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 June 30, 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 24 pages.

POLARIS AIRCRAFT INCOME FUND IV,
A California Limited Partnership

FORM 10-Q - For the Quarterly Period Ended June 30, 1994

INDEX

Part I. Financial Information Page

Item 1. Financial Statements

a) Balance Sheets - June 30, 1994 and
December 31, 1993 . . . . . . . . . . . . . . . . . . . . . 3

b) Statements of Operations - Three Months and
Six Months Ended June 30, 1994 and 1993 . . . . . . . . . . 4

c) Statements of Changes in Partners' Capital
(Deficit) - Year Ended December 31, 1993
and Six Months Ended June 30, 1994 . . . . . . . . . . . . 5

d) Statements of Cash Flows - Six Months
Ended June 30, 1994 and 1993 . . . . . . . . . . . . . . . 6

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

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

Part II. Other Information

Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . 15

Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . 17

Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . 23

Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Part I. Financial Information
Item 1. Financial Statements

POLARIS AIRCRAFT INCOME FUND IV,
A California Limited Partnership

BALANCE SHEETS

June 30, December 31,
1994 1993
(Unaudited)

ASSETS:

CASH AND CASH EQUIVALENTS $ 18,649,388 $ 628,222

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

Total Cash and Cash Equivalents and Short-Term Investments 18,649,388 20,474,194

RENT AND OTHER RECEIVABLES 1,424,334 1,348,406

NOTES RECEIVABLE 6,138,863 1,522,301

AIRCRAFT at cost, net of accumulated depreciation of
$43,211,672 in 1994 and $56,432,464 in 1993 75,180,601 92,256,548

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

$ 101,393,186 $ 115,637,336

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT):

PAYABLE TO AFFILIATES $ 197,887 $ 543,580

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 380,000 14,000

LESSEE SECURITY DEPOSITS 1,015,000 490,000

MAINTENANCE RESERVES 351,027 -

Total Liabilities 1,943,914 1,047,580

PARTNERS' CAPITAL (DEFICIT):
General Partner (3,461,255) (3,309,775)
Limited Partners, 499,964 units issued and outstanding 102,910,527 117,899,531

Total Partners' Capital 99,449,272 114,589,756

$ 101,393,186 $ 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 Six Months Ended
June 30, June 30,

1994 1993 1994 1993

REVENUES:
Rent from operating leases $ 3,037,419 $ 5,849,745 $ 6,159,392 $ 12,642,450
Interest 424,349 555,970 829,069 1,015,370
Net gain (loss) on sale of aircraft (6,707,562) 63,357 (6,282,562) (492,319)
Total Revenues (3,245,794) 6,469,072 705,899 13,165,501

EXPENSES:
Depreciation and amortization 2,531,776 2,593,067 5,335,520 10,452,087
Management and advisory fees 151,871 292,488 307,970 632,123
Operating 860,929 154,724 1,730,907 460,408
Administration and other 85,703 81,287 139,253 121,492
Total Expenses 3,630,279 3,121,566 7,513,650 11,666,110

NET INCOME (LOSS) $ (6,876,073) $ 3,347,506 $ (6,807,751) $ 1,499,391

NET INCOME ALLOCATED TO THE GENERAL PARTNER $ 306,174 $ 595,878 $ 681,793 $ 1,139,800

NET INCOME (LOSS) ALLOCATED TO LIMITED PARTNERS $ (7,182,247) $ 2,751,628 $ (7,489,544) $ 359,591

NET INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT $ (14.37) $ 5.50 $ (14.98) $ 0.72

<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
Six Months Ended June 30, 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) 681,793 (7,489,544) (6,807,751)

Cash distributions to partners (833,273) (7,499,460) (8,332,733)

Balance, June 30, 1994 $ (3,461,255) $ 102,910,527 $ 99,449,272

<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)

Six Months Ended
June 30,
1994 1993

OPERATING ACTIVITIES:
Net income (loss) $ (6,807,751) $ 1,499,391
Adjustments to reconcile net income (loss) to net cash provided by operating
activities:

Depreciation and amortization 5,335,520 10,452,087
Net loss on sale of aircraft 6,282,562 492,319
Changes in operating assets and liabilities:
Increase in rent and other receivables (75,928) (526,922)
Decrease in other assets 35,887 21,548
Increase (decrease) in payable to affiliates (345,693) 328,783
Increase (decrease) in accounts payable and accrued liabilities 366,000 (18,000)
Increase in lessee security deposits 525,000 -
Increase in maintenance reserves 351,027 -
Decrease in deferred income - (430,949)

Net cash provided by operating activities 5,666,624 11,818,257

INVESTING ACTIVITIES:
Increase in notes receivable (163,077) -
Principal payments on notes receivable 579,380 55,436
Proceeds from sale of aircraft 425,000 27,500,000

Net cash provided by investing activities 841,303 27,555,436

FINANCING ACTIVITIES:
Cash distributions to partners (8,332,733) (12,499,100)

Net cash used in financing activities (8,332,733) (12,499,100)

CHANGES IN CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (1,824,806) 26,874,593

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 $ 18,649,388 $ 47,775,423

<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 marketing one
aircraft for sale or lease.

