8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  03/31/2006

Income Opportunity Realty Investors, Inc.

(Exact name of registrant as specified in its charter)

Commission File Number:  001-14784

Nevada	75-2615944
(State or other jurisdiction of	(IRS Employer
incorporation)	Identification No.)

1755 Wittington Place, Suite 340

Dallas, Texas 75234

(Address of principal executive offices, including zip code)

469-522-4200

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ]   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Information to be included in the report

Item 2.02.    Results of Operations and Financial Condition

Section 2 B Financial Information

Item 2.02. Results of Operations and Financial Condition

On March 31, 2006, Income Opportunity Realty Investors, Inc. ("IOT" or the "Company") announced its operational results for the year ended December 31, 2005. A copy of the announcement is attached as Exhibit "99.1."

The information furnished pursuant to Item 2.02 in this Form 8-K, including Exhibit "99.1" attached hereto, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, unless we specifically incorporate it by reference in a document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934. We undertake no duty or obligation to publicly-update or revise the information furnished pursuant to Item 2.02 of this Current Report on Form 8-K.

Item 9.01.    Financial Statements and Exhibits

Section 9 B Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits

(c)        Exhibits.

The following exhibit is furnished with this Report:

Exhibit Designation        

        Description of Exhibit

        99.1*        

Earnings Release dated March 31, 2006.

_____________________

*Furnished herewith.

Signature(s)

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		Income Opportunity Realty Investors, Inc.
Date: March 31, 2006	By:	/s/    Steven A. Abney
		Steven A. Abney
		Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer and Acting Principal Executive Officer)

Exhibit Index

Exhibit No.	Description
EX-99.	IORI Exhibit 99.1

EX-99. 2 rrd113065_12786.htm IORI EXHIBIT 99.1

EXHIBIT 99.1

NEWS RELEASE FOR IMMEDIATE RELEASE Contact: Income Opportunity Realty Investors, Inc. Investors Relations
(800) 400-6407
investor.relations@primeasset.com

Income Opportunity Realty Investors, Inc. Reports 2005 Results

DALLAS (March 31, 2006) -- Income Opportunity Realty Investors, Inc. (AMEX: IOT), a Dallas-based real estate investment company, today reported net income of $1.4 million or $0.33 per share for the twelve months ended December 31, 2005, compared to $5.4 million and $1.30 per share for the same period in 2004. 2004 results included net income from discontinued operations of $5.5 million, on $1.29 per share.

Key items for the twelve months ended December 31, 2005, compared to the same period in 2004 included:

• Rents were $6.4 million in 2005 and $5.9 million in 2004. The increase is due to a combination of increased occupancy as well as increased rental rates.

• Operating expenses were $3.4 million in 2005 and $3.1 million in 2004. The increase is due to slightly higher rental expenses and general and administrative costs.

• Interest income was $4.1 million in 2005 and $3.3 million in 2004. The increase is due to a full year of interest in 2005 for notes acquired during the first half of 2004 and $218,000 interest on a $7.0 million loan made in August 2005 to Transcontinental Realty Investors, Inc., a related party.

• Interest expense was $3.6 million in both 2005 and 2004.

• Depreciation expense was $691,000 in 2005 and $740,000 in 2004. The decrease was due to the sale of properties in 2004 as well as fully depreciated tenant improvements in 2005 and 2004.

• The advisory fee to affiliate was $738,000 in 2005 and $741,000 in 2004 and the net income fee was $109,000 in 2005 as compared to $440,000 in 2004.

• General and administrative expense was $615,000 in 2005 and $563,000 in 2004. The increase was due principally to professional fees paid in 2005.

• Equity losses in partnerships were $57,000 in 2005 and $3,000 in 2004. IORI is a non-controlling partner in two partnerships.

Income Opportunity Realty Investors, Inc., a Dallas-based real estate investment company, holds a diverse portfolio of real estate properties located in Texas, including office buildings, apartments, and undeveloped land. For more information, go to IORI's website at www.incomeopp-realty.com.

