FORM 10-Q

UNITED STATES 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 March 31, 1994

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

For the transition period from to

Commission File No. 33-15551

POLARIS AIRCRAFT INCOME FUND IV,
A California Limited Partnership

State of Organization: California
IRS Employer Identification No. 94-3039169
Four Embarcadero Center, San Francisco, California 94111-4146
Telephone (415) 362-0333

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, and (2) has been subject to such filing requirements
for the past 90 days.

Yes X No

This document consists of 14 pages.

POLARIS AIRCRAFT INCOME FUND IV,
A California Limited Partnership

FORM 10-Q - For the Quarter Ended March 31, 1994

INDEX

Part I. Financial Information Page

Item 1. Financial Statements

a) Balance Sheets - March 31, 1994 and
December 31, 1993 . . . . . . . . . . . . . . . . . . . . 3

b) Statements of Operations - Three Months Ended
March 31, 1994 and 1993 . . . . . . . . . . . . . . . . . 4

c) Statements of Changes in Partners' Capital
(Deficit) - Year Ended December 31, 1993
and Three Months Ended March 31, 1994 . . . . . . . . . . 5

d) Statements of Cash Flows - Three Months
Ended March 31, 1994 and 1993 . . . . . . . . . . . . . . 6

e) Notes to Financial Statements . . . . . . . . . . . . . . 7

Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . 10

Part II. Other Information

Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . 12

Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . 13

Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Part I. Financial Information

Item 1. Financial Statements

POLARIS AIRCRAFT INCOME FUND IV,
A California Limited Partnership

BALANCE SHEETS

March 31, December 31,
1994 1993
(Unaudited)
ASSETS:

CASH AND CASH EQUIVALENTS $ 19,400,023 $ 628,222

SHORT-TERM INVESTMENTS, at cost which approximates market value - 19,845,972

Total Cash and Cash Equivalents and Short-Term Investments 19,400,023 20,474,194

RENT AND OTHER RECEIVABLES 1,428,497 1,348,406

NOTES RECEIVABLE 1,585,737 1,522,301

AIRCRAFT at cost, net of accumulated depreciation of
$59,236,208 in 1994 and $56,432,464 in 1993 89,452,804 92,256,548

OTHER ASSETS, net of accumulated amortization of
$2,069,479 in 1994 and 1993 - 35,887

$ 111,867,061 $ 115,637,336

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT):

PAYABLE TO AFFILIATES $ 662,850 $ 543,580

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 2,500 14,000

LESSEE SECURITY DEPOSITS 710,000 490,000

Total Liabilities 1,375,350 1,047,580

PARTNERS' CAPITAL (DEFICIT):

General Partner (3,350,793) (3,309,775)

Limited Partners, 499,964 units issued and outstanding 113,842,504 117,899,531

Total Partners' Capital 110,491,711 114,589,756

$ 111,867,061 $ 115,637,336

<FN>
The accompanying notes are an integral part of these statements.

POLARIS AIRCRAFT INCOME FUND IV,
A California Limited Partnership

STATEMENTS OF OPERATIONS
(Unaudited)

Three Months Ended March 31,
1994 1993

REVENUES:
Rent from operating leases $ 3,121,973 $ 6,792,705
Interest 404,720 459,400
Gain (loss) on sale of aircraft 425,000 (555,676)

Total Revenues 3,951,693 6,696,429

EXPENSES:
Depreciation and amortization 2,803,744 7,859,020
Management and advisory fees 156,099 339,635
Operating 869,978 305,684
Administration and other 53,550 40,205

Total Expenses 3,883,371 8,544,544

NET INCOME (LOSS) $ 68,322 $ (1,848,115)

NET INCOME ALLOCATED
TO THE GENERAL PARTNER $ 375,619 $ 543,922

NET LOSS ALLOCATED TO
LIMITED PARTNERS $ (307,297) $ (2,392,037)

NET LOSS PER LIMITED
PARTNERSHIP UNIT $ (.61) $ (4.78)

<FN>
The accompanying notes are an integral part of these statements.

POLARIS AIRCRAFT INCOME FUND IV,
A California Limited Partnership

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)

Year Ended December 31, 1993 and
Three Months Ended March 31, 1994

General Limited
Partner Partners Total

Balance, December 31, 1992 $ (643,718) $ 156,836,664 $156,192,946

Net income 1,916,946 2,309,897 4,226,843

Cash distributions to partners (4,583,003) (41,247,030) (45,830,033)

Balance, December 31, 1993 (3,309,775) 117,899,531 114,589,756

Net income (loss) 375,619 (307,297) 68,322

Cash distribution to partners (416,637) (3,749,730) (4,166,367)

Balance, March 31, 1994 $ (3,350,793) $ 113,842,504 $110,491,711

<FN>
The accompanying notes are an integral part of these statements.

