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

                                 FORM 10-KSB


/X/  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
     1934
                                 For the fiscal year ended:  December 31, 2005
                                                            __________________
                                      OR

/ /  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934
                                 For the transition period from: _____to______

                                 Commission file number:        0-16508
                                                         _____________________

                      USA REAL ESTATE INVESTMENT TRUST
______________________________________________________________________________
               (Name of small business issuer in its charter)

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

 One Scripps Drive, Suite 106, Sacramento, California          95825-7684
_____________________________________________________    _____________________
      (Address of principal executive offices)                 (Zip Code)

Issuer's telephone number (916)761-4992
                          ______________________________________

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

        Title of each class           Name of each exchange on which registered

                None
__________________________________    ________________________________________

__________________________________    ________________________________________

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

                         Shares of Beneficial Interests
______________________________________________________________________________
                                 (Title of class)

______________________________________________________________________________
                                 (Title of class)

Check whether the issuer is not required to file reports pursuant to Section
13 or 15(d) of the Exchange Act.
                                                                           / /



<PAGE>  2
     Check whether the issuer (1)filed all reports required to be filed by
Section 13 or 15(d) of the 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.
                                                                  /X/Yes / /No

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

     Indicate by check mark whether the Registrant is a shell company (as
defined under Rule 12b-2 of the Securities Exchange Act of 1934).
                                                                  / /Yes /X/No

     State issuer's revenues for its most recent fiscal year.  The Trust's
revenues for the year ended December 31, 2005 were $305,020.

     State the aggregate market value of the voting common equity held by
nonaffiliates.  The aggregate market value of the voting shares of beneficial
interest (the "shares") held by nonaffiliates of the registrant outstanding at
December 31, 2005, was $11,156,764.  This calculation is based on the book
value because there is no active public trading market for the shares.


     State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.  The number of shares of
beneficial interest outstanding at February 28, 2006 was 23,764.


     Documents Incorporated by Reference:  None


     Transitional Small Business Disclosure Format (Check one):   / /Yes /X/No























<PAGE>  3


                         USA REAL ESTATE INVESTMENT TRUST
                                  Table of Contents


                                                                      Page
    PART I.

              ITEM 1.   Business ...................................    4
              ITEM 2.   Description of Properties ..................    7
              ITEM 3.   Legal Proceedings ..........................    7
              ITEM 4.   Submission of Matters to a Vote
                          of Security Holders ......................    7

    PART II.

              ITEM 5.   Market for the Common Equity and
                          Related Shareholder Matters ..............    8
              ITEM 6.   Management's Discussion and Analysis .......    8
              ITEM 7.   Financial Statements .......................    10
              ITEM 8.   Changes in and Disagreements with
                          Accountants on Accounting and
                          Financial Disclosure .....................    18
              ITEM 8A.  Controls and Procedures ....................    18
              ITEM 8B.  Other Information ..........................    18

    PART III.

              ITEM 9.   Directors, Executive Officers, Promoters
                          and Control Persons; Compliance with
                          Section 16(a) of the Exchange Act ........    18
              ITEM 10.  Executive Compensation .....................    20
              ITEM 11.  Security Ownership of Certain
                          Beneficial Owners and Management
                          and Related Shareholder Matters ..........    20
              ITEM 12.  Certain Relationships and
                          Related Transactions .....................    21
              ITEM 13.  Exhibits ...................................    21
              ITEM 14.  Principal Accountant Fees and Services .....    22



















<PAGE>  4                         PART I.