Under the ATA lease, the Partnership agreed to incur certain maintenance costs
estimated at approximately $817,000. In addition, the Partnership may be
required to 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 six months of 1994, the Partnership received all
scheduled principal and interest payments due under the notes. The balances of
the notes at June 30, 1994 and December 31, 1993 were $1,024,155 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 $459,179 and $419,212 as of June 30, 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 of 1994.

5. Lease to GB Airways Limited (GB Airways)

In February 1994, the Partnership leased two Boeing 737-200 Advanced aircraft,
formerly on lease to Britannia Airways Limited (Britannia), to GB Airways.
Lease payments for the interim lease term through March 1994 were 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
meeting certain Airworthiness Directives (ADs), not to exceed the present value
of the remaining rent payable under the lease at the time the work is complete,
which cannot be estimated at this time.

6. Lease to TBG Airways Limited (TBG Airways)

In February 1994, the Partnership leased two Boeing 737-200 Advanced aircraft,
formerly on lease to Britannia, to TBG Airways. Lease payments for the interim
lease term through April 1994 were 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 ADs, not to exceed the present value of the remaining rent payable under
the lease at the time the work is complete, which cannot 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. Sale to Continental

The leases of five Boeing 727-200 aircraft to Continental expired on April 30,
1994. On May 26, 1994, the Partnership sold these aircraft to Continental for
an aggregate sale price of $5,032,865. The Partnership agreed to accept payment
of the sale price in 29 monthly installments of $192,500, with interest at a
rate of 9.5% per annum. The Partnership recorded a note receivable for the sale
price and recognized a loss on sale of $6,707,562 in the second quarter of 1994.
During the second quarter of 1994, the Partnership received all scheduled
payments due under the note. The note receivable balance at June 30, 1994 was
$4,655,529.

8. 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
June 30, 1994 June 30, 1994

Aircraft Management Fees $ 153,840 $ 69,374

Out-of-Pocket Administrative
Expense Reimbursement 94,690 80,261

Out-of-Pocket Maintenance and
Remarketing Expense
Reimbursement 937,242 48,252
----------- -----------
$ 1,185,772 $ 197,887
=========== ===========

9. Subsequent Events

Lease to Viscount Air Services, Inc. (Viscount) - The Partnership has agreed to
lease two Boeing 737-200 aircraft, formerly on lease to Britannia, to Viscount
for five years beginning in July 1994 and August 1994. The lease rates are the
same as the prior rates received from Britannia during the lease extension
period as discussed in the Form 10-K. The leases specify the Partnership incur
certain maintenance and modification costs estimated at approximately $2.1
million, of which approximately $1.3 million are included in operating expense
in the six months ended June 30, 1994 statement of operations. In addition, the
Partnership may be required to finance certain aircraft hushkits at an estimated

aggregate cost of $3.0 million to $4.0 million, which will be recovered with
interest through payments from Viscount over an extended lease term.

Viscount Restructuring

Rent Deferral - To assist Viscount with the funding of costs associated with
Federal Aviation Regulation compliance relating to the Partnership's aircraft,
the Partnership has entered into an agreement with Viscount to defer certain
rents due the Partnership for the first six months on the leases of two
aircraft. The deferred rents, which aggregate $600,000, will be repaid by
Viscount with interest at a rate of 6% per annum beginning in February 1995,
over the remaining terms of the leases.

Maintenance Advance - The Partnership has also agreed to extend a line of credit
to Viscount for a total of $387,000 to be used primarily for maintenance
expenses relating to the Partnership's aircraft. Payments of interest only at a
variable rate in arrears will be paid during the draw down period beginning in
August 1994 through December 1994. Beginning in January 1995, level payments to
amortize the advance over a 30-month period will be due in arrears, together
with interest at a rate of 4% per annum over the 18-month U.S. Treasury Rate.
In accordance with the agreement, the Partnership advanced Viscount $193,500 in
July 1994.

Option - The Partnership will have the option to acquire approximately 1.86% of
the issued and outstanding shares of Viscount stock as of July 26, 1994 for an
option price of approximately $279,000. The option may be exercised at any time
during the option period, which expires on July 20, 1999.

