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

FORM 10-K

OR

Commission file number: 0-14207

RANCON REALTY FUND IV,
A CALIFORNIA LIMITED PARTNERSHIP

Partnership’s telephone number, including area code (650) 343-9300
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:

Units of Limited Partnership Interest

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes [  ] No [X]

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

DOCUMENTS INCORPORATED BY REFERENCE:

Exhibits: the index of exhibits is contained in Part IV herein on page number 16.

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Part I

Item 1.          Business

Rancon Realty Fund IV, a California Limited Partnership, (“the Partnership”) was organized in accordance with the provisions of the California Uniform Limited Partnership Act for the purpose of acquiring, developing, operating and selling real property. The Partnership was organized in 1984 and reached final funding in July 1987. The general partner of the Partnership are Daniel L. Stephenson and Rancon Financial Corp. (“RFC”) hereinafter referred to as the Sponsor or the General Partner. RFC is wholly-owned by Daniel L. Stephenson. The Partnership has no employees.

The Partnership’s initial acquisition of property between December 1984 to August 1985 consisted of approximately 76.56 acres of partially developed and unimproved land located in San Bernardino, California. The property is part of a master-planned development of 153 acres known as Tri-City Corporate Centre (“Tri-City”) and is zoned for mixed commercial, office, hotel, transportation-related, and light industrial uses and all of the parcels thereof are separately owned by the Partnership and Rancon Realty Fund V (“Fund V”), a partnership sponsored by the General Partner of the Partnership. Since the acquisition of the land, the Partnership has constructed twelve projects at Tri-City consisting of three office projects, one industrial property, and eight commercial properties. In 2002, one office building was sold. The Partnership’s properties are more fully described in Item 2.

As of December 31, 2002, the Partnership owned eleven rental properties and approximately 22.5 acres of unimproved land (“Tri-City Properties”) in the Tri-City master-planned development in San Bernardino, California.

In April 1996, the Partnership formed Rancon Realty Fund IV Tri-City Limited Partnership, a Delaware limited partnership (“RRF IV Tri-City”). The limited partner of RRF IV Tri-City is the Partnership and the General Partner is Rancon Realty Fund IV, Inc. (“RRF IV, Inc.”), a corporation wholly owned by the Partnership. Since the Partnership owns 100% of RRF IV, Inc. and indirectly owns 100% of RRF IV Tri-City, the Partnership considers all assets owned by RRF IV, Inc. and RRF IV Tri-City to be owned by the Partnership.

In November 2000, the Partnership offered to redeem the units of limited partnership interest (the “Units”) in the Partnership held by investors who own no more than four Units in total under any single registered title (the “Small Investments”) at a purchase price of $292 per Unit. In 2001, a total of 574 Units were redeemed at an average price of $299. In 2002, a total of 2,488 Units were redeemed at an average price of $334. As of December 31, 2002, there were 71,546 Units outstanding.

Competition Within the Market

The Partnership competes in the leasing of its properties primarily with other available properties in the local real estate market. Management is not aware of any specific competitors of the Partnership’s properties doing business on a significant scale in the local market. Management believes that characteristics influencing the competitiveness of a real estate project are the geographic location of the property, the professionalism of the property manager and the maintenance and appearance of the property, in addition to external factors such as general economic circumstances, trends, and the existence of new, competing properties in the vicinity. Additional competitive factors with respect to commercial and industrial properties are the ease of access to the property, the adequacy of related facilities, such as parking, and the ability to provide rent concessions and tenant improvements commensurate with local market conditions. Although management believes the Partnership’s properties are competitive with comparable properties as to those factors within the Partnership’s control, over-building and other external factors could adversely affect the ability of the Partnership to attract and retain tenants. The marketability of the properties may also be affected (either positively or negatively) by these factors as well as by changes in general or local economic conditions, including prevailing interest rates. Depending on market and economic conditions, the Partnership may be required to retain ownership of its properties for periods longer than anticipated, or may need to sell earlier than anticipated or refinance a property, at a time or under terms and conditions that are less advantageous than would be the case if unfavorable economic or market conditions did not exist.