                        Forward-Looking Statements

     This Annual Report on Form 10-KSB, together with other statements and
information publicly disseminated by USA Real Estate Investment Trust (the
"Trust"), contains certain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934.  Such statements are based on assumptions and
expectations which may not be realized and are inherently subject to risks,
uncertainties and other factors, many of which cannot be predicted with
accuracy and some of which might not even be anticipated.  Future events
and actual results, performance, transactions or achievements, financial
and otherwise, may differ materially from the results, performance,
transactions or achievements expressed or implied by the forward-looking
statements.  Risks, uncertainties and other factors that might cause such
differences, some of which could be material, include, but are not limited
to: changes in the global political environment; national and local economic,
business and real estate and other market conditions; the competitive
environment in which the Trust operates; property management risks; financing
risks, such as the inability to obtain debt or equity financing on favorable
terms; possible future downgrades in the Trust's credit rating; the level of
volatility of interest rates; financial stability of tenants, including the
ability of tenants to pay rent, the decision of tenants to close stores and
the effect of bankruptcy laws; the rate of revenue increases versus expense
increases; the ability to maintain the Trust's status as a real estate
investment trust("REIT")for federal income tax purposes; governmental
approvals, actions and initiatives; environmental/safety requirements and
costs; risks of real estate acquisition and development, including the failure
of acquisitions to close and pending developments and redevelopments to be
completed on time and within budget; risks of disposition strategies,
including the failure to complete sales on a timely basis and the failure to
reinvest sale proceeds in a manner that generates favorable returns; risks of
joint venture activities; as well as other risks identified in this Annual
Report on Form 10-KSB and, from time to time, in the other reports the Trust
files with the Securities and Exchange Commission or in other documents that
the Trust publicly disseminates.  The Trust undertakes no obligation to
publicly update or revise these forward-looking statements, whether as a
result of new information, future events or otherwise.



ITEM 1.  BUSINESS.

GENERAL

     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, operating and financing real estate 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.  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.

<PAGE>  5

     The Trust has operated and intends to continue to operate in a manner
intended to qualify as a 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 90 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.

     The office of the Trust is located at One Scripps Drive, Suite 106, in
Sacramento, California.


INVESTMENT OBJECTIVES

     The Trust seeks to invest in real estate investments.

     At December 31, 2005, the Trust owned and managed one real property
and held three promissory notes collateralized by real property in order to
produce income. 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 depends principally upon the
following factors:

     1.  The number of real estate investments available for acquisition
which show current income or 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



<PAGE>  6
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.

     The Trust is involved in only one industry segment:  acquiring,
operating, holding for investment and disposing of real estate investments.
Revenues, net income and assets from this industry segment are included in
the Trust's financial statements which appear at Item 7 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
<PAGE>  7
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
predict what impact, if any, such new legislation may have on entities such
as a real estate investment trust.


ITEM 2.  DESCRIPTION OF PROPERTIES.

     At December 31, 2005, the Trust owned one real property.  The  real
property, 19401 Parthenia Street in Northridge, California ("Parthenia"),
is 60 percent occupied under month-to-month tenancies at rates the Trust
considers appropriate in the circumstances.  Parthenia is subject to a
contract of sale which the Trust anticipates will close in 2006 subject to
certain contingencies.  In order to lease the vacant portion of Parthenia at
normal competitive rates, substantial and costly renovation would be required.
Because Parthenia is about to be sold the Trust decided not to undertake such
renovation at the present time.

     Title insurance and liability insurance in amounts deemed appropriate by
the Trust have been obtained for the property referred to above.  The Trust
does not carry property damage, flood or earthquake insurance on said
property.

     For additional information concerning the aforesaid investments, see
Notes 1,2,3 and 4 of the Notes to Financial Statements.


ITEM 3.  LEGAL PROCEEDINGS.

     None.


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

     None.












<PAGE>  8                      PART II


ITEM 5.  MARKET FOR THE COMMON EQUITY AND RELATED SHAREHOLDER 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.  Since 1995 the Trust has repurchased 10,904 shares from 10,076
shareholders at a cost of $5,211,829.  Repurchased shares revert to authorized
but unissued shares and result in closing shareholders' accounts.  As of
December 31, 2005, the Trust had 23,909 shares outstanding to 2,691
shareholders of record.

     No active public trading market presently exists for the shares of the
Trust.  The Trust does not anticipate that an active public trading market
will exist within the foreseeable future.  Occasional trades in the shares of
the Trust take place without the participation of the Trust on the Over-the-
Counter Bulletin Board (www.otcbb.com).


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS.

CRITICAL ACCOUNTING ESTIMATES

     The Trust carries its rental properties at cost less accumulated
depreciation unless the asset is determined to be impaired.  The Trust
records impairment losses on long-lived assets used in operations when
events and circumstances indicate that the asset might be impaired and
the expected undiscounted cash flows estimated to be generated by those
assets are less than the related carrying amounts.  If a rental property
is determined to be impaired, the impairment would be measured based
upon the excess of the asset's carrying value over the fair value.

