<PAGE>  1
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                   
                                  FORM 10-K

                 ANNUAL REPORT PURSUANT TO SECTON 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 (Fee Required)
        For the fiscal year ended:  December 31, 1996

/ /     Transition Report Pursuant to Section 13 or 15(d) of the Securities
        Exchange Act of 1934 (No Fee Required)
        For the transition period from:


                      Commission file number:  0-16508
                Registrant:  USA Real Estate Investment Trust
            (Exact Name of Registrant as specified in its Charter)

          California                                 68-0109347
(State or other jurisdiction of        (I.R.S. Employer Identification No.)
 incorporation or organization)


          One Scripps Drive, Suite 201, Sacramento, California  95825
       (Address of registrant's principal executive offices)  (Zip Code)

                                 (916) 564-4532
             (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:
                         Shares of Benefieical Interests
                                 (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, and (2) has been subject to such filing
requirements for the past 90 days.

                  / X/    Yes            / /      No


     The aggregate market value of the voting shares of beneficial interest
(the "shares") held by nonaffiliates of the registrant outstanding at February
28, 1997, was $40,429,040 (based solely on the original offering price as
there is no trading market in the shares).

                       DOCUMENTS INCORPORATED BY REFERENCE
                                        None

<PAGE>  2



                         USA REAL ESTATE INVESTMENT TRUST
                                  Table of Contents



                                                                      Page
    PART I.                                                           
           
              ITEM 1.   Business ...................................    3
              ITEM 2.   Properties .................................    6
              ITEM 3.   Legal Proceedings ..........................    6
              ITEM 4.   Submission of Matters to a Vote 
                          of Security Holders ......................    6

    PART II.

              ITEM 5.   Market for Registrant's Equity Securities
                          and Related Security Holder Matters ......    7
              ITEM 6.   Selected Financial Data ....................    8
              ITEM 7.   Management's Discussion and Analysis
                          of Financial Condition and Results
                          of Operations ............................    8
              ITEM 8.   Financial Statements and Supplementary
                          Data .....................................    10
              ITEM 9.   Changes in and Disagreements with
                          Accountants on Accounting and
                          Financial Disclosure .....................    18

    PART III.

              ITEM 10.  Directors and Executive Officers
                          of the Registrant ........................    19
              ITEM 11.  Executive Compensation .....................    20
              ITEM 12.  Security Ownership of Certain
                          Beneficial Owners and Management .........    21
              ITEM 13.  Certain Relationships and
                          Related Transactions .....................    21

    PART IV.

              ITEM 14.  Exhibits, Financial Statement Schedules
                          and Reports on Form 8-K ..................    22














<PAGE>  3                       
                                      PART I.  



ITEM 1.  BUSINESS


GENERAL

     USA Real Estate Investment Trust (the "Trust") is a California business
trust that was formed on October 7, 1986, for the primary purpose of engaging
in the business of acquiring, owning and financing real property investments.
The Trust commenced operations on October 19, 1987, upon the sale of the
minimum offering amount of shares of beneficial interest ("shares").

     The purpose of the Trust is to provide investors with an opportunity to
own, through transferable shares, an interest in diversified real estate
investments.  The Trust invests primarily in income producing real properties
in accordance with the investment objectives and policies of the Trust.
Through such investments, the Trust seeks to provide investors with an
opportunity to participate in a portfolio of professionally managed real
estate investments in the same way a mutual fund affords investors an
opportunity to invest in a professionally managed portfolio of stocks, bonds
and other securities.  

     The Trust has operated and intends to continue to operate in a manner
intended to qualify as a "real estate investment trust" (REIT) under Sections
856-860 of the Internal Revenue Code of 1986, as amended (the "Code").  A
qualified REIT is relieved, in part, from federal income taxes on ordinary
income and capital gains distributed to its shareholders.  State tax benefits
also may accrue to a qualified REIT.  Pursuant to Code requirements, the Trust
distributes to its shareholders at least 95 percent of its taxable income and
100 percent of the net capital gain from the sale of Trust properties.

     The Trust will terminate 21 years after the death of the last survivor of
persons listed in the Trust's Declaration of Trust.  The Trust may also be
terminated at any time by the majority vote or written consent of shareholders
or by a majority vote of the Trustees.

     The principal offices of the Trust are located at One Scripps Drive,
Suite 201, Sacramento, California 95825.



CURRENT DEVELOPMENTS

     On August 31, 1994 the Trust became self-administered and 1996 is its
second year of operation as a self-administered real estate investment trust.

     In April, 1996 the Trust sold its property located at 1630 Industrial
Park Street in Redlands, California and in August, 1996 sold its property
located on Keystone Avenue in Reno, Nevada.







<PAGE>  4
INVESTMENT OBJECTIVES

     The Trust has acquired a diversified portfolio of income producing real
property investments.  Subject to certain limitations, the Declaration of
Trust gives the Trustees discretion to allocate the Trust's investments
without the prior approval of shareholders.



INVESTMENT GUIDELINES

     Acquisition Policies.  The Trustees have adopted investment guidelines
for the purpose of selecting the Trust's investments.  Pursuant to the
guidelines, the allocation of Trust assets among income producing real
property investments depends principally upon the following factors:

     1.  The number of properties available for acquisition which show current
income and potential for appreciation in value;

     2.  The availability of funds for investment;

     3.  The laws and regulations governing investment in and the subsequent
sale of real estate investments by a REIT; and

     4.  The applicable federal and state income tax, securities, and real
estate laws and regulations.

     The guidelines may vary from time to time, at the sole discretion of the
Trustees, in order to adapt to changes in real estate markets, federal income
tax laws and regulations and general economic conditions.  The Trustees also
have discretion to acquire an investment not meeting these guidelines if the
Trustees determine that other circumstances justify the acquisition in a
particular case.

