<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                 ---------------

                                   FORM 10-K/A
                                 AMENDMENT NO. 1

                        FOR ANNUAL AND TRANSITION REPORTS
                     PURSUANT TO SECTIONS 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                                 ---------------

[X]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
       ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996

                                       OR

[ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
       EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD 
       FROM ____________ TO _____________

                         COMMISSION FILE NUMBER 0-21378

                             INCO HOMES CORPORATION
             (Exact name of registrant as specified in its charter)

            DELAWARE                                     33-0534734
  (State or other jurisdiction              (I.R.S. employer identification no.)
of incorporation or organization)


                             1282 WEST ARROW HIGHWAY
                            UPLAND, CALIFORNIA 91786
               (Address of principal executive offices)(Zip code)

                                 (909) 981-8989
               Registrant's telephone number, including area code

           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:


                                      None


           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                                  COMMON STOCK
                                (Title of class)

     Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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. Yes [X]   No [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  [ ]

     The aggregate market value of the voting stock held by non-affiliates of
the registrant on March 31, 1997 was $2,878,037.

     The number of shares outstanding of each of the registrant's classes of
common stock on March 31, 1997 was as follows:

            COMMON STOCK (PAR VALUE $.01 PER SHARE) 1,637,096 shares

                       DOCUMENTS INCORPORATED BY REFERENCE

 No documents are incorporated by reference in this Form 10-K/A Amendment No. 1.



<PAGE>   2
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The number shown for "Value of warrants issued pursuant to consulting agreement"
in the Consolidated Statements of Stockholders' Equity in the Form 10-K for the
period ended December 31, 1996 should have been as shown in the corrected 
statement which is presented below.



INCO HOMES CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                Common Stock                                                                       
                                    ----------------------------------                                                             
                                            Shares                         Additional                 Retained                     
                                    (restated for reverse                   Paid-in      Treasury     Earnings                     
(Dollars in thousands)              stock split) - Note 1      Amount       Capital        Stock      (Deficit)        Total       
                                    ---------------------    ----------    -----------   ---------   -----------     ---------     
<S>                                      <C>                 <C>           <C>            <C>        <C>                           
Balance - December 31, 1993               1,330,833           $      80     $  40,527        -        $   2,541      $  43,148     
                                                                                                                                   
Net loss - 1994                                --                  --            --          -          (12,090)       (12,090)
                                          ---------           ---------     ---------    -------      ---------      ---------     
Balance - December 31, 1994               1,330,833                  80        40,527        -           (9,549)        31,058     
                                                                                                                                   
Common stock issued                          15,385                   1           149        -             --              150     
                                                                                                                                   
Net loss - 1995                                --                  --            --          -          (15,676)       (15,676)
                                          ---------           ---------     ---------    -------      ---------      ---------     
Balance - December 31, 1995               1,346,218                  81        40,676        -          (25,225)        15,532     
                                                                                                                                   
Common stock issued - Note 8                 90,878                   5           523        -             --              528     
                                                                                                                                   
Value of warrants issued to bank                                                                                                   
pursuant to extension of line of                                                                                                   
credit - Note 5                                --                  --             111        -             --              111     
                                                                                                                                   
Value of warrants issued pursuant to                                                                                               
consulting agreement - Note 8                  --                  --             131        -             --              131     
                                                                                                                                   
Cash received from common stock                                                                                                    
subscription - Note 8                          --                  --             250        -             --              250     
                                                                                                                                   
Net loss - 1996                                --                  --            --          -           (4,268)        (4,268)
                                          ---------           ---------     ---------    -------      ---------      ---------     
Balance - December 31, 1996               1,437,09            $      86     $  41,691        -        $ (29,493)     $  12,284     
                                          =========           =========     =========    =======      =========      =========     
                                                                                                          
</TABLE>

See accompanying notes to financial statements


                                       2
<PAGE>   3

                                                 PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.

DIRECTORS OF THE COMPANY.

         The members of the Board of Directors of Inco Homes are classified into
three classes, one of which is elected at each Annual Meeting of Stockholders to
hold office for a three-year term and until successors of such class have been
elected and qualified. The following are the names of the Board of Directors of
the Company as of March 31, 1997.


<TABLE>
<CAPTION>
                                                                                          CLASS AND YEAR
                                                                         DIRECTOR         IN WHICH TERM
           NAME                       PRINCIPAL OCCUPATION                 SINCE           WILL EXPIRE            AGE
           ----                       --------------------                 -----           -----------            ---
<S>                          <C>                                         <C>              <C>                    <C>
Ira C. Norris                Chairman of the Board, President and          1993              Class I              60
                             Chief Executive Officer of Inco                                   1999
                             Homes Corporation

Thomas E. Gibbs, Jr.         Attorney in private practice                  1995              Class II             53
                                                                                               1998

John F. Seymour, Jr.         Chief Executive Officer, Southern             1995              Class II             59
                             California Housing Development                                    1998
                             Corporation

Ronald L. Neeley             Former Chief Executive Officer,               1993             Class III             59
                             Maintenance Warehouse/America                                     1997
                             Corporation

Robert H. Daskal             Senior Vice President and Chief               1995             Class III             55
                             Financial Officer, Olympic Cascade                                1997
                             Financial Corporation
</TABLE>


         Ira C. Norris founded the Company in 1976. Mr. Norris has served as the
Chairman of the Board and Chief Executive Officer of the Company since 1993. Mr.
Norris has served as President of the Company since 1976. From 1968 to 1976, Mr.
Norris served as a Corporate Vice President and Division Operating Manager of
Kaufman and Broad, Inc., a company engaged in the real estate and life insurance
business. From 1960 to 1968, he was an independent builder/developer in Los
Angeles and the San Fernando Valley suburbs.

