511        795,412
                                                              -------------    --------------  -------------  -------------

Discontinued operations:
    Income from discontinued operations                                 --            39,616         63,342        105,422
    Gain on disposal of discontinued operations                         --                --        768,030        107,039
    Minority interest                                                   --           (11,424)      (336,371)       (34,692)
                                                              -------------    --------------  -------------  -------------
                                                                        --            28,192        495,001        177,769
                                                              -------------    --------------  -------------  -------------

Net income                                                    $    206,679     $     307,891   $  1,344,512   $    973,181
                                                              =============    ==============  =============  =============

Income per limited partner unit:
    Continuing operations                                     $       3.44     $        4.66   $      14.16   $      13.26
    Discontinued operations                                             --              0.47           8.25           2.96
                                                              -------------    --------------  -------------  -------------
                                                              $       3.44     $        5.13   $      22.41   $      16.22
                                                              =============    ==============  =============  =============

Weighted average number of limited partner
    units outstanding                                               60,000            60,000         60,000         60,000
                                                              =============    ==============  =============  =============
</TABLE>

           See accompanying notes to condensed financial statements.

                                        2

<PAGE>


                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)
                    CONDENSED STATEMENTS OF PARTNERS' CAPITAL
<TABLE>
<CAPTION>
<S><C>

                                                                          Nine Months Ended          Year Ended
                                                                            September 30,           December 31,
                                                                                 2004                   2003
                                                                         ---------------------    ------------------

General partners:
    Beginning balance                                                    $            787,351     $         787,351
    Net income                                                                             --                    --
                                                                         ---------------------    ------------------
                                                                         $            787,351     $         787,351
                                                                         ---------------------    ------------------
Limited partners:
    Beginning balance                                                              11,587,456            12,971,175
    Net income                                                                      1,344,512             1,308,181
    Distributions ($25.52 and $44.87 per
       limited partner unit, respectively)                                         (1,531,425)           (2,691,900)
                                                                         ---------------------    ------------------
                                                                                   11,400,543            11,587,456
                                                                         ---------------------    ------------------

Total partners' capital                                                  $         12,187,894     $      12,374,807
                                                                         =====================    ==================

</TABLE>
           See accompanying notes to condensed financial statements.

                                        3


<PAGE>


                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)
                       CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
<S><C>
                                                                                      Nine Months Ended
                                                                                        September 30,
                                                                                   2004               2003
                                                                               --------------    ---------------

Net cash provided by operating activities                                      $   1,317,487     $    1,245,748
                                                                               --------------    ---------------

Cash flows from investing activities:
    Proceeds from sale of assets                                                   1,851,635          2,044,709
                                                                               --------------    ---------------
          Net cash provided by investing activities                                1,851,635          2,044,709
                                                                               --------------    ---------------

Cash flows from financing activities:
    Distributions to limited partners                                             (1,531,425)        (2,194,897)
    Distributions to holders of minority interests                                  (716,265)           (73,304)
                                                                               --------------    ---------------
          Net cash used in financing activities                                   (2,247,690)        (2,268,201)
                                                                               --------------    ---------------


Net increase in cash and cash equivalents                                            921,432          1,022,256

Cash and cash equivalents at beginning of period                                   1,367,889            421,416
                                                                               --------------    ---------------

Cash and cash equivalents at end of period                                     $   2,289,321     $    1,443,672
                                                                               ==============    ===============

Supplemental schedule of non-cash investing and financing activities:

    Deferred real estate disposition fee incurred and unpaid at
       end of period                                                           $      13,950     $       62,959
                                                                               ==============    ===============

    Distributions declared and unpaid at end of period                         $     510,475     $      510,475
                                                                               ==============    ===============
</TABLE>
           See accompanying notes to condensed financial statements.

                                        4


<PAGE>


                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
           Quarters and Nine Months Ended September 30, 2004 and 2003


1.       Basis of Presentation

         The accompanying  unaudited  condensed  financial  statements have been
         prepared in accordance  with the  instructions  to Form 10-Q and do not
         include  all  of the  information  and  note  disclosures  required  by
         generally  accepted  accounting  principles.  The financial  statements
         reflect all adjustments,  consisting of normal  recurring  adjustments,
         which are, in the opinion of the general partners, necessary for a fair
         statement of the results for the interim periods  presented.  Operating
         results for the quarter and nine months ended  September 30, 2004,  may
         not be  indicative  of the results  that may be  expected  for the year
         ending December 31, 2004. Amounts as of December 31, 2003,  included in
         the  financial  statements,  have been derived  from audited  financial
         statements as of that date.

         These unaudited financial statements should be read in conjunction with
         the financial statements and notes thereto included in Form 10-K of CNL
         Income Fund IV, Ltd. (the  "Partnership")  for the year ended  December
         31, 2003.