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

Polaris Aircraft Income Fund IV (the Partnership) owns a portfolio of 14 used
commercial jet aircraft out of its original portfolio of 33 aircraft. The
portfolio includes five DC-9-30 aircraft leased to Continental Airlines, Inc.
(Continental), 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) that were leased to GB
Airways Limited (GB Airways) in February 1994, two Boeing 737-200 Advanced
aircraft formerly leased or subleased to Britannia, that were leased to TBG
Airways Limited (TBG Airways) in February 1994, two Boeing 737-200 aircraft
formerly leased or subleased to Britannia, that the Partnership has agreed to
lease to Viscount Air Services, Inc. (Viscount) beginning in July 1994 and
August 1994 as discussed below, and one Boeing 727-100 that was acquired from
ATA in 1993 and is being marketed for sale or lease. 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, fourteen Boeing 727-100 Freighters were sold to Emery in 1993,
and five Boeing 727-200 aircraft were sold to Continental in May 1994 as
discussed below. In 1993, ATA transferred to the Partnership two Boeing 727-100
aircraft 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.

Remarketing Update

Sale to Continental - The leases of five Boeing 727-200 aircraft to Continental
expired on April 30, 1994. On May 26, 1994, the Partnership sold these aircraft
to Continental for an aggregate sale price of $5,032,865. The Partnership
agreed to accept payment of the sale price in 29 monthly installments of
$192,500, with interest at a rate of 9.5% per annum. The Partnership recorded a
note receivable for the sale price and recognized a loss on sale of $6,707,562
in the second quarter of 1994. During the second quarter of 1994, the
Partnership received all scheduled payments due under the note. The note
receivable balance at June 30, 1994 was $4,655,529.

Lease to Viscount - The Partnership has agreed to lease two Boeing 737-200
aircraft, formerly on lease to Britannia, to Viscount for five years beginning
in July 1994 and August 1994. The lease rates are the same as the prior rates
received from Britannia during the lease extension period as discussed in the
Partnership's 1993 Annual Report to the Securities and Exchange Commission on
Form 10-K (Form 10-K). The leases specify the Partnership incur certain
maintenance and modification costs estimated at approximately $2.1 million, of
which approximately $1.3 million are included in operating expense in the six
months ended June 30, 1994 statement of operations. In addition, the
Partnership may be required to finance certain aircraft hushkits at an estimated
aggregate cost of $3.0 million to $4.0 million, which will be recovered with
interest through payments from Viscount over an extended lease term.

Viscount Restructuring

Partnership Operations

The Partnership recorded a net loss of $6,876,073, or $14.37 per limited
partnership unit, for the three months ended June 30, 1994, compared to net
income of $3,347,506, or $5.50 per unit, for the same period in 1993. The
Partnership recorded a net loss of $6,807,751, or $14.98 per limited partnership
unit, for the six months ended June 30, 1994, compared to net income of
$1,499,391, or $0.72 per unit, for the same period in 1993. The 1994 net losses
were attributable to the loss of $6,707,562 recorded in the second quarter of
1994 on the sale of five Boeing 727-200 aircraft to Continental. Partially
offsetting the loss on sale was a gain of $425,000 on the sale of one Boeing
727-100 aircraft to Total Aerospace in the first quarter of 1994, compared to a
net loss of $492,319 on fourteen Boeing 727-100 aircraft sold to Emery during
the first two quarters of 1993.

Further impacting the decrease in total revenues in 1994 was a decline in rental
revenues for the three- and six-month periods ended June 30, 1994 compared with
the same periods 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 and two of the aircraft were re-leased in July and August 1994.

Partially offsetting the decrease in total revenues in 1994, depreciation
expense was significantly lower for the six months ended June 30, 1994 as
compared to the same period in 1993. The six months ended June 30, 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 six months ended June 30, 1994 does
not include depreciation expense for the Emery aircraft sold during 1993.

Operating expenses increased in the three- and six-month periods ended June 30,
1994 compared to the same periods in 1993. This increase was the result of
maintenance and remarketing costs necessary to remarket the Boeing 737-200
aircraft and Boeing 737-200 Advanced aircraft formerly on lease to Britannia to
GB Airways, TBG Airways and Viscount.

Liquidity and Cash Distributions

Liquidity - The Partnership has received all lease payments due from current
lessees. As discussed in the 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 quarter of 1994. The Partnership's balance
sheets reflect as notes receivable such reimbursable costs financed through June
30, 1994 and December 31, 1993.

