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

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FORM 10-Q
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_X_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 1995

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

For the transition period from _____ to _____

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Commission File No. 33-15551
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POLARIS AIRCRAFT INCOME FUND IV,
A California Limited Partnership

State of Organization: California
IRS Employer Identification No. 94-3039169
201 Mission Street, 27th Floor, San Francisco, California 94105
Telephone - (415) 284-7400

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 18 pages.

POLARIS AIRCRAFT INCOME FUND IV,
A California Limited Partnership

FORM 10-Q - For the Quarterly Period Ended June 30, 1995

INDEX

Part I. Financial Information Page

Item 1. Financial Statements

a) Balance Sheets - June 30, 1995 and
December 31, 1994..............................3

b) Statements of Operations - Three Months and
Six Months Ended June 30, 1995 and 1994........4

c) Statements of Changes in Partners' Capital
(Deficit) - Year Ended December 31, 1994
and Six Months Ended June 30, 1995.............5

d) Statements of Cash Flows - Six Months
Ended June 30, 1995 and 1994...................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.................................14

Item 5. Other Information.................................16

Item 6. Exhibits and Reports on Form 8-K..................17

Signature......................................................18

Part I. Financial Information

Item 1. Financial Statements

POLARIS AIRCRAFT INCOME FUND IV,
A California Limited Partnership

BALANCE SHEETS
(Unaudited)

June 30, December 31,
1995 1994
---- ----
ASSETS:

CASH AND CASH EQUIVALENTS $ 21,168,930 $ 18,152,875

RENT AND OTHER RECEIVABLES 2,254,586 1,941,568

NOTES RECEIVABLE, net of allowance for credit
losses of $2,238,642 in 1995 and $3,263,108
in 1994 4,280,434 5,862,206

AIRCRAFT at cost, net of accumulated depreciation
of $54,665,429 in 1995 and $49,947,066 in 1994 64,012,015 68,730,378

OTHER ASSETS, net of accumulated amortization
of $2,127,811 in 1995 and $2,105,937 in 1994 82,439 104,313
------------ ------------

$ 91,798,404 $ 94,791,340
============ ============

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT):

PAYABLE TO AFFILIATES $ 185,484 $ 174,860

ACCOUNTS PAYABLE AND ACCRUED
LIABILITIES 56,928 32,995

LESSEE SECURITY DEPOSITS 1,097,921 1,072,067

MAINTENANCE RESERVES 3,664,048 2,146,917

DEFERRED RENTAL INCOME 382,500 110,000
------------ ------------

Total Liabilities 5,386,881 3,536,839
------------ ------------

PARTNERS' CAPITAL (DEFICIT):
General Partner (3,591,758) (3,543,265)
Limited Partners, 499,964 units
issued and outstanding 90,003,281 94,797,766
------------ ------------

Total Partners' Capital 86,411,523 91,254,501
------------ ------------

$ 91,798,404 $ 94,791,340
============ ============

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,
1995 1994 1995 1994
---- ---- ---- ----

REVENUES:
Rent from operating leases $ 3,227,039 $ 3,037,419 $ 6,296,412 $ 6,159,392
Interest 537,632 424,349 1,043,067 829,069
Net loss on sale of aircraft -- (6,707,562) -- (6,282,562)
----------- ----------- ----------- -----------

Total Revenues 3,764,671 (3,245,794) 7,339,479 705,899
----------- ----------- ----------- -----------

EXPENSES:
Depreciation and amortization 2,370,119 2,531,776 4,740,237 5,335,520
Management fees to general partner 161,352 151,871 314,821 307,970
Operating 2,767 860,929 46,934 1,730,907
Administration and other 76,440 85,703 136,520 139,253
----------- ----------- ----------- -----------

Total Expenses 2,610,678 3,630,279 5,238,512 7,513,650
----------- ----------- ----------- -----------