         The  Partnership  accounts  for its 96.10%,  interest  in Auburn  Joint
         Venture,  its 57%  interest  in Cocoa  Joint  Venture,  and its  68.87%
         interest  in   Kingsville   Real  Estate   Joint   Venture   using  the
         consolidation  method.  Prior  to  the  liquidation  of  Holland  Joint
         Venture,  in June 2004, the Partnership  accounted for its 51% interest
         in the joint venture using the consolidation method. Minority interests
         represent the minority joint venture partners'  proportionate  share of
         the equity in the joint ventures. All significant intercompany accounts
         and transactions have been eliminated.

         In December 2003,  the Financial  Accounting  Standards  Board issued a
         revision to FASB  Interpretation  No. 46 (originally  issued in January
         2003)  ("FIN  46R"),  "Consolidation  of  Variable  Interest  Entities"
         requiring  existing  unconsolidated  variable  interest  entities to be
         consolidated by their primary beneficiaries. The primary beneficiary of
         a variable  interest entity is the party that absorbs a majority of the
         entity's expected losses,  receives a majority of its expected residual
         returns, or both, as a result of holding variable interests,  which are
         the ownership,  contractual,  or other pecuniary interests in an entity
         that change with  changes in the fair value of the  entity's net assets
         excluding  variable  interests.  Prior to FIN 46R, a company  generally
         included  another  entity  in  its  financial  statements  only  if  it
         controlled the entity through voting interests.  Application of FIN 46R
         is  required  in  financial  statements  of public  entities  that have
         interests in variable  interest entities for periods ending after March
         15,  2004.  The  Partnership  adopted FIN 46R during the quarter  ended
         March 31,  2004,  which  resulted in the  consolidation  of  previously
         unconsolidated  joint  ventures,  which  were  accounted  for under the
         equity method. FIN 46R does not require, but does permit restatement of
         previously  issued financial  statements.  The Partnership has restated
         prior year's financial statements to maintain comparability between the
         periods presented.  Such  consolidation  resulted in certain assets and
         minority  interests,  and revenues and expenses,  of the entities being
         reported on a gross basis in the  Partnership's  financial  statements;
         however,  these  restatements had no effect on partners' capital or net
         income.

2.       Discontinued Operations

         During February 2004, the Partnership  identified for sale its property
         in Oak Ridge,  Tennessee.  In April  2004,  the  Partnership  sold this
         property  to  a  third  party  and  received  net  sales   proceeds  of
         approximately $452,000, resulting in a gain on disposal of discontinued
         operations of approximately $129,100.

         In April 2004, Holland Joint Venture,  in which the Partnership owned a
         51% interest and accounted for under the consolidation method,  entered
         into an  agreement  with a third party to sell its property in Holland,
         Michigan.  In June  2004,  the joint  venture  sold this  property  and
         received net sales proceeds of approximately $1,399,600, resulting in a
         gain on disposal of discontinued operations of approximately

                                       5
<PAGE>

                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
           Quarters and Nine Months Ended September 30, 2004 and 2003


2.       Discontinued Operations - Continued

         $638,900. As a result of the sale, the joint venture was dissolved, and
         approximately  $671,200  was  paid  to the  minority  interest  holder,
         representing its pro-rata share of the liquidating distribution.

         The  following  presents  the  operating  results  of the  discontinued
         operations for these properties, along with the properties in Portland,
         Indiana,  Richmond,  Virginia and Maywood,  Illinois  that were sold in
         February, March, and July 2003, respectively.
<TABLE>
<CAPTION>
<S><C>

                                                   Quarter Ended                    Nine Months Ended
                                                   September 30,                      September 30,
                                               2004             2003             2004             2003
                                           --------------   --------------   --------------  ----------------

             Rental revenues               $          --    $      50,139    $      71,871   $       187,128
             Expenses                                 --          (10,523)          (8,529)          (45,706)
             Provision for
                   write-down of assets               --               --               --           (36,000)
                                           --------------   --------------   --------------  ----------------
             Income from
                   discontinued operations $          --    $      39,616    $      63,342   $       105,422
                                           ==============   ==============   ==============  ================
</TABLE>


3.       Concentration of Credit Risk

         The following  schedule  presents total rental revenues from individual
         lessees,  each representing  more than 10% of the  Partnership's  total
         rental  revenues  (including  total rental  revenues from  consolidated
         joint  ventures and the  Partnership's  share of total rental  revenues
         from   unconsolidated   joint   ventures   and   properties   held   as
         tenants-in-common  with affiliates of the general partners) for each of
         the nine months ended September 30:
<TABLE>
<CAPTION>
<S><C>
                                                                        2004              2003
                                                                    --------------    --------------

                Shoney's, Inc.                                      $      168,742    $      161,961
                Denny's, Inc.                                              159,564               N/A
                Tampa Food, LP                                                 N/A           154,259
</TABLE>

         In addition, the following schedule presents total rental revenues from
         individual  restaurant  chains,  each representing more than 10% of the
         Partnership's  total rental revenues  (including  total rental revenues
         from the  consolidated  joint ventures and the  Partnership's  share of
         total rental revenues from unconsolidated joint ventures and properties
         held as tenants-in-common  with affiliates of the general partners) for
         each of the nine months ended September 30:
<TABLE>
<CAPTION>
<S><C>
                                                                        2004              2003
                                                                    --------------    --------------

                Wendy's                                             $      189,306    $      264,583
                Denny's                                                    161,405           226,685
                Pizza Hut                                                  122,895               N/A
                Shoney's                                                       N/A           161,961
</TABLE>

                                       6
<PAGE>

                            CNL INCOME FUND IV, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
           Quarters and Nine Months Ended September 30, 2004 and 2003


3.       Concentration of Credit Risk - Continued

         The  information   denoted  by  N/A  indicates  that  for  each  period
         presented, the tenant or group of affiliated tenants, the chain did not
         represent  more than ten  percent  of the  Partnership's  total  rental
         revenues.

