UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

Form 10-KSB



[X]

ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the fiscal year ended December 31, 2006



[ ]

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the transition period _________to _________



Commission file number 0-17646



UNITED INVESTORS INCOME PROPERTIES

(Name of small business issuer in its charter)



|                                |                     
|------------------------------- | --------------------
|Missouri                        | 43-1483942          
|(State or other jurisdiction of | (I.R.S. Employer    
|incorporation or organization)  | (Identification No.)



55 Beattie Place, P.O. Box 1089

Greenville, South Carolina 29602

(Address of principal executive offices)



(864) 239-1000

Issuer's telephone number



Securities registered under Section 12(b) of the Exchange Act:



None



Securities registered under Section 12(g) of the Exchange Act:



Units of Limited Partnership Interest

(Title of class)



Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YesX No___



Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.  [X]



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes []  No[X]



State issuer's revenues for its most recent fiscal year.  $1,226,000



State the aggregate market value of the voting partnership interests held by non-affiliates computed by reference to the price at which the partnership interests were sold, or the average bid and asked prices of such partnership interests, as of December 31, 2006.  No market exists for the limited partnership interests of the Registrant, and, therefore, no aggregate market value can be determined.



DOCUMENTS INCORPORATED BY REFERENCE

None









The matters discussed in this report contain certain forward-looking statements, including, without limitation, statements regarding future financial performance and the effect of government regulations. Actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors including, without limitation: national and local economic conditions; the terms of governmental regulations that affect the Registrant and interpretations of those regulations; the competitive environment in which the Registrant operates; financing risks, including the risk that cash flows from operations may be insufficient to meet required payments of principal and interest; real estate risks, including variations of real estate values and the general economic climate in local markets and competition for tenants in such markets; litigation, including costs associated with prosecuting and defending claims and any adverse outcomes, and possible environmental liabilities. Readers should carefully review the Registrant's financial statements and the notes thereto, as well as the risk factors described in the documents the Registrant files from time to time with the Securities and Exchange Commission.



PART I



Item 1.

Description of Business



United Investors Income Properties (the "Registrant" or "Partnership"), a Missouri Limited Partnership, was organized as a limited partnership under the laws of the State of Missouri on June 23, 1988.  The Partnership is governed by an Agreement of Limited Partnership dated July 27, 1988. United Investors Real Estate, Inc., a Delaware corporation, is the sole general partner ("UIRE" or the "General Partner") of the Partnership. UIRE is a wholly-owned subsidiary of Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust. The Partnership Agreement provides that the Partnership is to terminate on December 31, 2018 unless terminated prior to such date.



Commencing in May 1988, the Partnership offered, pursuant to a Registration Statement filed with the Securities and Exchange Commission ("SEC"), up to a maximum of 80,000 units of limited partnership interest (the "Units") at $250 per Unit with a minimum required purchase of eight Units or $2,000 (four Units or $1,000 for an Individual Retirement Account). The offering of Units terminated May 4, 1990. Upon termination of the offering, the Partnership had accepted subscriptions for 61,063 Units resulting in gross offering proceeds of approximately $15,266,000. Since its initial offering, the Partnership has not received, nor are limited partners required to make, additional capital contributions.



The Partnership was engaged in the business of acquiring and operating multifamily residential and commercial real estate properties and other income producing real estate.  The Partnership had acquired three multifamily residential properties, a medical office building, and an interest in a joint venture which owned a medical office building. The medical office building and the joint venture were sold December 30, 1999. One of the multifamily residential properties was sold July 22, 2005. The remaining two properties are residential properties and are further described in "Item 2. Description of Properties".



The Partnership has no employees. Management and administrative services are provided by the General Partner and by agents retained by the General Partner.  Property management services are provided by an affiliate of NHP Management Company (NHP), an affiliate of AIMCO.



Risk Factors



The real estate business in which the Partnership is engaged is highly competitive. There are other residential properties within the market area of the Partnership's









properties. The number and quality of competitive properties, including those which may be managed by an affiliate of the General Partner or NHP in such market area, could have a material effect on the rental market for the apartments and the rents that may be charged for such apartments. While the General Partner, NHP and their affiliates own and/or control a significant number of apartment units in the United States, such units represent an insignificant percentage of total apartment units in the United States and competition for the apartments is local.



Laws benefiting disabled persons may result in the Partnership's incurrence of unanticipated expenses.  Under the Americans with Disabilities Act of 1990, or ADA, all places intended to be used by the public are required to meet certain Federal requirements related to access and use by disabled persons. Likewise, the Fair Housing Amendments Act of 1988, or FHAA, requires apartment properties first occupied after March 13, 1990 to be accessible to the handicapped.  These and other Federal, state and local laws may require modifications to the Partnership's properties, or restrict renovations of the properties. Noncompliance with these laws could result in the imposition of fines or an award of damages to private litigants and also could result in an order to correct any non-complying feature, which could result in substantial capital expenditures. Although the General Partner believes that the Partnership's properties are substantially in compliance with present requirements, the Partnership may incur unanticipated expenses to comply with the ADA and the FHAA.



Both the income and expenses of operating the properties owned by the Partnership are subject to factors outside of the Partnership's control, such as changes in the supply and demand for similar properties resulting from various market conditions, increases/decreases in unemployment or population shifts, changes in the availability of permanent mortgage financing, changes in zoning laws, or changes in patterns or needs of users. In addition, there are risks inherent in owning and operating residential properties because such properties are susceptible to the impact of economic and other conditions outside of the control of the Partnership.



From time to time, the Federal Bureau of Investigation, or FBI, and the United States Department of Homeland Security issue alerts regarding potential terrorist threats involving apartment buildings. Threats of future terrorist attacks, such as those announced by the FBI and the Department of Homeland Security, could have a negative effect on rent and occupancy levels at the Partnerships properties. The effect that future terrorist activities or threats of such activities could have on the Partnerships operations is uncertain and unpredictable. If the Partnership were to incur a loss at a property as a result of an act of terrorism, the Partnership could lose all or a portion of the capital invested in the property, as well as the future revenue from the property.



There have been, and it is possible there may be other, Federal, state and local legislation and regulations enacted relating to the protection of the environment. The Partnership is unable to predict the extent, if any, to which such new legislation or regulations might occur and the degree to which such existing or new legislation or regulations might adversely affect the properties owned by the Partnership.



The Partnership monitors its properties for evidence of pollutants, toxins and other dangerous substances, including the presence of asbestos.  In certain cases environmental testing has been performed, which resulted in no material adverse conditions or liabilities. In no case has the Partnership received notice that it is a potentially responsible party with respect to an environmental clean up site.



A further description of the Partnership's business is included in "Item 6. Management's Discussion and Analysis or Plan of Operation" included in this Form 10-KSB.











Item 2.

Description of Properties



The following table sets forth the Partnership's investment in properties:



|                            |          |                       |          
|--------------------------- | -------- | --------------------- | ---------
|                            | Date of  |                       |          
|Property                    | Purchase | Type of Ownership     | Use      
|                            |          |                       |          
|Bronson Place Apartments    | 11/01/88 | Fee ownership subject | Apartment
|Mountlake Terrace, WA       |          | to a first mortgage   | 70 units 
|                            |          |                       |          
|Defoors Crossing Apartments | 05/01/89 | Fee simple            | Apartment
|Atlanta, GA                 |          |                       | 60 units 



On July 22, 2005, the Partnership sold Meadow Wood Apartments to a third party for a gross sales price of $5,075,000.  The net proceeds realized by the Partnership were approximately $4,941,000 after payment of closing costs of approximately $134,000. The Partnership recognized a gain of approximately $2,732,000 during the year ended December 31, 2005 as a result of the sale and this amount is included in gain from sale of discontinued operations on the statements of operations included in Item 7. Financial Statements.



Schedule of Properties



Set forth below for each of the Partnership's properties is the gross carrying value, accumulated depreciation, depreciable life, method of depreciation and Federal tax basis.



|              |                |              |             |                |          
|------------- | -------------- | ------------ | ----------- | -------------- | ---------
|              | Gross          |              |             |                |          
|              | Carrying       | Accumulated  | Depreciable | Method of      | Federal  
|Property      | Value          | Depreciation | Life        | Depreciation   | Tax Basis
|              | (in thousands) |              |             | (in thousands)
|Bronson Place |                |              |             |                |          
|Apartments    | $ 4,307        | $ 2,179      | 5-40 yrs    | S/L            | $ 2,199  
|Defoors       |                |              |             |                |          
|Crossing      |                |              |             |                |          
|Apartments    | 3,804          | 1,875        | 5-40 yrs    | S/L            | 1,899    
|Totals        | $8,111         | $4,054       |             |                | $4,098   



See "Note A, Organization and Summary of Significant Accounting Policies" to the financial statements included in "Item 7. Financial Statements" for a description of the Partnership's capitalization and depreciation policies.



Schedule of Property Indebtedness



The following table sets forth certain information relating to the loan encumbering one of the Partnership's properties.



|              |                |          |           |          |             
|------------- | -------------- | -------- | --------- | -------- | ------------
|              | Principal      |          |           |          | Principal   
|              | Balance At     | Stated   |           |          | Balance     
|              | December 31,   | Interest | Period    | Maturity | Due At      
|Property      | 2006           | Rate (1) | Amortized | Date(2)  | Maturity (2)
|              | (in thousands) |          |           |          |             
|              |                |          |           |          |             
|Bronson Place | $1,878         | (1)      | 30 yrs    | 09/15/07 | $1,861      
|Apartments    |                |          |           |          |             











(1)

Adjustable rate based on the Fannie Mae discounted mortgage-backed security index plus 105 basis points. The rate at December 31, 2006 was 6.30%.



(2)

See Note B  Mortgage Note Payable to the financial statements included in "Item 7. Financial Statements for information with respect to the Partnership's ability to prepay the loan and other specific details about the loan.