NET INCOME (LOSS) $ 1,153,993 $(6,876,073) $ 2,100,967 $(6,807,751)
=========== =========== =========== ===========

NET INCOME ALLOCATED
TO THE GENERAL PARTNER $ 323,986 $ 306,174 $ 645,902 $ 681,793
=========== =========== =========== ===========

NET INCOME (LOSS) ALLOCATED
TO LIMITED PARTNERS $ 830,007 $(7,182,247) $ 1,455,065 $(7,489,544)
=========== =========== =========== ===========

NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ 1.66 $ (14.37) $ 2.91 $ (14.98)
=========== =========== =========== ===========

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, 1994 and
Six Months Ended June 30, 1995

General Limited
Partner Partners Total

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

Net income (loss) 1,294,178 (9,352,755) (8,058,577)

Cash distributions to partners (1,527,668) (13,749,010) (15,276,678)
------------- ------------- -------------

Balance, December 31, 1994 (3,543,265) 94,797,766 91,254,501

Net income 645,902 1,455,065 2,100,967

Cash distributions to partners (694,395) (6,249,550) (6,943,945)
------------- ------------- -------------

Balance, June 30, 1995 $ (3,591,758) $ 90,003,281 $ 86,411,523
============= ============= =============

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,
1995 1994
---- ----
OPERATING ACTIVITIES:
Net income (loss) $ 2,100,967 $ (6,807,751)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 4,740,237 5,335,520
Net loss on sale of aircraft -- 6,282,562
Changes in operating assets and liabilities:
Increase in rent and other receivables (313,018) (75,928)
Decrease in other assets -- 35,887
Increase (decrease) in payable to affiliates 10,624 (345,693)
Increase in accounts payable
and accrued liabilities 23,933 366,000
Increase in lessee security deposits 25,854 525,000
Increase in maintenance reserves 1,517,131 351,027
Increase in deferred income 272,500 --
------------ ------------

Net cash provided by operating activities 8,378,228 5,666,624
------------ ------------

INVESTING ACTIVITIES:
Proceeds from sale of aircraft -- 425,000
Increase in notes receivable -- (163,077)
Principal payments on notes receivable 1,581,772 579,380
------------ ------------

Net cash provided by investing activities 1,581,772 841,303
------------ ------------

FINANCING ACTIVITIES:
Cash distributions to partners (6,943,945) (8,332,733)
------------ ------------

Net cash used in financing activities (6,943,945) (8,332,733)
------------ ------------

CHANGES IN CASH AND CASH
EQUIVALENTS AND SHORT-TERM
INVESTMENTS 3,016,055 (1,824,806)

CASH AND CASH EQUIVALENTS AND
SHORT-TERM INVESTMENTS AT
BEGINNING OF PERIOD 18,152,875 20,474,194
------------ ------------

CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 21,168,930 $ 18,649,388
============ ============

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, 1994, 1993, and
1992 included in the Partnership's 1994 Annual Report to the SEC on Form 10-K
(Form 10-K).

Aircraft and Depreciation - The aircraft are recorded at cost, which includes
acquisition costs. Depreciation to an estimated residual value is computed using
the straight-line method over the estimated economic life of the aircraft which
was originally estimated to be 30 years from the date of manufacture.
Depreciation in the year of acquisition was calculated based upon the number of
days that the aircraft were in service.

The Partnership periodically reviews the estimated realizability of the residual
values at the end of each aircraft's economic life based on estimated residual
values obtained from an independent party which provides current and future
estimated aircraft values by aircraft type. For any downward adjustment in
estimated residual, or decrease in the projected remaining economic life, the
depreciation expense over the projected remaining life of the acriraft is
increased. If the projected net income generated from the lease (projected
rental revenue, net of management fees, less adjusted depreciation and an
allocation of estimated administrative expense) results in a net loss, that loss
will be recognized currently. Off-lease aircraft are carried at the lower of
depreciated cost or estimated net realizable value. A further adjustment is made
for those aircraft, if any, that require substantial maintenance work.