POLARIS AIRCRAFT INCOME FUND IV,
A California Limited Partnership

STATEMENTS OF CASH FLOWS
(Unaudited)

Three Months Ended March 31,
1994 1993

OPERATING ACTIVITIES:
Net income (loss) $ 68,322 $ (1,848,115)

Adjustment to reconcile net income (loss) to net cash provided by
operating activities:

Depreciation and amortization 2,803,744 7,859,020
Loss (gain) on sale of aircraft (425,000) 555,676
Changes in operating assets and liabilities:
Increase in rent and other receivables (80,091) (99,322)
Decrease in other assets 35,887 10,192
Increase in payable to affiliates 119,270 191,476
Decrease in accounts payable and accrued liabilities (11,500) (17,867)
Increase in lessee security deposits 220,000 37,161

Net cash provided by operating activities 2,730,632 6,688,221

INVESTING ACTIVITIES:
Increase in notes receivable (163,077) -
Principal payments on notes receivable 99,641 27,304
Proceeds from sale of aircraft 425,000 1,500,000

Net cash provided by investing activities 361,564 1,527,304

FINANCING ACTIVITIES:
Cash distribution to partners (4,166,367) (6,249,550)

Net cash used in financing activities (4,166,367) (6,249,550)

CHANGES IN CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (1,074,171) 1,965,975

CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS AT BEGINNING OF
PERIOD 20,474,194 20,900,830

CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS AT END OF PERIOD $19,400,023 $ 22,866,805

<FN>
The accompanying notes are an integral part of these statements.

POLARIS AIRCRAFT INCOME FUND IV,
A California Limited Partnership

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

1. Accounting Principles and Policies

In the opinion of management, the financial statements presented herein include
all adjustments, consisting only of normal recurring items, necessary to
summarize fairly Polaris Aircraft Income Fund IV's (the Partnership's) financial
position and results of operations. The financial statements have been prepared
in accordance with the instructions of the Quarterly Report to the Securities
and Exchange Commission (SEC) Form 10-Q and do not include all of the
information and note disclosures required by generally accepted accounting
principles. These statements should be read in conjunction with the financial
statements and notes thereto for the years ended December 31, 1993, 1992, and
1991 included in the Partnership's 1993 Annual Report to the SEC on Form 10-K
(Form 10-K).

Cash and Cash Equivalents - This includes deposits at banks and investments in
money market funds.

2. Lease to American Trans Air, Inc. (ATA)

As discussed in the Form 10-K, the Partnership negotiated a seven year lease
with ATA for two Boeing 727-200 Advanced aircraft formerly on lease to USAir,
Inc. The leases began in February and March 1993. ATA was not required to
begin making cash rental payments until January 1994 although recognition of
rental income will be spread over the entire lease term. The leases are
renewable for up to three one year periods. ATA transferred to the Partnership
two unencumbered Boeing 727-100 aircraft as part of the lease transaction. The
Partnership has sold one aircraft as discussed in Note 4, and is remarketing one
aircraft for sale or lease.

The Partnership agreed to incur certain maintenance costs estimated at
approximately $817,000. In addition, the Partnership may finance aircraft
hushkits for use on the aircraft at an estimated aggregate cost of approximately
$5.0 million, which will be partially recovered with interest through payments
from ATA over the lease terms. The Partnership loaned $1,164,800 to ATA in 1993
to finance the purchase by ATA of two spare engines. This loan is reflected in
notes receivable in the accompanying balance sheets. During the first quarter
1994, the Partnership received all scheduled principal and interest payments due
under the notes. The balance of the notes at March 31, 1994 and December 31,
1993 was $1,062,675 and $1,103,089, respectively.

3. Continental Airlines, Inc. (Continental) Lease Modification

As discussed in the Form 10-K, the Continental leases for the Partnership's five
McDonnell Douglas DC-9-30 aircraft and Five Boeing 727-200 aircraft were
modified. The modified agreement specifies (i) extension of the leases for the

five Boeing 727-200s to the earlier of April 1994 or 60,000 cycles, and for the
five McDonnell Douglas DC-9-30 aircraft to June 1996; (ii) renegotiated rental
rates averaging approximately 67% of the original lease rates; (iii) payment of
ongoing rentals at the reduced rates beginning in October 1991; (iv) payment of
deferred rentals with interest beginning in July 1992; and (v) payment by the
Partnership of certain aircraft modification and refurbishment costs, not to
exceed approximately $4.9 million, a portion of which will be recovered with
interest through payments from Continental over the extended lease term. The
Partnership's share of such costs will be capitalized and depreciated over the
remaining lease terms. In February 1994, the Partnership loaned Continental
$163,077 for modification costs. The Partnership's balance sheets reflect the
net reimbursable costs incurred of $523,062 and $419,212 as of March 31, 1994
and December 31, 1993, respectively, as notes receivable.