     The Trust reports each individual property as a component for
determining discontinued operations.  The operating results of properties
that are sold or classified as held for sale in the current period are
reported as income from discontinued operations and their respective
results of operations from prior periods are reclassified as discontinued
operations.  Properties that are classified as held for sale are shown on
the balance sheet as real estate held for sale and no further depreciation
is recognized on these properties.  The operating results of real estate
sold or held for sale and the gains or losses from real estate sold are
included in discontinued operations on the statements of income.

RESULTS OF OPERATIONS

      Interest revenues increased in 2005 compared to 2004 primarily because
the Trust used the proceeds from the sale of 4350 Pell Drive in Sacramento,
California to invest in promissory notes and interest-bearing bank accounts.

     The operating results of 4350 Pell Drive in Sacramento, California
that was sold during 2005 and the operating results of 19401 Parthenia
Street in Northridge, California that was classified as held for sale
during 2005 were reported as discontinued operations in 2005 and their
respective 2004 operations were reclassified to discontinued operations.
These classifications and reclassifications had no impact on net income
or net income per share for 2005 or 2004.  For additional information about
discontinued operations, see Note 4 of the Notes to Financial Statements.

<PAGE>  9

     In 2005 the Trust sold 4350 Pell Drive in Sacramento, California for
$5,888,902.  This sale resulted in a $1,699,872 gain on sale of real estate
that was included in 2005 discontinued operations.  In 2004 the Trust sold
50,000 square feet of land at 19401 Parthenia Street in Northridge, California
for $1,395,629.  This sale resulted in a $1,252,984 gain on sale of real
estate that was included in 2004 discontinued operations.

LIQUIDITY AND CAPITAL RESOURCES

     The Trust has entered into a contract for the sale of 19401 Parthenia
Street in Northridge, California.  This sale is expected to close in 2006.
If the sale does not close by May 31, 2006 the Trust will consider
reducing the next quarterly dividend.

     At December 31, 2005, the Trust held three promissory notes totaling
$4,175,000.  A $2,850,000 promissory note that was payable on December 31,
2005 was not paid on that date and the maturity date has been extended to
May 31, 2006.  A $935,000 promissory note that was payable on January 12,
2006, was paid on March 15, 2006.  A $390,000 promissory note that was due
on January 12, 2006, was not paid on that date and has been extended to
April 30, 2006.

     The Trust's capital requirements in 2006 will depend upon what real
estate investments the Trust makes, the dividends paid and the number of
shares that might be repurchased.  The Trust expects it will have sufficient
liquidity and cash resources to meet its capital requirements in 2006.

IMPACT OF INFLATION

     The Trust's operations have not been materially affected by inflation.
The rate of inflation has been relatively low since the Trust commenced
operations in October 1987.

NEW ACCOUNTING PRONOUNCEMENTS

     On June 7, 2005, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standard (SFAS) No. 154, Accounting Changes
and Error Corrections - a replacement of Accounting Principles Board (APB)
Opinion No. 20, Accounting Changes, and SFAS No. 3 Reporting Accounting
Changes in Interim Financial Statements.  Under the provisions of SFAS No.
154, voluntary changes in accounting principles are applied retrospectively
to prior periods' financial statements unless it would be impractical to do
so.  SFAS No. 154 supercedes APB Opinion No. 20, which required that most
voluntary changes in accounting principles be recognized by including in the
current period's net income the cummulative effect of the change.  SFAS No.
154 also makes a distinction between "retrospective application" of a change
in accounting principle and the "restatement" of financial statements to
reflect the correction of an error.  The provisions of SFAS No. 154 are
effective for accounting changes made in fiscal years beginning after
December 15, 2005.  The Trust does not expect the adoption of this standard
to have a material impact on its financial position or results of operations.







<PAGE>  10

ITEM 7.  FINANCIAL STATEMENTS

                                                                         Page

         Report of Independent Registered Public Accounting Firm ...       11

         Balance Sheet
           As of December 31, 2005 .................................       12

         Statements of Income
           Years Ended December 31, 2005 and 2004 (Restated) .......       13

         Statements of Changes in Shareholders' Equity
           Years Ended December 31, 2005 and 2004 ..................       14

         Statements of Cash Flows
           Years Ended December 31, 2005 and 2004 (Restated) .......       15

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







































<PAGE>  11

           REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To the Trustees of
USA Real Estate Investment Trust




We have audited the accompanying balance sheet of USA Real Estate Investment
Trust as of December 31, 2005 and the related statements of income, changes
in shareholders' equity, and cash flows for each of the two years in the
periods ended December 31, 2005 and 2004.  These financial statements are the
responsibility of the Trust's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with the auditing standards of the
Public Company Accounting Oversight Board (United States).   Those standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement.
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 evaluating 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, 2005 and the results of its operations and its cash
flows for each of the two years in the periods ended December 31, 2005 and
2004 in conformity with U.S. generally accepted accounting principles.

