UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-KSB
                          Amendment No.1 to Form 10-KSB

(Mark One)

(X)  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                                     For the fiscal year ended December 31, 2007

                                       OR

( )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934

                                               Commission File Number: 333-11625

       CAPITAL ALLIANCE INCOME TRUST LTD., A REAL ESTATE INVESTMENT TRUST
       -------------------------------------------------------------------
                 (Name of small business issuer in its charter)

           Delaware                                            94-3240473
-------------------------------                            ----------------
(State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                           Identification Number)

         100 Pine Street
         Suite 2450
         San Francisco, California                                 94111
------------------------------------------------                ----------
         (Address of principal executive office)                (zip code)

                    Issuer's telephone number (415) 288-9595

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class Name of each exchange on which registered Common Stock
$0.01 par value American Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None.

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act 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.

                                 Yes [X] No [_]

Registrant meets the condition of General Instruction G(1)(a) and (b) of Form
10-KSB and is filing this form 10-KSB pursuant to its reduced disclosure format.

Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is not 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]

Issuer's revenues for its most recent fiscal year were $1,114,958.

As of March 3, 2008, the issuer's common shares closed at $3.35 and the
aggregate market value of the issuer's shares of Common Stock, $.01 par value,
held by non-affiliates of the issuer was approximately $817,400. At that date
approximately 380,532 common shares were outstanding and 244,000 common shares
were held by non-affiliates.

Transitional Small Business Disclosure Format.      Yes [_] No [X]


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                                EXPLANATORY NOTE

This Amendment No.1 on Form 10-KSB amends the Form 10-KSB for the year ending
December 31, 2007 as initially filed with the Securities and Exchange Commission
on March 31, 2008. This amendment addresses Item 8A regarding Management's
assessments over disclosure controls and procedures as well as internal controls
over financial reporting.

No other amendments to the original 10-KSB filed on March 31, 2008 have been
made.





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ITEM 8A. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Under the supervision and with the participation of our Company's management,
including our Chief Executive Officer and Principal Accounting Officer, we
evaluated the effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934) as of the end of the period covered by this
report. Based on this evaluation, our Chief Executive Officer and Principal
Accounting Officer concluded that our disclosures controls and procedures as of
the end of the period covered by this report were effective such that the
material information required to be included in our Securities and Exchange
Commission reports is recorded, processed, summarized and reported with the time
periods specified in Securities and Exchange Commission rules and forms relating
to our company, particularly during the period when this report was being
prepared.

MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal
control over financial reporting (as defined in Rule 13a-15(f) under the
Exchange Act). Our internal control over financial reporting includes those
policies and procedures that (i) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of our Company's assets; (ii) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted in the United States of America
and that receipts and expenditures of the Company are being made only in
accordance with the authorization of the Company's management and directors; and
(iii) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of our Company's assets that could
have a material effect on the financial statements.

Because of the inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Therefore, even those systems
determined to be effective can provide only reasonable assurance of achieving
their control objectives. Further, the evaluation of the effectiveness of
internal control over financial reporting was made as of a specific date, and
continued effectiveness in future periods is subject to the risks that controls
may become inadequate because of changes in conditions or that the degree of
compliance with the policies and procedures may decline.

Our management, with the participation of the Chief Executive Officer and
Principal Accounting Officer, evaluated the effectiveness of the Company's
internal control over financial reporting as of December 31, 2007. Based on this
evaluation, our management, with the participation of the Chief Executive
Officer and Principal Accounting Officer, concluded that, as of December 31,
2007, our internal control over financial reporting was effective.

This annual report does not include an attestation report of the Company's
independent registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation pursuant
to temporary rules of the Securities and Exchange Commission that permit the
Company to provide only management's report in this annual report.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

During the period ended December 31, 2007, there have been no changes in our
internal control over financial reporting (as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act) that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.





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                                   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, hereunto duly authorized.

                                            Capital Alliance Income Trust, Ltd.
Dated: August 25, 2008                      A Real Estate Investment Trust

By: /s/   Richard J. Wrensen                By: /s/  Andrea Barney
    -------------------------                   -------------------------------
    Richard J. Wrensen                          Andrea Barney
    Chairman and                                Principal Accounting Officer
    Chief Executive Officer                     Controller


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