To assist Viscount with the funding of costs associated with Federal Aviation
Regulation compliance relating to the Partnership's aircraft, the Partnership
has negotiated an agreement with Viscount under which it agreed to defer certain
rents due the Partnership on two aircraft as previously discussed. These
deferred rents will be repaid by Viscount with interest over the remaining terms
of the leases. The agreement with Viscount also stipulates that the Partnership
will advance Viscount $387,000, primarily for certain maintenance expenses
relating to the Partnership's aircraft to be incurred by Viscount. In
accordance with the agreement, the Partnership advanced Viscount $193,500 in
July 1994. The Partnership will advance Viscount an additional $193,500 prior
to December 31, 1994.

Cash reserves of approximately $14.7 million as of June 30, 1994 are being
retained to finance a portion of the cost that may be incurred under the leases
with Continental and ATA as discussed in the Form 10-K and obligations under the
Viscount restructuring agreement as previously discussed.

Cash Distributions - Cash distributions to limited partners during the three
months ended June 30, 1994 and 1993 were $3,749,730, or $7.50 per limited
partnership unit, and $5,624,595, or $11.25 per unit, respectively. Cash
distributions to limited partners during the six months ended June 30, 1994 and
1993 were $7,499,460, or $15.00 per limited partnership unit, and $11,249,190,
or $22.50 per unit, respectively. The timing and amount of future cash
distributions will depend on the Partnership's future cash requirements, the

receipt of payments from Continental for the sale of the five Boeing 727-200
aircraft, the receipt of rental payments from Continental, ATA, GB Airways, TBG
Airways and Viscount, and the receipt of deferred rental payments and financing
payments from Viscount.

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) and in Item I of Part II of the Partnership's Quarterly
Report on Form 10-Q for the period ended March 31, 1994, 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.

Continental Airlines, Inc. (Continental) - The Partnership continues to
negotiate with Continental regarding administrative claims in Continental's
bankruptcy proceeding.

Vern A. Kepford, et al. v. Prudential Securities, et al. - Certain defendants,
including Polaris Investment Management Corporation and the Partnership, filed a
general denial on June 29, 1994, and a motion for summary judgment on June 17,
1994 on the basis that the statute of limitation has expired. On June 29, 1994,
plaintiffs filed their First Amended Original Petition, which added additional
plaintiffs.

Other Proceedings - Item 10 of Part III of the Partnership's 1993 Form 10-K
discusses certain actions which have been filed against Polaris Investment
Management Corporation and others in connection with the sale of interests in
the Partnership and the management of the Partnership. Except as described
below, there have been no material developments with respect to any of the other
actions described therein during the period covered by this report.

Weisl, et al., v. Polaris Holding Company, et al. - On April 19, 1994, the
Supreme Court of the State of New York, County of New York, granted the
defendants' motion to dismiss the complaint on the grounds that the statute of
limitations barred almost all of the claims in the action. On July 20, 1994,
the Court entered an order dismissing almost all of the claims in the complaint
and amended complaint. Certain claims, however, remain pending.

Reuben Riskind, et al. v. Prudential Securities Inc., et al. - Polaris
Investment Management Corporation and Polaris Aircraft Income Fund I received
service of the Second Amended Original Petition and filed an Original Answer
containing a general denial on June 13, 1994. Subsequently, plaintiffs filed
Third and Fourth Amended Original Petitions, which added additional plaintiffs.
On April 24, 1994, plaintiffs filed motions (i) for joinder and consolidation of
cases in arbitration, (ii) for joinder and consolidation of cases not subject to
arbitration, and (iii) for a pre-trial scheduling order. These motions were
amended on June 29, 1994 and are now pending.

In re Prudential Securities Inc. Limited Partnerships Litigation - On June 8,
1994, a consolidated complaint captioned In re Prudential Securities Inc.
Limited Partnerships Litigation was filed in the United States District Court
for the Southern District of New York, purportedly consolidating cases that had
been transferred from other federal courts by the Multi-District Litigation