         Although the properties have some geographical  diversity in the United
         States  and the  lessees  operate a  variety  of  restaurant  concepts,
         default by any of these lessees or restaurant chains will significantly
         impact the  results of  operations  if the  Partnership  is not able to
         re-lease the properties in a timely manner.

4.       Related Party Transactions

         An  affiliate  of the  Partnership  is  entitled to receive a deferred,
         subordinated real estate  disposition fee, payable upon the sale of one
         or more  properties  based on the lesser of one-half  of a  competitive
         real  estate  commission  or three  percent  of the sales  price if the
         affiliate  provides a substantial amount of services in connection with
         the  sale.  However,  if the net sales  proceeds  are  reinvested  in a
         replacement  property,  no such  real  estate  disposition  fee will be
         incurred  until  such  replacement  property  is sold and the net sales
         proceeds are  distributed.  The payment of the real estate  disposition
         fee is  subordinated  to  receipt  by the  limited  partners  of  their
         aggregate   10%  preferred   return,   plus  their   adjusted   capital
         contributions.  During the nine  months  ended  September  30, 2004 and
         2003,  the  Partnership  incurred  deferred,  subordinated  real estate
         disposition fees of $13,950 and $62,959,  respectively,  as a result of
         the sale of one and three properties during each period, respectively.

5.       Merger Transaction

         On August 9, 2004, the Partnership entered into a definitive  Agreement
         and Plan of Merger  pursuant  to which the  Partnership  will be merged
         with a subsidiary of U.S. Restaurant Properties,  Inc. (NYSE: USV). The
         merger is one of multiple concurrent  transactions pursuant to which 17
         other  affiliated  limited  partnerships  also  will be  merged  with a
         subsidiary  of  U.S.  Restaurant  Properties,  Inc.  and in  which  CNL
         Restaurant  Properties,  Inc., an  affiliate,  also will be merged with
         U.S.  Restaurant  Properties,  Inc.  CNL  Restaurant  Properties,  Inc.
         currently  provides  property  management  and  other  services  to the
         Partnership.  The merger of the  Partnership  (and each of the 17 other
         affiliated mergers) is subject to certain conditions including approval
         by a majority of the limited partners, consummation of a minimum number
         of limited partnership mergers representing at least 75.0% in value (as
         measured  by the  value of the  merger  consideration)  of all  limited
         partnerships,  consummation  of  the  merger  between  U.S.  Restaurant
         Properties,  Inc. and CNL Restaurant Properties,  Inc., approval of the
         shareholders of U.S. Restaurant  Properties,  Inc., and availability of
         financing.  The  transaction is expected to be consummated in the first
         quarter of 2005.

         Under  the  terms  of  the  merger  agreement,  if the  transaction  is
         approved,  the limited  partners  will receive total  consideration  of
         approximately  $16.02  million,   consisting  of  approximately  $13.40
         million in cash and  approximately  $2.62  million  in U.S.  Restaurant
         Properties, Inc. Series A Convertible Preferred Stock that is listed on
         the New York Stock  Exchange.  The general  partners will receive total
         consideration  of  approximately  $622,000  consisting of approximately
         $520,000 in cash and approximately $102,000 in preferred stock.

                                       7
<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         CNL Income Fund IV, Ltd. (the  "Partnership,"  which may be referred to
as "we," "us," or "our") is a Florida limited  partnership that was organized on
November 18, 1987, to acquire for cash, either directly or through joint venture
arrangements, both newly constructed and existing restaurant properties, as well
as  land  upon  which  restaurants  were to be  constructed,  which  are  leased
primarily  to operators of national  and  regional  fast-food  and  family-style
restaurant chains  (collectively,  the  "Properties").  The leases generally are
triple-net leases, with the lessees responsible for all repairs and maintenance,
property taxes, insurance and utilities.  As of September 30, 2004 and 2003, the
Partnership owned 20 and 21 Properties directly,  respectively.  As of September
30,  2004  and  2003,  the  Partnership  also  owned  six and  seven  Properties
indirectly,   respectively,   through   joint   venture  or  tenancy  in  common
arrangements.

Merger Transaction

         The general  partners  believe their  primary  objective is to maintain
current operations with restaurant operators as successfully as possible,  while
evaluating  strategic  alternatives,  including  alternatives  that may  provide
liquidity to the limited  partners.  Real estate  markets are strong  throughout
much of the nation,  and the performance of restaurants  has generally  improved
after several  challenging years. As a result, the general partners believe that
this is an attractive  period for a strategic event to monetize the interests of
the limited partners.