Working Capital

The Partnership’s practice is to maintain cash reserves for normal repairs, replacements, working capital and other contingencies.

Other Factors

Approximately 15 acres of the Tri-City Corporate Centre land owned by the Partnership was part of a landfill operated by the City of San Bernardino (“the City”) from approximately 1950 to 1960. There are no records of which the Partnership is aware disclosing that hazardous wastes exist at the landfill. During 1996, the Santa Ana Regional Water Quality Control Board (“SARWQCB” - the state agency with regulatory jurisdiction over the closure and monitoring of landfills) determined that the City was primarily responsible for the landfill. Since that time the Partnership entered into a Limited Access Easement Agreement with the City to perform testing and monitoring. The City has developed a work plan approved by the SARWQCB, which includes a landfill cover system to be implemented in 2003.

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Item 2.          Properties

Tri-City Corporate Center

Between December 24, 1984 and August 19, 1985, the Partnership acquired a total of 76.56 acres of partially developed land in Tri-City for an aggregate purchase price of $9,917,000. During that time, Fund V acquired the remaining 76.21 acres within Tri-City.

Tri-City is located at the northeastern quadrant of the intersection of Interstate 10 (San Bernardino Freeway) and Waterman Avenue in the southernmost part of the City of San Bernardino, and is in the heart of the Inland Empire, the most densely populated area of San Bernardino and Riverside Counties.

Tri-City Properties

The Partnership’s improved properties in the Tri-City Corporate Centre are as follows:

These eleven operating properties total approximately 395,000 square feet and offer a wide range of retail, commercial, R&D and office products to the market.

The Inland Empire is generally broken down into two major markets, Inland Empire East and Inland Empire West. Tri-City Corporate Centre is located within the Inland Empire East market, which consists of approximately 12 million square feet of office space and an overall vacancy rate of approximately 12% as of December 31, 2002, according to research conducted by an independent broker.

Within the Tri-City Corporate Centre at December 31, 2002, the Partnership has approximately 155,000 square feet of office space with an average vacancy rate of 0.75%, approximately 178,000 square feet of retail space with an average vacancy rate of 0.8%, and approximately 62,000 square feet of R & D space with no vacancy.

Occupancy levels for the Partnership’s Tri-City buildings for each of the five years ended December 31, 2002, expressed as a percentage of the total net rentable square feet were as follows:

In 2002, management renewed eight leases totaling 36,139 square feet, expanded three existing tenants by 16,476 square feet, and executed two new leases totaling 4,214 square feet. During 2003, there are nine leases totaling 56,350 square feet that are due to expire. Three tenants with 6,530 total square feet of space have extended their leases. One tenant with 3,910 square feet has indicated that it will vacate upon expiration of its lease. The remaining four tenants occupying 45,910 total square feet of space have not yet indicated whether they plan to renew their leases or vacate the premises in 2003. Management, along with independent leasing brokers, is aggressively marketing the space.

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The annual effective rents per square foot for each of the five years ended December 31, 2002 were as follows:

Annual effective rent is calculated by dividing the aggregate of annualized current monthly rental income for each tenant by the total square feet occupied at the property.

At December 31, 2002, the Partnership’s annual rental rates ranged from $15.24 to $21.24 per square foot for office space; $9.96 to $24.48 per square foot for retail space; and $10.56 to $12.36 per square foot for R&D space.

The Partnership’s Tri-City properties had the following tenants which occupied a significant portion of the net rentable square footage as of December 31, 2002:

[Additional columns below]

[Continued from above table, first column(s) repeated]

The

University of

Office

Tenant

Phoenix, Inc.