Capitalized Costs - Aircraft modification and maintenance costs which are
determined to increase the value or extend the useful life of the aircraft are
capitalized and amortized using the straight-line method over the estimated
useful life of the improvement. These costs are also subject to periodic
evaluation as discussed above.

Financial Accounting Pronouncements - The Partnership adopted Statement of
Financial Accounting Standards (SFAS) No. 114, "Accounting by Creditors for
Impairment of a Loan," and the related SFAS No. 118 as of January 1, 1995. SFAS
No. 114 and SFAS No. 118 require that certain impaired loans be measured based
on the present value of expected cash flows discounted at the loan's effective
interest rate; or, alternatively, at the loan's observable market price or the
fair value of the collateral if the loan is collateral dependent. The
Partnership had previously measured the allowance for credit losses using
methods similar to that prescribed in SFAS No. 114. As a result, no additional
provision was required by the adoption of this pronouncement. The Partnership
has recorded an allowance for credit losses equal to the full amount of the
following impaired loan as a result of issues regarding its collection due to
restrictions regarding the cash flow by the Bankruptcy Court. The Partnership
recognizes revenue on this loan only as payments are received.

As discussed in Note 3, the modified leases with Continental Airlines, Inc.
(Continental) include an extended deferral of the dates when certain rental
payments are due the Partnership. The Partnership recorded a note receivable and
an allowance for credit losses equal to the total of the deferred rents, the net
of which is reflected in the accompanying balance sheets. The note receivable
and corresponding allowance for credit losses are reduced by the principal
portion of payments received. In addition, the Partnership recognizes rental
revenue and interest revenue in the period the deferred rental payments are
received. The deferred rents and corresponding allowance for credit losses were
$2,238,642 and $3,263,108 as of June 30, 1995 and December 31, 1994,
respectively.

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 and February 1994, although rental
revenue will be recognized 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 sold both of these aircraft as discussed in the Form 10-K.

Under the ATA lease, 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 an extended lease term. 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. The
Partnership has received all scheduled principal and interest payments due under
the notes. The balances of the notes at June 30, 1995 and December 31, 1994 were
$876,530 and $949,489, respectively.

3. 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 April 1994 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. The
Partnership's balance sheets reflect the net reimbursable costs incurred of
$535,285 and $819,259 as of June 30, 1995 and December 31, 1994, respectively,
as notes receivable.

On January 26, 1995, Continental announced a number of actual and proposed
changes in its operations and financial situation. In connection with those
changes, Continental indicated that it was discussing with certain of its major
lenders modifications to existing debt amortization schedules to enhance the
airline's capital structure. Continental stated that during those discussions it
would not be making payments to such lenders and lessors otherwise required
under the current contracts. The Partnership is not engaged in any such
discussions with Continental at the present time, and Continental has made all
payments due to the Partnership on a current basis to date.

In early April 1995, Continental announced that it had successfully concluded
discussions with The Boeing Company, as well as its primary lender and the City
and County of Denver, that would provide Continental with approximately $370
million in cash deferrals and savings over the next two years, and that it had
reached a preliminary agreement with certain of its lessors for additional cash
deferrals.

4. Sale of Aircraft to Continental

The leases of five Boeing 727-200 aircraft to Continental expired on April 30,
1994 as discussed in Note 3. In May 1994, the Partnership sold these aircraft to
Continental for an aggregate sales price of $5,032,865. The Partnership agreed
to accept payment of the sales 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 sales price and recognized a loss on sale of $6,707,562 in
the second quarter of 1994. The Partnership has received all scheduled payments
due under the note. The note receivable balance at June 30, 1995 and December
31, 1994 was $2,538,663 and $3,706,458, respectively.