         In furtherance of this, on August 9, 2004, we entered into a definitive
Agreement  and  Plan of  Merger  pursuant  to  which  we will be  merged  with a
subsidiary of U.S. Restaurant Properties, Inc. (NYSE: USV). The merger is one of
multiple concurrent  transactions  pursuant to which 17 other affiliated limited
partnerships  also  will  be  merged  with  a  subsidiary  of  U.S.   Restaurant
Properties,  Inc. and in which CNL  Restaurant  Properties,  Inc., an affiliate,
also will be merged with U.S. Restaurant  Properties,  Inc. Our merger (and each
of the 17 other affiliated  mergers) is subject to certain conditions  including
approval by a majority of the limited partners, consummation of a minimum number
of limited partnership mergers representing at least 75.0% in value (as measured
by  the  value  of  the  merger  consideration)  of  all  limited  partnerships,
consummation  of the merger between U. S.  Restaurant  Properties,  Inc. and CNL
Restaurant  Properties,  Inc.,  approval of the shareholders of U.S.  Restaurant
Properties,  Inc., and availability of financing.  U.S.  Restaurant  Properties,
Inc.  is a real  estate  investment  trust  (REIT)  that  focuses  primarily  on
acquiring, owning and leasing restaurant properties. The transaction is expected
to be consummated in the first quarter of 2005.

         Under  the  terms  of  the  merger  agreement,  if the  transaction  is
approved, our limited partners will receive total consideration of approximately
$16.02  million,   consisting  of  approximately  $13.40  million  in  cash  and
approximately  $2.62  million  in U.S.  Restaurant  Properties,  Inc.  Series  A
Convertible  Preferred Stock that is listed on the New York Stock Exchange.  The
general  partners will receive total  consideration  of  approximately  $622,000
consisting  of  approximately  $520,000  in cash and  approximately  $102,000 in
preferred stock.

         We received an opinion from Wachovia  Capital  Markets,  LLC that as of
August 9, 2004 the merger  consideration  to be  received  by the holders of our
general and limited  partnership  interests is fair,  from a financial  point of
view, to such holders.

         As reflected  above, the  contemplated  transactions  are complex,  and
contingent upon certain conditions. The restaurant marketplace,  the real estate
industry,  and the equities markets, all individually or taken as a whole, could
impact the  economics of this  transaction.  As a result,  there is no assurance
that we will be successful in completing the contemplated transaction.

Capital Resources

         Net  cash  provided  by  operating   activities   was   $1,317,487  and
$1,245,748,  during  the  nine  months  ended  September  30,  2004,  and  2003,
respectively.

                                       8
<PAGE>

         In April  2004,  we sold  the  Property  in Oak  Ridge,  Tennessee  and
received net sales proceeds of  approximately  $452,000,  resulting in a gain on
disposal of discontinued  operations of  approximately  $129,100.  In connection
with the sale, we incurred a deferred, subordinated, real estate disposition fee
of  $13,950.  Payment of the real  estate  disposition  fee is  subordinated  to
receipt by the limited  partners of their  aggregate,  cumulative  10% preferred
return,  plus their adjusted capital  contributions.  We intend to use the sales
proceeds to pay liabilities.

         In June 2004,  Holland Joint Venture,  in which we owned a 51% interest
and accounted for under the consolidation  method, sold the Property in Holland,
Michigan and received net sales proceeds of approximately $1,399,600,  resulting
in a gain on disposal of discontinued operations of approximately $638,900. As a
result  of the sale of the  Property,  the  joint  venture  was  dissolved,  and
$671,200 was paid to the minority  interest  holder,  representing  its pro-rata
share of the  liquidating  distribution.  We intend to use the  remaining  sales
proceeds to pay liabilities.

         At September 30, 2004, we had $2,289,321 in cash and cash  equivalents,
as compared to $1,367,889  at December 31, 2003.  At September  30, 2004,  these
funds were held in demand  deposit  accounts at a commercial  bank. The increase
was  primarily  a result of  holding  sales  proceeds.  The funds  remaining  at
September 30, 2004,  after the payment of distributions  and other  liabilities,
will be used to meet our working capital needs.

Short-Term Liquidity

         Our  investment  strategy of acquiring  Properties for cash and leasing
them under triple-net leases to operators who meet specified financial standards
minimizes our operating  expenses.  The general partners believe that the leases
will generate net cash flow in excess of operating expenses.

         Our  short-term   liquidity   requirements  consist  primarily  of  our
operating expenses.

         The general  partners have the right,  but not the obligation,  to make
additional capital  contributions if they deem it appropriate in connection with
our operations.

