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 June 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>
                                                          June 30,                December 31,
                                                            2004                      2003
                                                     ------------------       -------------------
                      ASSETS

Real estate properties with operating leases, net    $       9,128,383        $        9,257,733
Net investment in direct financing leases                      556,310                   580,803
Real estate held for sale                                           --                 1,078,662
Investment in joint ventures                                 1,253,485                 1,270,319
Cash and cash equivalents                                    2,424,983                 1,367,889
Receivables, less allowance for doubtful accounts
    of $3,214 in 2003                                           18,489                    19,510
Accrued rental income                                          226,434                   265,471
Other assets                                                    18,652                    15,048
                                                     ------------------       -------------------

                                                     $      13,626,736        $       13,855,435
                                                     ==================       ===================

        LIABILITIES AND PARTNERS' CAPITAL

Accounts payable and accrued expenses                $          20,714        $            6,963
Real estate taxes payable                                       19,162                    19,419
Distributions payable                                          510,475                   510,475
Due to related parties                                         278,266                   259,296
Rents paid in advance and deposits                              51,067                    62,018
                                                     ------------------       -------------------
    Total liabilities                                          879,684                   858,171

Minority interests                                             255,362                   622,457

Partners' capital                                           12,491,690                12,374,807
                                                     ------------------       -------------------

                                                     $      13,626,736        $       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                    Six Months Ended
                                                                          June 30,                           June 30,
                                                                   2004              2003             2004             2003
                                                              --------------    --------------   --------------   --------------
Revenues:
    Rental income from operating leases                       $     303,261     $     340,862    $     627,342    $     683,536
    Earned income from direct financing leases                       18,157            19,658           36,709           39,661
    Contingent rental income                                         16,971            11,696           32,698           24,518
    Lease termination income                                             --                --          225,000               --
    Interest and other income                                         3,863             2,261            6,726            3,654
                                                              --------------    --------------   --------------   --------------
                                                                    342,252           374,477          928,475          751,369
                                                              --------------    --------------   --------------   --------------

Expenses:
    General operating and administrative                             69,925            54,321          141,396          119,987
    Property related                                                 14,198             2,110           17,861            3,750
    State and other taxes                                               406                --           23,236           22,952
    Depreciation and amortization                                    64,743            65,148          129,351          130,296
    Provisions for write-down of assets                                  --                --           25,153               --
                                                              --------------    --------------   --------------   --------------
                                                                    149,272           121,579          336,997          276,985
                                                              --------------    --------------   --------------   --------------

Income before minority interests and equity in earnings
    of unconsolidated joint ventures                                192,980           252,898          591,478          474,384

Minority interests                                                   (3,172)           (7,563)          (6,691)         (15,137)

Equity in earnings of unconsolidated joint ventures                  29,207            28,723           58,045           56,466
                                                              --------------    --------------   --------------   --------------

Income from continuing operations                                   219,015           274,058          642,832          515,713
                                                              --------------    --------------   --------------   --------------

Discontinued operations:
    Income from discontinued operations                              30,346            40,048           63,342           65,806
    Gain on disposal of discontinued operations                     768,030                --          768,030          107,039
    Minority interest                                              (325,053)          (11,504)        (336,371)         (23,268)
                                                              --------------    --------------   --------------   --------------
                                                                    473,323            28,544          495,001          149,577
                                                              --------------    --------------   --------------   --------------

Net income                                                    $     692,338     $     302,602    $   1,137,833    $     665,290
                                                              ==============    ==============   ==============   ==============

Income per limited partner unit:
    Continuing operations                                     $        3.65     $        4.57    $       10.71    $        8.60
    Discontinued operations                                            7.89              0.47             8.25             2.49
                                                              --------------    --------------   --------------   --------------
                                                              $       11.54     $        5.04    $       18.96    $       11.09
                                                              ==============    ==============   ==============   ==============

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>

                                               Six Months Ended         Year Ended
                                                    June 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                                        1,137,833             1,308,181
    Distributions ($17.02 and $44.87 per
       limited partner unit, respectively)           (1,020,950)           (2,691,900)
                                              ------------------    ------------------
                                                     11,704,339            11,587,456
                                              ------------------    ------------------

Total partners' capital                       $      12,491,690     $      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>

                                                                            Six Months Ended
                                                                                June 30,
                                                                         2004              2003
                                                                    --------------    --------------

Net cash provided by operating activities                           $     936,566     $     840,465
                                                                    --------------    --------------

Cash flows from investing activities:
    Proceeds from sale of assets                                        1,851,635         1,698,733
                                                                    --------------    --------------
          Net cash provided by investing activities                     1,851,635         1,698,733
                                                                    --------------    --------------

Cash flows from financing activities:
    Distributions to limited partners                                  (1,020,950)       (1,684,422)
    Distributions to holders of minority interests                       (710,157)          (47,035)
                                                                    --------------    --------------
          Net cash used in financing activities                        (1,731,107)       (1,731,457)
                                                                    --------------    --------------


Net increase in cash and cash equivalents                               1,057,094           807,741

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

Cash and cash equivalents at end of period                          $   2,424,983     $   1,229,157
                                                                    ==============    ==============

Supplemental schedule of non-cash investing and financing
    activities:

    Deferred real estate disposition fee incurred and unpaid at
       end of period                                                $      13,950     $      52,459
                                                                    ==============    ==============

    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 Six Months Ended June 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 six months ended June 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.       Reclassification

         Certain  items in the  prior  year's  financial  statements  have  been
         reclassified to conform to 2004 presentation.  These  reclassifications
         had no effect on total partners' capital or net income.