     Portfolio Turnover.  The Trustees have set general guidelines for the
disposition of properties in its portfolio which take into consideration
certain regulatory restrictions and federal income tax laws regarding REIT
portfolio turnover.  Income tax regulations preclude the Trust from holding
any property (other than foreclosure property) primarily for sale to customers
in the ordinary course of the Trust's trade or business, but provide a "safe
harbor" for property held for at least four years from the date of
acquisition.  Portfolio turnover policy also depends on whether a favorable
sales price can be realized by the Trust, primarily a function of the
capitalization rate applied to similar types of property in similar markets. 
The Trust may elect to hold property as long as is reasonably necessary to
provide an attractive sales price.



OTHER INFORMATION

     The Trust has no employees.  It is administered by its Trustees and by
its Chairman, and by independent contractors who work under the supervision
thereof as a self-administered real estate investment trust.





<PAGE>  5
     The Trust is involved in only one industry segment:  acquiring, operating
and holding for investment income-producing real properties.  Revenues, net
income and assets from this industry segment are included in the Trust's
financial statements which appear at Item 8 of Part II.

     The Trust's results of operations will depend on the availability of
suitable opportunities for investment and the comparative yields available
from time to time on real estate and other investments, as well as market
conditions affecting leasing and sale of real estate in the areas in which the
Trust's investments are located.  These factors, in turn, are influenced to a
large extent by the type of investment involved, financing available for real
estate investment, the nature and geographic location of the property,
competition and other factors, none of which can be predicted with certainty. 
The real estate investment market is highly competitive.  The Trust competes
for acceptable investments with other financial institutions, including banks,
insurance companies, savings and loan associations, pension funds and other
real estate investment trusts and partnerships.  Many of these competitors
have greater resources than the Trust.  The number of such competitors and 
funds available for investment in properties of the type suitable for
investment by the Trust may increase, resulting in increased competition
for such investments and possibly increased costs and thus reduced income for
the Trust.

     The rules and regulations adopted by various agencies of federal, state
or local governments relating to environmental controls and the development
and operation of real property may operate to reduce the number of investment
opportunities available to the Trust or may adversely affect the properties
currently owned by it.  While the Trust does not believe environmental
controls have had a material impact on its activities, there can be no
assurance that the trust will not be adversely affected thereby in the future.



TAX LEGISLATION

     The Trust has elected to be treated as a real estate investment trust
under Sections 856-860 of the Internal Revenue Code of 1986, as amended (the
"Code").  The Trust expects to operate and to invest in a manner that will
maintain its qualification for real estate investment trust taxation.  The
Code requirements for such qualification are complex.  While no assurance can
be given that the Trust qualified for taxation as a real estate investment
trust for past taxable years, the Trust nevertheless believes that it has so
qualified and will endeavor to continue to qualify for its current year and
future years.

     The business of the Trust is uniquely sensitive to tax legislation. 
Changes in tax laws are made frequently.  There is no way for the Trust to
anticipate when or what changes in the tax laws may be made in the future, or
how such changes might affect the Trust.

     The Internal Revenue Service ("IRS") has not yet issued regulations to
carry out numerous provisions enacted as part of the tax legislation passed
since 1986.  Nor has the IRS addressed the issues relating to the application
of some of the new tax rules to entities such as real estate investment
trusts.  Until such regulations are issued by the IRS, it is difficult to
gauge what impact, if any, such new legislaton may have on entities such as a
real estate investment trust.


<PAGE>  6


ITEM 2.  PROPERTIES


     The Trust owns seven properties all of which are located in California.
The Trustees believe that most of the properties are quality income producing
properties that are well suited for their current uses.  Most of the
properties are leased under long term leases at competitive rates for the
areas in which they are located.  The lease terms provide for rental
adjustments on a periodic basis.

     Title insurance and liability and property damage insurance in amounts
deemed appropriate by the Trust have been obtained for the properties referred
to above.  The Trust does not carry flood insurance on said properties. 
Because of the high cost of premiums, excessive deductibles, and limited
coverage, the Trust does not carry earthquake insurance on said properties
except 19401 Parthenia Street in Northridge, California.

     For additional information concerning the aforesaid properties, see Notes
1 and 3 of the Notes to Financial Statements and Schedule III.




ITEM 3.  LEGAL PROCEEDINGS


     None.




ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


     No matters were submitted to a vote of the Trust's security holders
during the last quarter of 1996.





















<PAGE>  7
                                      PART II




ITEM 5.  MARKET FOR THE REGISTRANT'S EQUITY SECURITIES AND RELATED SECURITY
         HOLDER MATTERS


     The Trust has one class of authorized and outstanding equity consisting
of shares of beneficial interest, par value $1.00 per share.  The Trust
engaged in a continuous best efforts public offering from May 20, 1987, until
May 20, 1992.  As of December 31, 1996, the Trust had 4,042,904 shares
outstanding to about 10,643 shareholders of record.  There is no trading
market for the shares of the Trust.

     Pursuant to the Trust's offers in 1996 and 1995 to shareholders who
owned fewer than 100 shares, the Trust repurchased 92,419 shares from 2,918
shareholders at a cost of $332,507.

     In 1996, the Trust received unsolicited offers from other shareholders 
to sell their shares to the Trust, and accepted offers at or below $3.50 per
share.  Accordingly, the Trust repurchased 18,446 shares from 78 shareholders
at a cost of $61,643.

     Closing these accounts reduces annual servicing expenses and increases
the book value for the remaining shareholders.  

     






























<PAGE >  8

ITEM 6.  SELECTED FINANCIAL DATA


     The following represents selected financial data for the Trust for the
five years ended December 31, 1996.  The data should be read in conjunction
with the financial statements and related notes included elsewhere herein.