Max

Circuit City

Building

One Vanderbilt

Office Max

Circuit City

Nature of Business

Education facility

Supplies Retail

Electronics Retail

Lease Term

10 years

15 years

20 years

Expiration Date

8/31/09

10/31/13

1/13/18

Square Feet

24,719

23,500

39,123

% of rentable total

6%

5%

8%

Annual Rent

$297,000

$276,000

$523,000

Future Rent Increases

3% annually

5% in 2003

lesser of 10% or 5 yr. CPI every 5-years during lease term

Renewal Options

N/A

Four 5-year options

Four 5-year options

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The Partnership’s Tri-City Properties are owned by the Partnership, in fee, subject to the following notes and deeds of trust as of December 31, 2002:

Tri-City Land

22.5 acres of the Tri-City land owned by the Partnership remains undeveloped. The Partnership’s intention has been to develop parcels of this land on a build-to-suit basis, as tenants become available.

Approximately 15 acres of the Tri-City Corporate Centre land owned by the Partnership was part of a landfill operated by the City of San Bernardino (“the City”) from approximately 1950 to 1960. There are no records of which the Partnership is aware disclosing that hazardous wastes exist at the landfill. During 1996, the Santa Ana Regional Water Quality Control Board (“SARWQCB” - the state agency with regulatory jurisdiction over the closure and monitoring of landfills) determined that the City was primarily responsible for the landfill. Since that time the Partnership entered into a Limited Access Easement Agreement with the City to perform testing and monitoring. The City has developed a work plan approved by the SARWQCB, which includes a landfill cover system to be implemented in 2003.

Item 3.          Legal Proceedings

None.

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

None.

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Part II

Item 5.          Market for Partnership’s Common Equity and Related Stockholder Matters

Market Information

There is no established trading market for the Units issued by the Partnership.

Holders

As of December 31, 2002, there were 9,090 holders of Partnership Units.

Distributions

Distributions are paid from either Cash From Operations or Cash From Sales or Refinancing (as such terms are defined in the Partnership Agreement).

Cash From Operations includes all cash receipts from operations in the ordinary course of business (except for the sale, refinancing, exchange or other disposition of real property in the ordinary course of business) after deducting payments for operating expenses. All distributions of Cash From Operations are paid in the ratio of 90% to the Limited Partners and 10% to the General Partner.

Cash From Sales or Refinancing is the net cash realized by the Partnership from the sale, disposition or refinancing of any property after retirement of applicable mortgage debt and all expenses related to the transaction, together with interest on any notes taken back by the Partnership upon the sale of a property. Distributions of Cash From Sales or Refinancing are generally allocated as follows: (i) first, 1 percent to the General Partner and 99 percent to the Limited Partners until the Limited Partners have received an amount equal to their capital contributions, plus a 12 percent return on their unreturned capital contributions (less prior distributions of Cash from Operations); (ii) second, to Limited Partners who purchased their units of limited partnership interest prior to April 1, 1985, to the extent they receive an additional return (depending on the date on which they purchased the units) on their unreturned capital of either 9 percent, 6 percent or 3 percent (calculated through October 31, 1985); and (iii) third, 20 percent to the General Partner and 80 percent to the Limited Partners. A more detailed statement of these distribution policies is set forth in the Partnership Agreement.

In 2002, the Partnership distributed $971,000 and $10,000 to the Limited Partners and General Partner from the proceeds of the sale of the Two Vanderbilt property as discussed below, respectively.

In 2001, the Partnership distributed $852,000 and $95,000 to the Limited Partners and General Partner from operations, respectively.

Item 6.          Selected Financial Data

The following is selected financial data for each of the five years ended December 31, 2002 (in thousands, except per Unit data):

Item 7.         Management’s Discussion and Analysis of Financial Condition and Results of Operations

New Accounting Pronouncements

The Financial Accounting Standards Board (FASB) has approved for issuance a number of new accounting standards. Management does not expect these new accounting standards to have a material impact on the Partnership’s consolidated financial position or results of operations. These new accounting standards are as follows:

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In June 2001, the FASB approved for issuance SFAS 143, “Accounting for Asset Retirement Obligations.” SFAS 143 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred and that the associated asset retirement costs be capitalized as part of the carrying value of the related long-lived asset. SFAS 143 will be effective January 1, 2003 for the Partnership. Management does not expect this standard to have a material impact on the Partnership’s consolidated financial position or results of operations.

