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CAPITAL ALLIANCE INCOME TRUST LTD.,

A REAL ESTATE INVESTMENT TRUST

NOTICE OF ANNUAL MEETING,
PROXY STATEMENT AND PROXY CARD

FOR

1999 ANNUAL MEETING OF SHAREHOLDERS

JUNE 17, 1999

Capital Alliance Income Trust Ltd.,
A Real Estate Investment Trust
- --------------------------------------------------------------------------------
50 California Street, Suite 2020 - San Francisco, California 94111
415/288-9575 - Fax: 415/288-9590

May 13, 1999

Dear Fellow Shareholders:

RE: Annual Meeting of Shareholders - Request for Proxies
----------------------------------------------------

You are cordially invited to attend the 1999 Annual Meeting of Shareholders of
Capital Alliance Income Trust Ltd. (the "Trust") which is scheduled for
Thursday, June 17, 1999 and is to be held in the Trust's offices at 50
California Street, Suite 2020, San Francisco, California, 94111. Enclosed is a
Notice to Shareholders of Annual Meeting, a Proxy Statement describing the
business to be transacted, and a form of proxy for your use in voting at the
meeting, and the Trust's Annual Report.

At the Annual Meeting you will be asked (i) to elect one director of the Trust;
(ii) to approve the extension of the Trust's Management Agreement; (iii) to
ratify the selection of Novogradac & Company LLP as the independent auditors for
the Trust for 1999, and (iv) to act on such other business as may properly come
before the meeting or any adjournment thereof.

================================================================================
YOUR VOTE IS IMPORTANT

IT IS IMPORTANT THAT YOU COMPLETE, DATE, SIGN AND PROMPTLY RETURN YOUR PROXY IN
THE ENCLOSED ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING. IF YOU
ATTEND THE MEETING AND WISH TO WITHDRAW YOUR PROXY, YOU MAY VOTE IN PERSON AND
YOUR PROXY WILL BE WITHDRAWN.
================================================================================

Your prompt response would be most appreciated.

Very truly yours,

Thomas B. Swartz
Chairman and Chief Executive Officer

Capital Alliance Income Trust Ltd.,
A Real Estate Investment Trust,
A Delaware Corporation
- --------------------------------------------------------------------------------

NOTICE TO SHAREHOLDERS OF
ANNUAL MEETING TO BE HELD ON JUNE 17, 1999

PLEASE TAKE NOTICE that the 1999 Annual Meeting of Shareholders ("Annual
Meeting") of Capital Alliance Income Trust Ltd., A Real Estate Investment Trust,
a Delaware corporation (the "Trust"), will be held on June 17, 1999 at 11:00
a.m., local time, at 50 California Street, Suite 2020, San Francisco, California
94111, to consider and vote on the following matters:

1. Election of one Class I Director of the Trust (the "Director") to serve
until the third annual meeting of the Trust's shareholders following his
election and until the election and qualification of his respective
successors;

2. Approval of the extension of the Trust's Mangement Agreement with Capital
Alliance Advisors, Inc. to December 31, 2000;

3. Approval of the recommendation of the Board of Directors that Novogradac
& Company LLP be appointed as independent auditors of the Trust for the
year ending December 31, 1999; and

4. Such other business as may properly come before the Annual Meeting or any
postponements or adjournments thereof.

The Trust's Annual Report to Shareholders for the year ended December 31, 1998
accompanies this notice.

Only shareholders of record at the close of business on May 9, 1999, the record
date of the Annual Meeting, will be entitled to notice of, and to vote at, the
Annual Meeting or any postponements or adjournments thereof. A majority of the
outstanding shares of the Trust entitled to vote must be represented at the
Annual Meeting in order to constitute a quorum. Whether or not you plan to be
present, please complete, date, sign and return the enclosed proxy card.

You may revoke your proxy at any time before it is voted by filing with the
Trust a written revocation or a duly executed proxy bearing a later date. If you
are present at the Annual Meeting and vote in person, your proxy will not be
used.

We look forward to seeing you at the Annual Meeting.

BY ORDER OF THE TRUST,

Linda St. John, Secretary

San Francisco, California

May 13, 1999

================================================================================
WHETHEROR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
================================================================================

TABLE OF CONTENTS

INFORMATION CONCERNING SOLICITATION AND VOTING..................................1
General ..............................................................1
Voting Rights and Outstanding Shares...................................1
Revocability of Proxies................................................2

GENERAL TRUST INFORMATION.......................................................2
Management.............................................................2
Board Committees.......................................................2
Board and Committee Meetings...........................................3
Executive Officers.....................................................3
Stock Holdings of Principal Stockholders, Directors and Management.....4
Compensation of Directors..............................................4
Executive Compensation.................................................4
Certain Relationships and Related Transactions.........................4

PROPOSAL ONE
ELECTION OF DIRECTORS...........................................................6
General ..............................................................6
Nominees for Election as Class III Director for Term Expiring in 2002..6
Directors Continuing In Office.........................................6

PROPOSAL TWO
APPROVAL OF EXTENSION OF TRUST'S MANAGEMENT AGREEMENT...........................7

PROPOSAL THREE
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANT......................7