Panel. The consolidated complaint names as defendants Prudential entities and
various other sponsors of limited partnerships sold by Prudential, including
Polaris Holding Company, one of its former officers, Polaris Aircraft Leasing
Corporation, Polaris Investment Management Corporation and Polaris Securities
Corporation. The complaint alleges that the Prudential defendants created a
scheme for the sale of approximately $8-billion of limited partnership interests
in 700 assertedly high-risk limited partnerships, including the Partnership, to
approximately 350,000 investors by means of false and misleading offering
materials; that the sponsoring organizations (including the Polaris entities)
participated with the Prudential defendants with respect to the partnerships
that each sponsored; and that all of the defendants conspired to engage in a
nationwide pattern of fraudulent conduct in the marketing of all limited
partnerships sold by Prudential. The complaint alleges violations of the
federal Racketeer Influenced and Corrupt Organizations Act and the New Jersey
counterpart thereof, fraud, negligent misrepresentation, breach of fiduciary
duty and breach of contract. The complaint seeks rescission, unspecified
compensatory damages, treble damages, disgorgement of profits derived from the
alleged acts, costs and attorneys fees. A further litigation captioned Romano
v. Ball et. al, an action by Prudential Insurance Company policyholders against
many of the same defendants (including Polaris Investment Management Corporation
and Polaris Aircraft Leasing Corporation), has also been commenced by policy
holders of the Prudential Insurance Company as a purported derivative action on
behalf of the Prudential Insurance Company. The case is being coordinated with
In re Prudential. The complaint alleges claims under the federal Racketeer
Influenced and Corrupt Organizations Act, as well as claims for waste,
mismanagement and intentional and negligent misrepresentation, and seeks
unspecified compensatory, treble and punitive damages.

Item 5. Other Information

Polaris Holding Company (PHC) and its subsidiaries, including Polaris Aircraft
Leasing Corporation (PALC) and Polaris Investment Management Corporation (PIMC),
the general partner of Polaris Aircraft Income Fund IV (the Partnership), have
recently restructured their operations and businesses (the Polaris
Restructuring). In connection therewith, PIMC has entered into a services
agreement dated as of July 1, 1994 (the Services Agreement) with GE Capital
Aviation Services, Inc. (the Servicer or GECAS Inc.), a Delaware corporation
which is a wholly owned subsidiary of General Electric Capital Corporation, a
New York corporation (GE Capital). The Polaris Restructuring is part of a
larger restructuring involving the commercial aviation operations of GE Capital,
which has been PHC's parent company since 1986.

The GE Capital Restructuring

GE Capital is in the process of completing a restructuring (the GE Capital
Restructuring) of its commercial aviation operations, and as a result the owned
and managed aircraft portfolios of certain of its affiliates, including its
Polaris affiliates, will be managed by GECAS, subject in the case of Polaris
investment programs to overall management and supervision by PIMC. (As used
herein, the term "Polaris" refers collectively to PHC and its direct and
indirect subsidiaries (including PALC and PIMC), and the term "GECAS" refers
collectively to the Servicer and to its wholly owned subsidiary, GE Capital
Aviation Services, Limited (GECAS Limited), a private limited company
incorporated in Ireland.) When this restructuring is completed, the business of
GECAS will combine commercial aviation activities formerly conducted by GE
Capital's Polaris affiliates and its Transportation and Industrial Funding
Corporation division (the T&I Division). In addition, GECAS will provide a
significant range of management services to GPA Group plc, a public limited
company incorporated in Ireland. (GPA Group plc, together with its consolidated
subsidiaries, are collectively referred to herein as "GPA"). Information
regarding Polaris, the T&I Division and GPA is set forth below.

Polaris - Beginning in the mid-1980s, Polaris has acted as an operating lessor,
acquiring and managing aircraft for its own account and for the account of
investment entities sponsored by PIMC. PIMC has sponsored investment programs,
including the Partnership, for the purpose of acquiring and leasing jet
aircraft. Through such investment programs, as of December 31, 1993, PIMC had
spent approximately $1.3 billion of the funds it raised through such investment
programs to acquire corporate jet and commercial aircraft that were leased
primarily to U.S. domestic carriers. Many of these aircraft have since been
re-leased both domestically and abroad. Since its acquisition by GE Capital in
1986, PHC has acquired aircraft for its own account, which aircraft historically
have been on short to medium-term operating leases to U.S. domestic and
international carriers. As of December 31, 1993, PHC owned 113 aircraft, and
the fleet of additional aircraft managed by PALC and PIMC consisted of 127
aircraft, excluding aircraft in disassembly programs.

T&I Division - The business of GE Capital's T&I Division offered a broad range
of financial products to airlines and aircraft operators and to aircraft owners,

lenders and investors throughout the world, including financing leases (both
direct financing and leveraged leases), debt (both senior and subordinated) and
equity financing. As of December 31, 1993, the T&I Division's investment
portfolio included 284 aircraft, consisting primarily of aircraft on long-term
financing leases with U.S.-based carriers.