On October 21, 2005, the Partnership obtained financing for Bronson Place Apartments with a mortgage loan in the principal amount of approximately $1,912,000. The loan was financed under a permanent credit facility (Permanent Credit Facility) with Fannie Mae.  The Permanent Credit Facility has a maturity of September 15, 2007, with one five-year extension option. The Permanent Credit Facility includes properties in other partnerships that are affiliated with the general partner of the Partnership. The Permanent Credit Facility creates separate loans for each property.  The loans under the Permanent Credit Facility are not cross-collateralized or cross-defaulted with the other property loans. The loan encumbering Bronson Place Apartments has a variable interest rate of the Fannie Mae discounted mortgage-backed security index plus 105 basis points. The rate was 6.30% at December 31, 2006 and resets monthly. Monthly principal payments are required based on a 30-year amortization schedule using the interest rate in effect during the first month that the mortgage encumbering Bronson Place Apartments was financed under the Permanent Credit Facility. The loan is prepayable without penalty.  As a condition of making the new mortgage, the lender required an affiliate of the Partnership to guarantee the obligations and liabilities of the Partnership with respect to the new mortgage.



In accordance with the terms of the loan agreement relating to the mortgage, the payment of the mortgage may be accelerated at the option of the lender if an Event of Default, as defined in the loan agreement occurs. Events of Default include, but are not limited to nonpayment of monthly interest and reserve requirements and nonpayment of amounts outstanding on or before the maturity date.



Schedule of Rental Rates and Occupancy



Average annual rental rates and occupancy for 2006 and 2005 for each property are as follows:



|                                |                |                |      |     
|------------------------------- | -------------- | -------------- | ---- | ----
|                                | Average Annual | Average Annual
|                                | Rental Rates   | Occupancy     
|                                | (per unit)     |                |     
|Property                        | 2006           | 2005           | 2006 | 2005
|Bronson Place Apartments (1)    | $9,638         | $9,360         | 95%  | 90% 
|Mountlake Terrace, WA           |                |                |      |     
|Defoors Crossing Apartments (2) | 8,478          | 7,757          | 91%  | 94% 
|Atlanta, GA                     |                |                |      |     



(1)

The General Partner attributes the increase in occupancy at Bronson Place Apartments to improved economic conditions in the Seattle area and a more stable tenant base.



(2)

The General Partner attributes the decrease in occupancy at Defoors Crossing Apartments to increased competition in the Atlanta area.



As noted under "Item 1. Description of Business", the real estate industry is highly competitive. Both of the properties of the Partnership are subject to competition from other residential apartment complexes in the localities in which they operate. The General Partner believes that both of the properties are









adequately insured. Each residential property is an apartment complex which leases units for lease terms of one year or less. No residential tenant leases 10% or more of the available rental space. Both of the properties are in good physical condition, subject to normal depreciation and deterioration as is typical for assets of this type and age.



Schedule of Real Estate Taxes and Rates



Real estate taxes and effective rates in 2006 for each property were as follows:



|                            |                |      
|--------------------------- | -------------- | -----
|                            | 2006           | 2006 
|                            | Billings       | Rates
|                            | (in thousands) |      
|Bronson Place Apartments    | $ 49           | 1.02%
|Defoors Crossing Apartments | 36             | 1.75%



Capital Improvements





Bronson Place Apartments



During the year ended December 31, 2006, the Partnership completed approximately $280,000 of capital improvements at Bronson Place Apartments, consisting primarily of roof replacement, structural upgrades, appliance and floor covering replacements and construction related to the fire discussed in Item 6. Managements Discussion and Analysis or Plan of Operation - Results of Operations. These improvements were funded from operating cash flow and insurance proceeds.  The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine expenditures are anticipated during 2007. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.



DeFoors Crossing Apartments



During the year ended December 31, 2006, the Partnership completed approximately $75,000 of capital improvements at DeFoors Crossing Apartments, consisting primarily of roof and floor covering replacements. These improvements were funded from operating cash flow. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine expenditures are anticipated during 2007. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.



Capital expenditures will be incurred only if cash is available from operations or from Partnership reserves. To the extent that capital improvements are completed the Partnerships distributable cash flow, if any, may be adversely affected at least in the short term.



Item 3.

Legal Proceedings



AIMCO Properties, L.P. and NHP Management Company, both affiliates of the General Partner, are defendants in a lawsuit alleging that they willfully violated the Fair Labor Standards Act (FLSA) by failing to pay maintenance workers overtime for all hours worked in excess of forty per week. The complaint, filed in the United States District Court for the District of Columbia, attempts to bring a collective action under the FLSA and seeks to certify state subclasses in California, Maryland, and the District of Columbia. Specifically, the plaintiffs contend that AIMCO









Properties, L.P. and NHP Management Company failed to compensate maintenance workers for time that they were required to be "on-call." Additionally, the complaint alleges AIMCO Properties, L.P. and NHP Management Company failed to comply with the FLSA in compensating maintenance workers for time that they worked in excess of 40 hours in a week.   In June 2005 the court conditionally certified the collective action on both the on-call and overtime issues.  Approximately 1,049 individuals opted in to the class. The defendants moved to decertify the collective action on both issues and that issue is now fully briefed.  The defendants anticipate that the Court will soon set oral argument on the defendants decertification motion.  Because the court denied plaintiffs motion to certify state subclasses, in September 2005, the plaintiffs filed a class action with the same allegations in the Superior Court of California (Contra Costa County), and in November 2005 in Montgomery County Maryland Circuit Court.  The California and Maryland cases have been stayed pending the outcome of the decertification motion in the District of Columbia case.  Although the outcome of any litigation is uncertain, AIMCO Properties, L.P. does not believe that the ultimate outcome will have a material adverse effect on its consolidated financial condition or results of operations. Similarly, the General Partner does not believe that the ultimate outcome will have a material adverse effect on the Partnerships financial condition or results of operations.



Item 4.

Submission of Matters to a Vote of Security Holders



During the quarter ended December 31, 2006, no matters were submitted to a vote of Unit holders through the solicitation of proxies or otherwise.









PART II



Item 5.

Market for Partnership Equity and Related Partner Matters



The Partnership, a publicly-held limited partnership, offered 80,000 and sold 61,063 Limited Partnership Units (the "Units") during its offering period through May 4, 1990, aggregating approximately $15,266,000. The Partnership currently has 61,063 Units outstanding and 1,081 holders of record. Affiliates of the General Partner and AIMCO owned 24,498 Units or 40.12% at December 31, 2006. No public trading market has developed for the Units, and it is not anticipated that such a market will develop in the future.



The following table sets forth the distributions made by the Partnership for the years ended December 31, 2006 and 2005 (in thousands, except per unit data):



|              |                   |             |                   |            
|------------- | ----------------- | ----------- | ----------------- | -----------
|              |                   | Per Limited |                   | Per Limited
|              | Year Ended        | Partnership | Year Ended        | Partnership
|              | December 31, 2006 | Unit        | December 31, 2005 | Unit       
|              |                   |             |                   |            
|Operations    | $   110           | $  1.79     | $   380           | $  6.16    
|Sale (1)      | --                | --          | 4,941             | 80.11      
|Financing (2) | --                | --          | 1,704             | 27.63      
|              | $110              | $1.79       | $7,025            | $113.90    



(1)

Proceeds from the July 2005 sale of Meadow Wood Apartments.

(2)

Proceeds from the October 2005 financing of the mortgage encumbering Bronson Place Apartments.



Future cash distributions will depend on the levels of cash generated from operations, the timing of the debt maturity, property sales and/or financings.  The Partnerships cash available for distribution is reviewed on a monthly basis. There can be no assurance, however, that the Partnership will generate sufficient funds from operations after required capital expenditures to permit distributions to its partners in 2007 or subsequent periods.  See Item 2. Description of Properties  Capital Improvements for information relating to anticipated capital expenditures at the properties.



In addition to its indirect ownership of the sole general partner of the Partnership, AIMCO and its affiliates owned 24,498 Units in the Partnership representing 40.12% of the outstanding Units at December 31, 2006. A number of these Units were acquired pursuant to tender offers made by AIMCO or its affiliates. AIMCO or its affiliates may acquire additional Units in exchange for cash or a combination of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO, either through private purchases or tender offers. Under the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters that include, but are not limited to, voting on certain amendments to the Partnership Agreement and voting to remove the General Partner. As a result of its ownership of 40.12% of the outstanding Units at December 31, 2006, AIMCO and its affiliates are in a position to influence all such voting decisions with respect to the Partnership. Although the General Partner owes fiduciary duties to the limited partners of the Partnership, the General Partner also owes fiduciary duties to AIMCO as its sole stockholder. As a result, the duties of the General Partner, as general partner, to the Partnership and its limited partners may come into conflict with the duties of the General Partner to AIMCO as its sole stockholder.









Item 6.

Management's Discussion and Analysis or Plan of Operation



This item should be read in conjunction with the financial statements and other items contained elsewhere in this report.



The Partnerships financial results depend upon a number of factors including the ability to attract and maintain tenants at the investment properties, interest rates on mortgage loans, costs incurred to operate the investment properties, general economic conditions and weather.  As part of the ongoing business plan of the Partnership, the General Partner monitors the rental market environment of its investment properties to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership from increases in expenses.  As part of this plan, the General Partner attempts to protect the Partnership from the burden of inflation-related increases in expenses by increasing rents and maintaining a high overall occupancy level.  However, the General Partner may use rental concessions and rental rate reductions to offset softening market conditions; accordingly, there is no guarantee that the General Partner will be able to sustain such a plan.  Further, a number of factors that are outside the control of the Partnership such as the local economic climate and weather can adversely or positively affect the Partnerships financial results.



Results of Operations



The Partnership recognized a net loss of approximately $128,000 for the year ended December 31, 2006, compared to net income of approximately $2,867,000 for the year ended December 31, 2005. In accordance with Statement of Financial Accounting Standards (SFAS) No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets, the statement of operations included in Item 7. Financial Statements for the year ended December 31, 2005 reflects the operations of Meadow Wood Apartments as income from discontinued operations due to the sale of the property. On July 22, 2005, the Partnership sold Meadow Wood Apartments to a third party for a gross sales price of $5,075,000.  The net proceeds realized by the Partnership were approximately $4,941,000 after payment of closing costs of approximately $134,000. The Partnership recognized a gain of approximately $2,732,000 during the year ended December 31, 2005 as a result of the sale and this amount is included in gain from sale of discontinued operations.  The propertys operations included income of approximately $129,000 for the year ended December 31, 2005. Also included in the income from discontinued operations for the year ended December 31, 2005 are revenues of approximately $372,000.