                              Years Ended December 31
                  (Amounts in thousands, except for per share data)



                            1996       1995       1994       1993       1992
                          --------   --------   --------   --------   --------

Operating Results:

    Revenues              $ 2,677    $ 2,858    $ 2,978    $ 2,896    $ 2,839

    Net income (loss)         918        753     (1,443)    (2,507)    (2,567)

Total Assets               22,843     23,802     25,924     29,333     34,207

Long-term obligations       2,047      2,099      3,345      3,268      4,969

Net income (loss)
  per share               $  0.23    $  0.18    $ (0.35)   $ (0.60)   $ (0.61)

Cash distributions
  per share               $  0.38    $  0.32    $  0.26    $  0.12    $  0.39




       




ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS


LIQUIDITY AND CAPITAL RESOURCES

     The Trust expects that income, cash in the bank, proceeds from the sale
of properties, and borrowings collateralized by properties will adequately
meet its liquidity and capital resource requirements in the future.








<PAGE>  9  
RESULTS OF OPERATIONS

Comparison of 1996 to 1995 and 1995 to 1994

     Effective August 31, 1994, the Trust terminated its agreements with its
former advisor and property manager and became self-administered.  1996 was
the second full year the Trust was self-administered.

     Rent revenues decreased $214,497 in 1996 compared to 1995 due to the sale
of 1450 Hatch Road in Ceres, California, in May, 1995, and the sale of
Keystone Square in Reno, Nevada, in August, 1996.

     Interest revenues decreased $91,099 in 1995 compared to 1994 primarily
due to the collection of the $940,000 note receivable collateralized by 151
and 175 Opportunity Street in Sacramento, California, in December, 1994.

     A decrease in operating expenses of $24,110 or 8 percent in 1996
compared to 1995 was offset by the purchase of earthquake insurance for
19401 Parthenia in Northridge, California in the amount of $24,602, so that
total operating expenses increased by $492.

     Operating expenses decreased $498,116 in 1995 compared to 1994.  $373,464
of this decrease is due to the cost to repair uninsured earthquake damage at
19401 Parthenia in Northridge, California, incurred in 1994 and $124,652 is 
due to our focus on cutting expenses.

     Property management fees decreased $68,385 or 56 percent in 1995 compared
to 1994 because of the termination of the former property management agreement
and the hiring of new property managers who provided better service for less
money.

     Interest expense decreased $102,292 or 38 percent in 1996 compared to
1995 and $331,570 or 55 percent in 1995 compared to 1994 because of lower
interest rates and lower outstanding indebtedness.

     General and administrative expense decreased $260,057 or 41 percent in
1996 compared to 1995 and $265,248 or 30 percent in 1995 compared to 1994.
These decreases were primarily the result of fewer professional fees in 1996
and 1995.

     The legal settlement was for the settlement of all litigation with the 
former advisor of the Trust.  The Trust is not now engaged in litigation in
any court with any party.

     The 1995 gain on sale of properties was attributed to the sale of 1450
Hatch Road in Ceres California, in May, 1995.

     Net income was $918,269 or 23 cents per share in 1996 and $752,898 or
18 cents per share in 1995 compared to a net loss of $(1,442,875) or 35 cents
per share in 1994.

     Funds from operations were $1,555,265 or 38 cents per share in 1996,
$1,371,241 or 33 cents per share in 1995 and $333,603 or 8 cents per share in
1994.

     The Trust paid distributions per share of 38 cents, 32 cents and 26 cents
in 1996, 1995 and 1994, respectively.


<PAGE> 10

IMPACT OF INFLATION


     The Trust's operations have not been materially affected by inflation. 
While the rate of inflation has been relatively low since the Trust commenced
operations in October, 1987, even if the rate of inflation were to rise, the
Trust anticipates that it would be able to offset most of the impact of higher
operating expenses through rent escalation clauses and lease clauses that pass
on most of the operating expenses to tenants.











ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                                                                         Page

         Independent Auditors' Report ..............................       11

         Balance Sheets
           As of December 31, 1996 and 1995 ........................       12

         Statements of Income (Operations)
           Years Ended December 31, 1996, 1995 and 1994 ............       13

         Statements of Changes in Shareholders' Equity
           Years Ended December 31, 1996, 1995 and 1994 ............       14

         Statements of Cash Flows
           Years Ended December 31, 1996, 1995 and 1994 ............       15

         Notes to Financial Statements .............................       16

         Schedule III
           Real Estate and Accumulated Depreciation ................    23-26
















<PAGE>  11  


                          INDEPENDENT AUDITORS' REPORT




To the Board of Trustees
USA Real Estate Investment Trust




We have audited the accompanying balance sheets of USA Real Estate Investment
Trust as of December 31, 1996 and 1995 and the related statements of income
(operations), changes in shareholders' equity, and cash flows for the years
ended December 31, 1996, 1995 and 1994.  In connection with our audits of the
financial statements, we also have audited the financial statement schedule
as listed in the accompanying index.  These financial statements and
financial statement schedule are the responsibility of the Trust's management.
Our responsibility is to express an opinion on these financial statements
and financial statement schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluation of 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 USA Real Estate Investment
Trust as of December 31, 1996 and 1995 and the results of its operations and
its cash flows for the years ended December 31, 1996, 1995 and 1994 in
conformity with generally accepted accounting principles.  Also in our
opinion, the related financial statement schedule, when considered in relation
to the basic financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.