         Thomas E. Gibbs, Jr. has served as a director of the Company since
December 1995. Mr. Gibbs is an attorney in private practice of law specializing
in real estate, corporate and commercial law with an emphasis on real estate
syndication and investments. Mr. Gibbs has over twenty years of experience
representing residential real estate developers.

         John F. Seymour, Jr. has served as a director of the Company since
December 1995. Mr. Seymour has been the Chief Executive Officer of Southern
California Housing Development Corporation, a non-profit organization, since
January 1995. Prior to joining Southern California Housing Development
Corporation, Mr. Seymour served for two years as the Executive Director of the
California Housing Finance Agency which directs billions of dollars of capital
vital to affordable housing. In January 1991, Mr. Seymour was appointed by
Governor Pete Wilson to be his successor in the United States Senate, where he
served until January 1993. From April 1982 to January 1991, Mr. Seymour served
as a California State Senator for the 35th Senate District. Mr. Seymour is a
director of Irvine Apartment Communities, a Real Estate Investment Trust.


                                       3
<PAGE>   4

         Ronald L. Neeley has served as a director of the Company since May
1993. Mr. Neeley was the founder and Chief Executive Officer of Maintenance
Warehouse/America Corporation, the nation's largest distributor of replacement
parts for plumbing, electrical and hardware products to the multi-family housing
and hospitality markets. Mr. Neeley recently sold Maintenance Warehouse/America
Corporation and will continue on a temporary basis as a consultant.

         Robert H. Daskal has served as a director of the Company since May
1995. Mr. Daskal is Senior Vice President and Chief Financial Officer of Olympic
Cascade Financial Corporation, a financial services holding company. Mr. Daskal
was the Executive Vice President and Chief Financial Officer of Inco Homes
Corporation from October 1994 to January 15, 1997. Prior to joining the Company,
Mr. Daskal was Executive Vice President-Finance and Chief Financial Officer of
UDC Homes, Inc., a homebuilder in Tempe, Arizona, from 1985 to 1994. UDC Homes,
Inc. filed a petition for relief under Chapter 11 of the U.S. Bankruptcy code in
May 1995.

EXECUTIVE OFFICERS OF THE COMPANY.

         See "Item 1. Business -- Executive Officers of the Registrant."

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.

          Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file with
the Securities and Exchange Commission (the "SEC") initial reports of ownership
and reports of changes in ownership of Common Stock and other equity securities
of the Company. Officers, directors and greater than ten-percent stockholders
are required by SEC regulation to furnish the Company with copies of all Section
16(a) reports they file.

         Overland Opportunity Fund, LLC, the beneficial owner of 200,000 shares
of the Company's Common Stock (restated for reverse stock split), and Overland
Company, Inc., the beneficial owner of a warrant to acquire 200,000 shares of
the Company's Common Stock (restated for reverse stock split), did not file
their respective Form 3's covering those acquisitions on a timely basis. See
"Item 12. Security Ownership of Certain Beneficial Owners and Management."

         Except as stated above and based solely upon review of the copies of 
such reports furnished to the Company and written representations that no 
other reports were required, the Company believes that there was compliance 
for the fiscal year ended December 31, 1996 with all Section 16(a) filing 
requirements applicable to the Company's officers, directors and greater than 
ten-percent beneficial owners.



                                       4
<PAGE>   5

ITEM 11.   EXECUTIVE COMPENSATION.

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION

         The following table sets forth the compensation paid by the Company for
the years ended December 31, 1996, 1995 and 1994 to the Chief Executive Officer,
and the only other executive officer who was an executive officer of the Company
at December 31, 1996 whose total annual salary and bonus were in excess of
$100,000 at December 31, 1996 (the "named executive officers"). No executive
officer who would have been otherwise includable in such table on the basis of
salary and bonus earned for the 1996 fiscal year has resigned or terminated
employment during such fiscal year.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                 Long Term                                      
                                                                               Compensation                                     
                                                                               -------------                                    
                                                 Annual Compensation               Awards                                       
                                              ------------------------         -------------                                    
                                                                                 Securities                                     
        NAME AND PRINCIPAL                                                       Underlying              All Other              
             POSITION                 Year     Salary (1)       Bonus         Options/SARs (#)       Compensation (2)           
        ------------------            ----     ----------       -----         ----------------       ----------------           
<S>                                   <C>      <C>              <C>            <C>                   <C>                  
Ira C. Norris                         1996      $360,000 (3)    $    0                  0                  $7,856 (4)           
  Chairman of the Board,              1995       360,000             0                  0                  10,409 (5)           
  President and Chief                 1994       604,197             0                  0                       0               
  Executive Officer                                                                                                             
                                                                                                                                
                                                                                                                                
Robert H. Daskal (6)                  1996       240,000             0              4,167 (11)              1,203 (7)           
  Executive Vice President            1995       218,500           500 (8)         12,500 (9)(11)             600 (7)           
  and Chief Financial Officer         1994             0             0              2,500 (11)             26,500 (10)          
                                   
</TABLE>
-------------------
(1)      Salary includes employee contributions under the Company's 401(k) Plan.

(2)      Excludes a nominal amount, not in excess of $500 per employee annually,
         for life insurance premiums.

(3)      Includes $75,000 accrued in 1996, but not yet paid.

(4)      Represents medical expenses of $4,849 and auto expenses of $2,072 paid
         by the Company, and $935 of the Company's contribution under the
         Company's 401(k) Plan.

(5)      Represents medical expenses of $6,846 and auto expenses of $3,563 paid
         by the Company.

(6)      Mr. Daskal ceased to be an officer and employee of the Company as of
         January 15, 1997 but will continue to serve as a director.

(7)      Represents the Company's contributions under the Company's 401(k) Plan.

(8)      Includes a bonus of $500 accrued in 1995 and paid in 1996.

(9)      Includes options to purchase 2,500 shares granted in exchange for the
         options originally granted in 1994.