4. Sale to Total Aerospace Services, Inc. (Total Aerospace)

In February 1994, the Partnership sold one of the Boeing 727-100 aircraft that
was transferred to the Partnership by ATA, as discussed in Note 2, to Total
Aerospace for $425,000. The Partnership recorded a gain on sale of $425,000 in
the first quarter 1994.

5. Lease to GB Airways Limited (GB Airways)

In February 1994, the Partnership leased two Boeing 737-200 Advanced aircraft,
that were formerly on lease to Britannia Airways Limited (Britannia), to GB
Airways. Lease payments for the interim lease term through March 1994 are at a
variable rate based on usage. Thereafter and through March 1996, the lease rate
is 58% of the original rate received from Britannia. The rate is then adjusted
through the end of the lease in October 1996 to 67% of the original rate
received from Britannia. GB Airways has the option to extend the lease for one
year at the initial rate. The lease stipulates that the Partnership share in
the cost of certain modification and refurbishment costs, not to exceed the
present value of the remaining rent payable under the lease at the time the work
is complete, which can not be estimated at this time.

6. Lease to TBG Airways Limited (TBG Airways)

In February 1994, the Partnership leased the remaining two Boeing 737-200
Advanced aircraft, that were formerly on lease to Britannia, to TBG Airways.
Lease payments for the interim lease term through April 1994 are at a variable
rate based on usage. Thereafter and through the end of the lease in October
1998, the rate is increased annually from 55% to as much as 80% of the original
rate received from Britannia. The lease stipulates that the Partnership share
in the cost of certain modification and refurbishment costs, not to exceed the
present value of the remaining rent payable under the lease at the time the work
is complete, which can not be estimated at this time. TBG Airways has the
option to terminate the lease early in April 1997 after paying a termination fee
of $250,000. TBG Airways also has the option to purchase the aircraft at the
end of the lease term for $8.0 million each.

7. Related Parties

Under the Limited Partnership Agreement, the Partnership paid or agreed to pay
the following amounts for the current quarter to the general partner, Polaris
Investment Management Corporation, in connection with services rendered or
payments made on behalf of the Partnership:

Payments for
Three Months
Ended Payable at
March 31, 1994 March 31, 1994

Aircraft Management Fees $138,201 $ 71,343

Out-of-Pocket Administrative
Expense Reimbursement 40,858 75,304

Out-of-Pocket Maintenance and
Remarketing Expense
Reimbursement 780,390 516,203

$959,449 $662,850

8. Subsequent Event

Sale of Aircraft to Continental - The leases of five Boeing 727-200 aircraft to
Continental expired on April 30, 1994. The Partnership is currently negotiating
an agreement to sell these aircraft to Continental.

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

Polaris Aircraft Income Fund IV (the Partnership) owns 19 commercial jet
aircraft. The portfolio includes five DC-9-30 aircraft leased to Continental
Airlines, Inc. (Continental), five Boeing 727-200 aircraft leased to Continental
through April 1994 as discussed below, two Boeing 727-200 Advanced aircraft
leased to American Trans Air, Inc. (ATA), two Boeing 737-200 Advanced aircraft
formerly leased or subleased to Britannia Airways Limited (Britannia) which were
leased to GB Airways Limited (GB Airways) in February 1994, and two Boeing
737-200 Advanced aircraft formerly leased or subleased to Britannia, which were
leased to TBG Airways Limited (TBG Airways) in February 1994. ATA transferred
to the Partnership two Boeing 727-100 aircraft in 1993 as part of the ATA lease
transaction. One of these Boeing 727-100 aircraft was sold to Total Aerospace
Services, Inc. (Total Aerospace) in February 1994 and one is being remarketed
for sale or lease. Also being remarketed for sale or lease are two Boeing
737-200 aircraft formerly leased or subleased to Britannia. Out of an original
portfolio of 33 aircraft, one Boeing 727-100 Freighter formerly leased to Emery
Aircraft Leasing Corporation (Emery) was declared a casualty loss due to an
accident in 1991 and fourteen Boeing 727-100 Freighters were sold to Emery in
1993.