Burnett, Umphress & Kilgour





Rancho Cordova, California
January 23, 1997






<PAGE>  12

                        USA REAL ESTATE INVESTMENT TRUST
                                  Balance Sheets


                                                    December 31,  December 31,
                                                       1996           1995
                                                    -----------   -----------
                                        ASSETS

Rental properties, less accumulated
  depreciation of $2,271,650 and
  $2,218,805 in 1996 and 1995, 
  respectively and valuation allowances
  of $5,060,000 and $5,837,000 in 1996
  and 1995, respectively                           $ 17,939,415  $ 21,153,860  
Notes receivable                                        726,000       818,869
                                                     ----------   -----------
                                                     18,665,415    21,972,729


Cash and cash equivalents                             3,909,665     1,487,661
Other assets                                            268,013       341,333
                                                    -----------   -----------
    Total assets                                   $ 22,843,093  $ 23,801,723
                                                    ===========   ===========


                       LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
  Long-term notes payable                          $  2,047,333  $  2,098,919
  Accounts payable                                       40,638        35,320
  Lease deposits                                         59,845        70,371
                                                    -----------   -----------
    Total liabilities                                 2,147,816     2,204,610
                                                    -----------   -----------
Shareholders' Equity:
  Shares of beneficial interest, par value
    $1 a share; authorized 7,500,000 shares;
    4,042,904 and 4,120,430 shares outstanding
    in 1996 and 1995, respectively                 $  4,042,904  $  4,120,430  
  Additional paid-in capital                         30,202,139    30,395,534
  Distributions in excess of net income             (13,549,766)  (12,918,851)
                                                    -----------   -----------
    Total shareholders' equity                       20,695,277    21,597,113
                                                    -----------   -----------
    Total liabilities and shareholders' equity     $ 22,843,093  $ 23,801,723
                                                    ===========   ===========



See accompanying notes to financial statements.






<PAGE>  13   
                           
                           USA REAL ESTATE INVESTMENT TRUST
                           Statements of Income (Operations)
                    Years Ended December 31, 1996, 1995 and 1994





                                            1996         1995         1994
                                        -----------  -----------  -----------

Revenues:                                      
  Rent                                  $ 2,491,986  $ 2,706,483  $ 2,734,558
  Interest                                  184,869      151,851      242,950
                                        -----------  -----------  -----------

                                          2,676,855    2,858,334    2,977,508
                                        -----------  -----------  -----------


Expenses:
  Operating expenses                        308,460      307,968      806,084
  Property taxes                            227,696      225,342      218,835
  Property management fees                   48,000       54,000      122,385
  Interest                                  167,777      270,069      601,639
  Depreciation and amortization             636,996      655,597      687,478
  General and administative                 369,657      629,714      894,962 
  Legal settlement                                0      250,000            0 
  Valuation loss                                  0      124,000      839,000
                                        -----------  -----------  -----------

                                          1,758,586    2,516,690    4,170,383
                                        -----------  -----------  -----------

Net income (loss) before gain (loss)
  on sale of rental properties and
  disposition of promissory note            918,269      341,644   (1,192,875)

Gain (loss) on sale of rental properties
  and disposition of promissory note              0      411,254     (250,000)
                                        -----------  -----------  -----------


Net income (loss)                       $   918,269     $752,898  $(1,442,875)
                                        ===========  ===========  ===========



Net income (loss) per share of
  beneficial interest                   $      0.23      $  0.18  $     (0.35)
                                        ===========  ===========  ===========

Weighted average number of shares       $ 4,068,623  $ 4,153,717  $ 4,177,723
                                        ===========  ===========  ===========



See accompanying notes to financial statements.
<PAGE>  14


                       USA REAL ESTATE INVESTMENT TRUST
                Statements of  Changes in Shareholders' Equity
                 Years Ended December 31, 1996, 1995 and 1994






                                                     Distribu-      Total
                     Shares of        Additional     tions in       Share-
                Beneficial Interest     Paid-in      Excess of      holders'
                 Number     Amount      Capital      Net Income     Equity
               ---------   ---------  -----------  -------------  -----------
Balance at
 December 31,
 1993          4,177,723  $4,177,723  $30,535,678   $(9,801,497)  $24,911,904
               ---------   ---------   ----------   -----------    ----------

Net loss           -           -           -         (1,442,875)  (1,442,875)
Distributions      -           -           -         (1,096,725)  (1,096,725)
               ---------   ---------   ----------   -----------   ----------
Balance at
 December 31,
 1994          4,177,723   4,177,723   30,535,678   (12,341,097)  22,372,304
               ---------   ---------   ----------   -----------   ----------

Redemption of
 shares          (57,293)    (57,293)    (140,144)        -         (197,437)
Net income         -           -            -           752,898      752,898
Distributions      -           -            -        (1,330,652)  (1,330,652)
               ---------   ---------   ----------   -----------   ----------
Balance at
 December 31,
 1995          4,120,430   4,120,430   30,395,534   (12,918,851)  21,597,113
               _________   _________   __________   ___________   __________

Redemption of
 shares          (77,526)    (77,526)    (193,395)        -         (270,921)
Net income         -           -            -           918,269      918,269
Distributions      -           -            -        (1,549,184)  (1,549,184)
               _________   _________   __________    __________   __________

Balance at
 December 31, 
 1996          4,042,904  $4,042,904  $30,202,139  $(13,549,766) $20,695,277
               =========   =========   ==========    ==========   ==========

 






See accompanying notes to financial statements.