(10)     Includes $17,000 paid in 1994, and $9,500 accrued in 1994 but paid in
         1995, for consulting services.

(11)     Restated for reverse stock split.


                                       5
<PAGE>   6

STOCK OPTIONS

         The following table contains information concerning the grant of stock
options under the Company's 1992 Stock Option/Stock Issuance Plan for the 1996
fiscal year to the named executive officers. The table also lists potential
realizable values of such options on the basis of assumed annual compounded
stock appreciation rates of 5% and 10% over the life of the options which are
set at a maximum of 10 years.

                     OPTION/SAR GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
                                                                                              Potential Realizable
                                                                                                Value at Assumed
                                                                                             Annual Rates of Stock
                                                                                             Price Appreciation for
                                    INDIVIDUAL GRANTS                                             Option Term
----------------------------------------------------------------------------------------------------------------------------------
                               Number of            % of Total
                               Securities          Options/SARs        Exercise
                               Underlying           Granted to          or Base
                              Options/SARs         Employees in          Price         Expiration
          Name               Granted (#)(1)       Fiscal Year(2)      ($/Sh) (3)          Date           5% (4)         10% (4)
          ----               --------------       --------------      ----------          ----           ------         -------
<S>                            <C>                <C>                 <C>              <C>               <C>            <C>
Ira C. Norris                        0                  N/A                N/A             N/A             N/A             N/A

Robert H. Daskal                 4,167 (5)              21.8%             $3.75 (5)       09/12/06         $9,827          $24,904
</TABLE>


--------------
(1)      Each listed option granted to a named executive officer becomes
         exercisable for 25% of the option shares after 12 months of continued
         service from the date of grant. The option will become exercisable for
         the balance of the shares in a series of 36 successive equal monthly
         installments upon the optionee's completion of each additional month of
         service measured from the first anniversary of the date of grant. Each
         option will become immediately exercisable for all of the option shares
         in the event the Company is acquired by merger or sale of substantially
         all of the Company's assets or outstanding Common Stock, unless the
         option is assumed or otherwise replaced by the acquiring entity. The
         Compensation Committee has authority to provide for the acceleration of
         each option in connection with certain hostile tender offers or proxy
         contests for Board membership. Each option includes a limited stock
         appreciation right pursuant to which the option, if in effect for at
         least six months, will automatically be cancelled upon the occurrence
         of certain hostile tender offers, in return for a cash distribution
         from the Company based on the tender offer price per share. Each option
         has a maximum term of 10 years, subject to earlier termination in the
         event of the optionee's cessation of service with the Company.

(2)      Includes options granted pursuant to the Company's automatic option
         grant program for non-employee directors.

(3)      The exercise price of each option may be paid in cash, in shares of
         Common Stock valued at fair market value on the exercise date or
         through a cashless exercise procedure involving a same-day sale of the
         purchased shares. The Company may also finance the option exercise by
         loaning the optionee sufficient funds to pay the exercise price for the
         purchased shares and the federal and state tax liability incurred in
         connection with such exercise. The Compensation Committee has the
         authority to reprice outstanding options through the cancellation of
         those options and the grant of replacement options with an exercise
         price equal to the lower fair market value of the option shares on the
         regrant date.

(4)      The potential realizable value is reported net of the option price, but
         before income taxes associated with exercise. These amounts represent
         assumed annual compounded rates of appreciation at 5% and 10% only from
         the date of grant to the expiration date of the option. There is no
         assurance provided to any executive officer or any other holder of the
         Company's securities that the actual stock price appreciation over the
         10-year option term will be at the assumed 5% and 10% levels or at any
         other defined level. Unless the market price of the Common Stock does
         in fact appreciate over the option term, no value will be realized from
         the option grants made to the executive officers.

(5)      Restated for reverse stock split.


                                       6
<PAGE>   7

OPTION/SAR EXERCISES AND HOLDINGS

         The following table provides information with respect to the named
executive officers concerning the unexercised options held as of the end of the
last fiscal year. None of the named executive officers exercised options to
purchase the Company's Common Stock during the last fiscal year.

                     AGGREGATED OPTION/SAR EXERCISES IN LAST
                    FISCAL YEAR AND FY-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
                                                                         VALUE OF UNEXERCISED IN-THE-MONEY                     
                                                                           OPTIONS/SARS AT FY-END (MARKET                      
                               NUMBER OF SECURITIES UNDERLYING          PRICE OF SHARES AT FY-END ($1.875 -                    
                             UNEXERCISED OPTIONS/SARS AT FY-END          RESTATED FOR REVERSE STOCK SPLIT)                     
             NAME            (RESTATED FOR REVERSE STOCK SPLIT)                 LESS EXERCISE PRICE)                           
----------------------------------------------------------------------------------------------------------------         
                              Exercisable            Unexercisable            Exercisable          Unexercisable               
----------------------------------------------------------------------------------------------------------------         
<S>                                <C>                     <C>                     <C>                   <C>                   
Ira C. Norris                      0                       0                       0                     0                     
Robert H. Daskal                12,500                   4,167                     0                     0                     
================================================================================================================         
</TABLE>

DIRECTORS' FEES AND BENEFITS.