As discussed in Note 4 to the financial statements, USA Real Estate Investment
Trust has restated its financial statements for the year ended December 31,
2004 to correct its reporting for discontinued operations.

Perry-Smith LLP





Sacramento, California
March 2, 2006











<PAGE>  12

                        USA REAL ESTATE INVESTMENT TRUST
                                 Balance Sheet


                                                          December 31,
                                                             2005
                                                          -----------
                                    ASSETS

Real estate held for sale                                $  5,884,176
Notes receivable                                            4,175,000
                                                           ----------
                                                           10,059,176



Cash                                                        1,000,257
Other assets                                                  222,331
                                                          -----------
    Total assets                                         $ 11,281,764
                                                          ===========



                      LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
  Deferred income                                        $    125,000
                                                          -----------
Shareholders' Equity:
  Shares of beneficial interest, par value
    $1 per share; authorized 62,500 shares;
    23,909 shares outstanding                                  23,909
  Additional paid-in capital                               29,477,663
  Distributions in excess of net income                   (18,344,808)
                                                          -----------
    Total shareholders' equity                             11,156,764
                                                          -----------

    Total liabilities and shareholders' equity           $ 11,281,764
                                                          ===========















See notes to financial statements.

<PAGE>  13

                           USA REAL ESTATE INVESTMENT TRUST
                                 Statements of Income
                       Years Ended December 31, 2005 and 2004




                                                         2005         2004
                                                     -----------  -----------
                                                                    Restated
                                                     -----------  -----------

Revenues:
  Interest                                           $   305,020  $    34,554
                                                     -----------  -----------

Expenses:
  Depreciation and amortization                      $     1,853  $       984
  General and administrative                             174,022      185,340
                                                     -----------  -----------

                                                         175,875      186,324
                                                     -----------  -----------

Income(loss)from continuing operations
  before discontinued operations                         129,145     (151,770)


Discontinued operations                                1,543,071    1,429,144
                                                     -----------  -----------


Net income                                           $ 1,672,216  $ 1,277,374
                                                     ===========  ===========


Earnings(loss)per share:
  Income(loss)from continuing operations             $      5.28   $    (6.04)
  Discontinued operations                                  63.12        56.89
                                                     -----------  -----------
  Net income per share                               $     68.40   $    50.85
                                                     ===========  ===========

Dividends per share                                  $     63.36  $     63.36
                                                     ===========  ===========




See notes to financial statements.








<PAGE>  14


                       USA REAL ESTATE INVESTMENT TRUST
                Statements of  Changes in Shareholders' Equity
                    Years Ended December 31, 2005 and 2004



                                                     Distribu-      Total
                     Shares of        Additional     tions in       Share-
                Beneficial Interest     Paid-in      Excess of      holders'
                 Number     Amount      Capital      Net Income     Equity
               ---------   ---------  -----------  -------------  -----------

January 1,
2004              25,684   $  25,684  $30,274,345  $(18,154,372) $12,145,657

Repurchases
  of shares         (844)       (844)    (378,988)                  (379,832)

Net income                                            1,277,374    1,277,374

Distributions                                        (1,593,607)  (1,593,607)
               ---------   ---------   ----------   -----------   ----------
December 31,
2004              24,840  $   24,840  $29,895,357  $(18,470,605) $11,449,592

Repurchases
  of shares         (931)       (931)    (417,694)                  (418,625)

Net income                                            1,672,216    1,672,216

Distributions                                        (1,546,419)  (1,546,419)
               ---------   ---------   ----------   -----------   ----------
December 31,
2005              23,909  $   23,909  $29,477,663  $ 18,344,808  $11,156,764
               =========   =========   ==========   ===========   ==========


















See notes to financial statements.



