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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

For the year ended December 31, 2003

OR

For the transition period from              to             

Commission file number: 0-14207

RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP

(Exact name of registrant as specified in its charter)

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

(Title of class)

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.    Yes  x    No  ¨

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 herein on page number 34.

Table of Contents

INDEX

RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP

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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 partners 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 and August 1985 consisted of approximately 76.56 acres of partially developed and unimproved land located in San Bernardino, California. The property is part of a master-planned development of 153 acres known as Tri-City 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, 2003, the Partnership owned eleven rental properties, approximately one acre of land which is under construction, and approximately 21.5 acres of unimproved land (“Tri-City Properties”), all 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 2002, a total of 2,488 Units were redeemed at an average price of $334. In 2003, a total of 1,307 Units were redeemed at an average price of $375. As of December 31, 2003, there were 70,239 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. The Partnership knows of no statistical information which allows comparison of its cash reserve to those of its competitors.

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. The City is responsible for the landfill and the gas-monitoring program as prescribed by the Santa Ana Regional Water Quality Control Board (‘RWQCB”). Under an Access Agreement with the Partnership, methane monitoring is handled directly by the City. The City must submit to the RWQCB a final plan for both the cover improvements to the landfill and a gas collection system installation. This was due in January 2004. Also, in 2003 the County of San Bernardino Local Enforcement Agency (LEA) issued a tentative Notice and Order of Compliance directing the City to install gas collection systems. There is no immediate requirement to conduct clean closure of the site, and the Partnership is working directly with the City on the details of their plan with the RWQCB and the County. However, no assurance can be made that circumstances will not arise which could impact the Partnership’s responsibility related to the land.

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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 12.4 million square feet of office space and an overall vacancy rate of approximately 12% as of December 31, 2003, according to research conducted by an independent broker.

Within the Tri-City Corporate Centre at December 31, 2003, 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, 2003, expressed as a percentage of the total net rentable square feet were as follows:

In 2003, management renewed eight leases totaling 65,181 square feet, and executed one new lease totaling 1,615 square feet. During 2004, there are eight leases totaling 51,728 square feet that are due to expire. Four tenants with 8,090 total square feet of space have extended their leases. One tenant occupying 39,380 square feet has indicated that they will renew their lease. Terms and conditions are being negotiated. The remaining three tenants occupying 4,258 total square feet of space have not yet indicated whether they plan to renew their leases or vacate the premises in 2004. 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, 2003 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, 2003, the Partnership’s annual rental rates ranged from $15.24 to $21.60 per square foot for office space; $10.56 to $24.48 per square foot for retail space; and $10.56 to $12.72 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, 2003:

The lease term for ITT Educational Center will expire on 12/31/04. The tenant has indicated that they will extend the lease term for another quarter prior moving out of the building.

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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, 2003:

Tri-City Land

As of December 31, 2003 the Partnership owned approximately 22.5 acres of land. Construction has commenced on an approximately one-acre parcel (discussed below). The remaining 21.5 acres is currently undeveloped. The Partnership anticipates developing and/or selling the parcels of this land by the end of next year.

The one-acre land parcel, known as Vanderbilt Plaza, is currently under construction. It is estimated to be completed in late 2004. The estimated construction cost for this 120,000 square foot four-story office building is approximately $10,000,000.

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. The City is responsible for the landfill and the gas-monitoring program as prescribed by the Santa Ana Regional Water Quality Control Board (‘RWQCB”). Under an Access Agreement with the Partnership, methane monitoring is handled directly by the City. The City must submit to the RWQCB a final plan for both the cover improvements to the landfill and a gas collection system installation. This was due in January 2004. Also, in 2003 the County of San Bernardino Local Enforcement Agency (LEA) issued a tentative Notice and Order of Compliance directing the City to install gas collection systems. There is no immediate requirement to conduct clean closure of the site, and the Partnership is working directly with the City on the details of their plan with the RWQCB and the County. However, no assurance can be made that circumstances will not arise which could impact the Partnership’s responsibility related to the land. At this time, the Partnership believes that developing of this land is not practical.

