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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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<SEC-DOCUMENT>0000950134-05-015057.txt : 20050808
<SEC-HEADER>0000950134-05-015057.hdr.sgml : 20050808
<ACCEPTANCE-DATETIME>20050805212032
ACCESSION NUMBER:		0000950134-05-015057
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20050726
ITEM INFORMATION:		Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review
FILED AS OF DATE:		20050808
DATE AS OF CHANGE:		20050805

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			INCOME OPPORTUNITY REALTY INVESTORS INC /TX/
		CENTRAL INDEX KEY:			0000949961
		STANDARD INDUSTRIAL CLASSIFICATION:	REAL ESTATE INVESTMENT TRUSTS [6798]
		IRS NUMBER:				752615944
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-14784
		FILM NUMBER:		051004234

	BUSINESS ADDRESS:	
		STREET 1:		1800 VALLEY VIEW LANE
		STREET 2:		SUITE 300
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75234
		BUSINESS PHONE:		4685224200

	MAIL ADDRESS:	
		STREET 1:		1800 VALLEY VIEW LANE
		STREET 2:		SUITE 300
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75234
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>d27759e8vk.htm
<DESCRIPTION>FORM 8-K
<TEXT>
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<HEAD>
<TITLE>e8vk</TITLE>
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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM 8-K</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>CURRENT REPORT</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>Pursuant to Section&nbsp;13 or 15(d) of the Securities Exchange Act</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Date of Report: July&nbsp;26, 2005<BR>
(Date of Earliest Event Reported)</B></DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>INCOME
OPPORTUNITY REALTY<BR>
INVESTORS, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt">(Exact Name of Registrant as Specified in its Charter)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Nevada</B><BR>
(State or other<BR>
jurisdiction of incorporation)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>001-14784</B><BR>
(Commission<BR>
File No.)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>75-2615944</B><BR>
(I.R.S. Employer<BR>
Identification No.)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>1755 Wittington Place, Suite&nbsp;340<BR>
Dallas, Texas 75234</B><BR>
(Address of principal executive offices)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>214-750-5800</B><BR>
(Registrant&#146;s telephone number, including area code)</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT style="font-family: Wingdings">&#168;</FONT>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT style="font-family: Wingdings">&#168;</FONT>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12)</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT style="font-family: Wingdings">&#168;</FONT>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT style="font-family: Wingdings">&#168;</FONT>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Pre-commencement communications pursuant to Rule&nbsp;13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>





<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;On July&nbsp;18, 2005, in response to a comment raised by the Staff of the Securities and
Exchange Commission (the &#147;SEC&#148;) concerning Income Opportunity Realty Investors, Inc.&#146;s (&#147;IOT&#148; or
the &#147;Company&#148; or the &#147;Registrant&#148;) disclosure concerning partnerships formed with Metra Capital LLC
(&#147;Metra&#148;), Management identified an accounting error in the financial statements related to the
total Metra transactions. With guidance from the Registrant&#146;s auditors, Management determined that
the error needs to be corrected. The error involved the establishment of a process involving the
deferral of operating income or expense from the Metra properties until the sale of the property,
which set up an additional inter-company account with Metra that could have a receivable or payable
balance. Management of IOT worked through a materiality review with guidance from the Registrant&#146;s
auditors for the periods involved and determined that the operational income or expense deferral
resulting was not material to the historic period 2002 but was material for 2003. The result is
that Management of IOT has concluded that changes should be made in its financial statements for
the year ending December&nbsp;31, 2003, and corrections carried forward for the year ending December&nbsp;31,
2004, and for the quarter ended March&nbsp;31, 2005. The resulting impact on the prior periods&#146;
operations from the necessary corrections will be to decrease net income for the year ended
December&nbsp;31, 2003 by $436,000 from a reported $1,782,000 to $1,346,000, and a decrease on a per
share basis from a reported $1.24 per share to $0.94 per share. The changes for the fiscal year
ended December&nbsp;31, 2004 will result in a decrease in net income by $64,000 from a reported
$5,492,000 to $5,428,000, an overall decrease in net income per share by $0.04 from a reported
$3.95 per share to $3.91 per share. The resulting impact in the financial statements for the
quarter ended March&nbsp;31, 2005 will be an increase in net income by $54,000 from a reported $239,000
to $293,000, or an increase by $0.04 per share from a reported $0.17 per share to $0.21 per share.
Other changes will also be required in such financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of the foregoing, on July&nbsp;26, 2005, the Company&#146;s Management and Audit Committee
concluded that the Company&#146;s previously reported 2003 annual financial statements included in the
Company&#146;s 2003 Annual Report on Form 10-K and 2004 Annual Report on Form 10-K, should no longer be
relied upon, and such 2003 annual financial statements will accordingly be amended and restated.
The Company intends to file an amendment on Form 10-K/A for the years ended December&nbsp;31, 2003 and
December&nbsp;31, 2004, and Form 10-Q/A for the quarter ended March&nbsp;31, 2005 in order to restate such
2003 annual financial statements in its prior filings and to carry forward such changes in its
current filings, and expects to make such filings concurrently with or prior to the filing of its
2005 second quarter Form 10-Q due August&nbsp;15, 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing has been discussed with IOT&#146;s independent registered public accounting firm.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A &#147;material weakness&#148; is a control deficiency, or combination of control deficiencies, that
results in more than a remote likelihood that a material misstatement of annual or interim
financial statements will not be prevented or detected. Because of the error described above,
Management is reviewing all controls currently in place with a view toward implementation of any
changes which might improve the control process to further insure the prevention of any future
similar error. The controls and procedures currently in place for IOT are different from the
controls in place during April &#151; December&nbsp;2002, none of the personnel involved in the establishment
of the original process involving the Metra transactions are currently involved with or perform
work for IOT, the current independent registered public accounting firm for IOT is different from
the independent auditors for IOT for 2002, and Management believes that the likelihood of a failure
to detect a similar error at the outset is remote. Management also believes that any deficiency
that may have existed in 2002 in the internal controls has now been remediated.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly-caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto
duly-authorized.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
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    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dated: August 1, 2005.&nbsp;</TD>
    <TD colspan="3" align="left">INCOME OPPORTUNITY REALTY<BR>
INVESTORS, INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Robert N. Crouch II
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Robert N. Crouch II, Executive Vice&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">President, Chief Financial Officer and
Acting Principal Executive Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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