<PAGE>  15              USA REAL ESTATE INVESTMENT TRUST
                            Statements of Cash Flows
              For the Years Ended December 31, 2005 and 2004


                                                         2005        2004
                                                     ----------   ----------
                                                                   Restated
                                                     ----------   ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                          $ 1,672,216  $ 1,277,374
                                                     ----------   ----------
  Adjustments to reconcile net
  income to net cash provided
  by operating activities:
    Depreciation                                          1,853          984
    Discontinued operations                          (1,543,071)  (1,429,144)
  Changes in operating assets and liabilities:
    Decrease(increase)in other assets                    17,610     (230,375)
    Decrease in liabilities                             (14,155)     (52,130)
                                                     ----------   ----------
    Net cash provided by (used in)
      continuing operations                             134,453     (433,291)

    Operating cash(used in)provided by
      discontinued operations                          (156,801)     512,868
                                                     ----------   ----------
    Net cash(used in)provided by
      operating activities                              (22,348)      79,577

CASH FLOWS FROM INVESTING ACTIVITIES:
  Investment in notes receivable                     (3,785,000)    (390,000)
  Collections on notes receivable                             0       80,000
  Improvements to properties                                  0      (99,192)
  Proceeds from sale of properties                    5,888,902    1,395,629
  Deposits under sales agreement                        125,000            0
                                                     ----------   ----------
    Net cash provided by investing
      activities                                      2,228,902      986,437
                                                     ----------   ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Redemption of shares                                 (418,625)    (379,832)
  Dividends paid                                     (1,546,419)  (1,593,607)
                                                     ----------   ----------
    Net cash used in financing activities            (1,965,044)  (1,973,439)
                                                     ----------   ----------
    NET INCREASE(DECREASE)IN CASH                       241,510     (907,425)

CASH AT BEGINNING OF PERIOD                             758,747    1,666,172
                                                     ----------   ----------
CASH AT END OF PERIOD                               $ 1,000,257  $   758,747
                                                     ==========   ==========






See 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.
The Trust is a self-administered, self-managed, real estate investment trust.

    RECLASSIFICATION:  Certain amounts in the 2004 financial statements
have been reclassified to conform with the 2005 presentation.  All rent,
operating expenses, property taxes, property management fees, gain on sale of
properties and depreciation and amortization on rental properties on the
statement of income for the year ended December 31, 2004 have been
reclassified to discontinued operations.

    USE OF ESTIMATES:  The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of
America 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.

    RENTAL PROPERTIES:  The Trust carries its rental properties at cost less
accumulated depreciation unless the asset is determined to be impaired.  The
Trust records impairment losses on long-lived assets used in operations when
events and circumstances indicate that the assets might be impaired and the
expected undiscounted cash flows estimated to be generated by those assets
are less than the related carrying amounts.  If a rental property is
determined to be impaired, the impairment would be measured based upon the
excess of the asset's carrying value over the fair value.

     The Trust reports each individual property as a component for
determining discontinued operations.  The operating results of properties
that are sold or classified as held for sale in the current period are
reported as discontinued operations and their respective results of
operations from prior periods are reclassified as discontinued operations.
Properties that are classified as held for sale are shown on the balance
sheet as real estate held for sale and no further depreciation is recognized
on these properties.  The operating results of real estate sold or held for
sale and the gains or losses from real estate sold are included in
discontinued operations on the statements of income.

    Property improvements are capitalized while maintenance and repairs are
expensed as incurred.  Depreciation of buildings and capital improvements is
computed using the straight-line method over five to forty years.

    CONCENTRATION OF CREDIT RISK:  The Trust operates in one industry
segment.  The Trust's property and the collateral for its notes receivable
are all located in California.  The Trust maintains cash balances in excess
of Federal Deposit Insurance Corporation insurable limits.

    LEASING COSTS AND LOAN COSTS:  Costs incurred in obtaining leases are
amortized on the straight-line method over the terms of the related leases.
Costs incurred in obtaining loans are amortized on the straight-line method
(which approximates the effective-interest method) over the terms of the
related debt.

<PAGE>  17
    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.

    REVENUE RECOGNITION:  The Trust's leases are classified as operating
leases.  Minimum rents are recognized on a straight-line basis over the terms
of the related leases.  Property taxes, common area maintenance, and
insurance reimbursements are recognized on the accrual basis over the
periods in which the expenses occurred.

    Interest income is accrued on the outstanding principal amounts of the
promissory notes.