GPA - GPA was founded in 1975 to provide aircraft leasing and related services
to the commercial aviation industry. In 1979, GPA began purchasing aircraft for
its own account and continued to expand its aircraft portfolio throughout the
1980s and into the 1990s. In late 1992 and 1993, GPA experienced financial
difficulties that led to the restructuring of GPA's business (the GPA
Restructuring). As of June 30, 1994, GPA's owned and managed aircraft portfolio
consisted of 458 aircraft, of which 355 were owned by GPA, 82 were leased-in,
and 21 were managed on behalf of third parties. In connection with the GPA
Restructuring, GPA and GECAS Limited entered into a management agreement which
provided for GECAS Limited to act as exclusive manager of substantially all the
aircraft formerly managed by GPA, including aircraft owned by GPA, its
affiliates and certain third parties. As a part of the GPA Restructuring, GPA
also granted to GE Capital an option to acquire certain securities of GPA. This
option effectively gives GE Capital the right to acquire control of GPA if the
option is exercised.

The Polaris Restructuring

In connection with the GE Capital Restructuring, the Servicer has hired many of
the employees who had performed the functions for Polaris and its investment
programs (including the Partnership) that are now performed by the Servicer for
PHC owned aircraft and for Polaris investment programs under the Services
Agreement and under similar services agreements which will be entered into by
PIMC and/or PALC with the Servicer relating to other Polaris investment
programs. The Servicer's employees currently include approximately 36 former
employees of Polaris. The positions of a number of other employees of Polaris
were eliminated in connection with the Polaris Restructuring.

In order to allow it to continue to be able to discharge its responsibilities as
general partner of the Partnership, PIMC has retained certain of its employees.
As of July 1, 1994, PIMC had seven full-time employees. In addition, certain
employees of GECAS Inc. will serve as officers and directors of PIMC. The
following management personnel will serve in the capacities shown opposite their
names:

PIMC
Name Title

Howard L. Feinsand President; Director
Richard J. Adams Vice President; Director
Rodney Sirmons Director
James W. Linnan Vice President
John E. Flynn Vice President
Robert W. Dillon Vice President; Assistant Secretary
James F. Walsh Chief Financial Officer
James T. Caleshu Secretary

All of these management personnel other than Mr. Linnan will be employed by the
Servicer and will devote only such portion of their time to the business and
affairs of PIMC as they deem necessary or appropriate.

Mr. Feinsand, 46, Senior Vice President and Manager, Capital Markets, Pricing
and Investor Programs of GECAS Inc., joined PIMC and PALC as Vice President,
General Counsel and Assistant Secretary in April 1989. Effective July 1989,
Mr. Feinsand assumed the position of Senior Vice President, and served as
General Counsel and Secretary from July 1989 to August 1992. Mr. Feinsand, an
attorney, was a partner in the New York law firm of Golenbock and Barell from
1987 through 1989. In his previous capacities, Mr. Feinsand served as counsel
to PIMC and PALC. Mr. Feinsand also serves as a director on the board of Duke
Realty Investments, Inc. Effective July 1, 1994, Mr. Feinsand held the positions
of President and Director of PIMC.

Mr. Adams, 60, Senior Vice President, Aircraft Marketing - North America of
GECAS Inc., served as Senior Vice President - Aircraft Sales and Leasing of PIMC
and PALC effective August 1992, having previously served as Vice President -
Aircraft Sales & Leasing, Vice President - North America, and Vice President -
Corporate Aircraft since he joined PALC in August 1986. Effective July 1, 1994,
Mr. Adams held the positions of Vice President and Director of PIMC.

Mr. Sirmons, 48, is Vice President, Portfolio and Risk Management for GECAS Inc.
During the last twenty-one years, he has held a variety of credit, underwriting
and financial positions with several businesses within GE Capital and its
predecessor. Effective July 1, 1994, Mr. Sirmons held the position of Director
of PIMC.

Mr. Linnan, 52, became Vice President - Financial Management of PIMC and PALC
effective April 1991, having previously served as Vice President - Investor
Marketing of PIMC and PALC since July 1986. Effective July 1, 1994, Mr. Linnan
held the position of Vice President of PIMC.

Mr. Flynn, 53, Senior Vice President and Manager, Task Force Marketing and
General Manager, Cargo, of GECAS Inc., served as Senior Vice President, Aircraft
Marketing for PIMC and PALC effective April 1991, having previously served as
Vice President, North America of PIMC and PALC effective July 1989. Mr. Flynn
joined PALC in March 1989 as Vice President, Cargo. For the two years prior to
joining PALC, Mr. Flynn was a transportation consultant. Effective July 1,
1994, Mr. Flynn held the position of Vice President of PIMC.

Mr. Dillon, 52, became Vice President - Aviation Legal and Insurance Affairs
effective April 1989. Previously, he served as General Counsel of PIMC and PALC
effective January 1986. Effective July 1, 1994, Mr. Dillon held the positions
of Vice President and Assistant Secretary of PIMC.