                                       5
<PAGE>

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


3.       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 $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                    Six Months Ended
                                                      June 30,                          June 30,
                                                2004             2003             2004             2003
                                           --------------   --------------   --------------   --------------

              Rental revenues              $      30,346    $      51,316    $      71,871    $     136,989
              Expenses                                --          (11,268)          (8,529)         (35,183)
              Provision for write-down of
                  assets                              --               --               --          (36,000)
                                           --------------   --------------   --------------   --------------
              Income from discontinued
                  operations               $      30,346    $      40,048    $      63,342    $      65,806
                                           ==============   ==============   ==============   ==============
</TABLE>


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 six months ended June 30, 2004 and 2003, the
         Partnership  incurred  deferred,  subordinated real estate  disposition
         fees of $13,950 and $52,459,  respectively,  as a result of the sale of
         one and two properties during each period, respectively.

5.       Subsequent Event

         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

                                       6
<PAGE>

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


5.       Subsequent Event - Continued

         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  transaction,  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 June 30, 2004 and 2003,  the
Partnership owned 20 and 22 Properties  directly,  respectively.  As of June 30,
2004 and 2003, the Partnership also owned six and seven  Properties  indirectly,
respectively, through joint venture or tenancy in common arrangements.

Capital Resources

         Net cash  provided by operating  activities  was $936,566 and $840,465,
during the six months ended June 30, 2004, and 2003, respectively.  The increase
in net cash  provided by operating  activities  during the six months ended June
30, 2004, was a result of changes in our working capital,  such as the timing of
transactions  relating  to the  collection  of  receivables  and the  payment of
expenses.

         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 June 30, 2004, we had  $2,424,983 in cash and cash  equivalents,  as
compared to $1,367,889 at December 31, 2003. At June 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 June 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 six months ended June 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 $1,020,950 and $1,670,950 for the six months ended June 30, 2004 and
2003,  respectively  ($510,475 for each of the quarters  ended June 30, 2004 and
2003).  This represents  distributions of $17.02 and $27.85 per unit for the six
months  ended June 30, 2004 and 2003,  respectively  ($8.51 for each  applicable

                                       8
<PAGE>

quarter).  Distributions  for the six  months  ended June 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 six months ended June 30, 2004 and 2003. No amounts  distributed to
the  limited  partners  for the six  months  ended  June  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 $879,684 at
June 30,  2004,  as  compared to $858,171  at  December  31,  2003.  The general
partners  believe  that we have  sufficient  cash  on hand to meet  our  current
working capital needs.

Long-Term Liquidity

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

Results of Operations

         Rental  revenues from  continuing  operations were $664,051 for the six
months ended June 30, 2004,  as compared to $723,197 in the same period in 2003,
of which,  $321,418 and $360,520 were earned during the second  quarters of 2004
and 2003,  respectively.  Rental revenues from continuing  operations during the
six months and quarter  ended June 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 have an adverse effect on our
results of  operations  if we are not able to re-lease  the Property in a timely
manner.  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 six months ended June 30, 2004 and 2003,  we earned  $32,698
and $24,518,  respectively,  in contingent rental income from our Properties, of
which,  $16,971 and $11,696 were earned  during the second  quarters of 2004 and
2003, respectively. The increase in contingent rental income during 2004 was due
to an  increase  in reported  gross  sales of the  restaurants  with leases that
require the payment of contingent rental income.

         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 six months ended June 30, 2004 and 2003,  we earned  $58,045
and $56,466,  respectively,  attributable to net income earned by unconsolidated
joint  ventures,  of which,  $29,207 and $28,723  were earned  during the second
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.

         Operating  expenses,   including   depreciation  and  amortization  and
provision  for  write-down  of assets,  were  $336,997  and $276,985 for the six
months  ended  June 30,  2004 and 2003,  respectively,  of which,  $149,272  and
$121,579  were incurred in the second  quarters of 2004 and 2003,  respectively.
The increase in operating expenses during the six months ended June 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 six months ended June
30,  2004,  was  also  due  to  incurring   additional   general  operating  and

                                       9
<PAGE>

administrative expenses,  including legal fees. In addition,  operating expenses
were higher  during the quarter  and six months  ended June 30, 2004  because we
incurred  property related expenses such as insurance,  repairs and maintenance,
legal fees and real  estate  taxes  relating  to the vacant  Property  in Tampa,
Florida.  We will  continue  to incur  these  expenses  until  the  Property  is
re-leased.

         We recognized income from discontinued operations (rental revenues less
property related expenses and provision for write-down of assets) of $65,806 and
$40,048  during the six months and quarter  ended June 30,  2003,  respectively,
relating to the Properties in Portland,  Indiana, Richmond,  Virginia,  Maywood,
Illinois, Oak Ridge,  Tennessee,  and Holland,  Michigan.  During the six months
ended June 30, 2003, we sold the  Properties  in Portland,  Indiana and Richmond
Virginia  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 in  connection  with the July 2003 sale of the
property in Maywood,  Illinois. During the six months and quarter ended June 30,
2004, we recognized income from discontinued  operations of $63,342 and $30,346,
respectively,  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 $23,268 during
the six months ended June 30, 2004 and 2003, respectively, of which $325,053 and
$11,504 related to the quarters ended June 30, 2004 and 2003, respectively.

         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.

         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,

                                       10
<PAGE>

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  transaction,  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.


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.  Changes in Securities.  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

              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.)

                                       12
<PAGE>

              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.)

         (b)  Reports on Form 8-K

              No reports on Form 8-K were filed  during the  quarter  ended June
              30, 2004.


                                       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 9th day of August 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

         (c)  Exhibits

              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.)

              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