STOCKHOLDER PROPOSALS AND NOMINATIONS...........................................8

MISCELLANEOUS...................................................................8

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES ACT OF 1934
................................................................................8

OTHER BUSINESS..................................................................9

iii

Capital Alliance Income Trust Ltd.,
A Real Estate Investment Trust,
A Delaware Corporation
- --------------------------------------------------------------------------------

PROXY STATEMENT

INFORMATION CONCERNING SOLICITATION AND VOTING

General

The enclosed proxy card (the "Proxy") is being solicited from the
stockholders of Capital Alliance Income Trust Ltd., A Real Estate Investment
Trust, a Delaware corporation (the "Trust"), on behalf of the Trust's board of
directors (the "Board") for use at the Annual Meeting of the Trust's
shareholders to be held at the Trust's offices, 50 California Street, Suite
2020, San Francisco, California 94111 at 1:00 p.m., local time, on June 17,
1999, and at any postponements or adjournments thereof (the "Annual Meeting")
for the purposes set forth herein. The Trust's principal executive offices are
located at 50 California Street, Suite 2020, San Francisco, California 94111.

The Trust's 1998 Annual Report, including the Trust's 1998 Annual Report on
Form 10-K and audited financial statements for calendar year 1998 are being
forwarded to each shareholder of record as of May 9, 1999, together with this
Proxy Statement.

The Trust is mailing this Proxy Statement, the accompanying Notice To
Shareholders of Annual Meeting and the Proxy on or about May 13, 1999, to all
shareholders entitled to notice of, and to vote at, the Annual Meeting.

The cost of this solicitation of proxies will be borne by the Trust.
Solicitations will be made by mail. In addition, the officers and regularly
engaged employees of the Trust may, in a limited number of instances, solicit
proxies personally or by telephone. The Trust will reimburse banks, brokerage
firms, other custodians, nominees and fiduciaries for reasonable expenses
incurred in sending proxy materials to beneficial owners of stock.

Voting Rights and Outstanding Shares

Only shareholders of record at the close of business on April 30, 1999 (the
"Record Date"), are entitled to notice of, and to vote at, the Annual Meeting.
At the close of business on the Record Date, there were issued and outstanding
and entitled to vote 1,484,740 shares of the Trust's common stock, par value
$.01 per share ("Common Stock") and 641,283 shares of the Trust's Series "A"
Preferred Stock, par value $.01 per share ("Series A Preferred Stock")
(individually, "Share", and collectively, the "Shares").

The presence at the Annual Meeting in person or by proxy of shareholders
entitled to cast a majority of all the votes entitled to be cast at the Annual
Meeting is necessary to constitute a quorum for the transaction of business.
Each outstanding Share is entitled to one vote on each matter to be voted upon
at the Annual Meeting.

If there are insufficient Shares present to constitute a quorum or
insufficient affirmative votes to approve any matter presented for approval, the
Annual Meeting may be postponed or adjourned one or more times to permit for
solicitation of proxies. For each matter presented for approval, each
stockholder is entitled to one vote for each Share held. Directors are elected
by plurality vote. A

majority of the votes cast at a meeting of stockholders duly called and at which
a quorum is present will be sufficient to approve any other matter which may
properly come before the meeting, unless more than a majority of votes cast is
required by statute or by the bylaws of the Trust.

Shares represented by properly executed and returned Proxies, unless
revoked, will be voted at the Annual Meeting in accordance with the instructions
thereon. If a properly executed and returned Proxy contains no instructions, it
will be voted: (i) for the election to the Board of the person specified on the
Proxy; (ii) for the extension of the Trust's Management Agreement with Capital
Alliance Advisors, Inc. to December 31, 2000; (iii) for ratification of the
selection of Novogradac & Company LLP as the independent auditors for the Trust
for 1998, and (iv) in the discretion of the proxy holders as to any other matter
that properly may come before the Annual Meeting. The Trust's directors do not
know of any matter that will be presented for consideration at the Annual
Meeting other than the proposals described in this Proxy Statement.

Revocability of Proxies

Any shareholder giving a Proxy pursuant to this solicitation has the
power to revoke that Proxy at any time before the Shares to which it relates are
voted either (i) by filing with the Trust, at its principal executive offices,
written notice of revocation or a duly executed Proxy bearing a later date, or
(ii) by attending the Annual Meeting, withdrawing the Proxy, and voting in
person.

GENERAL TRUST INFORMATION

Management

The Board, which currently consists of the five individuals listed
below, directs the management of the Trust's business and affairs. Directors
Blomberg and Brooks are Independent Directors (i.e., are not officers, full-time
employees or members of the immediate family of officers or full-time
employees).

The Trust's current directors (the "Directors") and executive officers
and their respective positions are as follows:

Name Position
---- --------
Directors:
Thomas B Swartz.............Chairman of the Board, Chief Executive Officer
and Class I Director
Harvey Blomberg.............Class I Director
Stanley C. Brooks...........Class II Director
Dennis R. Konczal...........Class II Director, President and Chief Operating
Douglas A. Thompson.........Class III Director and Executive Vice-President

Name Position
---- --------
Officers:
Thomas B Swartz.............Chairman of the Board and Chief Executive Officer
Dennis R. Konczal...........President and Chief Operating Officer
Richard J. Wrensen..........Senior Vice-President and Chief Financial Officer
Douglas A. Thompson.........Executive Vice-President
Linda St. John..............Secretary

Board Committees

As is discussed below, the Board has two standing committees: an Audit
Committee and an Executive Committee.