Remarketing Update

Partnership Operations

The Partnership recorded net income of $68,322, or an allocated net loss of $.61
per limited partnership unit, for the three months ended March 31, 1994,
compared to a net loss of $1,848,115, or $4.78 per unit, for the same period in
1993. The improvement in operating results in the first quarter of 1994 is due
primarily to a significant decrease in depreciation expense in 1994, partially
offset by lower revenues and increased operating expense.

Depreciation expense was significantly lower for the three months ended March
31, 1994 as compared to the same period in 1993. The three months ended March
31, 1993 include approximately $3.5 million of increased depreciation expense as
a result of adjustments to the aircraft carrying values of the Emery aircraft.
Consequently, depreciation expense for the first quarter 1994 does not include
depreciation expense for the Emery aircraft sold during 1993.

Partially offsetting the decrease in depreciation expense is the decline in
rental revenues for the first three months of 1994 compared with the same period
in 1993. The Emery aircraft were sold at the termination of the extended leases
in January and April 1993, and no further rentals were received. Additionally,
the six aircraft formerly on lease to Britannia beginning in 1988 were returned
to the Partnership on various dates in October, November and December 1993.
Four of the aircraft were re-leased in February 1994 as previously discussed and
two of the aircraft are being remarketed for sale or lease. Partially

offsetting lower 1994 revenues was a gain of $425,000 on the sale of the
aircraft to Total Aerospace in February 1994, compared to a net loss of $555,676
on one aircraft sold to Emery during the first quarter 1993.

Further offsetting the decrease in depreciation expense for the first three
months of 1994 were aircraft operating expenses (maintenance and remarketing
costs) necessary to remarket the Boeing 737-200 aircraft and Boeing 737-200
Advanced aircraft formerly on lease to Britannia.

Liquidity and Cash Distributions

Liquidity - The Partnership has received all lease payments due from lessees
with the exception of a partial lease payment from TBG Airways and initial
maintenance reserve payments from TBG Airways and GB Airways. As discussed in
the Partnership's 1993 Annual Report to the Securities and Exchange Commission
on Form 10-K (Form 10-K), the lease with ATA includes a rent suspension period.
As specified in the lease, ATA began making scheduled rental payments in January
1994. As described in Item 7 of the Form 10-K, the Continental leases provide
for payment by the Partnership of the costs of certain maintenance work, AD
compliance, aircraft modification and refurbishment costs, which are not to
exceed approximately $4.9 million, a portion of which will be recovered with
interest through payments from Continental over the lease terms. In accordance
with the Continental leases, the Partnership financed $163,077 for new image
modifications during the first three months of 1994. The Partnership's balance
sheets reflect as notes receivable such reimbursable costs financed through
March 31, 1994 and December 31, 1993. Cash reserves of approximately $15.5
million as of March 31, 1994 are being retained to finance a portion of the
costs which may be incurred under the leases with Continental and ATA as
discussed in the Form 10-K and to cover the potential costs of remarketing the
Partnership's off-lease aircraft.

Cash Distributions - Cash distributions to limited partners during the first
quarter 1994 and 1993 totalled $3,749,730, or $7.50 per limited partnership
unit, and $5,624,595, or $11.25 per unit, respectively. The lower 1994 cash
available for distribution resulted from the absence of lease revenue from the
ATA lease through January 1994 and the Partnership's accumulation of cash
reserves to meet potential future financing requirements under the ATA and
Continental leases. The timing and amount of future cash distributions will
depend on the Partnership's future cash requirements, the Partnerships ability
to re-lease the off-lease aircraft, and receipt of rental payments from
Continental, ATA, GB Airways, and TBG Airways.

Part II. Other Information

Item 1. LEGAL PROCEEDINGS

As discussed in Item 3 of Part I of Polaris Aircraft Income Fund IV's (the
Partnership) 1993 Annual Report to the Securities and Exchange Commission on
Form 10-K (Form 10-K), there are a number of pending legal actions or
proceedings involving the Partnership. Except as described below, there have
been no material developments with respect to such actions or proceedings during
the period covered by this report.