<PAGE>  15              USA REAL ESTATE INVESTMENT TRUST
                            Statements of Cash Flows
              For the Years Ended December 31, 1996, 1995 and 1994
                                                        
                                           1996          1995        1994
                                        ----------   ----------   ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                   $    918,269  $   752,898  $(1,442,875)
                                        ----------   ----------   ----------
  Adjustments to reconcile net
  income(loss)to net cash provided
  by operating activities:
    Depreciation & amortization            636,996      655,597      687,478
    Amortization of loan fees                4,290        4,290       21,500
    Valuation loss                               0      124,000      839,000
    (Gain)loss on sale of properties
      & disposition of promissory note           0     (411,254)     250,000
    Bad debt expense                             0            0       75,519
  Changes in other assets &
    liabilities:
     Decrease(increase)in other assets       8,383      180,222     (276,484)
     Increase(decrease)in accounts payable   5,318      (97,683)     (35,988)
     Decrease in lease deposits            (10,526)      (3,287)     (10,658)
     Total adjustments to net           ----------   ----------   ----------
       income(loss)                        644,461      451,885    1,550,367
                                        ----------   ----------   ----------
         Net cash provided by
         operating activities            1,562,730    1,204,783      107,492
                                        ----------   ----------   ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases & improvement of properties   (501,586)  (1,269,097)    (198,338)
  Proceeds from the sale of properties   3,139,682    3,800,463            0
  Collections on notes receivable           92,869      147,178    1,376,624
                                        ----------   ----------   ----------
        Net cash provided by
        investing activities             2,730,965    2,678,544    1,178,286
                                        ----------   ----------   ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Redemption of shares                    (270,921)    (197,437)           0
  Proceeds from long-term notes payable          0            0    2,145,000
  Payments on long-term notes payable      (51,586)  (1,245,988)  (2,068,236)
  Payments on line of credit                     0            0     (900,000)
  Distributions paid                    (1,549,184)  (1,330,652)  (1,096,725)
                                        ----------   ----------   ----------
        Net cash used in
        financing activities            (1,871,691)  (2,774,077)  (1,919,961)  
                                        ----------   ----------   ----------
        Net increase (decrease) in cash  2,422,004    1,109,250     (634,183)

Cash and cash equivalents at
 beginning of year                       1,487,661      378,411    1,012,594
                                        ----------   ----------   ----------
Cash and cash equivalents at
 end of year                           $ 3,909,665  $ 1,487,661  $   378,411
                                        ==========   ==========   ==========

Interest paid                          $   163,487  $   270,069  $   618,666
                                        ==========   ==========   ==========

See accompanying notes to financial statements.
<PAGE>  16 

                         USA REAL ESTATE INVESTMENT TRUST
                           Notes to Financial Statements


(1)    ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General:  USA Real Estate Investment Trust (the "Trust") was organized under
the laws of the State of California pursuant to a Declaration of Trust dated
October 7, 1986.  The Trust commenced operations on October 19, 1987, upon the
sale of the minimum offering amount of shares of beneficial interest. 
Effective August 31, 1994, the Trust terminated its agreements with its former
advisor and its former property manager and became a self-administered real
estate investment trust.  At the Trust's 1994 Annual Meeting of Shareholders
held on December 29, 1994, the Trust's shareholders approved an amendment to
the Trust's Declaration of Trust which changed the name of the Trust from
Commonwealth Equity Trust USA to its current name.

Cash Equivalents:  For purposes of the statement of cash flows, all
certificates of deposit with original maturities of ninety days or less are
considered cash equivalents.

Rental Properties:  Rental properties are carried at cost, net of accumulated
depreciation and less an allowance for possible valuation loss.  An allowance
for possible investment losses is recognized when the carrying value of
individual properties exceeds their appraised value or estimated net
realizable value.  A gain or loss will be recorded to the extent that the
amounts ultimately realized from property sales differ from those currently
estimated.

The cost of buildings and improvements is depreciated on a straight-line basis
over estimated useful lives of 40 years. 

Distributions in Excess of Net Income:  The Trust has a general policy of
distributing cash to its shareholders in an amount that approximates taxable
income plus noncash charges such as depreciation and amortization.  As a
result, distributions to shareholders exceed cumulative net income.

Income Taxes:  The Trust has elected to be taxed as a real estate investment
trust.  Accordingly, the Trust does not pay income tax on income because
income distributed to shareholders is at least equal to 95 percent of its
taxable income.

Net Income (Loss) Per Share:  The net income (loss) per share is computed
based on the weighted-average number of shares of 4,068,623, 4,153,717, and
4,177,723 during 1996, 1995 and 1994, respectively.

Concentration of Credit Risk:  The Trust operates in one industry segment. 
The Trust's properties and the collateral for its notes receivable are
all located in California.

Use of Estimates:  The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets, liabilities,
revenues and expenses and the disclosure of contingent assets and liabilities.
Actual results could differ from those estimates.



<PAGE>  17

(2)     TRANSACTIONS WITH FORMERLY AFFILIATED PARTIES

B&B Property Investment, Development and Management Company, Inc. ("B&B")
served as advisor to the Trust, and B&B Property Investments, Inc., a wholly
owned subsidiary of B&B, served as property manager for the Trust from
inception through August 30, 1994.  Effective August 31, 1994, the Trust
terminated its agreements with B&B and B&B Property Investments, Inc.  In
June, 1995, the Trust settled all claims and cross claims between the Trust
and B&B and its related parties by the payment to the principal of B&B,
Jeffrey Berger, of $250,000.

Compensation and reimbursement to B&B and B&B Property Investments, Inc. was
$153,042 in 1994, of which $129,587 was for property management fees and
$23,455 was for leasing commissions.


(3)     ALLOWANCE FOR VALUATION LOSSES

The Trust recorded allowances for valuation losses on rental properties of
$124,000 and $839,000 in 1995 and 1994, respectively.  The Trust charged
$777,000 and $338,000 against the valuation allowance in connection with the
sale of properties in 1996 and 1995 and $600,000 in connection with the
disposition of a note receivable in 1994.


(4)     NOTES RECEIVABLE

Notes receivable consist of one note as of December 31, 1996 and two notes
as of December 31, 1995, all collateralized by properties in California.  As
of December 31, 1996, the $726,000 note bears interest at 8 percent per annum
and is payable in monthly installments of interest only until October 8, 2000,
when the entire note is due.  The aggregate fair value of the notes receivable
approximates the carrying value as of December 31, 1996 and December 31, 1995.