The Partnerships loss from continuing operations for the year ended December 31, 2006 was approximately $128,000, compared to income from continuing operations of approximately $6,000 for the year ended December 31, 2005. The decrease in income from continuing operations is due to an increase in total expenses, partially offset by an increase in total revenues. The increase in total expenses is due to increases in operating, depreciation, and interest expenses, partially offset by a decrease in general and administrative expenses. Property tax expense remained relatively constant for the comparable periods. Operating expenses increased primarily due to increases in salaries and related benefits at both of the Partnerships investment properties, contract services at Bronson Place Apartments, and maintenance expense related to water filtration affecting four units at Bronson Place Apartments, partially offset by a decrease in advertising expense at Defoors Crossing Apartments. Depreciation expense increased due to property improvements and replacements placed into service during the past twelve months at both properties. Interest expense increased due to the financing of the mortgage encumbering Bronson Place Apartments during 2005, as discussed in Liquidity and Capital Resources.











The decrease in general and administrative expenses is primarily due to a decrease in accountable reimbursements charged by an affiliate of the General Partner as allowed under the Partnership Agreement, partially offset by the write off of a commission owed to the General Partner previously accrued in association with the 1999 sale of the Peachtree Corners Medical Building. During the year ended December 31, 2005, the General Partner determined that the limited partners will not receive their adjusted capital investment and applicable return with future sales or financings and accordingly reversed the previous accrual of approximately $21,000. Also included in general and administrative expenses for the years ended December 31, 2006 and 2005 are costs associated with the quarterly and annual communications with investors and regulatory agencies and the annual audit required by the Partnership Agreement.



Total revenues increased due to an increase in rental income and the recognition of a casualty gain.  Rental income increased primarily due to increases in occupancy at Bronson Place Apartments and the average rental rate at both of the Partnerships investment properties and a decrease in bad debt expense, partially offset by a decrease in occupancy at Defoors Crossing Apartments. Other income remained relatively constant for the comparable periods.



In March 2006, there was a fire at Bronson Place Apartments, causing damage to one unit. Insurance proceeds of approximately $36,000 were received during the year ended December 31, 2006 to cover the damages. The Partnership recognized a casualty gain of approximately $20,000 during the year ended December 31, 2006 as a result of the receipt of insurance proceeds offset by the write-off of the undepreciated damaged assets of approximately $16,000.



Liquidity and Capital Resources



At December 31, 2006, the Partnership had cash and cash equivalents of approximately $73,000, compared to approximately $229,000 at December 31, 2005. Cash and cash equivalents decreased approximately $156,000 due to approximately $332,000 and $24,000 of cash used in investing and financing activities, respectively, partially offset by approximately $200,000 of cash provided by operating activities. Cash used in investing activities consisted of property improvements and replacements, partially offset by the receipt of insurance proceeds. Cash used in financing activities consisted of distributions to partners and principal payments made on the mortgage encumbering Bronson Place Apartments, partially offset by advances received from an affiliate of the General Partner and a refund of loan costs previously paid related to the financing obtained on Bronson Place Apartments during October 2005. The Partnership invests its working capital reserves in interest bearing accounts.



The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the properties to adequately maintain the physical assets and other operating needs of the Partnership and to comply with Federal, state and local legal and regulatory requirements. The General Partner monitors developments in the area of legal and regulatory compliance. For example, the Sarbanes-Oxley Act of 2002 mandates or suggests additional compliance measures with regard to governance, disclosure, audit and other areas. In light of these changes, the Partnership expects that it will incur higher expenses related to compliance. The Partnership regularly evaluates the capital improvement needs of the properties. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2007. Such capital expenditures will depend on the physical condition of the properties as well as anticipated cash flow generated by the properties.











Capital expenditures will be incurred only if cash is available from operations or from Partnership reserves. To the extent that capital improvements are completed the Partnerships distributable cash flow, if any, may be adversely affected at least in the short term.



The Partnerships assets are thought to be generally sufficient for any near-term needs (exclusive of capital improvements) of the Partnership.  On October 21, 2005, the Partnership obtained financing for Bronson Place Apartments with a mortgage loan in the principal amount of approximately $1,912,000. The outstanding balance at December 31, 2006 was approximately $1,878,000. The loan was financed under a permanent credit facility (Permanent Credit Facility) with Fannie Mae.  The Permanent Credit Facility has a maturity of September 15, 2007, with one five-year extension option. The Permanent Credit Facility includes properties in other partnerships that are affiliated with the General Partner of the Partnership. The Permanent Credit Facility creates separate loans for each property.  The loans under the Permanent Credit Facility are not cross-collateralized or cross-defaulted with the other property loans. The loan encumbering Bronson Place Apartments has a variable interest rate of the Fannie Mae discounted mortgage-backed security index plus 105 basis points. The rate was 6.30% at December 31, 2006 and resets monthly. Monthly principal payments are required based on a 30-year amortization schedule using the interest rate in effect during the first month that the mortgage encumbering Bronson Place Apartments was financed under the Permanent Credit Facility. The loan is prepayable without penalty.  As a condition of making the new mortgage, the lender required an affiliate of the Partnership to guarantee the obligations and liabilities of the Partnership with respect to the new mortgage. In connection with obtaining the mortgage, loan costs of approximately $80,000 were capitalized and are included in other assets on the balance sheet included in Item 7. Financial Statements. The General Partner will attempt to refinance the mortgage encumbering Bronson Place Apartments and/or sell the property prior to its September 2007 maturity. If the property cannot be refinanced or sold for a sufficient amount, the Partnership will risk losing such property through foreclosure.



The Partnership distributed the following amounts during the years ended December 31, 2006 and 2005 (in thousands, except per unit data):



|              |                   |             |                   |            
|------------- | ----------------- | ----------- | ----------------- | -----------
|              |                   | Per Limited |                   | Per Limited
|              | Year Ended        | Partnership | Year Ended        | Partnership
|              | December 31, 2006 | Unit        | December 31, 2005 | Unit       
|              |                   |             |                   |            
|Operations    | $   110           | $  1.79     | $   380           | $  6.16    
|Sale (1)      | --                | --          | 4,941             | 80.11      
|Financing (2) | --                | --          | 1,704             | 27.63      
|              | $110              | $1.79       | $7,025            | $113.90    



(1)

Proceeds from the July 2005 sale of Meadow Wood Apartments.

(2)

Proceeds from the October 2005 financing of the mortgage encumbering Bronson Place Apartments.



Future cash distributions will depend on the levels of cash generated from operations, the timing of the debt maturity, property sales and/or financings.  The Partnerships cash available for distribution is reviewed on a monthly basis.  There can be no assurance, however, that the Partnership will generate sufficient funds from operations after required capital expenditures to permit distributions to its partners during 2007 or subsequent periods.











Other



In addition to its indirect ownership of the sole general partner of the Partnership, AIMCO and its affiliates owned 24,498 Units in the Partnership representing 40.12% of the outstanding Units at December 31, 2006. A number of these Units were acquired pursuant to tender offers made by AIMCO or its affiliates. AIMCO or its affiliates may acquire additional Units in exchange for cash or a combination of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO, either through private purchases or tender offers. Under the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters that include, but are not limited to, voting on certain amendments to the Partnership Agreement and voting to remove the General Partner. As a result of its ownership of 40.12% of the outstanding Units at December 31, 2006, AIMCO and its affiliates are in a position to influence all such voting decisions with respect to the Partnership. Although the General Partner owes fiduciary duties to the limited partners of the Partnership, the General Partner also owes fiduciary duties to AIMCO as its sole stockholder. As a result, the duties of the General Partner, as general partner, to the Partnership and its limited partners may come into conflict with the duties of the General Partner to AIMCO as its sole stockholder.



Critical Accounting Policies and Estimates



A summary of the Partnerships significant accounting policies is included in "Note A  Organization and Summary of Significant Accounting Policies" which is included in the financial statements in "Item 7. Financial Statements". The General Partner believes that the consistent application of these policies enables the Partnership to provide readers of the financial statements with useful and reliable information about the Partnerships operating results and financial condition.  The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires the Partnership to make estimates and assumptions.  These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements as well as reported amounts of revenues and expenses during the reporting period.  Actual results could differ from these estimates.  Judgments and assessments of uncertainties are required in applying the Partnerships accounting policies in many areas.  The Partnership believes that of its significant accounting policies, the following may involve a higher degree of judgment and complexity.



Impairment of Long-Lived Assets



Investment properties are recorded at cost, less accumulated depreciation, unless the carrying amount of the asset is not recoverable.  If events or circumstances indicate that the carrying amount of a property may not be recoverable, the Partnership will make an assessment of its recoverability by comparing the carrying amount to the Partnerships estimate of the undiscounted future cash flows, excluding interest charges, of the property.   If the carrying amount exceeds the aggregate undiscounted future cash flows, the Partnership would recognize an impairment loss to the extent the carrying amount exceeds the estimated fair value of the property.



Real property investments are subject to varying degrees of risk.  Several factors may adversely affect the economic performance and value of the Partnerships investment properties.  These factors include, but are not limited to, general economic climate; competition from other apartment communities and other housing options; local conditions, such as loss of jobs or an increase in the supply of apartments that might adversely affect apartment occupancy or rental rates; changes in governmental regulations and the related cost of compliance; increases in









operating costs (including real estate taxes) due to inflation and other factors, which may not be offset by increased rents; and changes in tax laws and housing laws, including the enactment of rent control laws or other laws regulating multi-family housing.  Any adverse changes in these factors could cause impairment of the Partnerships assets.



Revenue Recognition



The Partnership generally leases apartment units for twelve-month terms or less.  The Partnership will offer rental concessions during particularly slow months or in response to heavy competition from other similar complexes in the area.  Rental income attributable to leases, net of any concessions, is recognized on a straight-line basis over the term of the lease.  The Partnership evaluates all accounts receivable from residents and establishes an allowance, after the application of security deposits, for accounts greater than 30 days past due on current tenants and all receivables due from former tenants.











Item 7.

Financial Statements



UNITED INVESTORS INCOME PROPERTIES



LIST OF FINANCIAL STATEMENTS



Report of Independent Registered Public Accounting Firm



Balance Sheet - December 31, 2006



Statements of Operations - Years ended December 31, 2006 and 2005



Statements of Changes in Partners' (Deficiency) Capital - Years ended December 31, 2006 and 2005



Statements of Cash Flows - Years ended December 31, 2006 and 2005



Notes to Financial Statements









Report of Independent Registered Public Accounting Firm







The Partners

United Investors Income Properties





We have audited the accompanying balance sheet of United Investors Income Properties as of December 31, 2006, and the related statements of operations, changes in partners' (deficiency) capital, and cash flows for each of the two years in the period ended December 31, 2006. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.