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, 2003, there were 8,609 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 2003, the Partnership distributed $1,068,000 and $119,000 to the Limited Partners and General Partner from the proceeds of the sale of the Two Vanderbilt property as discussed below, respectively.

In 2002, the Partnership distributed $971,000 and $10,000 to the Limited Partners and General Partner from operations, respectively.

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Item 6. Selected Financial Data

The following is selected financial data for each of the five years ended December 31, 2003 (in thousands, except per Unit data):

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

Results Of Operations

Comparison of the year ended December 31, 2003 to the year ended December 31, 2002

Revenue

Rental income for the year ended December 31, 2003 increased $762,000, compared to the year ended December 31, 2002, primarily due to increases in rental rates.

Occupancy rates at the Partnership’s Tri-City properties at the end of each of the five years ended December 31, 2003 were as follows:

In 2003, tenants at Tri-City occupying substantial portions of leased rental space included: (i) ITT Educational Center with a lease through December 2004; (ii) Countrywide Home Loan with a lease through August 2005; (iii) CompUSA with a lease through August 2008; (iv) Fidelity National Title with a lease through August 2008; (v) PetsMart with a lease through January 2009; (vi) Inland Regional Center with a lease through July 2009; (vii) The University of Phoenix, Inc. with a lease through August 2009; (viii) Office Max with a lease through October 2013; and (ix) Circuit City with a lease through January 2018. These nine tenants, in the aggregate, occupied approximately 293,000 square feet of the 395,000 total leasable square feet at Tri-City and accounted for approximately 74% of the rental income of the Partnership in 2003.

The 4% decrease in occupancy from December 31, 2002 to December 31, 2003 at One Vanderbilt was due to a 3,900 square foot tenant moving out when its lease term expired.

Interest and other income for the year ended December 31, 2003 decreased $14,000 from the year ended December 31, 2002, primarily due to a lower average invested cash balance as a result of distributions made to the General and Limited Partners in November 2002 and 2003, as well as decreases in interest rates.

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Expenses

Interest expense decreased $73,000, or 9%, for the year ended December 31, 2003, compared to the year ended December 31, 2002, primarily due to a pay down on the Partnership’s line of credit in March 2002.

Expenses associated with undeveloped land decreased $544,000 during the year ended December 31, 2003, compared to the year ended December 31, 2002, primarily due to a decrease in property taxes resulting from early payoff in 2002 of an annual assessment levied by the City of San Bernardino. The City of San Bernardino issued bonds which were used to fund land infrastructure costs. The Partnership benefited from these improvements and was responsible for a portion of the annual bond service costs. In 2002, the bonds were repaid which required the Partnership to incur a larger expense.

Comparison of the year ended December 31, 2002 to the year ended December 31, 2001

Revenue

Rental income for the year ended December 31, 2002 increased $304,000 compared to the year ended December 31, 2001, primarily due to increases in occupancy 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:

In 2002, tenants at Tri-City occupying substantial portions of leased rental space included: (i) CompUSA with a lease through August 2003; (ii) ITT Educational Center with a lease through December 2004; (iii) PetsMart with a lease through January 2009; (iv) Inland Regional Center with a lease through July 2009; (v) The University of Phoenix, Inc. with a lease through August 2009; (vi) Office Max with a lease through October 2013; and (vii) Circuit City with a lease through January 2018. These seven tenants, in the aggregate, occupied approximately 254,000 square feet of the 395,000 total leasable square feet at Tri-City and accounted for approximately 60% of the rental income of the Partnership in 2002.

The 23% increase in occupancy from December 31, 2001 to December 31, 2002 at One Vanderbilt was primarily due to the expansion of two existing tenants into approximately 16,700 square feet of vacant space.