(5)     LONG-TERM NOTES PAYABLE

As of December 31, 1996 and 1995, the Trust had a long-term note payable
collateralized by a property in California.  The amount of the note was 
$2,047,333 at December 31, 1996, and $2,098,919 at December 31, 1995.  As of
December 31, 1996, the long-term note payable bears interest at 7 5/8 percent.
Scheduled principal payments over the next three years are as follows:
$55,374, $59,780 and $1,932,179, respectively.  The fair value of the note
approximates the carrying value as of December 31, 1996 and 1995.  Rates
currently available to the Trust for debt with similar terms and maturity were
used to estimate the fair value of the note.


(6)     DISTRIBUTIONS

Cash distributions per share of beneficial interest for Federal income tax
purposes for the past three years were:  1 percent of the distributions paid
in 1996 were capital gains, 13 percent were ordinary income and 86 percent
were return of capital; 6 percent of the distributions paid in 1995 were
capital gains, 37 percent were ordinary income and 57 percent were return
of capital; 100 percent of the distributions paid in 1994 were a return of
capital.

<PAGE 18>

(7)     RENT UNDER OPERATING LEASES

Noncancelable operating leases provide for minimum rent during each of the
next five years of $1,866,857, $1,305,676, $1,128,952, $855,224, and
$748,187, respectively, and in aggregate $1,519,828 thereafter.  The above
assumes that all leases which expire are not renewed, therefore neither
renewal rent nor rent from replacement tenants is included.



















































<PAGE>  19                    PART III.


ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

     None.


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
GENERAL

     The Trust has no employees.  It is administered by its Trustees
and by its Chairman, and by independent contractors who work under the
supervision thereof.


THE TRUSTEES

     The trustees of the Trust are as follows:

                                         Trustee
               Name              Age      Since                Office
               ----              ---     -------               ------

        Gregory E. Crissman       45       1986      Trustee and Chairman and
                                                      Chief Financial Officer
        Benjamin A. Diaz          63       1988        Trustee and Secretary
        William M. Gallagher      77       1992                Trustee
        Joyce A. Marks            62       1986                Trustee


     The following is a brief description of the background and business
experience of each Trustee.

     GREGORY E. CRISSMAN.  Mr. Crissman is the Chairman and Chief Financial
Officer of the Trust.  He has over 20 years of experience in real estate,
accounting, auditing, and taxation.  He also served as Chairman of the Board
of California Real Estate Investment Trust, a New York Stock Exchange listed
real estate investment trust, and was its Chief Financial Officer from 1989
until 1993.  Mr. Crissman was an Executive Vice President of B&B Property
Investment, Development and Management Company, Inc. ("B&B"), from 1983 until
1990 and from 1992 until 1993.  In addition, Mr. Crissman was a director of
B&B and was President of B&B from 1990 until 1992.  From 1976 to 1979 Mr.
Crissman worked at Bowman & Company, an accounting firm in Stockton,
California.  In 1976 Mr. Crissman received his BS degree with honors from the
California State University at Sacramento and is a Certified Public
Accountant.  Mr. Crissman is also a member of the American Institute of
Certified Public Accountants.

     BENJAMIN A. DIAZ.  The Honorable Benjamin A. Diaz is a retired judge of
the Superior Court of California.  He served as a judge of the Sacramento
County Superior Court from April, 1976, to May, 1986.  He has been engaged in
private practice in Sacramento, California, as a partner in the law firm of
Grossfield and Diaz from June, 1986, to September, 1987, and in the law firm
of Diaz & Gebers, specializing in real estate transactions, general practice,
litigation, business law, and personal injury matters from October, 1987 to
December, 1991.  From January, 1992, to the present, Judge Diaz has been
engaged in pro tem judging, arbitration, mediation and consulting services. 
Mr. Diaz received his Juris Doctor degree from the University of Pacific,
<PAGE> 20
McGeorge School of Law, Sacramento, California, in 1966.  Prior to serving on
the bench, Mr. Diaz had extensive tax and auditing experience with the State
of California Franchise Tax Board, dealing with large corporate unitary tax
audits, and with the California State Board of Equalization.

     WILLIAM M. GALLAGHER.  The Honorable William M. Gallagher is a retired
judge of the Superior Court of California.  He served as a judge of the
Sacramento County Superior Court from 1964 until 1980, and of the Sacramento
Municipal Court from 1961 to 1964.  Mr. Gallagher received his Juris Doctor
degree from Hastings College of the Law in San Francisco.  After 1980, Mr.
Gallagher was engaged in private practice as a partner in the law firm of
Hefner, Stark & Marois in Sacramento, California, specializing in Chapter 11
bankruptcy, lender liability litigation and real estate related transactions.

     JOYCE A. MARKS.  Ms. Marks has been employed by the Bank of America for
more than forty years.  During her career with Bank of America, Ms. Marks had
extensive experience with land development and subdivision financing,
including construction and take-out financing for commercial properties.  Ms.
Marks was for many years active in the Building Industry Association of
Sacramento and from 1976 to 1983 served as a board member of, and in 1983 as
President of, its Associate Counsel.  Ms. Marks received Bank of America's
Award for Excellence in 1985.  Her most recent positions include Senior Sales
Training Specialist, Marketing Officer, Branch Manager and Credit
Administrator at one of Bank of America's Regional Headquarters.

     Trustees of the Trust are elected annually by the Trust's shareholders
and hold office until their successors are duly elected and qualified.  No
family relationship exists between any Trustee and any other Trustee.  No
arrangement exists or existed between any Trustee and any other person or
entity pursuant to which the Trustee was selected as a Trustee or nominee.