         We  generally  distribute  cash  from  operations  remaining  after the
payment of operating expenses, to the extent that the general partners determine
that such funds are available for distribution. Based on current and anticipated
future cash from operating  activities  and for the nine months ended  September
30,  2004 and  2003,  the net  proceeds  from the  sales  of the  Properties  in
Portland,   Indiana   and   Richmond,   Virginia,   respectively,   we  declared
distributions  to the limited partners of $1,531,425 and $2,181,425 for the nine
months ended September 30, 2004 and 2003, respectively ($510,475 for each of the
quarters ended September 30, 2004 and 2003).  This represents  distributions  of
$25.52 and $36.36 per unit for the nine  months  ended  September  30,  2004 and
2003,  respectively ($8.51 for each applicable  quarter).  Distributions for the
nine  months  ended  September  30,  2003,  included a special  distribution  of
$650,000 as a result of the  distribution  of net sales  proceeds  from the 2003
sale of the  Property in  Richmond,  Virginia.  This  special  distribution  was
effectively a return of a portion of the limited partners investment,  although,
in accordance with the Partnership agreement, it was applied towards the limited
partners' unpaid preferred return. As a result of the sales of Properties in the
current year and in previous  years,  our total  revenues  have declined and are
expected to remain  reduced in  subsequent  periods,  while the  majority of our
operating   expenses  have  remained  and  are  expected  to  remain  fixed.  No
distributions were made to the general partners for the quarters and nine months
ended  September  30,  2004 and 2003.  No  amounts  distributed  to the  limited
partners for the nine months ended  September  30, 2004 and 2003 are required to
be or have been treated as a return of capital for purposes of  calculating  the
limited partners' return on their adjusted capital  contributions.  We intend to
continue to make  distributions  of cash to the limited  partners on a quarterly
basis.

         Total liabilities,  including  distributions  payable, were $949,223 at
September 30, 2004,  as compared to $858,171 at December 31, 2003.  The increase
in total  liabilities  was  primarily  due to increases in accounts  payable and
accrued  expenses,  amounts due to related parties and rents paid in advance and
deposits.  The general  partners believe that we have sufficient cash on hand to
meet our current working capital needs.

                                       9
<PAGE>

Long-Term Liquidity

         We have no long-term debt or other long-term liquidity requirements.

Results of Operations

         Rental revenues from  continuing  operations were $994,214 for the nine
months ended  September 30, 2004, as compared to $1,082,759  for the same period
in 2003, of which,  $330,163 and $359,562 were earned during the third  quarters
of 2004 and 2003,  respectively.  Rental  revenues  from  continuing  operations
during the nine months and quarter ended  September  30, 2004,  decreased due to
the lease  related to a Property in Tampa,  Florida  being  terminated  in March
2004. The lost revenues  resulting from the lease  termination  will continue to
have an  adverse  effect  on our  results  of  operations  until  we are able to
re-lease the Property.  In addition,  the decrease was also partially due to the
fact that in January  2004,  the lease  relating  to the  Property  owned by the
Kingsville  Real Estate  Joint  Venture,  in which we own a 68.87%  interest and
account for under the consolidation method, expired. The lost revenues resulting
from the lease expiration will continue to have an adverse effect on our results
of operations until the joint venture is able to re-lease the Property.

         During the nine months  ended  September  30, 2004 and 2003,  we earned
$47,402  and  $42,685,  respectively,  in  contingent  rental  income  from  our
Properties,  of which $14,704 and $18,167 were earned during the third  quarters
of 2004 and 2003, respectively.

         As, described above, the lease relating to a Property in Tampa, Florida
was  terminated in March 2004.  In  connection  with the  terminated  lease,  we
received approximately $225,000 in lease termination income as consideration for
releasing  the tenant  from its  obligation  under the lease.  We are  currently
seeking a new tenant for this Property.

         During the nine months  ended  September  30, 2004 and 2003,  we earned
$87,213  and  $85,012,  respectively,  attributable  to  net  income  earned  by
unconsolidated  joint ventures,  of which $29,168 and $28,546 were earned during
the  third  quarters  of 2004 and 2003,  respectively.  These  amounts  remained
relatively  constant,  because  there were no  changes  in the  leased  Property
portfolio owned by the unconsolidated joint ventures and tenancies in common.

         During the nine months ended September 30, 2004, two lessees, Shoney's,
Inc.  and  Denny's,  Inc.,  each  contributed  more than 10% of our total rental
revenues  (including total rental revenues from consolidated  joint ventures and
our share of total  rental  revenues  from  unconsolidated  joint  ventures  and
Properties held as  tenants-in-common  with affiliates of the general partners).
We anticipate that based on the minimum rental payments  required by the leases,
these lessees will each continue to contribute more than 10% of our total rental
revenues.  In addition,  during the nine months ended September 30, 2004,  three
restaurant chains,  Denny's, Pizza Hut and Wendy's, each accounted for more than
10% of our total rental  revenues  (including  total revenues from  consolidated
joint ventures and our share of total rental revenues from unconsolidated  joint
ventures and Properties held as tenants-in-common with affiliates of the general
partners).  We  anticipate  that these  restaurant  chains will each continue to
account for more than 10% of the total rental  revenues to which we are entitled
under the terms of the leases. Any failure of these lessees or restaurant chains
will materially  affect our operating results if we are not able to re-lease the
Properties in a timely manner.