         Each non-employee member of the Board is paid an annual retainer fee of
$10,000 and reimbursed for all out-of-pocket costs incurred in connection with
attendance at meetings of the Board of Directors of the Company. All 1996 and
1997 directors fees will be paid with non-registered shares of Common Stock of
the Company on a quarterly basis. The number of shares to be issued to each
director in each quarter will be determined by dividing $2,500 by (i) the
closing price of the Common Stock on the day of the quarter's board meeting, or
(ii) if no board meeting is held in a particular calendar quarter, the closing
price of the Common Stock on the last trading day of the calendar quarter. Upon
joining the Board, each non-employee Board member also received an option grant
for 1,250 shares of Common Stock (restated for reverse stock split) pursuant to
the Company's automatic option grant program under the Company's 1992 Stock
Option/Stock Issuance Plan. The exercise price per share (restated for reverse
stock split) for grants made to Ronald L. Neeley was $56.25 (restated for
reverse stock split), to Thomas E. Gibbs, Jr. and John F. Seymour, Jr. was $6.00
(restated for reverse stock split), and to Robert H. Daskal was $2.622 (restated
for reverse stock split), the fair market value per share of Common Stock on the
respective grant date. Similar automatic option grants in the amount of 834
shares (restated for reverse stock split) are made annually to each individual
who continues to serve as a non-employee Board member on the date of each
subsequent Annual Meeting of Stockholders, provided that such individual has
served as a non-employee Board member for at least six months prior to the date
of such meeting. Accordingly, in May 1996, Ronald L. Neeley received an option
grant for 834 shares of Common Stock (restated for reverse stock split) with an
exercise price of $4.875 per share (restated for reverse stock split). Automatic
option grants may be exercised in full six months after the grant date, provided
the eligible director remains a member of the board through that date. Such
automatic grants will cease for any non-employee Board member who has been
granted a cumulative total of options to purchase 5,417 shares of Common Stock
(restated for reverse stock split).


                                       7
<PAGE>   8
OPTION AND SAR REPRICING

                         TEN-YEAR OPTION/SAR REPRICINGS

<TABLE>
<CAPTION>
                                               Number of
                                               Securities           Market Price
                                               Underlying             of Stock            Exercise Price at
                                              Options/SARs           at Time of                Time of               New
                                              Repriced or           Repricing or            Repricing or           Exercise
          NAME                 Date          Amended (#)(1)       Amendment ($)(1)        Amendment ($)(1)       Price ($)(1)
          ----                 ----          --------------       ----------------        ----------------       ------------
<S>                          <C>                    <C>                 <C>                      <C>                <C>  
Robert H. Daskal             10/02/95               2,500               $6.75                    $14.25             $6.75
  Executive Vice                                                                                                 
  President and Chief                                                                                            
  Financial Officer (2)                                                                                          
                                                                                                                 
Lynn C. Parkes               10/02/95                 417                6.75                     56.25              6.75
  Controller                                                                                               
</TABLE>

--------------
(1)      Restated for reverse stock split.

(2)      Mr. Daskal ceased to be an officer and employee of the Company as of
         January 15, 1997.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

         The Compensation Committee (the "Committee") of the Board of Directors
sets the base salary of the Company's executive officers and approves individual
bonus programs for executive officers. Option grants to executive officers are
made by the Committee, and the Committee has complete discretion in establishing
the terms of each such grant. The following is a summary of policies of the
Committee that affect the compensation paid to executive officers, as reflected
in the tables and text set forth elsewhere in this Item 11.

Compensation Philosophy

         The Committee applies a consistent philosophy to compensation for all
employees, including executive officers. This philosophy is based on the premise
that the achievements of the Company result from the coordinated efforts of all
individuals working toward common objectives. The Company strives to achieve
those objectives through teamwork that is focused on meeting the expectations of
customers and stockholders.

         The Company strives to pay competitively. The Company is committed to
providing a pay program that helps attract and retain quality employees. To
ensure that pay is competitive, the Company compares its pay practices with
those of competing companies and sets its pay parameters based on this review.
In general, the compensation for the Company's executive officers approximate
the compensation for the comparison group, reflecting the Company's relative
position within the group. The Committee reviewed several compensation surveys
of nearly 100 real estate development and management companies prepared by a
firm that specializes in real estate compensation studies. Many of the public
homebuilders included in the peer group index reflected on the Performance Graph
were also included in the compensation survey.

         The Company pays for relative sustained performance. Executive officers
are rewarded based upon corporate performance and individual performance.
Corporate performance is evaluated by reviewing the extent to which strategic
and business plan goals are met, including such factors as operating profit and
performance relative to competitors. Individual performance is evaluated by
reviewing development progress against set objectives and the degree to which
Company values are fostered.


                                       8
<PAGE>   9

         The Company strives for fairness in the administration of pay. The
Company strives to balance the compensation paid to a particular individual and
the compensation paid to other persons both inside the Company and at comparable
companies.

General Compensation Policy

         The Committee's overall policy is to offer the Company's executive
officers competitive cash-based and equity-based compensation opportunities
based upon their individual performance, the financial performance of the
Company and their contribution to that performance. One of the Committee's
primary objectives is to have a substantial portion of each officer's
compensation contingent upon the Company's performance as well as upon his or
her own level of performance.

         The principal factors taken into account in establishing each executive
officer's compensation package are summarized below. Additional factors may be
taken into account to a lesser degree, and the relative weight given to each
factor varies with each individual in the sole discretion of the Committee. The
Committee may in its discretion apply entirely different factors, such as
different measures of financial performance, for future fiscal years.

         Cash-Based Compensation. The Committee sets base salary for executive
officers on the basis of individual performance, years of experience, the salary
levels in effect for comparable positions with other companies in the industry
and internal comparability considerations. The aggregate amount of the Company's
annual bonus pool is based on a percentage of the Company's pre-tax income. This
amount is allocated to executive officers, including the Chief Executive
Officer, on the basis of the officer's salary level, years of experience,
operating performance and individual performance. No bonus was accrued or paid
to the Chief Executive Officer in 1996. The Company also has a tax-qualified
profit sharing plan to which it can contribute a portion of profits and such
contribution is allocated to eligible participants in proportion to their total
compensation for the year relative to the total aggregate compensation for all
eligible participants. The Company believes that all employees share the
responsibility of achieving profits. In addition, the Company has a 401(k) plan
to which it makes matching contributions.