ITEM 11.  EXECUTIVE COMPENSATION


COMPENSATION OF OFFICERS

     During 1995, the Trust was managed by its Trustees as a self-administered
real estate investment trust.  The Trust has the following officers: 
Chairman, Chief Financial Officer, and Secretary.  No officer except Gregory
E. Crissman is compensated by the Trust in his capacity as a officer.  During
1995, none of the Trust's officers received compensation in excess of $24,000.



                      Summary Compensation Table

                                                       Total       Long-Term
          Name and                      Officer        Annual      and other
     Principal Position         Year  Compensation  Compensation  Compensation
-----------------------------   ----  ------------  ------------  ------------

Gregory E. Crissman, Chairman   1996    $48,000      $67,063 (1)     None



(1)  Includes fees of $1,250 or $313 for each meeting of the Trustees
     attended.
<PAGE>  21
COMPENSATON OF TRUSTEES

     During 1996 and currently, the Trustees receive $1,250 or $313 for each
Trustees' meeting attended plus direct expenses incurred in connection with
such attendance.  There are currently no plans to alter this compensation
schedule.  No Trustee received compensation under any other arrangement during
1996.  The Trust does not maintain a nominating or compensation committee or
any other standing committee.  However, the Trustees have authority to
establish such committees and to compensate committee members as appropriate
for their service.  During 1996, the Trust had twelve regular and four special
meetings of its Trustees.  No Trustee attended less than 75 percent of the
meetings held by the Trustees.




ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth as of February 28, 1997, the number of
Shares owned by each person who is known by the Trust to own beneficially more
than 5 percent of its outstanding Shares and the Trustees and officers of the
Trust as a group.  No Trustee beneficially owns any shares of the Trust except
as set forth below.  The Trust has been advised that all of such Shares are
beneficially owned and the sole investment and voting power is held by the
persons named:


                                               Amount and Nature of   Percent
  Name and Address of Beneficial Owner         Beneficial Ownership   of Class
  ------------------------------------         --------------------   --------

Gregory E. Crissman, Chairman and Trustee             1,400           .00035
2561 Fulton Square Lane, #55
Sacramento, CA  95821


All Trustees and officers as a group                  1,400           .00035




     During 1996, based upon a review of the Forms 3, 4 and 5 on file with the
Trust, it does not appear that any officer or trustee failed to file such a
required report on a timely basis.

     No person is known to the Trust to hold 10 percent or more of the Trust's
outstanding Shares.




ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          None.





<PAGE> 22
                                  PART IV.


ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K


(a)(1)    FINANCIAL STATEMENTS                                   Page
                                                                 ----

          Independent Auditors' Report ......................      11

          Balance Sheets:  December 31, 1996 and 1995 .......      12

          Statements of Income (Operations):  Years Ended
            December 31, 1996, 1995 and 1994 ................      13

          Statements of Changes in Shareholders' Equity:  
            Years Ended December 31, 1996, 1995 and 1994 ....      14

          Statements of Cash Flows:  Years Ended
            December 31, 1996, 1995 and 1994 ................      15

          Notes to Financial Statements .....................   16-18


(a)(2)    FINANCIAL STATEMENT SCHEDULES

          Schedule III - Real Estate and Accumulated
            Depreciation ....................................   23-26


          The statements and schedules referred to above should be read in
conjunction with the financial statements and notes thereto included in Part
II of this Form 10-K.  Schedules not included in this item have been omitted
because they are not applicable or because the required information is
presented in the financial statements or notes thereto.


(a)(3)    LIST OF EXHIBITS

          3.1(1)     Form of Amended and Restated Declaration of Trust of
                     Commonwealth Equity Trust USA

          3.2(1)     Form of Bylaws of the Board of Trustees

          3.4(2)     Amendments to Sections 2.3.1, 2.3.7, 2.3.8, 2.4.2 and
                     2.4.3 of the Amended and Restated Declaration of Trust
                     of Commonwealth Equity Trust USA (adopted on August 29,
                     1988 at the 1988 Annual Meeting)

          4.1(1)     Article VIII of Exhibit 3.1

          4.2(1)     Form of Share Certificate 



(b)       REPORTS ON FORM 8-K

          None.
<PAGE>  23
                        USA REAL ESTATE INVESTMENT TRUST
             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
                               December 31, 1996


Page 1, Part A
 __________________    ____________   ___________________________
     Column A            Column B                Column C
 __________________    ____________   ___________________________

                                      ---Initital Cost to Trust--

                                                      Buildings
                                                     Improvements,
                                                      & Personal
     Decription        Encumbrances       Land         Property
 __________________    ____________   ____________   ____________

RETAIL:
170-174 West Shaw
 Avenue, Clovis,
 California            $ 2,047,333   $  1,690,000   $  2,542,532
7390 Greenback Lane,
 Citrus Heights,
 California                   -           533,000        179,333
3090 Sunrise Blvd., 
 Rancho Cordova,
 California                   -           450,000           -
19401 Parthenia
 Street, Northridge,
 California                   -         5,770,000      3,100,000
1056 Harbor Blvd.,
 West Sacramento, 
 California                   -           716,500           -

                      ____________   ____________   ____________   
Total Retail             2,047,333      9,159,500      5,821,865
                      ____________   ____________   ____________

INDUSTRIAL:
4350 Pell Drive,
 Sacramento,
 California                   -         1,500,000      2,213,325

                      ____________   ____________   ____________   
Total Industrial              -         1,500,000      2,213,325
                      ____________   ____________   ____________   

OFFICE:
One Scripps Drive,
 Sacramento,
 California                   -           650,000      2,274,888

                      ____________   ____________   ____________   
Total Office                  -           650,000      2,274,888
                      ____________   ____________   ____________   
                      $  2,047,333   $ 11,309,500   $ 10,310,078
                      ============   ============   ============  

<PAGE>  24
                        USA REAL ESTATE INVESTMENT TRUST
             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
                               December 31, 1996