The 40% increase in occupancy from December 31, 2001 to December 31, 2002 at Palm Court Retail #1 was primarily due to the leasing of 2,000 square feet to one new tenant.

Interest and other income for the year ended December 31, 2002 decreased $27,000 from the year ended December 31, 2001, primarily due to a lower average invested cash balance resulting from distributions to the partners in 2001, and decreases in interest rates.

Expenses

Interest expense decreased $442,000, or 34%, for the year ended December 31, 2002, compared to the year ended December 31, 2001, primarily due to the replacement of two higher rate loans with a line of credit with a lower variable interest rate in April 2001, and paydowns on the line of credit in April 2001 and March 2002.

Expenses associated with undeveloped land increased $416,000 during the year ended December 31, 2002, compared to the year ended December 31, 2001, primarily due to the early payoff of an annual assessment levied by the City of San Bernardino. The City of San Bernardino issued bonds which were used to fund land infrastructure costs. The Partnership benefited from these improvements and was responsible for a portion of the annual bond service costs. In 2002, the bond was repaid by the City of San Bernardino at a discount which required the Partnership to incur a larger expense in 2002.

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Liquidity and Capital Resources

At December 31, 2003, the Partnership had cash of $3,312,000. The remainder of the Partnership’s assets consists primarily of its net investments in real estate, totaling approximately $29,361,000, which includes $27,568,000 in rental properties, $1,090,000 of construction in progress, and $703,000 of land held for development.

The Partnership’s primary liabilities at December 31, 2003 include loans payable, totaling approximately $7,782,000 which consist of two secured loans encumbering properties with an aggregate net book value of approximately $13,239,000 and with maturity dates of January 1, 2005 and May 1, 2006. These notes require monthly principal and interest payments of $20,000 and $53,000 and bear fixed interest rates of 8.744% and 9%. A line of credit, which bears interest at Prime Rate (4% as of December 31, 2003), has no outstanding balance at December 31, 2003.

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 approximately $5,120,000. The Partnership made a pay down on the line of credit of $4,200,000 from the sales proceeds and also made distributions to the Partners of $981,000, with the remaining cash added to the Partnership’s cash reserves.

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, 2003, 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 6% 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 activities. Other sources of funds may include permanent financing, draws on the line of credit, property sales, 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 the development of properties or distribution to the partners.

Management believes that the Partnership’s cash balance as of December 31, 2003, 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 effect 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, 2003, the Partnership’s cash provided by operating activities totaled $2,355,000.

The $180,000 decrease in accounts receivable at December 31, 2003, compared to December 31, 2002, was primarily due to the collection of tenant rents and the reimbursement of tenant improvements from the impound account.

The $150,000 decrease in deferred costs at December 31, 2003, compared to December 31, 2002 was primarily due to $120,000 of lease commissions paid for new and renewal leases, offset by $270,000 of amortization expense.

The $62,000 increase in prepaid expenses and other assets at December 31, 2003, compared to December 31, 2002, was primarily due to increases in prepaid insurance and impound accounts.

The $219,000 decrease in accounts payable and other liabilities at December 31, 2003, compared to December 31, 2002, was primarily due to payments of audit and tax preparation fees, offset by increases in accruals for building operating expenses.

The $58,000 increase in prepaid rents at December 31, 2003, compared to December 31, 2002, was due to the receipt of January 2004 rents in December 2003.

Investing Activities

During year ended December 31, 2003, the Partnership’s cash used for investing activities totaled $942,000, which included $509,000 primarily for tenant improvements at One Vanderbilt, Inland Regional Center and Carnegie Business Center I, and $433,000 for construction costs at Vanderbilt Tower.

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Financing Activities

During the year ended December 31, 2003, the Partnership’s cash used for financing activities totaled $1,865,000, which consisted of $188,000 in principal payments on loans payable, $1,187,000 of distributions to the Limited Partners and General Partner, and $490,000 paid to redeem 1,307 limited partnership units (“Units”).

