<DOCUMENT>
<TYPE>EX-8.1
<SEQUENCE>6
<FILENAME>d93379ex8-1.txt
<DESCRIPTION>OPINION OF JACKSON WALKER LLP RE: TAX MATTERS
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                                                                     EXHIBIT 8.1



-----------------------
February 22, 2002


American Realty Investors, Inc.
10670 N. Central Expressway, Suite 300
Dallas, Texas  75231


Gentlemen:

We have acted as counsel to American Realty Investors, Inc., a Nevada
corporation ("ARL") in connection with (i) the proposed merger of Income
Opportunity Acquisition Corporation, a Nevada corporation ("IOAC") into Income
Opportunity Realty Investors, Inc., a Nevada corporation ("IOT") pursuant to a
certain Agreement and Plan of Merger among ARL, IOAC and IOT (the "IOT Merger
Agreement"); and (ii) the proposed merger of TCI Acquisition Corporation, a
Nevada corporation ("TCIA") into Transcontinental Realty Investors, Inc., a
Nevada corporation ("TCI") pursuant to the terms of a certain Agreement and Plan
of Merger among ARL, TCIA and TCI (the "TCI Merger Agreement"). The merger
contemplated in the IOT Merger Agreement is referred to herein as the "IOT
Merger" and the merger contemplated in the TCI Merger Agreement is referred to
herein as the "TCI Merger." The IOT Merger Agreement and TCI Merger Agreement
are sometimes referred to herein collectively as the "Merger Agreements."

In rendering the opinions expressed herein, we have examined such documents as
we have deemed relevant or necessary, including without limitation, the Merger
Agreements. In our examination, we have assumed the Merger Agreements will be
duly executed and delivered in the form that we reviewed.

As to factual matters, in rendering such opinions, we have relied solely on and
have assumed the present and continuing truth and accuracy of the factual
representations and warranties contained in the Merger Agreements and related
documents and agreements, and we have assumed that (i) TCI is not a real estate
investment trust as defined in Section 856(a) of the Internal Revenue Code of
1986 (the"Code"); (ii) that IOT will not make any distributions to its
shareholders in the taxable year in which the IOT Merger occurs; and (iii) IOT
had no undistributed capital gain at the end of its taxable year preceding the
taxable year in which the IOT Merger occurs. The initial and continuing truth
and accuracy of all such factual matters constitutes an integral basis for, and
a material condition to, such opinions.

Based upon and subject to the foregoing, we are of the opinion that the TCI
Merger will have the following federal income tax consequences to the TCI and
ARL shareholders:

1. Each TCI shareholder receiving cash in the TCI Merger will recognize taxable
gain or loss to the extent that the cash received by it exceeds its adjusted
basis in its TCI common stock.

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2. Each TCI shareholder electing to receive shares of ARL Series G Preferred
Stock in the TCI Merger will recognize taxable gain or loss to the extent that
the fair market value of the Series G Preferred Stock received by it exceeds its
adjusted basis in its TCI common stock.

3. The basis of ARL Series G Preferred Stock received in the TCI Merger will be
the fair market value of the Series G Preferred Stock at the date of
distribution, and the holding period for shares of Series G Preferred Stock
received by electing TCI shareholders will not include the holding period of
their TCI common stock.

4. ARL shareholders will not recognize gain or loss as a result of the TCI
Merger.

Based upon and subject to the assumptions and qualifications contained herein,
we are of the opinion that the IOT Merger will have the following federal income
tax consequences for the IOT and ARL shareholders:

1. Each IOT shareholder receiving cash in the IOT Merger will recognize taxable
gain or loss to the extent that the cash received by it exceeds its adjusted
basis in its IOT common stock.

2. Each IOT shareholder electing to receive shares of ARL Series H Preferred
Stock in the IOT Merger will recognize taxable gain or loss to the extent that
the fair market value of the Series H Preferred Stock received by it exceeds its
adjusted basis in its IOT common stock.

3. The basis of ARL Series H Preferred Stock received in the IOT Merger will be
the fair market value of the Series H Preferred Stock at the date of
distribution, and the holding period for shares of Series H Preferred Stock
received by electing IOT shareholders will not include the holding period of
their IOT shares.

4. ARL Shareholders will not recognize gain or loss as a result of the IOT
Merger.

This opinion is based on the Code, the Income Tax Regulations promulgated
thereunder, judicial decisions and administrative pronouncements of the Internal
Revenue Service, all as in effect on the date of this opinion and all of which
are subject to change at any time, possibly retroactively. We undertake no
obligation to you or any other person to give notice of any such change. This
opinion is limited strictly to the matters expressly stated herein and no other
opinion may be implied or inferred beyond such matters. This opinion represents
only our best legal judgment and is not binding on the Internal Revenue Service
or the courts.

This opinion is provided to you solely for use in connection with a registration
statement on Form S-4 to be filed by you with the Securities and Exchange
Commission. We hereby consent to the filing of this opinion as an exhibit to
such registration statement. This opinion shall not otherwise be quoted or
referred to in whole or in part in any report or document nor furnished to any
other person or entity other than your counsel or your employees, except with
our prior written consent or in response to a valid subpoena or other lawful
process.

                                       Very truly yours,

                                       /s/ JACKSON WALKER, L.L.P.



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