We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Partnerships internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnerships internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.



In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of United Investors Income Properties at December 31, 2006, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2006, in conformity with U.S. generally accepted accounting principles.





/s/Ernst & Young LLP





Greenville, South Carolina

March 15, 2007

















|                                  
|----------------------------------
|UNITED INVESTORS INCOME PROPERTIES
|                                  
|BALANCE SHEET                     
|(in thousands, except unit data)  
|                                  
|December 31, 2006                 







|                                                       |          |        
|------------------------------------------------------ | -------- | -------
|Assets                                                 |          |        
|Cash and cash equivalents                              |          | $    73
|Receivables and deposits                               |          | 70     
|Other assets                                           |          | 63     
|Investment properties (Notes B and C):                 |          |        
|Land                                                   | $ 1,021  |        
|Buildings and related personal property                | 7,090    |        
|                                                       | 8,111    |        
|Less accumulated depreciation                          | (4,054)  | 4,057  
|                                                       |          | $4,263 
|Liabilities and Partners' (Deficiency) Capital         |          |        
|Liabilities                                            |          |        
|Accounts payable                                       |          | $    16
|Tenant security deposit liabilities                    |          | 26     
|Other liabilities                                      |          | 30     
|Due to affiliates (Note D)                             |          | 131    
|Mortgage note payable (Note B)                         |          | 1,878  
|                                                       |          |        
|Partners (Deficiency) Capital                         |          |        
|General partner                                        | $   (41) |        
|Limited partners (61,063 units issued and outstanding) | 2,223    | 2,182  
|                                                       |          | $4,263 



See Accompanying Notes to Financial Statements















|                                    
|------------------------------------
|UNITED INVESTORS INCOME PROPERTIES  
|                                    
|STATEMENTS OF OPERATIONS            
|(in thousands, except per unit data)







|                                                    |                          |        
|--------------------------------------------------- | ------------------------ | -------
|                                                    | Years Ended December 31,
|                                                    | 2006                     | 2005   
|Revenues:                                           |                          |        
|Rental income                                       | $ 1,093                  | $ 1,001
|Other income                                        | 113                      | 112    
|Casualty gain (Note F)                              | 20                       | --     
|Total revenues                                      | 1,226                    | 1,113  
|                                                    |                          |        
|Expenses:                                           |                          |        
|Operating                                           | 715                      | 618    
|General and administrative                          | 105                      | 113    
|Depreciation                                        | 286                      | 264    
|Interest                                            | 164                      | 24     
|Property taxes                                      | 84                       | 88     
|Total expenses                                      | 1,354                    | 1,107  
|                                                    |                          |        
|(Loss) income from continuing operations            | (128)                    | 6      
|Income from discontinued operations (Notes A and E) | --                       | 129    
|Gain from sale of discontinued operations (Note E)  | --                       | 2,732  
|                                                    |                          |        
|Net (loss) income (Note G)                          | $(128)                   | $2,867 
|                                                    |                          |        
|Net (loss) income allocated to general partner      | $    (1)                 | $    96
|Net (loss) income allocated to limited partners     | (127)                    | 2,771  
|                                                    | $(128)                   | $2,867 
|Per limited partnership unit:                       |                          |        
|(Loss) income from continuing operations            | $ (2.08)                 | $  0.10
|Income from discontinued operations                 | --                       | 2.08   
|Gain from sale of discontinued operations           | --                       | 43.20  
|                                                    |                          |        
|Net (loss) income                                   | $(2.08)                  | $45.38 
|                                                    |                          |        
|Distributions per limited partnership unit          | $1.79                    | $113.90



See Accompanying Notes to Financial Statements















|                                                       
|-------------------------------------------------------
|UNITED INVESTORS INCOME PROPERTIES                     
|                                                       
|STATEMENTS OF CHANGES IN PARTNERS' (DEFICIENCY) CAPITAL
|(in thousands, except unit data)                       







|                                  |             |          |          |        
|--------------------------------- | ----------- | -------- | -------- | -------
|                                  | Limited     |          |          |        
|                                  | Partnership | General  | Limited  |        
|                                  | Units       | Partner  | Partners | Total  
|                                  |             |          |          |        
|Original capital contributions    | 61,063      | $--      | $15,266  | $15,266
|                                  |             |          |          |        
|Partners' (deficiency) capital at |             |          |          |        
|December 31, 2004                 | 61,063      | $   (65) | $ 6,643  | $ 6,578
|                                  |             |          |          |        
|Distributions to partners         | --          | (70)     | (6,955)  | (7,025)
|                                  |             |          |          |        
|Net income for the year ended     |             |          |          |        
|December 31, 2005                 | --          | 96       | 2,771    | 2,867  
|                                  |             |          |          |        
|Partners' (deficiency) capital at |             |          |          |        
|December 31, 2005                 | 61,063      | (39)     | 2,459    | 2,420  
|                                  |             |          |          |        
|Distribution to partners          | --          | (1)      | (109)    | (110)  
|                                  |             |          |          |        
|Net loss for the year ended       |             |          |          |        
|December 31, 2006                 | --          | (1)      | (127)    | (128)  
|                                  |             |          |          |        
|Partners' (deficiency) capital at |             |          |          |        
|December 31, 2006                 | 61,063      | $(41)    | $2,223   | $2,182 





See Accompanying Notes to Financial Statements















|                                  
|----------------------------------
|UNITED INVESTORS INCOME PROPERTIES
|                                  
|STATEMENTS OF CASH FLOWS          
|(in thousands)                    



|                                                            |                          |         
|----------------------------------------------------------- | ------------------------ | --------
|                                                            |                         
|                                                            | Years Ended December 31,
|                                                            | 2006                     | 2005    
|Cash flows from operating activities:                       |                          |         
|Net (loss) income                                           | $   (128)                | $  2,867
|Adjustments to reconcile net (loss) income to net cash      |                          |         
|provided by operating activities:                           |                          |         
|Depreciation                                                | 286                      | 311     
|Amortization of loan costs                                  | 43                       | 4       
|Casualty gain                                               | (20)                     | --      
|Gain from sale of discontinued operations                   | --                       | (2,732) 
|Change in accounts:                                         |                          |         
|Receivables and deposits                                    | (4)                      | (26)    
|Other assets                                                | 11                       | 1       
|Accounts payable                                            | (5)                      | (22)    
|Tenant security deposit liabilities                         | 8                        | 2       
|Accrued property taxes                                      | --                       | 3       
|Due to affiliates                                           | 26                       | (5)     
|Other liabilities                                           | (17)                     | (5)     
|Net cash provided by operating activities                   | 200                      | 398     
|                                                            |                          |         
|Cash flows from investing activities:                       |                          |         
|Insurance proceeds received                                 | 36                       | --      
|Property improvements and replacements                      | (368)                    | (274)   
|Net proceeds from sale of discontinued operations           | --                       | 4,941   
|Net cash (used in) provided by investing activities         | (332)                    | 4,667   
|                                                            |                          |         
|Cash flows from financing activities:                       |                          |         
|Payments on mortgage note payable                           | (29)                     | (5)     
|Advances from affiliate                                     | 105                      | 22      
|Payments on advances from affiliate                         | --                       | (22)    
|Loan costs refunded (paid)                                  | 10                       | (74)    
|Proceeds from mortgage note payable                         | --                       | 1,912   
|Distributions to partners                                   | (110)                    | (7,025) 
|Net cash used in financing activities                       | (24)                     | (5,192) 
|                                                            |                          |         
|Net decrease in cash and cash equivalents                   | (156)                    | (127)   
|Cash and cash equivalents at beginning of year              | 229                      | 356     
|Cash and cash equivalents at end of year                    | $73                      | $229    
|                                                            |                          |         
|Supplemental disclosure of cash flow information:           |                          |         
|Cash paid for interest                                      | $120                     | $20     
|Supplemental disclosure of non-cash activity:               |                          |         
|Property improvements and replacements included in accounts |                          |         
|payable                                                     | $--                      | $13     





See Accompanying Notes to Financial Statements















|                                  
|----------------------------------
|UNITED INVESTORS INCOME PROPERTIES
|                                  
|NOTES TO FINANCIAL STATEMENTS     
|                                  
|December 31, 2006                 



Note A - Organization and Summary of Significant Accounting Policies



Organization: United Investors Income Properties (the "Registrant" or "Partnership"), a Missouri Limited Partnership, was organized as a limited partnership under the laws of the State of Missouri on June 23, 1988.  The Partnership is governed by an Agreement of Limited Partnership dated July 27, 1988. United Investors Real Estate, Inc., a Delaware corporation, is the sole general partner ("UIRE" or the "General Partner") of the Partnership. UIRE is a wholly-owned subsidiary of Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust. The Partnership Agreement provides that the Partnership is to terminate on December 31, 2018 unless terminated prior to such date. As of December 31, 2006, the Partnership operates one residential property in the northwest and one residential property in the south.



Basis of Presentation: In accordance with Statement of Financial Accounting Standards (SFAS) No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets", the accompanying statement of operations for the year ended December 31, 2005 reflects the operations of Meadow Wood Apartments, which was sold July 22, 2005, as income from discontinued operations.



Cash and cash equivalents: Cash and cash equivalents includes cash on hand and in banks. At certain times, the amount of cash deposited at a bank may exceed the limit on insured deposits. Cash balances include approximately $57,000 at December 31, 2006 that are maintained by an affiliated management company on behalf of affiliated entities in cash concentration accounts.



Allocations of profits, losses and distributions: In accordance with the partnership agreement, all operating profits, losses and distributions are to be allocated 1% to the General Partner and 99% to the limited partners. Profits from the sale of an investment property are allocated in accordance with the partnership agreement.



Tenant Security Deposits: The Partnership requires security deposits from lessees for the duration of the lease and such deposits are included in receivables and deposits. Deposits are refunded when the tenant vacates, provided the tenant has not damaged the space and is current on rental payments.