         Long-Term Equity-Based Compensation. The Committee intends to make
stock option grants on an annual basis. Each grant is designed to align the
interests of the executive officer with those of the stockholders and provide
each individual with a significant incentive to manage the Company from the
perspective of an owner with an equity stake in the business. Each grant
generally allows the officer to acquire shares of the Company's Common Stock at
a fixed price per share (the market price on the grant date) over a specified
period of time (up to 10 years), thus providing a return to the officer only if
he or she remains in the employ of the Company and the market price of the
shares appreciates over the option term. The size of the option grant to each
executive officer generally is set at a level that is intended to create a
meaningful opportunity for stock ownership based upon the individual's current
position with the Company, but there is also taken into account the size of
comparable awards made to individuals in similar positions in the industry as
reflected in external surveys, the individual's potential for future
responsibility and promotion over the option term, the individual's individual
performance in recent periods. Generally, as an officer's level of
responsibility increases, a greater portion of his or her total compensation
will be dependent upon Company performance and stock price appreciation rather
than base salary. The relative weight given to these factors varies with each
individual in the sole discretion of the Committee.

         CEO Compensation. In setting the compensation payable to the Company's
CEO, the Compensation Committee has sought to establish a level of base salary
competitive with that paid by companies within the industry which are comparable
in size to the Company and by companies outside of the industry with which the
Company competes for executive talent. The CEO has voluntarily reduced his
salary from $360,000 to $240,000, commencing in 1997. He will be eligible to
receive an annual bonus under the Company's executive incentive plan. No bonus
was accrued or paid to the CEO in 1994, 1995 or 1996.


                                       9
<PAGE>   10

Deduction Limit for Executive Compensation

         Section 162(m) of the Internal Revenue Code ("Section 162(m)"), enacted
in 1993, limits federal income tax deductions for compensation paid to the Chief
Executive Officer and the four other most highly compensated officers of a
public company to $1.0 million per year, but contains an exception for
performance-based compensation that satisfies certain conditions. The stock
options granted to its executives currently do not qualify for the
performance-based exception to the deduction limit.

         Because it is unlikely that compensation payable to any Company
executive would exceed the deduction limit in the near future, the Committee has
not yet considered whether it will seek to qualify compensation or will prohibit
the payment of compensation that would exceed the deduction limit. However, in
approving the amount and form of compensation for Company executives, the
Committee will continue to consider all elements of cost to the Company of
providing that compensation.

         Reports on Option Exchange and Executive Compensation submitted by the
Compensation Committee of the Company's Board of Directors:

                                  Ira C. Norris
                                Ronald L. Neeley
                              Thomas E. Gibbs, Jr.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.

         Ira C. Norris, the Chairman of the Board, President and Chief Executive
Officer of the Company, was a member of the Compensation Committee of the Board
of Directors in 1996.



                                       10
<PAGE>   11

PERFORMANCE GRAPH

         The following performance graph shows the percentage change in
cumulative total return to a holder of the Company's Common Stock, assuming
dividend reinvestment, compared with the cumulative total return, assuming
dividend reinvestment, of the Standard & Poor's 500 Stock Index, the Standard &
Poor's SmallCap 600 Index and the peer group indicated below, during the period
from April 1, 1993 (the date prior to the Company's initial public offering)
through December 31, 1996. The Company has changed its comparison to the
Standard & Poor's SmallCap 600 Index from the Standard & Poor's 500 Stock 
Index. The Company considers its capitalization more closely reflective of the 
companies indexed in the S&P SmallCap 600 Index.


                     COMPARISON OF CUMULATIVE TOTAL RETURN*
                       APRIL 1, 1993 TO DECEMBER 31, 1996












                                    [GRAPH]
















<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
                                            4/1/93             12/31/93        12/31/94          12/31/95        12/31/96
                                           -------             --------        --------          --------        --------
<S>                                        <C>                  <C>              <C>               <C>             <C>  
Inco Homes                                 $100.00              $80.00           $15.31            $8.75           $3.12
S&P 500 Stock Index                        $100.00             $105.78          $107.18          $147.45         $181.31
S&P SmallCap 600 Index                     $100.00             $114.69          $109.22          $141.94         $172.20
Peer Group                                 $100.00             $119.69           $75.79          $101.84          $95.94
--------------------------------------------------------------------------------------------------------------------------
</TABLE>

* $100 invested on 4/1/93 in stock, group or index.


                                       11
<PAGE>   12

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         The following table sets forth information regarding the beneficial
ownership of the Company's Common Stock as of March 31, 1997 by (i) each person
who is known to the Company to own beneficially more than 5% of the outstanding
shares of the Common Stock of the Company, (ii) each director, (iii) each
officer listed in the Summary Compensation Table, and (iv) all directors and
executive officers as a group. All shares are subject to the named person's sole
voting and investment power except where otherwise indicated. Common Stock
shares and per share amounts have been restated to give effect to the Company's
one-for-six reverse stock split.

<TABLE>
<CAPTION>

                                                       SHARES BENEFICIALLY OWNED                                          
NAME AND ADDRESS                                       -------------------------                                        
OF BENEFICIAL OWNER                                     NUMBER       PERCENTAGE                                             
-------------------                                     ------       ----------                                             
<S>                                                     <C>            <C>                                                   
Ira C. Norris(1) .....................................  409,587        25.02%          
1282 West Arrow Highway                                                                                                     
Upland, CA                                                                                                                  
                                                                                                                            
Overland Opportunity Fund, LLC(2) ....................  200,000        12.22%          
147 East Olive Avenue                                                                                                       
Monrovia, CA 91016                                                                                                          
                                                                                                                            
Overland Company, Inc.(3).............................  200,000        10.89%          
147 East Olive Avenue                                                                  
Monrovia, CA 91016                                                                                                          
                                                                                                                            