5. Viscount Air Services, Inc. (Viscount) Restructuring

As discussed in the Form 10-K, in July 1994 the Partnership entered into an
agreement with Viscount to defer certain rents due the Partnership which
aggregate $600,000; 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; and which gives the Partnership 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 deferred rents are being repaid by Viscount with interest at a rate of 6%
per annum over the mareining terms of the leases. The deferred rents were
recognized as revenue in the period earned. Payments on the deferred rents are
current, and at present, the Partnership considers these deferred rents to be
collectible. The unpaid balances of the deferred rents, which are reflected as
rents receivable in the June 30, 1995 and December 31, 1994 balance sheets, were
$555,933 and $450,000, respectively. The line of credit, which was advanced to
Viscount in full during 1994, is being repaid by Viscount over a 30-month
period, beginning in January 1995, with interest at a rate of 11.53% per annum.
The line of credit balances, which are reflected as notes receivable in the June
30, 1995 and December 31, 1994 balance sheets, were $329,956 and $387,000,
respectively.

Viscount is presently past due on certain rent payments due the Partnership in
April and May 1995. The past due payments aggregate $200,000 and are included in
rents receivable in the June 30, 1995 balance sheet. The Partnership considers
these past due amounts to be collectible. At the present time, the Partnership
is considering a restructuring of Viscount's financial obligations to the
Partnership, which would require Viscount to remain current on its existing
monthly obligations and permit a deferral of the past-due portion of the April
and May 1995 obligations. In the interim, beginning in June 1995, Viscount has
undertaken to pay in full, by the end of each month, the current month's
obligations by making partial periodic payments during that month. Viscount is
presently current on these periodic payments. Any agreement for a further
deferral as well as any failure by Viscount to perform its financial obligations
with the Partnership will have an adverse effect on the Partnership's financial
position.

6. 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, 1995 June 30, 1995
------------- -------------

Aircraft Management Fees $150,315 $119,351

Out-of-Pocket Administrative Expense
Reimbursement 24,148 66,133

Out-of-Pocket Maintenance and
Remarketing Expense Reimbursement 26,794 --
-------- --------

$201,257 $185,484
======== ========

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 13 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 leased to GB Airways
Limited (GB Airways); two Boeing 737-200 Advanced aircraft leased to TBG Airways
Limited (TBG Airways); and two Boeing 737-200 aircraft leased to Viscount Air
Services, Inc. (Viscount). 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 in the Partnership's
1994 Annual Report to the Securities and Exchange Commission on Form 10-K (Form
10-K), 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 in February 1994 and the second Boeing 727-100 aircraft was sold in August
1994.

Partnership Operations

The Partnership recorded net income of $1,153,993, or $1.66 per limited
partnership unit, for the three months ended June 30, 1995, compared to a net
loss of $6,876,073, or $14.37 per unit, for the same period in 1994. The
Partnership recorded net income of $2,100,967, or $2.91 per limited partnership
unit, for the six months ended June 30, 1995, compared to a net loss of
$6,807,751, or $14.98 per unit, for the same period in 1994. The 1994 net losses
were primarily 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, as
discussed in the 1994 Form 10-K, combined with increased operating expenses. The
improved operating results in the three and six months ended June 30, 1995 as
compared to the same periods of 1994 is due primarily to a significant decrease
in operating and depreciation expenses in 1995.

During the first quarter of 1994, the Partnership incurred maintenance and
remarketing costs of approximately $850,000 necessary to remarket the two Boeing
737-200 aircraft and four Boeing 737-200 Advanced aircraft, formerly on lease to
Britannia Airways Limited, to GB Airways, TBG Airways and Viscount. Maintenance
expenses recognized during the first and second quarters of 1995 were minimal in
comparison.

Further impacting the improved operating results in the first and second
quarters of 1995 as compared to the same periods of 1994 was a decrease in
depreciation expense in 1995. Depreciation expense for the three and six months
ended June 30, 1995 does not include depreciation expense for the five Boeing
727-200 aircraft sold to Continental in May 1994.

Partially offsetting the loss on sale of $6,707,562 in the first quarter of 1994
was a gain of $425,000 recognized on the sale of one Boeing 727-100 aircraft to
Total Aerospace Services, Inc. in the same period. No aircraft sales were
concluded in the first or second quarter of 1995.