INCOME OPPORTUNITY REALTY INVESTORS, INC.

CONSOLIDATED SATEMENTS OF OPERATIONS

	Years Ended December 31,
	2005	2004	2003
	(dollars in thousands)
Property revenue
Rents and other property revenues	$ 6,447	$ 5,905	$ 5,224
Operating expenses:
Property operations	3,388	3,129	3,331
Depreciation and amortization	691	740	816
General and administrative	615	563	779
Advisory fees	738	741	424
Total operating expenses	5,432	5,173	5,350
Operating income (loss)	1,015	732	(126)
Other income (expense):
Interest income	4,135	3,325	626
Mortgage and loan interest	(3,569)	(3,570)	(1,812)
Provision for asset impairment	--	--	(848)
Recovery of loss provision on receivable from related party	--	--	1,569
Net income fee	(109)	(440)	(109)
Total other income(expense)	457	(685)	(574)
Loss before gain on land sales, equity in earnings of investees and minority interest	1,472	47	(700)
Equity in earnings (loss) of investees	(57)	(3)	(7)
Minority interests	(38)	--	--
Net income (loss) from continuing operations	1,377	44	(707)
Income from discontinued operations	--	5,384	2,053
Net income	$ 1,377	$ 5,428	$ 1,346
Earnings per share
Net income (loss) from continuing operations	$ 0.33	$ 0.01	$ (0.16)
Discontinued operations	--	1.29	0.47
Net income	$ 0.33	$ 1.30	$ 0.31
Weighted average Common shares used in computing earnings per share	4,168,035	4,168,035	4,316,835

INCOME OPPORTUNITY REALTY INVESTORS, INC.

CONSOLIDATED BALANCE SHEETS

	December 31, 2005	December 31, 2004
	(dollars in thousands)
Assets
Real estate held for investment	$ 35,083	$ 34,988
Less--accumulated depreciation	(4,311)	(3,620)
	30,772	31,368
Notes and interest receivable	63,230	54,911
Investment in real estate partnerships	547	604
Cash and cash equivalents	201	399
Receivables from affiliates	1,853	261
Other assets	2,738	3,095
	$ 99,341	$ 90,638
Liabilities and Stockholders' Equity
Liabilities
Notes and interest payable	$ 52,817	$ 44,571
Payables to affiliates	--	1,248
Other liabilities	1,344	1,529
	54,161	47,348
Commitments and contingencies
Minority interest	513	--
Stockholders' equity
Common Stock, $.01 par value, authorized 10,000,000 shares; issued and outstanding 4,168,035 shares in 2005 and in 2004	42	42
Paid-in capital	61,955	61,955
Accumulated deficit	(17,330)	(18,707)
	44,667	43,290
	$ 99,341	$ 90,638

-----END PRIVACY-ENHANCED MESSAGE-----

EX-99.

EXHIBIT 99.1

NEWS RELEASE FOR IMMEDIATE RELEASE Contact: Income Opportunity Realty Investors, Inc. Investors Relations
(800) 400-6407
investor.relations@primeasset.com

Income Opportunity Realty Investors, Inc. Reports 2005 Results

DALLAS (March 31, 2006) -- Income Opportunity Realty Investors, Inc. (AMEX: IOT), a Dallas-based real estate investment company, today reported net income of $1.4 million or $0.33 per share for the twelve months ended December 31, 2005, compared to $5.4 million and $1.30 per share for the same period in 2004. 2004 results included net income from discontinued operations of $5.5 million, on $1.29 per share.

Key items for the twelve months ended December 31, 2005, compared to the same period in 2004 included:

• Rents were $6.4 million in 2005 and $5.9 million in 2004. The increase is due to a combination of increased occupancy as well as increased rental rates.

• Operating expenses were $3.4 million in 2005 and $3.1 million in 2004. The increase is due to slightly higher rental expenses and general and administrative costs.

