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<SEC-DOCUMENT>0000950134-08-002168.txt : 20080410
<SEC-HEADER>0000950134-08-002168.hdr.sgml : 20080410
<ACCEPTANCE-DATETIME>20080211163358
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950134-08-002168
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20080211

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:		CORRESP

	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>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
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<TITLE>corresp</TITLE>
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 12pt; margin-top: 6pt">METZGER &#038; McDONALD PLLC
</DIV>

<DIV align="center" style="font-size: 10pt">(formerly Prager, Metzger &#038; Kroemer PLLC)</DIV>

<DIV align="center" style="font-size: 8pt"><FONT style="font-variant: SMALL-CAPS">A PROFESSIONAL LIMITED LIABILITY COMPANY</FONT></DIV>

<DIV align="center" style="font-size: 8pt"><FONT style="font-variant: SMALL-CAPS">ATTORNEYS, MEDIATORS &#038; COUNSELORS</FONT></DIV>

<DIV align="center" style="font-size: 10pt">&nbsp;</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 width="30%"></TD>
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    <TD width="5%"></TD>
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<TR valign="bottom">
    <TD align="left" valign="top"><FONT style="font-variant: SMALL-CAPS">Steven C. Metzger</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-variant: SMALL-CAPS">3626 N. Hall Street, Suite&nbsp;800</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top"><FONT style="font-variant: SMALL-CAPS">Direct Dial 214-740-5030</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-variant: SMALL-CAPS">Dallas, Texas 75219-5133</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top"><FONT style="font-variant: SMALL-CAPS">Facsimile 214-523-3838</FONT></TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top"><FONT style="font-variant: SMALL-CAPS">smetzger@pmklaw.com</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-variant: SMALL-CAPS">214-969-7600</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top"><FONT style="font-variant: SMALL-CAPS">214-969-7635</FONT></TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-variant: SMALL-CAPS">www.pmklaw.com</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
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</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">February&nbsp;11, 2008
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Via EDGAR</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Securities and Exchange Commission<BR>
100 F Street N.E., Mail Stop 4561<BR>
Washington, D.C. 20549<BR>
Attn: Evan Woody, Branch Chief<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Jennifer Monick, Staff Accountant

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Re:</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Income Opportunity Realty Investors, Inc. (Commission File No.
001-14784;<br> CIK No.&nbsp;0000949961) &#151; Form&nbsp;10-K for the fiscal year ended<br>December
31, 2006 filed March&nbsp;30, 2007</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ladies and Gentlemen:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On behalf of Income Opportunity Realty Investors, Inc., a Nevada corporation (&#147;IOT&#148;), this
letter is being filed as correspondence uploaded on the EDGAR system on behalf of IOT in response
to a letter of additional comment from the Staff of the Securities and Exchange Commission dated
February&nbsp;1, 2008. Schedule&nbsp;1 annexed to this letter contains the response to the comment of the
Staff. In each instance on such Schedule, for convenience, each comment of the Staff is repeated,
followed in each instance by the applicable response to such comment or explanation. Also included
in such response, where appropriate, is a letter/page reference to the text to the applicable
document or instrument referenced in the comment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This letter is being filed under the EDGAR system in direct response to the comment of the
Staff. If you would like to discuss any item concerning the referenced matter or included in this
letter or Schedule&nbsp;1, please do not hesitate to contact the undersigned at any time at 214-740-5030
direct or Steven A. Abney, Executive Vice President and Chief Financial Officer of IOT at
469-522-4238 direct. For your future reference, the facsimile transmission number for IOT should
be 469-522-4240.
</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>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Very truly yours,<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">/s/ Steven C. Metzger
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Steven C. Metzger&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">cc:</TD>
    <TD>&nbsp;</TD>
    <TD>Steven A. Abney<br>
Executive Vice President and Chief Financial Officer<br>
Income Opportunity Realty Investors, Inc.<br>
1800 Valley View Lane, Suite&nbsp;300<br>
Dallas, Texas 75234</TD>
</TR>
</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</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>SCHEDULE 1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RESPONSE TO COMMENT OF THE STAFF OF</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>THE SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>BY LETTER DATED FEBRUARY 1, 2008 WITH RESPECT TO FORM 10-K</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006 OF</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INCOME OPPORTUNITY REALTY INVESTORS, INC.</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>COMMISSION FILE NO. 1-14784</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following information is to provide a further response to an additional comment of the
Staff of the Securities and Exchange Commission rendered by letter dated February&nbsp;1, 2008 with
respect to Form 10-K Annual Report to the Securities and Exchange Commission for the fiscal year
ended December&nbsp;31, 2006 of Income Opportunity Realty Investors, Inc. (the &#147;Company&#148; or &#147;IOT&#148;). For
convenience, each comment of the Staff is restated below, with our response noted immediately
following the comment. Also included in such response is a letter/page reference to the text in
the Form 10-K for the fiscal year ended December&nbsp;31, 2006 (which was filed on March&nbsp;30, 2007).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Form&nbsp;10-K for the year ended December&nbsp;31, 2006</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Financial Statements</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Consolidated Balance Sheets, page 28</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Comment/Observation No.&nbsp;1.</B>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We note your response to our prior comment one. Please tell us how you determined it was
necessary to continue to account for the residential real estate as directly owned assets
upon settlement of the litigation in August of 2005. Within your response, please tell us
how you determined it was appropriate to neither consolidate MOPI nor record it as an
equity method investee. Please reference the authoritative literature relief upon by
management.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Response to Comment/Observation No.&nbsp;1.</B>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The settlement of the litigation did not affect the Company&#146;s accounting for the conveyance of
the properties. The transfer of the properties and the MOPI stock issued to IOT were recognized
for income tax and legal purposes but nor for GAAP and SEC financial reporting purposes. This
concept was disclosed in Note 5 to the December&nbsp;31, 2005 financial statements per the following
excerpt below:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;...transferred a portion of the residential real estate properties back to the Company and
its&#146; affiliates for tax/legal basis in the form of stock in Midland Odessa Properties, Inc.
(MOPI).&#148;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The statement &#147;back to the Company and its&#146; affiliates&#148;... further indicates that the conveyance
was a financing transaction and not available for treatment as a sale in accordance with the</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>requirements of SFAS 66, as IOT continued to be involved with and maintained control of the
properties as well as the risks and rewards of ownership. IOT continued to collect all rents,
pay all operating expenses (including insurance and property taxes), pay the first-lien, third
party mortgages on the properties and funded all capital improvements to the properties. IOT
accordingly continued to account for the properties as 100&nbsp;percent owned assets.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>MOPI was formed to acquire the interest in the Metra partnership that was previously owned by
Innovo Realty, Inc. MOPI owns no properties directly and has no other interest other than its
ownership interest in the Metra partnership. For legal purposes the properties are owned by the
Metra partnership. As the properties were accounted for as 100&nbsp;percent owned assets on IOT&#146;s
books there would be no additional transactions or entities to consolidate; further, no equity
method accounting would have been required.</TD>
</TR>

</TABLE>
</DIV>


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



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