In May 2002, the FASB approved for issuance SFAS 145, “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections.” SFAS 145 requires gains and losses from extinguishment of debt to be classified as an extraordinary item only if the criteria in APB No. 30 has been met. Further, lease modifications with economic effects similar to sale-leaseback transactions must be accounted for in the same manner as sale-leaseback transactions. While the technical corrections to existing pronouncements are not substantive in nature, in some instances they may change accounting practice. SFAS 145 will be effective January 1, 2003 for the Partnership. Management does not expect this standard to have a material impact on the Partnership’s consolidated financial position and results of operations.

In June 2002, the FASB approved for issuance SFAS 146, “Accounting for Costs Associated with Exit or Disposal Activities.” SFAS 146 addresses accounting and reporting for costs associated with exit and disposal activities and supercedes Emerging Issues Task Force Issue No. 94-3 (EITF 94-3), “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).” SFAS 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred, as defined by the Statement. Under EITF 94-3, an exit cost was recognized at the date an entity committed to an exit plan. Additionally, SFAS 146 provides that exit and disposal costs should be measured at fair value and that the associated liability will be adjusted for changes in estimated cash flows. The provisions of SFAS 146 are effective for exit and disposal activities that are initiated after December 31, 2002. Management does not expect this standard to have a material impact on the Partnership’s consolidated financial position and results of operations.

In November 2002, the FASB approved for issuance FASB Interpretation 45 (FIN 45), “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.” FIN 45 elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. It also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and initial measurement provisions of FIN 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The disclosure requirements are effective for financial statements of interim and annual periods ending after December 15, 2002. The Partnership does not provide for any guarantees, therefore, the pronouncement is not expected to have any impact on the Partnership’s financial position or results of operations.

In January 2003, the FASB approved for issuance FASB Interpretation No. 46 (FIN 46), “Consolidation of Variable Interest Entities.” FIN 46 clarifies the application of Accounting Research Bulletin No. 51, “Consolidated Financial Statements” to certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. FIN 46 applies immediately to variable interest entities created after January 31, 2003, and to variable interest entities in which an enterprise obtains an interest after that date. It applies in the first fiscal year or interim period beginning after June 15, 2003, to variable interest entities in which an enterprise holds a variable interest that it acquired before February 1, 2003. FIN 46 may be applied prospectively with a cumulative-effect adjustment as of the date on which it is first applied or by restating previously issued financial statements for one or more years with a cumulative-effect adjustment as of the beginning of the first year restated. The disclosure requirements of FIN 46 are effective for all financial statements initially issued after January 31, 2003. Management is currently assessing the impact of this interpretation on the Partnership’s consolidated financial position and results of operations. The disclosures provided reflect management’s understanding and analysis of FIN 46 based upon information currently available. The evaluation of the Partnership’s various arrangements is ongoing and is subject to change in the event additional interpretive guidance is provided by the Financial Accounting Standards Board or others.

Liquidity and Capital Resources

The following discussion should be read in conjunction with the financial statements and the notes thereto as listed in Item 15 of Part IV.

At December 31, 2002, the Partnership had cash of $3,764,000. The remainder of the Partnership’s assets consisted primarily of its net investments in real estate, totaling approximately $29,520,000 at December 31, 2002, which included $28,306,000 of rental properties and $1,214,000 of land held for development.

The Partnership’s primary liabilities at December 31, 2002 included notes payable, totaling approximately $7,970,000 which consisted of two secured loans encumbering properties with an aggregate net book value of approximately $13,523,000 and with maturity dates ranging from January 1, 2005 to May 1, 2006. These notes require monthly principal and interest payments ranging from $20,000 to $53,000 and bear fixed interest at rates between 8.74% and 9%. A $7,200,000 line of credit, which bears interest at the lender’s Prime Rate, has no outstanding balance at December 31, 2002.