    Sales of real estate are recognized at closing only when sufficient
down payments have been obtained, possession and other attributes of
ownership have been transferred to the buyer and the Trust has no
significant continuing involvement.

    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 the greater
of 90 percent of its taxable income or 100 percent of its capital gains.

    NET INCOME PER SHARE:  Net income per share is computed based on the
weighted-average number of shares of 24,448 and 25,119 during 2005 and 2004,
respectively.

2.  NOTES RECEIVABLE

    At December 31, 2005, the Trust held three promissory notes totaling
$4,175,000.  All three promissory notes bear interest at 10 percent per annum
and are collateralized by properties in California. A $2,850,000 promissory
note that was payable on December 31, 2005 was not paid on that date and the
maturity date has been extended to May 31, 2006.  A $935,000 promissory note
that was payable on January 12, 2006, was paid on March 15, 2006.  A $390,000
promissory note that was due on January 12, 2006, was not paid on that date
and has been extended to April 30, 2006.

    The fair market value of the notes approximated their carrying value at
December 31, 2005 due to the short-term nature of the notes.

3.  DISTRIBUTIONS

    For federal income tax purposes:  27 percent of the distributions
paid in 2005 were nontaxable and 73 percent were capital gains, and 6
percent of the distributions paid in 2004 were ordinary income, 15 percent
were nontaxable, and 79 percent were capital gains.

4.  RESTATEMENT AND DISCONTINUED OPERATIONS

    The Trust restated its statement of income for the year ended December 31,
2004 to correct its reporting for the discontinued operations of 4350 Pell
Drive in Sacramento, California whose results of operations should have been
reclassified as discontinued operations in August 2004 when the Trust agreed
to sell said property under a no-contingency sales agreement.

    19401 Parthenia Street in Northridge, California was reclassified as
discontinued operations in May 2005 when the potential buyer obtained
<PAGE>  18
certain approvals, which the Trust believes will result in the property
being sold within twelve months.

    The operating results of 4350 Pell Drive in Sacramento, California that
was sold during 2005 and the operating results of 19401 Parthenia Street in
Northridge, California that was classified as held for sale during 2005 were
reported as discontinued operations in 2005 and their respective 2004
operations were reclassified as discontinued operations.  These
classifications and reclassifications had no impact on net income or net
income per share for 2005 or 2004.

    The following is a summary of the Trust's discontinued operations for
the years ended December 31:
                                                2005           2004
                                            ----------      ----------
                                                             Restated
                                            ----------      ----------
Rent                                        $  205,106      $1,067,239
Operating expenses                             102,749         291,825
Property taxes                                 139,370         209,746
Property management fees                        52,800          52,800
Depreciation and amortization                   66,988         336,708
Gain on sale of real estate                  1,699,872       1,252,984
                                            ----------      ----------
Discontinued operations                     $1,543,071      $1,429,144
                                            ==========      ==========

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
         AND FINANCIAL DISCLOSURE.

         None.

ITEM 8A.  CONTROLS AND PROCEDURES.

     The Trust's Chairman, Chief Executive Officer and Chief Financial
Officer, Gregory Crissman, conducted an evaluation of the effectiveness
of the Trust's disclosure controls and procedures.  Based on that
evaluation, he concluded that the Trust's disclosure controls and
procedures were effective as of December 31, 2005.  Additionally, there
have been no significant changes in the Trust's internal controls or in
other factors that could significantly affect these controls subsequent
to December 31, 2005, including any corrective actions with regard to
significant deficiencies and material weaknesses.

ITEM 8B.  OTHER INFORMATION.

          None.

                                 PART III.


ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
          COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

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.
<PAGE>  19
THE TRUSTEES

     The Trustees of the Trust are as follows:

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

        Gregory E. Crissman       54       1986      Trustee and Chairman,
                                                      Chief Executive Officer
                                                      and Chief Financial
                                                      Officer
        Benjamin A. Diaz          72       1988      Trustee and Secretary
        Joyce A. Marks            71       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, Chief Executive
Officer and Chief Financial Officer of the Trust.  He has over 20 years of
<PAGE> 18
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.  Mr. Diaz is the Secretary of the Trust.  Mr. 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 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, 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.

     JOYCE A. MARKS.  Ms. Marks was 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
<PAGE>  20

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 10.  EXECUTIVE COMPENSATION.