Mr. Walsh, 44, Senior Vice President and Chief Financial Officer of GECAS Inc.,
joined PIMC and PALC in March 1987. He served as Senior Vice President and
Chief Financial Officer, having previously served as Vice President and Chief
Financial Officer. Effective October, 1993, Mr. Walsh resigned as Senior Vice
President and Chief Financial Officer of PIMC to assume new responsibilities at
GE Capital. Effective July 1, 1994, Mr. Walsh held the position of Chief
Financial Officer of PIMC.

Mr. Caleshu, 54, Senior Vice President and General Counsel of GECAS Inc., joined
PIMC and PALC in August 1992 as Senior Vice President and General Counsel.
Prior to joining PIMC and PALC, Mr. Caleshu, an attorney, was a partner in the
San Francisco firm of Pettit & Martin from 1966 to 1992. Effective July 1,
1994, Mr. Caleshu held the position of Secretary of PIMC.

Through the personnel it has retained, PIMC will oversee the services to be
performed by the Servicer under the Services Agreement, make decisions as to
matters that are effectively reserved to PIMC for decision by the Services
Agreement, receive and analyze reports received from the Servicer, and otherwise
discharge its responsibilities as general partner of the Partnership. (See "The
Services Agreement".) In addition, PIMC will continue to perform investor
relations services for the Partnership and will continue to deal with
ReSource/Phoenix, a division of Phoenix Leasing Incorporated which, since August
1993, has been performing substantially all of the accounting and financial
reporting services previously performed by PIMC, pursuant to a Program
Accounting and Financial Reporting Administration Agreement.

In connection with the Polaris Restructuring, PIMC is relocating its San
Francisco office. On or about September 16, 1994, PIMC's principal office will
be moved to 201 Mission Street, San Francisco, California 94104. PIMC's
telephone numbers will remain (415) 362-0333 and (800) 652-1285.

GECAS

GECAS is a global commercial aviation financial services company that (i) offers
a broad range of financial products to airlines and aircraft operators, aircraft
owners, lenders and investors, including financing leases, operating leases,
tax-advantaged and other incentive-based financing and debt and equity
financing, and (ii) provides management, marketing and technical support
services to aircraft owners, lenders and investors, including GE Capital, GPA
and their respective affiliates, and certain third parties. GECAS has
approximately 230 employees worldwide and operations in Stamford, Connecticut;
Shannon, Ireland; San Francisco, California; and a number of other locations,
including Beijing, Chicago, Dallas, Hong Kong, London and Miami.

GECAS is comprised of two wholly owned subsidiaries of GE Capital, the Servicer
and GECAS Limited (which is a wholly owned subsidiary of the Servicer). In
October 1993, GECAS commenced operations following completion of the GPA
Restructuring and had no operating history prior to that time. Initially,
GECAS's operations consisted solely of managing substantially all of the
aircraft assets owned or leased-in by GPA and aircraft assets that GPA managed
on behalf of its affiliates and third parties. Currently, GECAS's operations
also include commercial aviation activities conducted in the past by the T&I
Division and Polaris. GECAS did not acquire the assets of the T&I Division,
Polaris or GPA, but instead has the responsibility for managing the aircraft
assets owned and/or formerly managed by such entities, subject in the case of
aircraft assets owned by Polaris investment programs to overall management and
supervision by PIMC.

GECAS is the world's largest manager of commercial aircraft. As of June 30,
1994, the portfolio managed by GECAS consisted of approximately 888 aircraft,

and it is expected that GECAS will enter into an agreement to provide
administrative and marketing services with respect to 63 additional aircraft
that are owned by a limited liability company in which affiliates of GECAS have
an interest. Moreover, from time to time, GE Capital and its affiliates are
likely to acquire additional new and used aircraft which are expected to be
included in the portfolio to be managed by GECAS. The aircraft in GECAS's
managed portfolio are on lease to more than 150 customers in 56 countries
throughout the world. GECAS's managed portfolio includes other aircraft of the
same type as those owned by the Partnership. Accordingly, the Servicer may have
certain conflicts of interest in performing its duties under the Services
Agreement. (See "The Services Agreement", herein.)

The Servicer has represented to PIMC that the Servicer's net worth will be
greater than $25,000,000, and has agreed not to pay or make any dividends or
distributions to its shareholder(s) which would have the effect of reducing the
Servicer's net worth below that amount.

The Services Agreement

PIMC, as general partner of the Partnership, has entered into a Services
Agreement dated as of July 1, 1994, with the Servicer. As subsidiaries of GE
Capital, the Servicer and PIMC are affiliates.