As discussed below and in Note 5 to the financial statements, as a result of the
uncertainty over Viscount's future performance, the Partnership has begun a
market evaluation for the two aircraft currently on lease to Viscount. Should
the Partnership determine that it is in its best interest to repossess these
aircraft and prepare them for lease to another operator, the negative effects on
the Partnership's operating results and liquidity could be significant.

Statement of Financial Accounting Standards (SFAS) No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,"
requires that long-lived assets and certain identifiable intangibles to be held
and used by an entity be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. This Statement will be adopted by the Partnership as of January 1,
1996 and will be applied prospectively. Management is gathering information and
evaluating the requirements of the Statement, but has not determined the impact
of its application on the Partnership's financial position or results of
operations.

Liquidity and Cash Distributions

Liquidity - As discussed in the Form 10-K, the Partnership entered into an
agreement with Viscou ntin July 1994 under which it agreed to defer certain
rents due the Partnership on two aircraft. These deferred rents, which aggregate
$600,000, are being repaid by Viscount with interest over the remaining lease
terms. The deferred rents were recognized as revenue in the period earned.
Payments on the deferred rents are current, and at present, the Partnership
considers these deferred rents to be collectible. The agreement with Viscount
also stipulates that the Partnership advance Viscount up to $387,000, primarily
for maintenance expenses incurred by Viscount relating to the Partnership's
aircraft. In accordance with the agreement, the Partnership advanced Viscount
$387,000 during 1994 which is being repaid by Viscount with interest over a
30-month period beginning in January 1995.

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,
Airworthiness Directive compliance, aircraft modification and refurbishment
costs, a portion of which will be recovered with interest through payments from
Continental over the lease terms. The balance of the costs that the Partnership
is currently obligated to pay or finance is approximately $2.3 million.

As described in the Form 10-K, the ATA lease specifies that the Partnership may
finance certain aircraft hushkits at an estimated aggregate cost of
approximately $5.0 million, which will be partially recovered with interest
through payments from ATA over an extended lease term.

The Partnership receives maintenance reserve payments from certain of its
lessees that may be reimbursed to the lessee or applied against certain costs
incurred by the Partnership for maintenance work performed on the Partnership's
aircraft, as specified in the leases. Maintenance reserve balances, if any,
remaining at the termination of the lease may be used by the Partnership to
offset future maintenance expenses or recognized as revenue. The net maintenance
reserve balances aggregate $3,664,048 as of June 30, 1995.

The Partnership's cash reserves are being retained to finance a portion of the
cost that may be incurred under the leases with Continental and ATA and to cover
other potential cash requirements.

Cash Distributions - Cash distributions to limited partners during the three
months ended June 30, 1995 and 1994 were $3,124,775, or $6.25 per limited
partnership unit and $3,749,730, or $7.50 per unit, respectively. Cash
distributions to limited partners during the six months ended June 30, 1995 and
1994 were $6,249,550, or $12.50 per limited partnership unit and $7,499,460, or
$15.00 per unit, respectively. The timing and amount of future cash
distributions will depend upon 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 modification financing payments from Continental, 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.

Industry Effects on the Partnership's Aircraft

As discussed in Note 1 to the financial statements, the Partnership periodically
reviews the estimated realizability of the residual values at the projected end
of each aircraft's economic life. For any downward adjustment in estimated
residual value, depreciation expense over the projected remaining life of the
aircraft is increased. If the increase in depreciation expense for on-lease
aircraft causes the projected future net income generated from the lease to
result in a net loss, that loss will be recognized currently as additional
depreciation expense. The Partnership made downward adjustments to the estimated
residual value of eight of its on-lease aircraft as of December 31, 1994. As a
result of these adjustments to the estimated residual values, the Partnership
will recognize increased depreciation expense of approximately $1.61 million per
year beginning in 1995 through the end of the projected economic lives of the
aircraft. The increased depreciation expense over the projected remaining lives
of these aircraft caused the future projected net income generated from the
lease (projected rental revenue, net of management fees, less adjusted
depreciation and an allocation of estimated administrative expense) to result in
a net loss. The Partnership recognized approximately $2.57 million, or $5.09 per
limited Partnership unit, of this net loss as increased depreciation expense as
of December 31, 1994.