Ronald L. Neeley(4)(5)(6) ............................  142,385         8.64%          
P.O. Box 371347                                                                                                             
San Diego, CA                                                                                                               
                                                                                                                            
Wellington Management Company, LLP(7) ................  128,017         7.82%          
75 State Street                                                                                                             
Boston, MA 02109                                                                                                            
                                                                                                                            
First Financial Fund, Inc.(8) ........................  128,017         7.82%          
One Seaport Plaza - 25th Floor                                                                                              
New York, NY 10292                                                                                                          
                                                                                                                            
Robert H. Daskal(9) ..................................   12,750            *           
                                                                                       
John F. Seymour, Jr.(10) .............................    1,384            *           
                                                                                       
Thomas E. Gibbs, Jr.(10)(11) .........................    1,267            *           
                                                                                                                            
Norman B. Gold(12) ...................................      417            *           
                                                                                                                            
Lynn C. Parkes(12) ...................................      417            *           
                                                                                                                            
All directors and executive officers as a group                                                                             
(7 persons)(1)(4)(5)(6)(9)(10)(11)(12) ...............  568,207        34.13%          
</TABLE>

------------------
(1)      Includes (i) 337,418 shares of Common Stock owned by Norris Living
         Trust Dated 2/17/89, a family trust of which Mr. Norris and his wife,
         Nancy D. Norris, serve as trustees, (ii) 834 shares of Common Stock
         owned by Mr. Norris and his wife jointly, and (iii) 2,657 shares of
         Common Stock owned of record by Mr. Norris' wife.

(2)      In December 1996, the Company entered into a Common Stock Purchase
         Agreement with Overland Opportunity Fund, LLC to sell 200,000 shares of
         the Company's Common Stock in a private transaction. The stock was
         issued in January and February, 1997 for a total purchase price of
         $750,000. The Company also


                                       12
<PAGE>   13

         granted Overland Opportunity Fund, LLC the right to require the Company
         to register the stock for public sale with the Securities and Exchange
         Commission. Schedule 13D states that in its capacity as a real estate
         investment company, Overland Opportunity Fund, LLC may be deemed
         beneficial owner of the shares. The Schedule 13D indicates that
         Overland Opportunity Fund, LLC has sole voting power and sole
         dispositive power. Schedule 13D also disclaims beneficial ownership by
         Overland Opportunity Fund, LLC, of the warrant described in (3) below
         owned by Overland Company, Inc., an affiliated corporation. Certain
         equity owners of Overland Opportunity Fund, LLC are also equity 
         owners of Overland Company, Inc.
(3)      In December 1996, the Company issued a warrant to purchase 200,000
         shares of Common Stock in a private transaction to Overland Company,
         Inc. The warrant was issued as compensation for all services to be
         performed pursuant to a Consulting Agreement entered into in December
         1996. The Consulting Agreement is for a term of two years during which
         Overland Company, Inc. on a non-exclusive basis, shall seek out,
         investigate and pursue residential development projects and present
         them to the Company for its consideration and approval. The warrant may
         be exercised within eighteen months of the date of the agreement at a
         price of $5.25 per share. If at least half of the warrant shares are
         not exercised during this period, then half of the warrant shares will
         expire, with the balance exercisable over an additional eighteen month
         period at $9.75 per share. Overland Company, Inc. may also convert the
         warrant or any portion thereof into shares of common stock using a
         formula based upon the fair market value of the Company's common stock
         on the conversion date. Schedule 13D states that in its capacity as a
         real estate investment and consulting company, Overland Company, Inc.
         may be deemed beneficial owner of the warrant. The Schedule 13D
         indicates that Overland Company, Inc. has sole voting power and sole
         dispositive power. Schedule 13D also disclaims beneficial ownership by
         Overland Company, Inc. of the shares of common stock described in (2)
         above owned by Overland Opportunity Fund, LLC, an affiliated limited
         liability company. Certain equity owners of Overland Opportunity Fund,
         LLC are also equity owners of Overland Company, Inc.
(4)      Includes 130,713 shares of Common Stock owned by Neeley Revocable
         Family Trust Dated 9/15/81, as amended, of which Mr. Neeley is a
         co-trustee with his wife.
(5)      Includes warrants to purchase 7,920 shares of the Company's Common
         Stock, currently exercisable at $60.00 per share, which were granted to
         the Neeley Revocable Family Trust Dated 9/15/81, as amended.
(6)      Includes options held by Mr. Neeley to purchase 1,250 shares of Common
         Stock currently exercisable at a price of $56.25 per share, 834 shares
         of Common Stock currently exercisable at a price of $25.50 per share,
         834 shares of Common Stock currently exercisable at a price of $11.25
         per share and 834 shares of Common Stock currently exercisable at a
         price of $4.875 per share. These options were granted pursuant to the
         Company's automatic option grant program for non-employee Board
         members.
(7)      Beneficial ownership is as of December 31, 1996, per Schedule 13G, that
         states that in its capacity as investment advisor, it may be deemed
         beneficial owner of the shares owned by its investment counseling
         clients. The Schedule 13G indicates that Wellington Management Company,
         LLP has no voting power and shared dispositive power.
(8)      Beneficial ownership is as of December 31, 1996, per Schedule 13G, that
         states that in its capacity as an investment company, it may be deemed
         beneficial owner of the shares. The Schedule 13G indicates that First
         Financial Fund, Inc. has sole voting power and shared dispositive
         power.
(9)      Includes 250 shares of Common Stock owned by Mr. Daskal and his wife
         jointly and an option held by Mr. Daskal to purchase 12,500 shares of
         Common Stock currently exercisable at a price of $6.75 per share.
(10)     Includes options held by Mr. Seymour and Mr. Gibbs, respectively, to
         purchase 1,250 shares of Common Stock, respectively, currently
         exercisable at $6.00 per share. These options were granted pursuant to
         the Company's automatic option grant program for non-employee Board
         members.
(11)     Includes 17 shares of Common Stock held by Gibbs Family Trust Dated
         2/19/93, of which Mr. Gibbs is a co-trustee with his wife.
(12)     Includes options held by Mr. Gold and Ms. Parkes, respectively, to
         purchase 417 shares of Common Stock, respectively, currently 
         exercisable at $6.75 per share.