Investment Properties: Investment properties consist of two apartment complexes and are stated at cost.  The Partnership capitalizes costs incurred in connection with capital expenditure activities, including redevelopment and construction projects, other tangible property improvements and replacements of existing property components.  Costs including interest, property taxes and operating costs associated with redevelopment and construction projects are capitalized during periods in which redevelopment and construction projects are in progress in accordance with SFAS No. 34, Capitalization of Interest Costs and SFAS No. 67, Accounting for Costs and the Initial Rental Operations of Real Estate Properties.  Costs incurred in connection with capital projects are capitalized where the costs of the project exceed $250.  Included in these capitalized costs are payroll costs associated with time spent by site employees in connection with the planning, execution and control of all capital expenditure activities at the property level.



The Partnership did not capitalize any costs related to interest, property taxes, or operating costs during the years ended December 31, 2006 and 2005.  Capitalized costs are depreciated over the useful life of the asset.  Expenditures for ordinary repairs, maintenance and apartment turnover costs are expensed as incurred.













In accordance with SFAS No. 144, the Partnership records impairment losses on long-lived assets used in operations when events and circumstances indicate the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets.  No adjustments for impairment of value were necessary for the years ending December 31, 2006 and 2005.



Depreciation:  Depreciation is provided by the straight-line method over the estimated lives of the apartment properties and related personal property.  For Federal income tax purposes, the accelerated cost recovery method is used for real property over 19 years for additions after May 8, 1985, and before January 1, 1987.  As a result of the Tax Reform Act of 1986, for additions after December 31, 1986, the modified accelerated cost recovery method is used for depreciation of (1) real property over 27.5 years and (2) personal property additions over 5 years.



Deferred Costs: Loan costs of approximately $80,000, less accumulated amortization of approximately $47,000, are included in other assets and are amortized over the term of the related loan agreement. During the year ended December 31, 2006, $10,000 of loan costs previously paid for the financing obtained on Bronson Place Apartments during October 2005 were refunded. Amortization expense for 2006 and 2005 of approximately $43,000 and $4,000, respectively, is included in interest expense on the accompanying statements of operations. Amortization expense is expected to be approximately $33,000 for 2007.



Leasing commissions and other direct costs incurred in connection with successful leasing efforts are deferred and amortized over the terms of the related leases.  Amortization of these costs is included in operating expenses and income from discontinued operations.



Fair Value of Financial Instruments:  SFAS No. 107, Disclosures about Fair Value of Financial Instruments, as amended by SFAS No. 119, Disclosures about Derivative Financial Instruments and Fair Value of Financial Instruments, requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate fair value.  Fair value is defined in the SFAS as the amount at which the instruments could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.  The Partnership believes that the carrying amount of its financial instruments approximates their fair value due to the short term maturity of these instruments.



Leases: The Partnership generally leases apartment units for twelve-month terms or less.  The Partnership will offer rental concessions during particularly slow months or in response to heavy competition from other similar complexes in the area.  Rental income attributable to leases, net of any concessions, is recognized on a straight-line basis over the term of the lease.  The Partnership evaluates all accounts receivable from residents and establishes an allowance, after the application of security deposits, for accounts greater than 30 days past due on current tenants and all receivables due from former tenants.



Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.



Advertising: The Partnership expenses the costs of advertising as incurred. Advertising expense was approximately $53,000 and $91,000 for the years ended December 31, 2006 and 2005, respectively, and is included in operating expense and income from discontinued operations.



Segment Reporting: SFAS No. 131, "Disclosure about Segments of an Enterprise and Related Information" established standards for the way that public business











enterprises report information about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in interim financial reports. SFAS No. 131 also established standards for related disclosures about products and services, geographic areas, and major customers. As defined in SFAS No. 131, the Partnership has only one reportable segment.



Reclassifications: Certain reclassifications have been made to the 2005 balances to conform to the 2006 presentation.



Recent Accounting Pronouncements:



In May 2005, the Financial Accounting Standards Board (FASB) issued SFAS No. 154 Accounting Changes and Error Corrections, which replaces APB Opinion No. 20 and SFAS No. 3, and changes the requirements for the accounting for and reporting of a change in accounting principle. This statement is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Partnership adopted SFAS No. 154 effective January 1, 2006. The adoption of SFAS No. 154 did not have a material effect on the Partnerships financial condition or results of operations.



In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. SFAS No. 157 applies whenever other standards require assets or liabilities to be measured at fair value and does not expand the use of fair value in any new circumstances. SFAS No. 157 establishes a hierarchy that prioritizes the information used in developing fair value estimates. The hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data, such as the reporting entitys own data. SFAS No. 157 requires fair value measurements to be disclosed by level within the fair value hierarchy. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The Partnershipdoes not anticipate that the adoption of SFAS No. 157 will have a material effect on the Partnerships financial statements.



In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS No. 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Partnership has not yet determined whether it will elect the fair value option for any of its financial instruments.



Note B - Mortgage Note Payable



The terms of the mortgage note payable are as follows:



|         |                |           |          |                |          
|-------- | -------------- | --------- | -------- | -------------- | ---------
|         | Principal      | Monthly   |          |                | Principal
|         | Balance At     | Payment   | Stated   |                | Balance  
|         | December 31,   | Including | Interest | Maturity       | Due At   
|Property | 2006           | Interest  | Rate     | Date           | Maturity 
|         | (in thousands) |           |          | (in thousands)













|                         |        |     |     |          |       
|------------------------ | ------ | --- | --- | -------- | ------
|                         |        |     |     |          |       
|Bronson Place Apartments | $1,878 | $10 | (1) | 09/15/07 | $1,861



(1)

Adjustable rate based on the Fannie Mae discounted mortgage-backed security index plus 105 basis points. The rate at December 31, 2006 was 6.30%.



On October 21, 2005, the Partnership obtained financing for Bronson Place Apartments with a mortgage loan in the principal amount of approximately $1,912,000. The loan was financed under a permanent credit facility (Permanent Credit Facility) with Fannie Mae.  The Permanent Credit Facility has a maturity of September 15, 2007, with one five-year extension option. The Permanent Credit Facility includes properties in other partnerships that are affiliated with the general partner of the Partnership. The Permanent Credit Facility creates separate loans for each property.  The loans under the Permanent Credit Facility are not cross-collateralized or cross-defaulted with the other property loans. The loan encumbering Bronson Place Apartments has a variable interest rate of the Fannie Mae discounted mortgage-backed security index plus 105 basis points. The rate was 6.30% at December 31, 2006 and resets monthly. Monthly principal payments are required based on a 30-year amortization schedule using the interest rate in effect during the first month that the mortgage encumbering Bronson Place Apartments was financed under the Permanent Credit Facility. The loan is prepayable without penalty. As a condition of making the new mortgage, the lender required an affiliate of the Partnership to guarantee the obligations and liabilities of the Partnership with respect to the new mortgage.



In accordance with the terms of the loan agreement relating to the mortgage, the payment of the mortgage may be accelerated at the option of the lender if an Event of Default, as defined in the loan agreement occurs. Events of Default include, but are not limited to nonpayment of monthly interest and reserve requirements and nonpayment of amounts outstanding on or before the maturity date.













Scheduled principal payments on the mortgage note payable subsequent to December 31, 2006 are as follows (in thousands):



|     |       
|---- | ------
|2007 | $1,878



Note C  Investment Properties and Accumulated Depreciation



|                            |                |                |                |               |  |  | 
|--------------------------- | -------------- | -------------- | -------------- | ------------- |  |  | 
|                            | Initial Cost   |               
|                            | To Partnership |               
|                            |                |                |                |              
|                            |                |                | Buildings      | Net Cost     
|                            |                |                | and Related    | Capitalized  
|                            |                |                | Personal       | Subsequent to
|Description                 | Encumbrances   | Land           | Property       | Acquisition  
|                            | (in thousands) | (in thousands) | (in thousands)
|Bronson Place Apartments    | $ 1,878        | $   501        | $ 2,568        | $ 1,238      
|Defoors Crossing Apartments | --             | 520            | 2,480          | 804          
|Totals                      | $1,878         | $1,021         | $5,048         | $2,042       



|                 |                               |             |         |                |              |          |            
|---------------- | ----------------------------- | ----------- | ------- | -------------- | ------------ | -------- | -----------
|                 | Gross Amount At Which Carried |             |         |                |             
|                 | At December 31, 2006          |             |         |                |             
|                 | (in thousands)                |             |         |                |             
|                 |                               |             |         |                |              |          |            
|                 |                               | Buildings   |         |                |              |          |            
|                 |                               | And Related |         |                |              |          |            
|                 |                               | Personal    |         | Accumulated    | Date of      | Date     | Depreciable
|Description      | Land                          | Property    | Total   | Depreciation   | Construction | Acquired | Life       
|                 |                               |             |         | (in thousands) |              |          |            
|Bronson Place    |                               |             |         |                |              |          |            
|Apartments       | $   501                       | $ 3,806     | $ 4,307 | $ 2,179        | 1988         | 11/01/88 | 5-40 yrs   
|Defoors Crossing |                               |             |         |                |              |          |            
|Apartments       | 520                           | 3,284       | 3,804   | 1,875          | 1988         | 05/01/89 | 5-40 yrs   
|Totals           | $1,021                        | $7,090      | $8,111  | $4,054         |              |          |            













Reconciliation of "investment properties and accumulated depreciation":



|                                       |                          |        
|-------------------------------------- | ------------------------ | -------
|                                       | Years Ended December 31,
|                                       | 2006                     | 2005   
|                                       | (in thousands)          
|Investment Properties                  |                          |        
|Balance at beginning of year           | $ 7,784                  | $11,575
|Property improvements and replacements | 355                      | 287    
|Sale of investment property            | --                       | (4,078)
|Disposal of property                   | (28)                     | --     
|Balance at end of year                 | $8,111                   | $7,784 
|                                       |                          |        
|Accumulated Depreciation               |                          |        
|Balance at beginning of year           | $ 3,780                  | $ 5,373
|Additions charged to expense           | 286                      | 311    
|Sale of investment property            | --                       | (1,904)
|Disposal of property                   | (12)                     | --     
|Balance at end of year                 | $4,054                   | $3,780 



The aggregate cost of the real estate for Federal income tax purposes at December 31, 2006 and 2005 is approximately $8,220,000 and $7,893,000, respectively. The accumulated depreciation taken for Federal income tax purposes at December 31, 2006 and 2005 is approximately $4,122,000 and $3,818,000, respectively.