         Operating  expenses,   including   depreciation  and  amortization  and
provision  for  write-down  of assets,  were  $501,689 and $396,254 for the nine
months ended September 30, 2004 and 2003,  respectively,  of which, $164,692 and
$119,269 were incurred in the third quarters of 2004 and 2003, respectively. The
increase in operating  expenses  during the nine months ended September 30, 2004
was due to the  provision for  write-down of assets  incurred as a result of the
termination  of the  lease  of a  Property  in  Tampa,  Florida.  The  provision
represented  the  difference  between the carrying value of the Property and its
estimated  fair value.  The  increase  during the quarter and nine months  ended
September 30, 2004, was also due to incurring  additional  general operating and
administrative expenses, including, primarily, legal fees incurred in connection
with the merger  transaction  described above. In addition,  operating  expenses
were higher during the quarter and nine months ended  September 30, 2004 because
we  incurred   property  related   expenses  such  as  insurance,   repairs  and
maintenance,  legal fees and real estate taxes relating to the vacant Properties
in Tampa,  Florida  and  Kingsville,  Texas.  We will  continue  to incur  these
expenses until the Properties are re-leased.

                                       10
<PAGE>

         We recognized income from discontinued operations (rental revenues less
property  related  expenses and provision for  write-down of assets) of $105,422
and  $39,616  during the nine  months and  quarter  ended  September  30,  2003,
respectively,  relating  to  the  Properties  in  Portland,  Indiana;  Richmond,
Virginia; Maywood, Illinois; Oak Ridge, Tennessee; and Holland, Michigan. During
the nine months ended  September 30, 2003,  we sold the  Properties in Portland,
Indiana; Richmond,  Virginia; and Maywood, Illinois,  resulting in a net gain on
disposal of  discontinued  operations  of  approximately  $107,000.  During this
period we also recorded a provision for write-down of assets of $36,000  related
to the property in Maywood, Illinois. During the nine months ended September 30,
2004, we recognized income from discontinued operations of $63,342,  relating to
the Properties in Oak Ridge, Tennessee and Holland,  Michigan. In April 2004, we
sold the Property in Oak Ridge,  Tennessee, to a third party resulting in a gain
on disposal of discontinued  operations of approximately $129,100. In June 2004,
Holland  Joint  Venture,  in which the we owned a 51% interest and accounted for
under the consolidation  method,  sold the property in Holland,  Michigan,  to a
third  party  resulting  in a gain on  disposal of  discontinued  operations  of
approximately $638,900. The amount of income and gain attributed to the owner of
the 49% interest was $336,371 and $34,692 during the nine months ended September
30, 2004 and 2003,  respectively,  of which $11,424 related to the quarter ended
September 30, 2003.

         In December 2003,  the Financial  Accounting  Standards  Board issued a
revision to FASB Interpretation No. 46 (originally issued in January 2003) ("FIN
46R"),   "Consolidation  of  Variable  Interest  Entities"   requiring  existing
unconsolidated  variable  interest  entities to be consolidated by their primary
beneficiaries.  The primary  beneficiary  of a variable  interest  entity is the
party that  absorbs a  majority  of the  entity's  expected  losses,  receives a
majority  of its  expected  residual  returns,  or both,  as a result of holding
variable  interests,  which are the ownership,  contractual,  or other pecuniary
interests  in an  entity  that  change  with  changes  in the fair  value of the
entity's net assets excluding  variable  interests.  Prior to FIN 46R, a company
generally  included  another  entity  in its  financial  statements  only  if it
controlled  the  entity  through  voting  interests.  Application  of FIN 46R is
required in  financial  statements  of public  entities  that have  interests in
variable  interest  entities for periods ending after March 15, 2004. We adopted
FIN 46R  during  the  quarter  ended  March  31,  2004,  which  resulted  in the
consolidation of previously unconsolidated joint ventures, Auburn Joint Venture,
Cocoa Joint Venture, and Kingsville Real Estate Joint Venture, all of which were
accounted for under the equity  method.  Prior to its  liquidation in June 2004,
Holland Joint Venture was also  consolidated  and accounted for under the equity
method.  FIN 46R does not require,  but does permit  restatement  of  previously
issued financial statements.  We have restated prior year's financial statements
to maintain comparability between the periods presented.  These restatements had
no effect on partners'  capital or net income.  Such  consolidation  resulted in
certain  assets and minority  interests,  and revenues  and  expenses,  of these
entities being reported on a gross basis in our financial  statements;  however,
these restatements had no effect on partners' capital or net income.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Not applicable.


ITEM 4.  CONTROLS AND PROCEDURES

         The  general  partners  maintain  a  set  of  disclosure  controls  and
procedures  designed to ensure that information  required to be disclosed in our
filings  under  the  Securities  Exchange  Act of 1934 is  recorded,  processed,
summarized and reported within the time periods  specified in the Securities and
Exchange  Commission's  rules and forms.  The principal  executive and financial
officers of the corporate general partner have evaluated our disclosure controls
and procedures as of the end of the period  covered by this Quarterly  Report on
Form 10-Q and have determined  that such disclosure  controls and procedures are
effective.