Vern A. Kepford, et al. v. Prudential Securities, et al. On April 13, 1994, an
action entitled Vern A. Kepford, et al. v. Prudential Securities, Inc. was filed
in the District Court of Harris County, Texas. Plaintiffs' Original Petition
(the Petition) names Polaris Investment Management Corporation (PIMC), Polaris
Securities Corporation (PSC), Polaris Holding Company (PHC), Polaris Aircraft
Leasing Corporation (PALC), Polaris Aircraft Income Funds I - VI (collectively,
the Partnerships), General Electric Capital Corporation (GE Capital), Prudential
Securities, Inc., Prudential Insurance Company of America and James J. Darr, as
defendants. Certain defendants were served with a Summons and the Petition on
or about May 2, 1994. The Petition alleges that defendants violated the Texas
Securities Act, the Texas Deceptive Trade Practices Act (the DTPA), sections 11
and 12 of the Securities Act of 1933 and committed common law fraud, fraud in
the inducement, negligent misrepresentation, negligence, breach of fiduciary
duty and civil conspiracy by misrepresenting and failing to disclose material
facts in connection with the sale of limited partnership units in the
Partnerships. Plaintiffs seek, among other things, an award of compensatory
damages in an unspecified amount plus interest thereon, and double and treble
damages under the DTPA.

Howland, et al. v. Polaris Holding Company, et al. On or about February 4, 1994,
a purported class action entitled Howland, et al. v. Polaris Holding Company, et
al. was filed in the United States District Court for the District of Arizona on
behalf of investors in the Partnerships. The complaint names each of the
Partnerships, PIMC, PHC, PALC, PSC, GE Capital, Prudential Securities, Inc.,
Prudential Securities Group, Inc., Prudential Insurance Company of America,
George W. Ball, Robert J. Sherman, James J. Darr, Paul J. Proscia, Frank W.
Giordano, William A. Pittman, Joseph H. Quinn, Joe W. Defur, James M. Kelso and
Brian J. Martin, as defendants. As of May 11, 1994, neither PIMC nor any of its
affiliates has been served with the complaint. The complaint alleges that
defendants violated federal RICO statutes, committed negligent
misrepresentations, and breached of their fiduciary duties by misrepresenting
and failing to disclose material facts in connection with the sale of limited
partnership units in the Partnerships. Plaintiffs seek, among other things, an
accounting of all monies invested by Plaintiffs and the class and the uses made
thereof by defendants, an award of compensatory, punitive and treble damages in
unspecified amounts plus interest thereon, rescission, attorneys' fees and
costs.

Reuben Riskind, et al. v. Prudential Securities, Inc., et al. An action
entitled Reuben Riskind, et al. v. Prudential Securities, Inc., et al. has been
filed in the District Court of the 165 Judicial District, Maverick County,
Texas. Plaintiffs have subsequently filed a Second Amended Original Petition
(the Amended Petition). As of May 11, 1994, neither PIMC nor any of its

affiliates has received service of any petition, and the Partnership has not yet
determined when this action was commenced. This action purports to be on behalf
of over one hundred individual investors who purchased units in the
Partnerships. The Amended Petition names PIMC, Polaris Aircraft Income Fund I,
Prudential Securities, Inc. and Jerry Cohn as defendants and alleges that these
defendants violated the Texas Securities Act and the DTPA and committed common
law fraud, fraud in the inducement, negligent misrepresentation, negligent
breach of fiduciary duty and civil conspiracy by misrepresenting and failing to
disclose material facts in connection with the sale of limited partnership units
in the Partnerships. Plaintiffs seek, among other things, an award of
compensatory damages in an unspecified amount plus interest thereon, and double
and treble damages under the DTPA.

Other Proceedings - Item 10 of Part III of the Partnership's 1993 Form 10-K
discusses certain actions which have been filed against PIMC and others in
connection with the sale of interests in the Partnerships and the management of
the Partnerships. With respect to Weisl, et al., v. Polaris Holding Company, et
al., the Supreme Court of the State of New York, County of New York, granted the
defendants' motion to dismiss the complaint on April 19, 1994 on the grounds
that the action was barred by the statute of limitations. In addition, an
amended complaint filed by plaintiffs in Weisl on or about January 25, 1994,
which may contain timely claims, is pending. There have been no material
developments with respect to any of the other actions described therein during
the period covered by this report.

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

a) Exhibits (numbered in accordance with Item 601 of Regulation S-K)

None

b) Reports on Form 8-K

No reports on Form 8-K were filed by the Registrant during the
quarter for which this report is filed.

SIGNATURE

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

POLARIS AIRCRAFT INCOME FUND IV
(Registrant)
By: Polaris Investment
Management Corporation,
General Partner

May 12, 1994 By: /S/Bobbe V. Sabella
Bobbe V. Sabella
Vice President and
Chief Financial Officer
(principal financial
officer and principal
accounting officer of
Polaris Investment
Management Corporation,
General Partner of the
Registrant)