• Interest income was $4.1 million in 2005 and $3.3 million in 2004. The increase is due to a full year of interest in 2005 for notes acquired during the first half of 2004 and $218,000 interest on a $7.0 million loan made in August 2005 to Transcontinental Realty Investors, Inc., a related party.

• Interest expense was $3.6 million in both 2005 and 2004.

• Depreciation expense was $691,000 in 2005 and $740,000 in 2004. The decrease was due to the sale of properties in 2004 as well as fully depreciated tenant improvements in 2005 and 2004.

• The advisory fee to affiliate was $738,000 in 2005 and $741,000 in 2004 and the net income fee was $109,000 in 2005 as compared to $440,000 in 2004.

• General and administrative expense was $615,000 in 2005 and $563,000 in 2004. The increase was due principally to professional fees paid in 2005.

• Equity losses in partnerships were $57,000 in 2005 and $3,000 in 2004. IORI is a non-controlling partner in two partnerships.

Income Opportunity Realty Investors, Inc., a Dallas-based real estate investment company, holds a diverse portfolio of real estate properties located in Texas, including office buildings, apartments, and undeveloped land. For more information, go to IORI's website at www.incomeopp-realty.com.

INCOME OPPORTUNITY REALTY INVESTORS, INC.

CONSOLIDATED SATEMENTS OF OPERATIONS

	Years Ended December 31,
	2005	2004	2003
	(dollars in thousands)
Property revenue
Rents and other property revenues	$ 6,447	$ 5,905	$ 5,224
Operating expenses:
Property operations	3,388	3,129	3,331
Depreciation and amortization	691	740	816
General and administrative	615	563	779
Advisory fees	738	741	424
Total operating expenses	5,432	5,173	5,350
Operating income (loss)	1,015	732	(126)
Other income (expense):
Interest income	4,135	3,325	626
Mortgage and loan interest	(3,569)	(3,570)	(1,812)
Provision for asset impairment	--	--	(848)
Recovery of loss provision on receivable from related party	--	--	1,569
Net income fee	(109)	(440)	(109)
Total other income(expense)	457	(685)	(574)
Loss before gain on land sales, equity in earnings of investees and minority interest	1,472	47	(700)
Equity in earnings (loss) of investees	(57)	(3)	(7)
Minority interests	(38)	--	--
Net income (loss) from continuing operations	1,377	44	(707)
Income from discontinued operations	--	5,384	2,053
Net income	$ 1,377	$ 5,428	$ 1,346
Earnings per share
Net income (loss) from continuing operations	$ 0.33	$ 0.01	$ (0.16)
Discontinued operations	--	1.29	0.47
Net income	$ 0.33	$ 1.30	$ 0.31
Weighted average Common shares used in computing earnings per share	4,168,035	4,168,035	4,316,835

INCOME OPPORTUNITY REALTY INVESTORS, INC.

CONSOLIDATED BALANCE SHEETS

	December 31, 2005	December 31, 2004
	(dollars in thousands)
Assets
Real estate held for investment	$ 35,083	$ 34,988
Less--accumulated depreciation	(4,311)	(3,620)
	30,772	31,368
Notes and interest receivable	63,230	54,911
Investment in real estate partnerships	547	604
Cash and cash equivalents	201	399
Receivables from affiliates	1,853	261
Other assets	2,738	3,095
	$ 99,341	$ 90,638
Liabilities and Stockholders' Equity
Liabilities
Notes and interest payable	$ 52,817	$ 44,571
Payables to affiliates	--	1,248
Other liabilities	1,344	1,529
	54,161	47,348
Commitments and contingencies
Minority interest	513	--
Stockholders' equity
Common Stock, $.01 par value, authorized 10,000,000 shares; issued and outstanding 4,168,035 shares in 2005 and in 2004	42	42
Paid-in capital	61,955	61,955
Accumulated deficit	(17,330)	(18,707)
	44,667	43,290
	$ 99,341	$ 90,638