         There was no change in internal  control over financial  reporting that
occurred during the most recent fiscal quarter that has materially affected,  or
is  reasonably  likely to materially  affect,  internal  control over  financial
reporting.

                                       11
<PAGE>


                           PART II. OTHER INFORMATION



Item 1.  Legal Proceedings.   Inapplicable.
         -----------------

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

Item 3.  Defaults upon Senior Securities.  Inapplicable.
         -------------------------------

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

Item 5.  Other Information.  Inapplicable.
         -----------------

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

         (a)    Exhibits

                2.1     Agreement  and  Plan of  Merger  among  U.S.  Restaurant
                        Properties,  Inc., Ivanhoe  Acquisition IV, LLC, and CNL
                        Income  Fund IV,  Ltd.,  dated  as of  August  9,  2004.
                        (Included  as  Exhibit  99.2 to Form 8-K filed  with the
                        Securities  and Exchange  Commission  on August 9, 2004,
                        and incorporated herein by reference.)

                3.1     Certificate  of Limited  Partnership  of CNL Income Fund
                        IV, Ltd.  (Included as Exhibit 3.1 in Amendment No. 1 to
                        Registration  Statement  No.  33-20249  on Form S-11 and
                        incorporated herein by reference.)

                3.2     Amended  and  Restated   Agreement  and  Certificate  of
                        Limited   Partnership   of  CNL  Income  Fund  IV,  Ltd.
                        (Included  as  Exhibit  3.2 to Form 10-K  filed with the
                        Securities  and Exchange  Commission  on March 31, 1994,
                        and incorporated herein by reference.)

                4.1     Certificate  of Limited  Partnership  of CNL Income Fund
                        IV, Ltd.  (Included as Exhibit 3.1 in Amendment No. 1 to
                        Registration  Statement  No.  33-20249  on Form S-11 and
                        incorporated herein by reference.)

                4.2     Amended  and  Restated   Agreement  and  Certificate  of
                        Limited   Partnership   of  CNL  Income  Fund  IV,  Ltd.
                        (Included  as  Exhibit  3.2 to Form 10-K  filed with the
                        Securities  and Exchange  Commission  on March 31, 1994,
                        and incorporated herein by reference.)

                10.1    Property Management  Agreement (Included as Exhibit 10.1
                        to Form 10-K  filed  with the  Securities  and  Exchange
                        Commission on March 31, 1994, and incorporated herein by
                        reference.)

                10.2    Assignment  of Property  Management  Agreement  from CNL
                        Investment  Company to CNL Income  Fund  Advisors,  Inc.
                        (Included  as  Exhibit  10.2 to Form 10-K filed with the
                        Securities  and Exchange  Commission  on March 30, 1995,
                        and incorporated herein by reference.)

                10.3    Assignment  of Property  Management  Agreement  from CNL
                        Income Fund Advisors,  Inc. to CNL Fund  Advisors,  Inc.
                        (Included  as  Exhibit  10.3 to Form 10-K filed with the
                        Securities and Exchange Commission on April 1, 1996, and
                        incorporated herein by reference.)
                                       12
<PAGE>

                10.4    Assignment  of  Management   Agreement   from  CNL  Fund
                        Advisors,  Inc. to CNL APF  Partners,  LP.  (Included as
                        Exhibit 10.4 to Form 10-Q filed with the  Securities and
                        Exchange  Commission on August 9, 2001, and incorporated
                        herein by reference.)

                10.5    Assignment   of  Management   Agreement   from  CNL  APF
                        Partners, LP to CNL Restaurants XVIII, Inc. (Included as
                        Exhibit 10.5 to Form 10-Q filed with the  Securities and
                        Exchange Commission on August 14, 2002, and incorporated
                        herein by reference.)

                31.1    Certification  of Chief  Executive  Officer of Corporate
                        General  Partner  Pursuant  to Rule  13a-14  as  Adopted
                        Pursuant  to Section  302 of the  Sarbanes-Oxley  Act of
                        2002. (Filed herewith.)

                31.2    Certification  of Chief  Financial  Officer of Corporate
                        General  Partner  Pursuant  to Rule  13a-14  as  Adopted
                        Pursuant  to Section  302 of the  Sarbanes-Oxley  Act of
                        2002. (Filed herewith.)

                32.1    Certification  of Chief  Executive  Officer of Corporate
                        General  Partner  Pursuant to 18 U.S.C.  Section 1350 as
                        Adopted  Pursuant to Section  906 of the  Sarbanes-Oxley
                        Act of 2002. (Filed herewith.)

                32.2    Certification  of Chief  Financial  Officer of Corporate
                        General  Partner  Pursuant to 18 U.S.C.  Section 1350 as
                        Adopted  Pursuant to Section  906 of the  Sarbanes-Oxley
                        Act of 2002. (Filed herewith.)


                                       13

<PAGE>




                                   SIGNATURES


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

         DATED this 10th day of November 2004.


                                CNL INCOME FUND IV, LTD.