On March 20, 2002, the Partnership sold the Two Vanderbilt property to an anchor tenant, Inland Empire Health Plan, who occupied 78% of the property for a sales price of $8,750,000. The sale generated net proceeds of approximately $8,382,000 and a gain on sale of

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approximately $5,120,000. The Partnership made a pay down on the line of credit of $4,200,000 from the sales proceeds and was initially added to its cash reserves. $981,000 of these sales proceeds were distributed to the Partners in 2002.

The Partnership is contingently liable for subordinated real estate commissions payable to the General Partner in the aggregate amount of $643,000 at December 31, 2002, for sales that were completed in previous years. The subordinated real estate commissions are payable only after the Limited Partners have received distributions equal to their original invested capital plus a cumulative non-compounded return of 12% per annum on their adjusted invested capital. Since the circumstances under which these commissions would be payable are limited, the liability has not been recognized in the accompanying consolidated financial statements; however, the amount will be recorded when and if it becomes payable.

Operationally, the Partnership’s primary source of funds consists of cash provided by its rental properties. Other sources of funds may include permanent financing, property sales and interest income on certificates of deposit and other deposits of funds invested temporarily. Cash generated from property sales is generally added to the Partnership’s cash reserves, pending use in development of other properties or distribution to the partners.

Management believes that the Partnership’s cash balance as of December 31, 2002, together with cash from operations, sales and financing, will be sufficient to finance the Partnership’s and the properties’ continued operations and development plans on a short-term basis and for the reasonably foreseeable future. There can be no assurance that the Partnership’s results of operations will not fluctuate in the future and at times affect its ability to meet its operating requirements.

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

Operating Activities

During the year ended December 31, 2002, the Partnership’s cash provided by operating activities totaled $797,000.

The $96,000 increase in accounts receivable at December 31, 2002, compared to December 31, 2001, was primarily due to an accrual for reimbursement from the reserve impound accounts for tenant improvements paid for previously by the Partnership at Carnegie Business Center II, Promotional Retail Center and Service Retail Center.

The $146,000 increase in deferred costs at December 31, 2002, compared to December 31, 2001, was primarily due to lease commissions paid for new and renewal leases.

The $57,000 decrease in prepaid expenses and other assets at December 31, 2002, compared to December 31, 2001, was primarily due to a decrease in the reserve impound account at Carnegie Business Center II, Promotional Retail Center and Service Retail Center.

The $276,000 decrease in accounts payable and other liabilities at December 31, 2002, compared to December 31, 2001, was primarily due to the refund of security deposits related to the sale of the Two Vanderbilt property, offset by accruals for building operating expenses and audit and tax preparation fees.

Investing Activities

During the year ended December 31, 2002, the Partnership’s cash provided by investing activities totaled $7,767,000, which included $8,382,000 of net cash proceeds from the sale of the Two Vanderbilt property, offset by $615,000 of cash primarily used for tenant improvements at One Vanderbilt and Carnegie Business Center I.

Financing Activities

During the year ended December 31, 2002, the Partnership’s cash used for financing activities totaled $6,262,000, which consisted of $4,372,000 in principal payments on notes payable and the line of credit, $981,000 of distributions to the partners, and $909,000 paid to redeem 2,488 limited partnership units (“Units”).

RESULTS OF OPERATIONS

2002 versus 2001

Revenue

Rental income for the year ended December 31, 2002 increased $304,000, or 5%, compared to the year ended December 31, 2001, primarily due to increases in occupancies at One Vanderbilt, Carnegie Business Center I and Palm Court Retail #1.

Occupancy rates at the Partnership’s Tri-City properties at the end of each of the five years ended December 31, 2002 were as follows:

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