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) 1994 Annual Report to the Securities and Exchange Commission (SEC)
on Form 10-K (Form 10-K) and in Item 1 of Part II of the Partnership's Quarterly
Report to the SEC on Form 10-Q for the period ended March 31, 1995, 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 any
such actions or proceedings during the period covered by this report.

Reuben Riskind, et al. v. Prudential Securities, Inc., et al. - Prudential
Securities, Inc. has reached a settlement with the plaintiffs. The trial of the
claims of one plaintiff, Robert W. Wilson, against Polaris aircraft Income Funds
I - VI, their general partner Polaris Investment Management Corporation and
various affiliates of Polaris Investment Management Corporation, including
General Electric Capital Corporation, was commenced on July 10, 1995. On July
26, 1995, the jury returned a verdict in favor of the defendants on all counts.

Adams, et al. v. Prudential Securities, Inc., et al. - The Judicial Panel
conditionally transferred the action to the Multi-District Litigation filed in
the United States District Court for the Southern District of New York, which is
described in Item 10 of Part III of the Partnership's 1994 Form 10-K. Defendants
time to answer or otherwise respond to the complaint has been extended by the
court until 20 days after the Judicial Panel determines whether to transfer the
case to the Multi-District Litigation.

Other Proceedings - Item 10 in Part III of the Partnership's 1994 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. As discussed in the Form
10-K, the Partnership is not a rtpay to any of these actions. Except as
described below, there have been no material developments with respect to any of
the actions described therein during the period covered by this report.

Moross, et al. v. Polaris Holding Company, et al. - On April 11, 1995, the
action was transferred to the Multi-District Litigation described in Item 10 of
Part III of the Partnership's 1994 Form 10-K. On April 20, 1995, the parties
stipulated that defendants need not answer or otherwise respond to the complaint
at this time.

Kahn v. Polaris Holding Company, et al. - On April 18, 1995, the action was
discontinued without prejudice.

Novak, et al. v. Polaris Holding Company, et al. - On July 7, 1995, defendants
filed briefs in support of their appeal from that portion of the trial court's
order denying the motion to dismiss.

Cohen, et al. v. J.B. Hanauer & Company, et al. - On June 7, 1995, plaintiffs
filed an amended complaint which did not include as defendants General Electric
Capital Corporation, General Electric Financial Services, Inc., and General
Electric Company, thus effectively dismissing without prejudice the case against
these entities.

Bashein, et al. v. Kidder, Peabody & Company Inc., et al. - As previously
disclosed in the Partnership's 1994 Form 10-K and first quarter 1995 Form 10-Q,
a purported class action entitled Cohen, et al. v. Kidder Peabody & Company
Inc., et al. was filed in the Circuit Court of the Fifteenth Judicial Circuit In
And For Palm Beach County, Florida on January 12, 1995, and on March 31, 1995,
the case was removed to the United States District Court for the Southern
District of Florida. An amended class action complaint (the "amended
complaint"), which re-named this action as Bashein, et al. v. Kidder, Peabody &
Company Inc., et al., was filed on June 12, 1995. The amended complaint names
Kidder, Peabody & Company Inc., General Electric Capital Corporation, General
Electric Financial Services, Inc., and General Electric Company. The amended
complaint sets forth various causes of action purportedly arising in connection
with the public offerings of the Partnership, Polaris Aircraft Income Fund III,
Polaris Aircraft Income Fund V, and Polaris Aircraft Income Fund VI.
Specifically, plaintiffs assert claims for violation of Sections 12(2) and 15 of
the Securities Act of 1933, fraud, negligent misrepresentation, breach of
fiduciary duty, breach of third party beneficiary contract, violation of NASD
Rules of Fair Practice, breach of implied covenant, and breach of contract.
Plaintiffs seek compensatory damages, interest, punitive damages, costs and
attorneys' fees, as well as any other relief the court deems just and proper.
Defendants moved to dismiss the amended complaint on June 26, 1995. The
Partnership is not named as a defendant in this action.