 *       Percentage of shares beneficially owned does not exceed 1% of the class
         so owned.



                                       13
<PAGE>   14

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Transactions with Ira C. Norris and Entities Controlled by Ira C. Norris

         The Company leases its corporate headquarters in Upland, California
from Inco Plaza, Ltd. Inco Plaza, Ltd. is a limited partnership owned 80% by G&N
Investments, Ltd., its sole general partner. G&N Investments, Ltd. is a limited
partnership owned 70% by Nancy and Ira C. Norris, its sole general partners. The
lease, subject to extension by the Company, expires in September 2000 and
provides for the lease by the Company of approximately 6,800 square feet of
rentable area at an initial monthly base rent of $8,823. Rent increases
annually, as of October 1996, based upon the Consumer Price Index. The Company
believes that this lease is on as favorable terms as those that could have been
obtained from unaffiliated third parties. In 1996, the Company incurred rental
expense of $107,000 with Inco Plaza, Ltd. for the use of office space.

         The Company advanced funds to Victor Valley Commercial Properties over
several years prior to 1992. Victor Valley Commercial Properties is a limited
partnership owned 50% by G&N Investments, Ltd., its sole general partner. In May
1996, this unsecured receivable from Victor Valley Commercial Properties
approximated $293,000. At that time, the Company assigned this advance to Ira C.
Norris in exchange for a cash payment of $293,000.

         The Company engaged Nancy Orman Interiors ("NOI"), an interior
decorating firm, to decorate certain of the Company's model homes. The firm is
owned by Nancy Norris, the wife of Ira C. Norris. NOI analyzes the demographic
information prepared by the Company, designs the interior areas, purchases the
furnishings, hires the subcontractors and installs the furnishings with the
assistance of the Company's employees. NOI's fees primarily include its direct
costs and a fee for its design services. In 1996, the Company incurred costs of
$200,000 to NOI, of which approximately $153,000 represented reimbursement for
out-of-pocket expenses and items purchased for the Company and approximately
$47,000 represented fees for its design services. The Company believes that
these services were provided on as favorable terms as those that could have been
obtained from unaffiliated third parties.

         At December 31, 1996, the Company had received from Ira C. Norris
unsecured advances net of paybacks totaling $676,000 (which includes accrued
interest of $13,000). Subsequent to year end, the Company received an additional
$982,000 from Mr. Norris and paid back $220,000 to him. The Company has issued
several notes to Mr. Norris, bearing interest at 10.0%, which mature either on
June 30, 1997 or September 30, 1997.

         Historically, certain of the predecessor subsidiaries of the Company
(the "S Subsidiaries") were treated for federal and state income tax purposes as
S Corporations under Subchapter S of the Internal Revenue Code of 1986, as
amended, and under comparable state tax laws. As a result, the earnings from the
S Subsidiaries through the day preceding the date of termination of the S
Subsidiaries' status as S Corporations, which was April 1993 (the "Termination
Date"), have been or will be, as the case may be, taxed, with certain
exceptions, for federal and state income tax purposes directly to Ira C. Norris,
the sole stockholder of the S Subsidiaries, rather than to the Company. In March
1993, the Company and Mr. Norris entered into a Tax Indemnification Agreement,
which generally provided that Mr. Norris would be indemnified by the Company
with respect to federal and state income taxes (plus interest and penalties)
shifted from an S Subsidiary taxable year subsequent to the Termination Date to
a taxable year in which the S Subsidiary was an S Corporation, and the Company
would be indemnified by Mr. Norris with respect to federal and state income
taxes (plus interest and penalties) shifted from Mr. Norris in a taxable year
ending on or before the Termination Date to the Company for taxable years ending
either before or after the Termination Date. Pursuant to this agreement, Mr.
Norris also agreed to indemnify the Company against any amounts that may be paid
to the IRS as a result of tax deductions disallowed due to excessive
compensation paid to him, as well as fifty percent of all out-of-pocket costs
incurred in defending an IRS challenge. In November 1993, Mr. Norris paid
$247,000 to the Company in satisfaction of such indemnification obligation.



                                       14
<PAGE>   15

Transactions with Overland Opportunity Fund, LLC and Overland Company, Inc.

         At the time the Company entered into a Common Stock Purchase Agreement
with Overland Opportunity Fund, LLC, the Company, in consideration of a $50,000
payment, gave Overland Opportunity Fund, LLC an exclusive option to purchase
approximately 71 acres of commercial property located in the Company's Eagle
Ranch project. See "Item 12. Security Ownership of Certain Beneficial Owners and
Management."

         In December 1996, the Company issued a warrant to Overland Company,
Inc. to purchase shares of the Company's Common Stock. The warrant was issued as
compensation for all services to be performed pursuant to a Consulting Agreement
entered into in December 1996. See "Item 12. Security Ownership of Certain
Beneficial Owners and Management."

         The Company is the managing general partner of, and has a 50% interest
in, Freedom-Eagle Ranch Housing Partners ("FERHP"), a limited partnership. One
of the owners of both Overland Opportunity Fund, LLC and Overland Company, Inc.
holds a 5.55% limited partnership interest in FERHP. FERHP was formed in May
1996 to obtain land from the Company and develop 166 single family homes in
Victorville, California. See "Item 1. Business-Table II-Current and Planned
Projects." This limited partner has contributed $100,000 to FERHP, none of which
has been repaid. This limited partner has also been paid a fee of $18,000 from
FERHP, and earns a fee of .5% of the net sales price as single family homes
developed by FERHP close escrow.