The Partnership has a line of credit with a total availability of $7.2 million. The line of credit is secured by first deeds of trust on Inland Regional Center, Circuit City and TGI Friday’s, requires monthly interest-only payments, carries a variable interest rate of “Prime Rate” (4% as of December 31, 2003), and has a maturity date of April 15, 2004. (see note 4 for terms of this line of credit). Currently, there is $0 drawn on this line of credit. The Partnership is currently negotiating with the lender to extend the Partnership’s line of credit for another two years and increase the availability of the Partnership’s line of credit to meet the funding for the construction cost at Vanderbilt Plaza which is approximately $10,000,000. As of December 31, 2003, the total construction cost was $579,000. The construction started in September 2003, and is estimated to be completed in late 2004.

Critical Accounting Policies

Revenue recognized on a straight-line basis

The Partnership recognizes rental revenue on a straight-line basis at amounts that it believes it will collect on a tenant by tenant basis. The estimation process may result in higher or lower levels from period to period as the Partnership’s collection experience and the credit quality of the Partnership’s tenant’s changes. Actual amounts collected could be lower or higher than the amounts recognized on a straight-line basis if specific tenants are unable to pay rent that the Partnership has previously recognized as revenue.

Carrying value of rental properties and land held for development

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

Land held for development is stated at cost unless events or circumstances indicate that cost cannot be recovered, in which case, the carrying value is reduced to estimated fair value. Estimated fair value: (i) is based on the Partnership’s plans for the development of each property; (ii) is computed using estimated sales price, based upon market values for comparable properties; and (iii) considers the cost to complete and the estimated fair value of the completed project. The fulfillment of the Partnership’s plans related to each of its properties is dependent upon, among other things, the presence of economic conditions which will enable the Partnership to either hold the properties for eventual sale or obtain financing to further develop the properties.

The actual value of the Partnership’s portfolio of properties and land held for development could be significantly higher or lower than their carrying amounts.

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:

In January 2003, the FASB issued FASB Interpretation No. 46 (FIN 46), “Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51,” which addresses consolidation by business enterprises of variable interest entities (“VIEs”) either: (1) that do not have sufficient equity investment at risk to permit the entity to finance its activities without additional subordinated financial support, or (2) in which the equity investors lack an essential characteristic of a controlling financial interest. In December 2003, the FASB completed deliberations of proposed modifications to FIN 46 (FIN 46 Revised) resulting in multiple effective dates based on the nature as well as the creation date of the VIE. VIEs created after January 31, 2003, but prior to January 1, 2004, may be accounted for either based on FIN 46 or FIN 46 Revised. However, FIN 46 Revised must be applied no later than the first quarter of fiscal 2004. VIEs created after January 1, 2004 must be accounted for under FIN 46 Revised. Special Purpose Entities (“SPEs”) created prior to February 1, 2003 may be accounted for under FIN 46 or FIN 46 Revised’s provisions no later than the fourth quarter of fiscal 2003. Non-SPEs created prior to February 1, 2003, should be accounted for under FIN 46 Revised’s provisions no later than the first quarter of fiscal 2004. The Partnership has not entered into any arrangements which are considered SPEs. FIN 46 Revised 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 Revised are effective for all financial statements initially issued after December 31, 2003. The adoption of FIN 46 will not have a material impact on the financial statements of the Partnership.

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In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.” This statement establishes standards for the classification and measurement of certain financial instruments with characteristics of both liabilities and equity. SFAS No. 150 requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). Many of those instruments were previously classified as equity. This statement is effective for financial instruments entered into or modified after May 31, 2003 and, otherwise, is effective at the beginning of the first interim period beginning after June 15, 2003. Certain provisions have been deferred indefinitely by the FASB under FSP 150-3. This standard did not have a material impact on the Partnership’s financial position or results of operations.