Page 1, Part B
__________________    _____________________________
     Column A                   Column D        
__________________    _____________________________


                          Cost Capitalization
                             Subsequent to
                      ---------Acquisition---------

   Description        Improvements   Carrying Cost
__________________    _____________   _____________   

RETAIL:
170-174 West Shaw
 Avenue, Clovis,
 California           $       7,300  $         -
7390 Greenback Lane,
 Citrus Heights, 
 California                   3,457            -
3090 Sunrise Blvd.,
 Rancho Cordova,
 California                    -               -
19401 Parthenia
 Street, Northridge,
 California               2,412,355            -
1056 Harbor Blvd.,
 West Sacramento, 
 California                   6,087            -

                      _____________   _____________
Total Retail              2,429,199            -
                      _____________   _____________    

INDUSTRIAL:
4350 Pell Drive,
 Sacramento,
 California                  96,657            -

                      _____________   _____________
Total Industrial             96,657            -
                      _____________   _____________

OFFICE:
One Scripps Drive,
 Sacramento,
 California               1,125,631            -

                      _____________   _____________
Total Office              1,125,631            -
                      _____________   _____________
                      $   3,651,487   $        -
                      =============   =============

<PAGE>  25
                        USA REAL ESTATE INVESTMENT TRUST
             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
                               December 31, 1996


Page 1, Part C
__________________   _________________________________________________________
     Column A                                 Column E
__________________   _________________________________________________________
                                      
                                        Gross Amount at Which
                     ----------------Carried at Close of Period---------------

                                                    Valuation
                                    Buildings &       Write
   Description           Land       Improvements       Down          Total    
__________________   ____________   ____________   ____________   ____________

RETAIL:
170-174 West Shaw
 Avenue, Clovis,
 California          $  1,690,000   $  2,549,832   $    590,000   $  3,649,832
7390 Greenback Lane,
 Citrus Heights,
 California               533,000        182,790        102,000        613,790
3090 Sunrise Blvd.,
 Rancho Cordova,                                       
 California               450,000           -              -           450,000
19401 Parthenia
 Street, Northridge,
 California             5,770,000      5,512,355      3,483,000      7,799,355
1056 Harbor Blvd.,
 West Sacramento,
 California               716,500          6,087        115,000        607,587

                     ____________   ____________   ____________   ____________
Total Retail            9,159,500      8,251,064      4,290,000     13,120,564
                     ____________   ____________   ____________   ____________

INDUSTRIAL:
4350 Pell Drive,
 Sacramento, 
 California             1,500,000      2,309,982           -         3,809,982

                     ____________   ____________   ____________   ____________
Total Industrial        1,500,000      2,309,982           -         3,809,982
                     ____________   ____________   ____________   ____________

OFFICE: 
One Scripps Drive,
 Sacramento,
 California               650,000      3,400,519        770,000      3,280,519

                     ____________   ____________   ____________   ____________
Total Office              650,000      3,400,519        770,000      3,280,519
                     ____________   ____________   ____________   ____________
                     $ 11,309,500   $ 13,961,565   $  5,060,000   $ 20,211,065
                     ============   ============   ============   ============

<PAGE>  26 
                       USA REAL ESTTE INVESTMENT TRUST
             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
                               December 31, 1996


Page 1, Part D
__________________   ____________   ____________   ____________   ____________
     Column A          Column F       Column G       Column H       Column I
__________________   ____________   ____________   ____________   ____________

                                                                     Life
                                                                   on Which
                                                                 Depreciation
                                                                  in Latest
                     Accumulated      Date of          Date      Statement is
   Description       Depreciation   Construction     Acquired       Computed
__________________   ____________   ____________   ____________   ____________

RETAIL:
170-174 West Shaw
 Avenue, Clovis,
 California          $    417,744       1985          05/90        40 years
7390 Greenback Lane,
 Citrus Heights,
 California                28,565       1980          08/90        40 years
3090 Sunrise Blvd.,
 Rancho Cordova,
 California                  -           N/A          10/90            N/A
19401 Parthenia
 Street, Northridge,
 California             1,275,142       1973          11/90        40 years    
1056 Harbor Blvd.,
 West Sacramento,
 California                    63        N/A          12/92            N/A

                     ____________
Total Retail            1,721,514
                     ____________

INDUSTRIAL:
4350 Pell Drive,
 Sacramento,
 California               261,181       1975          09/92        40 years

                     ____________
Total Industrial          261,181
                     ____________

OFFICE:
One Scripps Drive,
 Sacramento,
 California               288,955                                  40 years

                     ____________
Total Office              288,955
                     ____________
                     $  2,271,650
                     ============

<PAGE>  27             
                    USA REAL ESTATE INVESTMENT TRUST
                                 Signatures



     Pursuant to the requirements of Section 13 of 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.




     Dated:    March 25, 1997           USA Real Estate Investment Trust
           --------------------     



                                   
                                               Gregory E. Crissman
                                    By:  -------------------------------
                                              Gregory E. Crissman as 
                                             Chief Financial Offficer



     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:




     Dated:    March 25, 1997                  Gregory E. Crissman
           -------------------      By:  -------------------------------
                                               Gregory E. Crissman
                                                     Chairman



     Dated:    March 25, 1997                    Benjamin A. Diaz
           -------------------      By:  -------------------------------
                                                 Benjamin A. Diaz
                                                      Trustee 




     Dated:    March 25, 1997                  William M. Gallagher
           -------------------      By:  -------------------------------
                                               William M. Gallagher
                                                      Trustee




     Dated:    March 25, 1997                     Joyce A. Marks
           -------------------      By:  -------------------------------
                                                  Joyce A. Marks
                                                      Trustee
<PAGE>  28
                              EXHIBIT INDEX

Exhibit No.                    Description
-----------                    -----------

    27                   Financial Data Schedule