Note D - Transactions with Affiliated Parties



The Partnership has no employees and depends on the General Partner and its affiliates for the management and administration of all Partnership activities.  The Partnership Agreement provides for payments to affiliates for services and for reimbursement of certain expenses incurred by affiliates on behalf of the Partnership.



Affiliates of the General Partner receive 5% of gross receipts from all of the Partnership's properties as compensation for providing property management services. The Partnership paid to such affiliates approximately $59,000 and $73,000 for the years ended December 31, 2006 and 2005, respectively, which are included in operating expenses and income from discontinued operations.



An affiliate of the General Partner charged the Partnership for reimbursement of accountable administrative expenses amounting to approximately $40,000 and $76,000 for the years ended December 31, 2006 and 2005, respectively, which are included in general and administrative expenses. At December 31, 2006, approximately $23,000 of these accountable administrative expenses remain unpaid and are included in due to affiliates.



In accordance with the Partnership Agreement, during the years ended December 31, 2006 and 2005, an affiliate of the General Partner advanced approximately $105,000 and $22,000, respectively, to the Partnership to fund operating expenses at both of the Partnerships investment properties. Interest is charged at the prime rate plus

2% (10.25% at December 31, 2006). Interest expense was approximately $3,000 and less than $1,000, respectively, for the years ended December 31, 2006 and 2005. During the year ended December 31, 2005, the Partnership repaid advances of approximately $22,000 with proceeds from the financing obtained on Bronson Place Apartments. At December 31, 2006, the total amount of advances and accrued interest











due to an affiliate of the General Partner was approximately $108,000 and is included in due to affiliates.



For acting as real estate broker in connection with the 1999 sale of Peachtree Corners Medical Building, the General Partner earned a real estate commission of approximately $21,000. However, this amount is not payable until the limited partners receive an amount equal to their adjusted capital investment and a cumulative distribution equal to an 8% annual return from the last additional closing date or, if greater, a 6% cumulative annual return from their date of admission to the Partnership. At December 31, 2005, the limited partners had not received their return.  During the year ended December 31, 2005, the General Partner determined that the limited partners would not receive both their adjusted capital investment and applicable return with future property sales or financings.  Therefore, the General Partner reversed the real estate commission previously accrued associated with the 1999 sale of Peachtree Corners Medical Building.



The Partnership insures its properties up to certain limits through coverage provided by AIMCO, which is generally self-insured for a portion of losses and liabilities related to workers compensation, property casualty, general liability and vehicle liability. The Partnership insures its properties above the AIMCO limits through insurance policies obtained by AIMCO from insurers unaffiliated with the General Partner. During each of the years ended December 31, 2006 and 2005, the Partnership was charged by AIMCO and its affiliates approximately $25,000 for insurance coverage and fees associated with policy claims administration.



In addition to its indirect ownership of the sole general partner of the Partnership, AIMCO and its affiliates owned 24,498 limited partnership units (the "Units") in the Partnership representing 40.12% of the outstanding Units at December 31, 2006. A number of these Units were acquired pursuant to tender offers made by AIMCO or its affiliates. AIMCO or its affiliates may acquire additional Units in exchange for cash or a combination of cash and Units in AIMCO Properties, L.P., the operating partnership of AIMCO, either through private purchases or tender offers. Pursuant to the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters that include, but are not limited to, voting on certain amendments to the Partnership Agreement and voting to remove the General Partner. As a result of its ownership of 40.12% of the outstanding Units at December 31, 2006, AIMCO and its affiliates are in a position to influence all such voting decisions with respect to the Partnership. Although the General Partner owes fiduciary duties to the limited partners of the Partnership, the General Partner also owes fiduciary duties to AIMCO as its sole stockholder. As a result, the duties of the General Partner, as general partner, to the Partnership and its limited partners may come into conflict with the duties of the General Partner to AIMCO as its sole stockholder.



Note E  Disposition of Investment Property



On July 22, 2005, the Partnership sold Meadow Wood Apartments to a third party for a gross sales price of $5,075,000.  The net proceeds realized by the Partnership were approximately $4,941,000 after payment of closing costs of approximately $134,000. The Partnership recognized a gain of approximately $2,732,000 during the year ended December 31, 2005 as a result of the sale and this amount is included in gain from sale of discontinued operations.  The propertys operations included income of approximately $129,000 for the year ended December 31, 2005. Also included in the income from discontinued operations for the year ended December 31, 2005 are revenues of approximately $372,000.



Note F  Casualty Event



In March 2006, there was a fire at Bronson Place Apartments, causing damage to one unit. Insurance proceeds of approximately $36,000 were received during the year











ended December 31, 2006 to cover the damages. The Partnership recognized a casualty gain of approximately $20,000 as a result of the receipt of insurance proceeds, offset by the write-off of the undepreciated damaged assets of approximately $16,000.



Note G - Income Taxes



The Partnership is classified as a partnership for Federal income tax purposes.  Accordingly, no provision for income taxes is made in the financial statements of the Partnership. Taxable income or loss of the Partnership is reported in the income tax returns of its partners.



The following is a reconciliation between net (loss) income as reported in the financial statements and Federal taxable income allocated to the partners in the Partnership's tax return for the years ended December 31, 2006 and 2005 (in thousands, except unit data):



|                                          |         |       
|----------------------------------------- | ------- | ------
|                                          | 2006    | 2005  
|Net (loss) income as reported             | $ (128) | $2,867
|Add (deduct):                             |         |       
|Gain from sale of property                | --      | 61    
|Deferred revenue and other liabilities    | (23)    | (78)  
|Depreciation differences                  | (18)    | (19)  
|Federal taxable (loss) income             | $(169)  | $2,831
|Federal taxable (loss) income per limited |         |       
|partnership unit                          | $(2.74) | $43.97



The following is a reconciliation between the Partnership's reported amounts and Federal tax basis of net assets at December 31, 2006 (in thousands):



|                                       |        
|-------------------------------------- | -------
|Net assets as reported                 | $ 2,182
|Differences in basis of assets         |        
|Deferred revenue and other liabilities | (66)   
|Accumulated depreciation               | (68)   
|Buildings                              | 109    
|Syndication costs                      | 1,902  
|                                       |        
|Net assets - tax basis                 | $4,059 













Note H - Contingencies



AIMCO Properties, L.P. and NHP Management Company, both affiliates of the General Partner, are defendants in a lawsuit alleging that they willfully violated the Fair Labor Standards Act (FLSA) by failing to pay maintenance workers overtime for all hours worked in excess of forty per week. The complaint, filed in the United States District Court for the District of Columbia, attempts to bring a collective action under the FLSA and seeks to certify state subclasses in California, Maryland, and the District of Columbia. Specifically, the plaintiffs contend that AIMCO Properties, L.P. and NHP Management Company failed to compensate maintenance workers for time that they were required to be "on-call." Additionally, the complaint alleges AIMCO Properties, L.P. and NHP Management Company failed to comply with the FLSA in compensating maintenance workers for time that they worked in excess of 40 hours in a week.   In June 2005 the court conditionally certified the collective action on both the on-call and overtime issues.  Approximately 1,049 individuals opted in to the class. The defendants moved to decertify the collective action on both issues and that issue is now fully briefed.  The defendants anticipate that the Court will soon set oral argument on the defendants decertification motion.  Because the court denied plaintiffs motion to certify state subclasses, in September 2005, the plaintiffs filed a class action with the same allegations in the Superior Court of California (Contra Costa County), and in November 2005 in Montgomery County Maryland Circuit Court.  The California and Maryland cases have been stayed pending the outcome of the decertification motion in the District of Columbia case.  Although the outcome of any litigation is uncertain, AIMCO Properties, L.P. does not believe that the ultimate outcome will have a material adverse effect on its consolidated financial condition or results of operations. Similarly, the General Partner does not believe that the ultimate outcome will have a material adverse effect on the Partnerships financial condition or results of operations.



The Partnership is unaware of any other pending or outstanding litigation matters involving it or its investment properties that are not of a routine nature arising in the ordinary course of business.



Environmental



Various Federal, state and local laws subject property owners or operators to liability for management, and the costs of removal or remediation, of certain hazardous substances present on a property. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release or presence of the hazardous substances. The presence of, or the failure to manage or remedy properly, hazardous substances may adversely affect occupancy at affected apartment communities and the ability to sell or finance affected properties. In addition to the costs associated with investigation and remediation actions brought by government agencies, and potential fines or penalties imposed by such agencies in connection therewith, the presence of hazardous substances on a property could result in claims by private plaintiffs for personal injury, disease, disability or other infirmities. Various laws also impose liability for the cost of removal, remediation or disposal of hazardous substances through a licensed disposal or treatment facility. Anyone who arranges for the disposal or treatment of hazardous substances is potentially liable under such laws. These laws often impose liability whether or not the person arranging for the disposal ever owned or operated the disposal facility. In connection with the ownership, operation and management of its properties, the Partnership could potentially be liable for environmental liabilities or costs associated with its properties.



Mold













The Partnership is aware of lawsuits against owners and managers of multifamily properties asserting claims of personal injury and property damage caused by the presence of mold, some of which have resulted in substantial monetary judgments or settlements.  The Partnership has only limited insurance coverage for property damage loss claims arising from the presence of mold and for personal injury claims related to mold exposure.  Affiliates of the General Partner have implemented policies, procedures, third-party audits and training and the General Partner believes that these measures will prevent or eliminate mold exposure and will minimize the effects that mold may have on residents.  To date, the Partnership has not incurred any material costs or liabilities relating to claims of mold exposure or to abate mold conditions.  Because the law regarding mold is unsettled and subject to change the General Partner can make no assurance that liabilities resulting from the presence of or exposure to mold will not have a material adverse effect on the Partnerships financial condition or results of operations.











Item 8.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure



None.



Item 8a.

Controls and Procedures



(a)

Disclosure Controls and Procedures. The Partnerships management, with the participation of the principal executive officer and principal financial officer of the General Partner, who are the equivalent of the Partnerships principal executive officer and principal financial officer, respectively, has evaluated the effectiveness of the Partnerships disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of the period covered by this report. Based on such evaluation, the principal executive officer and principal financial officer of the General Partner, who are the equivalent of the Partnerships principal executive officer and principal financial officer, respectively, have concluded that, as of the end of such period, the Partnerships disclosure controls and procedures are effective.