Item 7A. Qualitative and Quantitative Information About Market Risk

Interest Rates

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

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

As of December 31, 2003, the Partnership had cash equivalents of $2,997,000 invested in interest-bearing certificates of deposit. This investment is subject to interest rate risk due to changes in interest rates upon maturity. Declines in interest rates over time would reduce Partnership interest income. The Partnership does not own any derivative instruments.

Item 8. Financial Statements and Supplementary Data

For information with respect to this Item 8, see Financial Statements and Schedules as listed in Item 15.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

On July 18, 2002, the General Partner of the Rancon Realty Fund IV, a California Limited Partnership (“the Partnership”), engaged KPMG LLP (“KPMG”) to serve as the Partnership’s independent public accountants for the fiscal year ending December 31, 2002, to replace Arthur Andersen LLP (“Arthur Andersen”), the Partnership’s former independent public accountants.

Arthur Andersen’s reports on the Partnership’s consolidated financial statements for each of the fiscal years ended December 31, 2001 and 2000 did not contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles. Arthur Andersen’s report on the Partnership’s consolidated financial statements for the fiscal year ended December 31, 2001 was issued on an unqualified basis in conjunction with the publication of the Partnership’s Annual Report on Form 10-K.

During the fiscal years ended December 31, 2001 and 2000 and through July 18, 2002, there were no disagreements with Arthur Andersen on any matter of accounting principle or practice, financial statement disclosure, or auditing scope or procedure which, if not resolved to Arthur Andersen’s satisfaction, would have caused them to make reference to the subject matter in connection with their report on the Partnership’s consolidated financial statements for such fiscal years; and there were no reportable events as defined in Item 304(a) (1) (v) of Regulation S-K.

Pursuant to Item 304 (a) (3) of Regulation S-K, the Partnership is required to provide Arthur Andersen with a copy of the foregoing disclosures and to file as an exhibit a letter from Arthur Andersen stating whether it agrees with the statements made in this Item. The Partnership provided Arthur Andersen with a copy of the foregoing disclosures. Arthur Andersen advised the Partnership that it has ceased furnishing such letters. Item 304T (b) (2) of Regulation S-K provides that if an issuer cannot obtain such a letter after reasonable efforts, compliance with Item 304 (a) (3) is not required. After reasonable efforts, the Partnership was not able to obtain such a letter; accordingly, no such letter has been filed herewith.

During the fiscal years ended December 31, 2001 and 2000 and through July 18, 2002, the Partnership did not consult KPMG with respect to the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Partnership’s consolidated financial statements, or any other matter that was the subject of a disagreement or a reportable event as set forth in Items 304(a) (2) (i) and (ii) of Regulation S-K.

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Item 9A. Controls and procedures

(a) Evaluation of disclosure controls and procedures.

The General Partner’s chief executive officer and chief financial officer, after evaluating the effectiveness of the Partnership’s “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15-d-14(c)) as of a date (the “Evaluation Date”) within 90 days before the filing date of this annual report, has concluded that as of the Evaluation Date, the Partnership’s disclosure controls and procedures were effective and designed to ensure that material information relating to the Partnership and its consolidated subsidiaries would be made known to him by others within those entities.

(b) Changes in internal controls.

There were no significant changes in the Partnership’s internal controls or in other factors that could significantly affect those controls subsequent to the Evaluation Date.

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Part III

Item 10. Directors and Executive Officers of the Partnership

Daniel L. Stephenson and Rancon Financial Corporation (“RFC”) are the General Partner of the Partnership. The executive officer and director of RFC is Daniel L. Stephenson who is Director, President, Chief Executive Officer and Chief Financial Officer.

Mr. Stephenson founded RFC (formerly known as Rancon Corporation) in 1971 for the purpose of establishing a commercial, industrial and residential property syndication, development and brokerage concern. Mr. Stephenson has, from inception, held the position of Director. In addition, Mr. Stephenson was President and Chief Executive Officer of RFC from 1971 to 1986, from August 1991 to September 1992, and from March 31, 1995 to present. Mr. Stephenson is Chairman of the Board of PacWest Group, Inc., a real estate firm which has acquired a portfolio of assets from the Resolution Trust Corporation.