                                By:   CNL REALTY CORPORATION
                                      General Partner


                                      By:   /s/ James M. Seneff, Jr.
                                           ------------------------------------
                                            JAMES M. SENEFF, JR.
                                            Chief Executive Officer
                                            (Principal Executive Officer)


                                      By:   /s/ Robert A. Bourne
                                           ------------------------------------
                                            ROBERT A. BOURNE
                                            President and Treasurer
                                            (Principal Financial and
                                            Accounting Officer)



<PAGE>


                                  EXHIBIT INDEX


Exhibit Number

                 Exhibits

                 2.1    Agreement  and  Plan of  Merger  among  U.S.  Restaurant
                        Properties,  Inc., Ivanhoe  Acquisition IV, LLC, and CNL
                        Income  Fund IV,  Ltd.,  dated  as of  August  9,  2004.
                        (Included  as  Exhibit  99.2 to Form 8-K filed  with the
                        Securities  and Exchange  Commission  on August 9, 2004,
                        and incorporated herein by reference.)

                 3.1    Certificate  of Limited  Partnership  of CNL Income Fund
                        IV, Ltd.  (Included as Exhibit 3.1 in Amendment No. 1 to
                        Registration  Statement  No.  33-20249  on Form S-11 and
                        incorporated herein by reference.)

                 3.2    Amended  and  Restated   Agreement  and  Certificate  of
                        Limited   Partnership   of  CNL  Income  Fund  IV,  Ltd.
                        (Included  as  Exhibit  3.2 to Form 10-K  filed with the
                        Securities  and Exchange  Commission  on March 31, 1994,
                        and incorporated herein by reference.)

                 4.1    Certificate  of Limited  Partnership  of CNL Income Fund
                        IV, Ltd.  (Included as Exhibit 3.1 in Amendment No. 1 to
                        Registration  Statement  No.  33-20249  on Form S-11 and
                        incorporated herein by reference.)

                 4.2    Amended  and  Restated   Agreement  and  Certificate  of
                        Limited   Partnership   of  CNL  Income  Fund  IV,  Ltd.
                        (Included  as  Exhibit  3.2 to Form 10-K  filed with the
                        Securities  and Exchange  Commission  on March 31, 1994,
                        and incorporated herein by reference.)

                 10.1   Property Management  Agreement (Included as Exhibit 10.1
                        to Form 10-K  filed  with the  Securities  and  Exchange
                        Commission on March 31, 1994, and incorporated herein by
                        reference.)

                 10.2   Assignment  of Property  Management  Agreement  from CNL
                        Investment  Company to CNL Income  Fund  Advisors,  Inc.
                        (Included  as  Exhibit  10.2 to Form 10-K filed with the
                        Securities  and Exchange  Commission  on March 30, 1995,
                        and incorporated herein by reference.)

                 10.3   Assignment  of Property  Management  Agreement  from CNL
                        Income Fund Advisors,  Inc. to CNL Fund  Advisors,  Inc.
                        (Included  as  Exhibit  10.3 to Form 10-K filed with the
                        Securities and Exchange Commission on April 1, 1996, and
                        incorporated herein by reference.)

                 10.4   Assignment  of  Management   Agreement   from  CNL  Fund
                        Advisors,  Inc. to CNL APF  Partners,  LP.  (Included as
                        Exhibit 10.4 to Form 10-Q filed with the  Securities and
                        Exchange  Commission on August 9, 2001, and incorporated
                        herein by reference.)

                 10.5   Assignment   of  Management   Agreement   from  CNL  APF
                        Partners, LP to CNL Restaurants XVIII, Inc. (Included as
                        Exhibit 10.5 to Form 10-Q filed with the  Securities and
                        Exchange Commission on August 14, 2002, and incorporated
                        herein by reference.)

                 31.1   Certification  of Chief  Executive  Officer of Corporate
                        General  Partner  Pursuant  to Rule  13a-14  as  Adopted
                        Pursuant  to Section  302 of the  Sarbanes-Oxley  Act of
                        2002. (Filed herewith.)
<PAGE>

                 31.2   Certification  of Chief  Financial  Officer of Corporate
                        General  Partner  Pursuant  to Rule  13a-14  as  Adopted
                        Pursuant  to Section  302 of the  Sarbanes-Oxley  Act of
                        2002. (Filed herewith.)

                 32.1   Certification  of Chief  Executive  Officer of Corporate
                        General  Partner  Pursuant to 18 U.S.C.  Section 1350 as
                        Adopted  Pursuant to Section  906 of the  Sarbanes-Oxley
                        Act of 2002. (Filed herewith.)

                 32.2   Certification  of Chief  Financial  Officer of Corporate
                        General  Partner  Pursuant to 18 U.S.C.  Section 1350 as
                        Adopted  Pursuant to Section  906 of the  Sarbanes-Oxley
                        Act of 2002. (Filed herewith.)


<PAGE>




                                  EXHIBIT 31.1




<PAGE>



                                  EXHIBIT 31.2




<PAGE>



                                  EXHIBIT 32.1



<PAGE>



                                  EXHIBIT 32.2