(b)

Internal Control Over Financial Reporting. There have not been any changes in the Partnerships internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter of 2006 that have materially affected, or are reasonably likely to materially affect, the Partnerships internal control over financial reporting.



Item 8b.

Other Information



None.











PART III



Item 9.

Directors, Executive Officers, Promoters and Control Persons and Corporate Governance, Compliance with Section 16(a) of the Exchange Act



United Investors Income Properties (the "Registrant" or the "Partnership") has no directors or officers.  The names of the directors and officers of United Investors Real Estate, Inc. ("UIRE" or the "General Partner"), their ages and the nature of all positions with UIRE presently held by them are set forth below. There are no family relationships between or among any directors and officers.



|                     |     |                                               
|-------------------- | --- | ----------------------------------------------
|Name                 | Age | Position                                      
|                     |     |                                               
|Martha L. Long       | 47  | Director and Senior Vice President            
|Harry G. Alcock      | 44  | Director, Executive Vice President and Chief  
|                     |     | Investment Officer                            
|Timothy Beaudin      | 48  | Executive Vice President and Chief Development
|                     |     | Officer                                       
|Miles Cortez         | 63  | Executive Vice President, General Counsel     
|                     |     | and Secretary                                 
|Patti K. Fielding    | 43  | Executive Vice President  Securities and Debt
|Thomas M. Herzog     | 44  | Executive Vice President and Chief            
|                     |     | Financial Officer                             
|Robert Y. Walker, IV | 41  | Executive Vice President                      
|Scott W. Fordham     | 39  | Senior Vice President and Chief Accounting    
|                     |     | Officer                                       
|Stephen B. Waters    | 45  | Vice President                                



Martha L. Long has been a Director and Senior Vice President of the General Partner since February 2004.  Ms. Long has been with AIMCO since October 1998 and has served in various capacities.  From 1998 to 2001, Ms. Long served as Senior Vice President and Controller of AIMCO and the General Partner.  During 2002 and 2003, Ms. Long served as Senior Vice President of Continuous Improvement for AIMCO.



Harry G. Alcock was appointed as a Director of the General Partner in October 2004 and was appointed Executive Vice President and Chief Investment Officer of the General Partner in February 2004 and has been Executive Vice President and Chief Investment Officer of AIMCO since October 1999.  Mr. Alcock has had responsibility for acquisition and financing activities of AIMCO since July 1994, serving as Vice President from July 1996 to October 1997 and as Senior Vice President from October 1997 to October 1999.



Timothy Beaudin was appointed Executive Vice President and Chief Development Officer of the General Partner and AIMCO in October 2005.  Prior to this time, beginning in 2005, Mr. Beaudin was with Catellus Development Corporation, a San Francisco, California-based real estate investment trust.  During his last five years at Catellus, Mr. Beaudin served as Executive Vice President, with management responsibility for development, construction and asset management.



Miles Cortez was appointed Executive Vice President, General Counsel and Secretary of the General Partner in February 2004 and of AIMCO in August 2001.  Prior to joining AIMCO, Mr. Cortez was the senior partner of Cortez Macaulay Bernhardt & Schuetze LLC, a Denver law firm, from December 1997 through September 2001.



Patti K. Fielding was appointed Executive Vice President - Securities and Debt of the General Partner in February 2004 and of AIMCO in February 2003.  Ms. Fielding was appointed Treasurer of AIMCO in January 2005.  Ms. Fielding is responsible for











debt financing and the treasury department.  Ms. Fielding previously served as Senior Vice President - Securities and Debt of AIMCO from January 2000 to February 2003.  Ms. Fielding joined AIMCO in February 1997 as a Vice President.



Thomas M. Herzog was appointed Chief Financial Officer of the General Partner and AIMCO in November 2005 and was appointed Executive Vice President of the General Partner and AIMCO in July 2005.  In January 2004, Mr. Herzog joined AIMCO as Senior Vice President and Chief Accounting Officer and of the General Partner in February 2004.  Prior to joining AIMCO in January 2004, Mr. Herzog was at GE Real Estate, serving as Chief Accounting Officer & Global Controller from April 2002 to January 2004 and as Chief Technical Advisor from March 2000 to April 2002.  Prior to joining GE Real Estate, Mr. Herzog was at Deloitte & Touche LLP from 1990 to 2000.



Robert Y. Walker, IV was appointed Senior Vice President of the General Partner and AIMCO in August 2005 and served as the Chief Accounting Officer of the General Partner and AIMCO from November 2005 to January 2007. Mr. Walker was promoted to Executive Vice President of the General Partner and AIMCO in July 2006 and in January 2007 became the chief financial officer of Conventional Property Operations for AIMCO. From June 2002, until he joined AIMCO, Mr. Walker served as senior vice president and chief financial officer at Miller Global Properties, LLC, a Denver-based private equity, real estate fund manager.  From May 1997 to June 2002, Mr. Walker was employed by GE Capital Real Estate, serving as global controller from May 2000 to June 2002.



Scott W. Fordham was appointed Senior Vice President and Chief Accounting Officer in January 2007 of the General Partner and AIMCO. Prior to joining AIMCO, Mr. Fordham served as Vice President and Chief Accounting Officer of Brandywine Realty Trust. Prior to the merger of Prentiss Properties Trust with Brandywine Realty Trust, Mr. Fordham served as Senior Vice President and Chief Accounting Officer of Prentiss Properties Trust and was in charge of the corporate accounting and financial reporting groups. Prior to joining Prentiss Properties Trust in 1992, Mr. Fordham worked in public accounting with PricewaterhouseCoopers LLP.



Stephen B. Waters was appointed Vice President of the General Partner and AIMCO in April 2004.  Mr. Waters previously served as a Director of Real Estate Accounting since joining AIMCO in September 1999.  Mr. Waters has responsibility for partnership accounting with AIMCO and serves as principal financial officer of the General Partner.



One or more of the above persons are also directors and/or officers of a general partner (or general partner of a general partner) of limited partnerships which either have a class of securities registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, or are subject to the reporting requirements of Section 15(d) of such Act. Further, one or more of the above persons are also officers of Apartment Investment and Management Company and the general partner of AIMCO Properties, L.P., entities that have a class of securities registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, or are subject to the reporting requirements of Section 15 (d) of such Act.



The board of directors of the General Partner does not have a separate audit committee. As such, the board of directors of the General Partner fulfills the functions of an audit committee. The board of directors has determined that Martha L. Long meets the requirement of an "audit committee financial expert".



The directors and officers of the General Partner with authority over the Partnership are all employees of subsidiaries of AIMCO. AIMCO has adopted a code of ethics that applies to such directors and officers that is posted on AIMCO's website (www.AIMCO.com). AIMCO's website is not incorporated by reference to this filing.













Item 10.

Executive Compensation



No remuneration was paid by the Partnership to any officer or director of the General Partner during the year ended December 31, 2006.



Item 11.

Security Ownership of Certain Beneficial Owners and Management



The following table sets forth those persons or entities known by the Registrant to be the beneficial owner of more than 5% of the Limited Partnership Units of the Registrant as of December 31, 2006 and the ownership interests in limited partnership units of the General Partner and its affiliates.



|                        |                 |           
|----------------------- | --------------- | ----------
|Entity                  | Number of Units | Percentage
|                        |                 |           
|AIMCO IPLP, L.P.        | 88              | 0.14%     
|(an affiliate of AIMCO) |                 |           
|AIMCO Properties, L.P.  | 24,410          | 39.98%    
|(an affiliate of AIMCO) |                 |           



AIMCO IPLP, L.P. is indirectly but ultimately owned by AIMCO. Its business address is 55 Beattie Place, Greenville, South Carolina 29602.



AIMCO Properties, L.P. is indirectly but ultimately controlled by AIMCO. Its business address is 4582 S. Ulster St. Parkway, Suite 1100, Denver, Colorado 80237.



Item 12.

Certain Relationships and Related Transactions, and Director Independence



The Partnership has no employees and depends on the General Partner and its affiliates for the management and administration of all Partnership activities.  The Partnership Agreement provides for payments to affiliates for services and for reimbursement of certain expenses incurred by affiliates on behalf of the Partnership.



Affiliates of the General Partner receive 5% of gross receipts from all of the Partnership's properties as compensation for providing property management services. The Partnership paid to such affiliates approximately $59,000 and $73,000 for the years ended December 31, 2006 and 2005, respectively, which are included in operating expenses and income from discontinued operations on the statements of operations included in Item 7. Financial Statements.



An affiliate of the General Partner charged the Partnership for reimbursement of accountable administrative expenses amounting to approximately $40,000 and $76,000 for the years ended December 31, 2006 and 2005, respectively, which are included in general and administrative expenses on the statements of operations included in Item 7. Financial Statements. At December 31, 2006, approximately $23,000 of these accountable administrative expenses remain unpaid and are included in due to affiliates on the balance sheet included in Item 7. Financial Statements.



In accordance with the Partnership Agreement, during the years ended December 31, 2006 and 2005, an affiliate of the General Partner advanced approximately $105,000 and $22,000, respectively, to the Partnership to fund operating expenses at both of the Partnerships investment properties. Interest is charged at the prime rate plus 2% (10.25% at December 31, 2006). Interest expense was approximately $3,000 and less than $1,000, respectively, for the years ended December 31, 2006 and 2005. During the year ended December 31, 2005, the Partnership repaid advances of approximately $22,000 with proceeds from the financing obtained on Bronson Place Apartments. At December 31, 2006, the total amount of advances and accrued interest











due to an affiliate of the General Partner was approximately $108,000 and is included in due to affiliates.



For acting as real estate broker in connection with the 1999 sale of Peachtree Corners Medical Building, the General Partner earned a real estate commission of approximately $21,000. However, this amount is not payable until the limited partners receive an amount equal to their adjusted capital investment and a cumulative distribution equal to an 8% annual return from the last additional closing date or, if greater, a 6% cumulative annual return from their date of admission to the Partnership. At December 31, 2005, the limited partners had not received their return.  During the year ended December 31, 2005, the General Partner determined that the limited partners would not receive both their adjusted capital investment and applicable return with future property sales or financings.  Therefore, the General Partner reversed the real estate commission previously accrued associated with the 1999 sale of Peachtree Corners Medical Building.