         One of the owners of both Overland Opportunity Fund, LLC and Overland
Company, Inc., is a general partner in Victorville 163 Partners, L.P. In
November 1996, the Company entered into a Development and Marketing Agreement
with Victorville 163 Partners, L.P. to develop, construct and market 163 lots
owned by Victorville 163 Partners, L.P. in Victorville, California. All
financing and bonding will be the responsibility of Victorville 163 Partners,
L.P. The Company will receive compensation in the form of overhead draws,
development fees and sales and marketing fees totaling approximately 8.0% of the
gross sales price of the homes. The Company will assume the home warranty costs
for which it will be paid $750 per house.

Transaction with Ronald L. Neeley

         In January 1993, the Company entered into a loan agreement with a
revocable trust of Ronald L. Neeley pursuant to which the Company had the right
to borrow up to $3 million. $1.76 million was borrowed under this loan
agreement, which amount was repaid in full in April 1993. No further borrowings
can be made under the terms of this loan agreement. In connection with this
loan, the Company issued a warrant to Mr. Neeley to purchase 7,920 shares
(restated for reverse stock split) of the Company's Common Stock at an exercise
price of $60.00 per share (restated for reverse stock split), the Company's
initial public offering price. The warrant was exercisable in October 1993 and
expires in April 1998. As of the date hereof, the warrant has not been
exercised.

Transactions with Thomas E. Gibbs, Jr.

         The Company is the managing general partner of, and has a 51.295%
interest in, Palmdale Vistas Housing Developments, Ltd. ("Palmdale Vistas"), a
limited partnership. Mr. Gibbs holds a 1.295% limited partner's interest in
Palmdale Vistas, and also a 23% general partner's interest and a 1.376% limited
partner's interest in Palmdale Vistas Housing Investments, a limited partnership
which holds a 47.41% limited partnership interest in Palmdale Vistas. Palmdale
Vistas was formed in June 1989 to purchase land and develop approximately 261
single family homes in Palmdale, California. See "Item 1. Business-Table
II-Current and Planned Projects." Mr. Gibbs has contributed $120,000 to Palmdale
Vistas, none of which has been repaid.


                                       15
<PAGE>   16

         In June 1996, the Company signed a $600,000 Secured Participation Note
with ALG 1996-1 ("ALG"). Mr. Gibbs holds a 25% general partner's interest in
ALG. The note bears interest at the prime rate plus 3.0% per annum and matures
in June 1998. The Company pays interest monthly to ALG and pays down portions of
the note upon closings of completed single family homes in a 151 unit
subdivision in Adelanto, California. Additionally, 45% of the net income from
the sale of these homes will be paid by the Company to ALG. See "Item 1.
Business-Table II-Current and Planned Projects."

         The Company is the managing general partner of, and has a 50% interest
in, Triumph-Lancaster Housing Partners ("Triumph"), a limited partnership. The
Gibbs Family Trust, of which Mr. Gibbs is a beneficiary and trustee, holds a 50%
limited partner's interest in Triumph. Triumph was formed in August 1996 to
purchase land and develop 78 single family homes in Lancaster, California. See
"Item 1. Business-Table II-Current and Planned Projects." The Gibbs Family Trust
has contributed $190,000 to Triumph, none of which has been repaid. In November
1996, Mr. Gibbs loaned $75,000 to Triumph. In February 1997, Triumph repaid Mr.
Gibbs in full, including interest at the rate of prime plus 2.5% per annum.

         In October 1996, the Company signed a $1.2 million Secured
Participation Note with Hunters Ridge Investment Partners ("HRIP"). Mr. Gibbs is
the managing general partner of HRIP, with a 56.25% interest. The note bears
interest at 10.0% per annum and matures in December 1998. The Company pays
interest monthly to HRIP and will pay down portions of the note upon closings of
completed single family homes in an 83 unit subdivision in Fontana, California.
Additionally, 50% of the net income from the sale of these homes will be paid by
the Company to HRIP. See "Item 1. Business-Table II-Current and Planned
Projects."

         The Company incurred legal fees of approximately $16,400 to Mr. Gibbs
in 1996, and will incur additional legal fees in 1997. The other members of the
Board of Directors agreed at their March 3, 1997 meeting to pay Mr. Gibbs for
his legal services up to $25,000 with non-registered common stock of the
Company. The price of the stock issued will be based upon the closing price on
March 3, 1997.


                                       16
<PAGE>   17

                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                     INCO HOMES CORPORATION


                                     By     /s/    Ira C. Norris
                                       -----------------------------------------
                                            Ira C. Norris
                                            Chairman of the Board, President and
                                            Chief Executive Officer
Dated:  April 30, 1997

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
                     SIGNATURE                                              Title                                    Date
                     ---------                                              -----                                    ----



<S>                                                      <C>                                                     <C> 
               /s/ Ira C. Norris                         Chairman of the Board, President and                    April 30, 1997
-------------------------------------------------------     Chief Executive Officer (principal
                   Ira C. Norris                            executive officer)
                                                            


               /s/ Norman B. Gold                        Vice President and Chief Financial Officer              April 30, 1997
------------------------------------------------------      (principal financial officer)
                   Norman B. Gold                                           



               /s/ Robert H. Daskal                      Director                                                April 30, 1997
------------------------------------------------------
                   Robert H. Daskal



               /s/ Thomas E. Gibbs, Jr.                  Director                                                April 30, 1997
------------------------------------------------------
                   Thomas E. Gibbs, Jr.



               /s/ Ronald L. Neeley                      Director                                                April 30, 1997
------------------------------------------------------
                   Ronald L. Neeley



               /s/ John Seymour                          Director                                                April 30, 1997
------------------------------------------------------
                   John F. Seymour, Jr.
</TABLE>








                                       17