Under the Services Agreement, PIMC has engaged the Servicer to perform, or
arrange for the performance of, aircraft management services, aircraft leasing
and sales services, and certain portfolio management services. These services
will include, inter alia, managing the Partnership's portfolio of Aircraft,
arranging for the re-leasing and sale of Aircraft, preparing certain reports for
the Partnership, employing persons to perform services for the Partnership, and
otherwise performing various portfolio and partnership management functions.
PIMC will continue to serve as general partner of the Partnership and will
retain all of its rights, powers and interests as general partner. In its
capacity as general partner, PIMC will exercise supervisory control over the
Servicer's rendering of services in connection with the Partnership and will
continue to have control and overall management of all matters relating to the
Partnership's ongoing business and operations. The Servicer is not becoming a
general partner of the Partnership and is not assuming any fiduciary duty that
PIMC, as general partner, has had or will have.

As compensation for services provided by the Servicer, PIMC will pay to the
Servicer (i) a portion of the Aircraft Management Fees, Cash Available from
Operations and Cash Available from Sales Proceeds received by PIMC under the
Partnership Agreement, and (ii) all Sales Commissions received by PIMC under the
Partnership Agreement with respect to sales of Partnership Aircraft arranged by
the Servicer. The Servicer will also receive an amount equal to the
reimbursement for Partnership expenses which PIMC receives from the Partnership
on account of expenses incurred by the Servicer in performing services pursuant
to the Services Agreement. The expense reimbursement limitations in the
Partnership Agreement will not be affected by the Services Agreement.

The Services Agreement recognizes that the Servicer will be providing services
with respect to the separate aircraft of GE Capital and its affiliates as well
as with respect to the aircraft of third parties, and that conflicts of interest

may arise as a result. The Servicer is required to perform services under the
Services Agreement in good faith and, to the extent that a particular
Partnership Aircraft and other aircraft then in the Servicer's managed portfolio
are substantially similar in terms of relevant objectively identifiable
characteristics, the Servicer must not discriminate between such aircraft on the
basis of ownership, fees payable to the Servicer, or on an unreasonable basis.
The Services Agreement also requires the Servicer to perform services in
accordance with all applicable laws, in a manner consistent with all applicable
provisions of the Partnership Agreement, and with such care and in accordance
with such standards of performance as would have been applied to PIMC had PIMC
performed the services directly.

The Services Agreement requires the Servicer to take any actions relating to the
Services Agreement that PIMC may direct so long as such actions are reasonably
deemed by PIMC to be necessary or appropriate in order to permit PIMC to fulfill
its fiduciary duties as general partner of the Partnership or otherwise to be in
the best interest of the Partnership or its limited partners. Furthermore,
certain actions with respect to the Partnership may not be taken by the Servicer
without the prior approval of PIMC. Such prohibited actions include, among
others: (i) selling or otherwise disposing of one or more Aircraft by the
Partnership (including the sale or other disposition of an Aircraft as parts or
scrap); (ii) entering into any new lease (or any renewal or extension of an
existing lease) with respect to any Aircraft; (iii) terminating or modifying any
lease with respect to any Aircraft; (iv) financing or refinancing one or more
Aircraft by the Partnership; (v) making material capital, maintenance or
inspection expenditures for the Partnership; (vi) hiring any broker to sell or
lease any Aircraft; (vii) entering into any contract (including any contract of
sale), agreement or instrument other than a contract, agreement or instrument
entered into in the ordinary course of business that has a term of less than one
year and that does not contemplate payments which will exceed, over the term of
the contract, agreement or instrument, $100,000 in the aggregate; (viii)
changing in any material respect the type or amount of insurance coverage in
place for the Partnership; and (ix) incurring any Partnership expenses for which
the Servicer will seek reimbursement pursuant to the Services Agreement which
exceed in the aggregate, for any calendar month, the sum of $10,000. Absent
PIMC authorization, it is contemplated that the Servicer will not enter into
contracts, agreements or instruments on behalf of the Partnership.

Absent earlier termination based on certain events (including the withdrawal,
removal or replacement of PIMC as general partner of the Partnership), the
Services Agreement will terminate upon the completion of the winding up and
liquidation of the Partnership and the distribution of all of its assets.

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,
A California Limited Partnership
(Registrant)
By: Polaris Investment
Management Corporation,
General Partner

August 10, 1994 By: /S/James F. Walsh
James F. Walsh
Chief Financial Officer
(principal financial
officer and principal
accounting officer of
Polaris Investment
Management Corporation,
General Partner of the
Registrant)