The Partnership insures its properties up to certain limits through coverage provided by AIMCO, which is generally self-insured for a portion of losses and liabilities related to workers compensation, property casualty, general liability and vehicle liability. The Partnership insures its properties above the AIMCO limits through insurance policies obtained by AIMCO from insurers unaffiliated with the General Partner. During each of the years ended December 31, 2006 and 2005, the Partnership was charged by AIMCO and its affiliates approximately $25,000 for insurance coverage and fees associated with policy claims administration.



In addition to its indirect ownership of the sole general partner of the Partnership, AIMCO and its affiliates owned 24,498 Units in the Partnership representing 40.12% of the outstanding Units at December 31, 2006. A number of these Units were acquired pursuant to tender offers made by AIMCO or its affiliates. AIMCO or its affiliates may acquire additional Units in exchange for cash or a combination of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO, either through private purchases or tender offers. Pursuant to the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters that include, but are not limited to, voting on certain amendments to the Partnership Agreement and voting to remove the General Partner. As a result of its ownership of 40.12% of the outstanding Units at December 31, 2006, AIMCO and its affiliates are in a position to influence all such voting decisions with respect to the Partnership. Although the General Partner owes fiduciary duties to the limited partners of the Partnership, the General Partner also owes fiduciary duties to AIMCO as its sole stockholder. As a result, the duties of the General Partner, as general partner, to the Partnership and its limited partners may come into conflict with the duties of the General Partner to AIMCO as its sole stockholder.



Neither of the General Partners directors is independent under the independence standards established for New York Stock Exchange listed companies as both directors are employed by the parent of the General Partner.



Item 13.

Exhibits



See Exhibit Index.



Item 14.

Principal Accountant Fees and Services



The General Partner has reappointed Ernst & Young LLP as independent auditors to audit the financial statements of the Partnership for 2007.  The aggregate fees billed for services rendered by Ernst & Young LLP for 2006 and 2005 are described below.













Audit Fees.  Fees for audit services totaled approximately $31,000 and $41,000 for 2006 and 2005, respectively. Fees for audit services also include fees for the reviews of the Partnerships Quarterly Reports on Form 10-QSB.



Tax Fees.  Fees for tax services totaled approximately $6,000 and $13,000 for 2006 and 2005, respectively.













SIGNATURES







In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



| |                                         
| | ----------------------------------------
| | UNITED INVESTORS INCOME PROPERTIES      
| |                                         
| | By:   United Investors Real Estate, Inc.
| | General Partner                         
| |                                         
| | By:   /s/Martha L. Long                 
| | Martha L. Long                          
| | Senior Vice President                   
| |                                         
| | By:   /s/Stephen B. Waters              
| | Stephen B. Waters                       
| | Vice President                          
| |                                         
| | Date: March 16, 2007                    



In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



|                     |                        |                     
|-------------------- | ---------------------- | --------------------
|/s/Harry G. Alcock   | Director and Executive | Date: March 16, 2007
|Harry G. Alcock      | Vice President         |                     
|                     |                        |                     
|/s/Martha L. Long    | Director and Senior    | Date: March 16, 2007
|Martha L. Long       | Vice President         |                     
|                     |                        |                     
|/s/Stephen B. Waters | Vice President         | Date: March 16, 2007
|Stephen B. Waters    |                        |                     

















|                                  
|----------------------------------
|UNITED INVESTORS INCOME PROPERTIES
|                                  
|INDEX TO EXHIBITS                 



Exhibit

Description



1

Form of Dealer Manager Agreement between the General Partner and the Dealer Manager, including Form of Soliciting Broker Agreement; incorporated by reference to Exhibit 1 to Partnership's Amendment to Registration Statement (File No. 33-20350) previously filed on May 2, 1988.



1.1

Amendment to Dealer Manager Agreement; incorporated by reference to Exhibit 1.1 to Post-Effective Amendment No. 2 to Partnership's Registration Statement previously filed on March 21, 1989.



4.1

Form of Subscription Agreement; incorporated by reference as part of the Prospectus of Partnership contained in Partnership's Amendment to Registration Statement previously filed on May 2, 1988.



4.2

Form of Agreement of Limited Partnership of Partnership; incorporated by reference as part of the Prospectus of Partnership contained in Partnership's Amendment to Registration Statement previously filed on May 2, 1988.



4.3

Tenth Amendment to Agreement of Limited Partnership of Partnership; incorporated by reference to Exhibit 4.3 to Partnership's Quarterly Report on Form 10-Q previously filed on May 15, 1989.



4.4

Certificate of Limited Partnership (Exhibit 3 to Partnership's Current Report on Form 8-K filed on April 29, 1991, is incorporated herein by reference).



4.5

Amendment to Agreement of Limited Partnership effective March 28, 2005; incorporated by reference to Exhibit 4.5 to Partnerships Quarterly Report on Form 10-QSB filed on May 13, 2005.



10.2

Agreement of Purchase and Sale, dated June 22, 1988, between United Investors Real Estate, Inc., as nominee for United Investors Income Properties, as purchaser, and Nilsen/Bay Ridge Development, Inc. and MBIV Development, as seller, relating to Bronson Place Apartments; incorporated by reference to Exhibit 10.1 to Partnership's Quarterly Report on Form 10-Q previously filed on August 11, 1988.



10.3

Agreement of Purchase and Sale, dated October 20, 1988, between United Investors Real Estate, Inc., as purchaser, and Defoors Crossing Associates, Ltd., as seller, relating to Defoors Crossing Apartments, and amendments thereto; incorporated by reference to Exhibit 10.3 to Post-Effective Amendment No.1 to Partnership's Registration Statement previously filed on February 1, 1989.











UNITED INVESTORS INCOME PROPERTIES



INDEX TO EXHIBITS (continued)



Exhibit

Description



10.8

Stock Purchase Agreement dated December 4, 1992, showing the purchase of 100% of the outstanding stock of United Investors Real Estate, Inc. by MAE GP Corporation; incorporated by reference to Exhibit 10.8 to Partnership's Current Report on Form 8-K previously filed on December 31, 1992.



10.9

Purchase and Sale Contract between United Investors Income Properties, a Missouri limited partnership, as Seller, and The Meadow Wood Investors, LLC, an Oregon limited liability company, as Purchaser, effective May 10, 2005; incorporated by reference to Exhibit 10.9 to Partnerships Quarterly Report on Form 10-QSB filed on May 13, 2005.



10.10

Amendment of Purchase and Sale Contract between United Investors Income Properties, a Missouri limited partnership, as Seller, and The Meadow Wood Investors, LLC, a Oregon limited liability company, as Purchaser, effective June 2, 2005 incorporated by reference to Exhibit 10.10 to Partnerships Current Report on Form 8-K filed August 1, 2005.



10.11

Second Amendment of Purchase and Sale Contract between United Investors Income Properties, a Missouri limited partnership, as Seller, and The Meadow Wood Investors, LLC, a Oregon limited liability company, as Purchaser, effective June 30, 2005 incorporated by reference to Exhibit 10.11 to Partnerships Current Report on Form 8-K filed August 1, 2005.



10.12

Multifamily Note dated October 21, 2005 between United Investors Income Properties, a Missouri Limited Partnership and GMAC Commercial Mortgage Corporation. (1)



10.13

Guaranty dated October 21, 2005 by AIMCO Properties, L.P. for the benefit of GMAC Commercial Mortgage Corporation. (1)



10.14

Replacement Reserve and Security Agreement dated October 21, 2005 between United Investors Income Properties, a Missouri Limited Partnership and GMAC Commercial Mortgage Corporation. (1)



10.15

Assignment of Security Instrument dated October 21, 2005 between GMAC Commercial Mortgage Corporation and Fannie Mae. (1)



10.16

Multifamily Deed of Trust, Assignment of Rents and Security Agreement dated October 21, 2005 between United Investors Income Properties, a Missouri Limited Partnership and GMAC Commercial Mortgage Corporation. (1)











UNITED INVESTORS INCOME PROPERTIES



INDEX TO EXHIBITS (continued)



Exhibit

Description



10.17

Indemnification Agreement dated October 21, 2005 between United Investors Income Properties, a Missouri Limited Partnership and AIMCO Properties, L.P. in favor of GMAC Commercial Mortgage Corporation. (1)



31.1

Certification of equivalent of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.



31.2

Certification of equivalent of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.



32.1

Certification of the equivalent of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



(1)

Incorporated herein by reference to the Registrants Current Report on Form 8-K dated October 21, 2005, as filed October 27, 2005.











Exhibit 31.1

CERTIFICATION

I, Martha L. Long, certify that:

1.

I have reviewed this annual report on Form 10-KSB of United Investors Income Properties;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;



4.

The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:



(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



(b)

Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



(c)

Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and



5.

The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):



(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and



(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.

Date:  March 16, 2007

/s/Martha L. Long

Martha L. Long

Senior Vice President of United Investors Real Estate, Inc., equivalent of the chief executive officer of the Partnership











Exhibit 31.2

CERTIFICATION

I, Stephen B. Waters, certify that:

1.

I have reviewed this annual report on Form 10-KSB of United Investors Income Properties;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;



4.

The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:



(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



(b)

Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



(c)

Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and



5.

The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):



(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and



(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.

Date:  March 16, 2007

/s/Stephen B. Waters

Stephen B. Waters

Vice President of United Investors Real Estate, Inc., equivalent of the chief financial officer of the Partnership











Exhibit 32.1





|                                             
|---------------------------------------------
|Certification of CEO and CFO                 
|Pursuant to 18 U.S.C. Section 1350,          
|As Adopted Pursuant to                       
|Section 906 of the Sarbanes-Oxley Act of 2002







In connection with the Annual Report on Form 10-KSB of United Investors Income Properties (the "Partnership"), for the fiscal year ended December 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Martha L. Long, as the equivalent of the Chief Executive Officer of the Partnership, and Stephen B. Waters, as the equivalent of the Chief Financial Officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:



(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.





| |                        
| | -----------------------
| | /s/Martha L. Long      
| | Name: Martha L. Long   
| | Date: March 16, 2007   
| |                        
| | /s/Stephen B. Waters   
| | Name: Stephen B. Waters
| | Date: March 16, 2007   





This certification is furnished with this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Partnership for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.