B & L Industries, Inc., et al. v. Polaris Holding Company, et al. - On or around
April 13, 1995, a class action complaint entitled B & L Industries, Inc., et al.
v. Polaris Holding Company, et al. was filed in the Supreme Court of the State
of New York. The complaint names as defendants Polaris Holding Company, Polaris
Aircraft Leasing Corporation, Polaris Investment Management Corporation, Polaris
Securities Corporation, Peter G. Pfendler, Marc P. Desautels, General Electric
Capital Corporation, General Electric Financial Services, Inc., General Electric
Company, Prudential Securities Inc., and Kidder Peabody & Company Incorporated.
The complaint sets forth various causes of action purportedly arising out of the
public offerings of the Partnership and Polaris Aircraft Income Fund III.
Plaintiffs allege claims of fraud, negligent misrepresentation, breach of
fiduciary duty, knowingly inducing or participating in breach of fiduciary duty,
breach of third party beneficiary contract, violation of NASD Rules of Fair
Practice, breach of implied covenant, and unjust enrichment. Plaintiffs seek
compensatory damages, interest, general, consequential and incidental damages,
exemplary and punitive damages, disgorgement, rescission, costs, attorneys'
fees, accountants' and experts' fees, and other legal and equitable relief as
the court deems just and proper. The Partnership is not named as a defendant in
this action.

Item 5. Other Information

Directors and Officers

James W. Linnan, 53, has assumed the position of Director and President of PIMC
effective March 31, 1995. Mr. Linnan has served PIMC in various capacities since
April 1979, most recently as Vice President.

Effective July 31, 1995, Eric Dull resigned as Director of PIMC.

Richard L. Blume, 53, has assumed the position of Secretary of PIMC effective
May 1, 1995. Mr. Blume presently holds the position of Executive Vice President
and General Counsel of GE Capital Aviation Services, Inc. (GECAS). Prior to
joining GECAS, Mr. Blume was counsel at GE Aircraft Engines since 1987.

Norman Liu, 37, has assumed the position of Vice President of PIMC effective May
1, 1995 and has assumed the position of Director of PIMC effective July 31,
1995. Mr. Liu presently holds the position of Executive Vice President, Capital
Funding and Portfolio Management of GECAS. Prior to joining GECAS, Mr. Liu was
with General Electric Capital Corporation for nine years. He has held management
positions in corporate Business Development and in Syndications and Leasing for
Transportation and Industrial Funding Corporation (TIFC). Mr. Liu was also at
Kidder, Peabody as a managing director.

Edward Sun, 45, has assumed the position of Vice President of PIMC effective May
1, 1995. Mr. Sun presently holds the position of Senior Managing Director,
Structured Finance of GECAS. Prior to joining GECAS, Mr. Sun held various
positions with TIFC since 1990.

Selected Financial Data
For the years ended December 31,

1994 1993 1992 1991 1990
---- ---- ---- ---- ----

Cash Distributions per Limited
Partnership Unit $27.50 $82.50 $45.00 $55.56 $62.52

Amount of Cash Distributions
Included Above Representing
a Return of Capital on a Generally
Accepted Accounting Principle
Basis per Limited Partnership Unit * $27.50 $77.88 $22.14 $48.90 $28.98

* The portion of such distributions which represents a return of capital on an
economic basis will depend in part on the residual sale value of the
Partnership's aircraft and thus will not be ultimately determinable until the
Partnership disposes of its aircraft. However, such portion may be significant
and may equal, exceed or be smaller than the amount shown in the above table.

Item 6. Exhibits and Reports on Form 8-K

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

27. Financial Data Schedules (Filed electronically only)

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 Investmt
en
Management Corporation,
General Partner

August 9, 1995 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)