COMPENSATION OF OFFICERS

     During 2005, the Trust was a self-administered, self-managed real estate
investment trust.  The Trust has the following officers:  Chairman, Chief
Executive Officer, Financial Officer, and Secretary.  No officer except
Gregory E. Crissman is compensated by the Trust in his capacity as an
officer.  During 2005, none of the Trust's officers received compensation
in excess of $65,175.

                      Summary Compensation Table

                                                       Total       Long-Term
          Name and                      Officer        Annual      and other
     Principal Position         Year  Compensation  Compensation  Compensation
-----------------------------   ----  ------------  ------------  ------------
Gregory E. Crissman, Chairman   2005    $52,800      $65,175 (1)     None

(1)  Includes fees for each meeting of the Trustees attended for a
     total of $12,375.


COMPENSATION OF TRUSTEES

     Each Trustee receives $1,375 for each Trustees' meeting attended
plus reimbursement of 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 2005 except
Gregory E. Crissman who received compensation as an officer for work performed.
The Trustees do not maintain a nominating or compensation committee or any
other standing committee except for an audit committee.  The audit committee
consists of Benjamin A. Diaz who serves without additional compensation.  The
Trustees have authority to establish committees and to compensate members as
appropriate for their service.  During 2005, the Trustees had nine regular
meetings.  All Trustees attended all meetings.


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
          AND RELATED SHAREHOLDER MATTERS.

     The following table sets forth as of December 31, 2005, 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:
<PAGE>  21

                                               Amount and Nature of   Percent
  Name and Address of Beneficial Owner         Beneficial Ownership   of Class
  ------------------------------------         --------------------   --------
Mitchell Partners, L.P. and James E. Mitchell

3187-D Airway Avenue
Costa Mesa, California  92626                          1,953           8.1685

Gregory E. Crissman, Chairman,
  Chief Executive Officer,
  Chief Financial Officer and Trustee                     46           0.1924

3609 Kakul Street
Clearlake, California 95422

All Trustees and officers as a group                      46           0.1924


     During 2005, 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.


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

          None.


ITEM 13.  EXHIBITS.

          3.1     Amended and Restated Declaration of Trust of
                     Commonwealth Equity Trust USA

          3.2     Bylaws of the Trust

          3.3     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     Article VIII of Exhibit 3.1

          4.2     Form of Share Certificate

         14.1     Code of Ethics

         31.1     Section 302 Certifications as filed by the Chief Executive
                     Officer and the Chief Financial Officer pursuant to SEC
                     Release No. 33-8212 and 34-47551.

         32.1     Section 906 Certifications as filed by the Chief Executive
                     Officer and the Chief Financial Officer pursuant to SEC
                     Release No. 33-8212 and 34-47551.





<PAGE>  22

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.


     The following table represents aggregate fees billed to the Trust for
2005 and 2004 by Perry-Smith LLP, the Trust's principal accounting firm.

                                              2005           2004
                                              ----           ----

          Audit Fees                       $ 30,945       $ 31,230
          Audit Related Fees                      0            310
          Tax Fees                                0          2,530
                                             ------         ------
                                           $ 30,945       $ 34,070
                                             ======         ======

     Pre-Approval Policy for Accounting Services.  In 2005, the Audit Committee
and the Trustees adopted a formal pre-approval policy for accounting services
and fees.  The policy requires that all audit services, audit related services,
tax fees and all other fees of the Trust's independent auditor be pre-approved
by the Audit Committee and the Trustees.  The Audit Committee and the Trustees
approved the audit and tax services and fees provided by the independent
auditor during 2005 and 2004.



































<PAGE>  23

                    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 20, 2006               USA Real Estate Investment Trust
           --------------------




                                               Gregory E. Crissman
                                    By:  -------------------------------
                                              Gregory E. Crissman as
                                              Chairman, Chief Executive
                                              Officer and Chief Financial
                                              Officer



     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 20, 2006                     Gregory E. Crissman
           -------------------      By:  -------------------------------
                                               Gregory E. Crissman
                                                     Trustee



     Dated: March 20, 2006                       Benjamin A. Diaz
           -------------------      By:  -------------------------------
                                                 Benjamin A. Diaz
                                                      Trustee




     Dated: March 20, 2006                        Joyce A. Marks
           -------------------      By:  -------------------------------
                                                  Joyce A. Marks
                                                      Trustee