Item 11. Executive Compensation

The Partnership has no executive officers. For information relating to fees, compensation, reimbursement and distributions paid to related parties, reference is made to Item 13 below.

Item 12. Security Ownership of Certain Beneficial Owners and Management

Security Ownership of Certain Beneficial Owners

No person is known by the Partnership to be the beneficial owner of more than 5% of the Units outstanding.

Security Ownership of Management

Changes in Control

The Limited Partners have no right, power or authority to act for or bind the Partnership. However, the Limited Partners generally have the power to vote upon the following matters affecting the basic structure of the Partnership, passage of each of which requires the approval of Limited Partners holding a majority of the outstanding Units: (i) amendment of the Partnership Agreement; (ii) termination and dissolution of the Partnership; (iii) sale, exchange or pledge of all or substantially all of the assets of the Partnership; (iv) removal of the General Partner or any successor General Partner; (v) election of a new General Partner or General Partner upon the removal, retirement, death, insanity, insolvency, bankruptcy or dissolution of the General Partner or any successor General Partner; and (vi) extension of the term of the Partnership.

Item 13. Certain Relationships and Related Transactions

During the year ended December 31, 2003, the Partnership did not incur any expenses or costs reimbursable to RFC, Mr. Stephenson or any other affiliate of the Partnership.

Item 14. Principal Accountant Fees and Services

The Partnership was billed for $67,500 and $62,300 in 2003 and 2002, respectively for professional services rendered by the principal accountant in connection with the audit of the annual financial statements included on Form 10-K and review of the quarterly financial statements included on Form 10-Q. In 2002, the Partnership was also billed $64,500 for the re-audit of the fiscal years ended December 31, 2001 and 2000.

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Part IV

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

Independent Auditors’ Report

Consolidated Balance Sheets as of December 31, 2003 and 2002

Consolidated Statements of Operations for the years ended December 31, 2003, 2002 and 2001

Consolidated Statements of Partners’ Equity for the years ended December 31, 2003, 2002 and 2001

Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001

Notes to Consolidated Financial Statements

Schedule III - Real Estate and Accumulated Depreciation as of December 31, 2003 and Notes thereto

None.

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SIGNATURES

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

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INDEX TO FINANCIAL STATEMENTS

AND SCHEDULE

All other schedules are omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto.

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Independent Auditors’ Report

The General Partner

RANCON REALTY FUND IV, a California Limited Partnership:

We have audited the accompanying consolidated balance sheets of RANCON REALTY FUND IV, a California Limited Partnership, and subsidiaries as of December 31, 2003 and 2002, and the related consolidated statements of operations, partners’ equity, and cash flows for each of the years in the three-year period ended December 31, 2003. In connection with our audits of the consolidated financial statements, we have also audited the related financial statement schedule listed in the accompanying index to the financial statements and schedule. These consolidated financial statements and financial statement schedule are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of RANCON REALTY FUND IV, a California Limited Partnership, and subsidiaries as of December 31, 2003 and 2002, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the related financial statement schedule, when considered in relation to the consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

San Francisco, California

February 4, 2004

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RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP, and SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2003 and 2002

(in thousands, except units outstanding)

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

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RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP, and SUBSIDIARIES

Consolidated Statements of Operations

For the years ended December 31, 2003, 2002 and 2001

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

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

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RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP, and SUBSIDIARIES

Consolidated Statements of Partners’ Equity

For the years ended December 31, 2003, 2002 and 2001

(in thousands)

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

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RANCON REALTY FUND IV,

A CALIFORNIA LIMITED PARTNERSHIP, and SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2003, 2002 and 2001

(in thousands)