Executive Committee. The Executive Committee is empowered to exercise any
of the Board's powers over the Trust's business affairs (including the
declaration of dividends) except those powers specifically reserved to the full
Board or to the shareholders. The Executive Committee consists of Messrs.
Blomberg, Konczal and Swartz.

Audit Committee. The Audit Committee makes recommendations concerning the
annual appointment of the Trust's public accountants and reviews the
arrangements for and the scope of the audit conducted by those accountants. This
committee (i) reviews the Trust's accounting functions and operations, (ii)
considers the adequacy and effectiveness of the system of accounting controls,
including any proposed corrective actions, (iii) reviews and monitors the
Trust's policies regarding business ethics and conflicts of interest, (iv)
discusses with management and the independent accountants the Trust's draft
annual financial statements and key accounting and reporting matters, (v)
reviews the Trust's insurance program and makes recommendations to the Board
concerning that program, and (vi) reviews the activities and recommendation of
the Trust's audit staff. The Trust's independent accountants have unrestricted
access to the Audit Committee. The Audit Committee consists of Messrs. Blomberg,
Brooks and Konczal.

Board and Committee Meetings

During 1998, the Board held five meetings and acted by unanimous written
consent two times; the Executive Committee held three meetings and the Audit
Committee held one meeting (although it will meet prior to the Annual Meeting).
Each Director attended all of the 1998 Board meetings, except for Mr. Brooks who
attended four meetings.

Executive Officers

The business experience of each of the Trust's executive officers is set
forth below.

Thomas B. Swartz, age 67, has served as Chairman and Chief Executive
Officer of the Trust since its formation in 1995 and of the Trust's predecessors
since their formation in 1991 and 1994. As a Class I Director, his term expires
in 2000. He also has served as Chairman and Chief Executive Officer of Sierra
Capital Funding, LLC (and its predecessors), an affiliated mortgage banking firm
since 1994. Mr. Swartz has also served as Chairman and Chief Executive Officer
of Capital Alliance Advisors, Inc., the Trust's Manager, since its formation in
1989 and of Sierra Capital Companies which he founded in 1980 and which
sponsored and advised six publicly-held equity real estate investment trusts. In
1989-1990 he served as President of the National Association of Real Estate
Investment Trusts and as a Member of its Board of Governors from 1983 to 1993.
Prior to founding Sierra Capital Companies, Inc. Swartz was a partner in the San
Francisco law firm of Bronson, Bronson & McKinnon from 1960 to 1980. He
graduated from Yale University in 1954, and from Boalt School of Law of the
University of California in 1959 and was an officer in the U.S. Navy from 1954
to 1956.

Dennis R. Konczal, age 48, has served as President and Chief Operating
Officer of the Trust since its formation in 1995 and of the Trust's predecessors
since their formation in 1991 and 1994. As a Class II Director his term expires
in 1998. Mr, Konczal has also served as Chairman and Chief Operating Officer of
Capital Alliance Advisors, Inc., the Trust's Manager, since 1989, of the Sierra

Capital Companies since 1984 and of Sierra Capital Funding, LLC, an affiliated
mortgage banking firm since 1994. Prior to joining Sierra Capital Companies, Mi.
Konczal was President and Chief Operating Officer of Granada Management
Corporation and related companies, an agribusiness concern, from 1981 to 1984.
He is a Licensed Principal of the NASD and graduated in 1972 with a B.S. degree
in Agricultural Economics from Michigan State University.

Douglas A. Thompson, age 55, is an Executive Vice-President of the Trust
and of its Manager, Capital Alliance Advisors, Inc., since 1995. Before joining
Capital Alliance Advisors, Inc., Mr. Thompson founded and was an officer of
Blackhawk Financial and The Paradigm Group, mortgage banking and brokerage
firms, from 1990 to 1995. He also served as Vice-President of Principal
Residential Advisors from 1988 to 1990 and as a Mortgage Specialist for Morgan
Stanley & Co. from 1985 to 1988 and for Merrill Lynch Pierce Fenner & Smith from
1982 to 1985. He holds a California Real Estate Brokers License and graduated
with a B.S.E. degree from Abeline Christian University in 1967 and a Master's
degree from the University of Southern California in 1969.

Richard J. Wrensen, age 43, became the Senior Vice-President and Chief
Financial Officer of the Trust and of its Manager, Capital Alliance Advisors,
Inc., in December 1997. He serves in a similar capacity with Sierra Capital
Companies and its affiliates. Prior to joining the Manager and the Trust, Mr.
Wrensen was Vice-President of Finance with SNK Realty Group, a Japanese merchant
builder, during 1997 and from 1987 to 1997 was Vice-President-Finance of
Mattison and Shidler, a national real estate investment firm. From 1979 through
1987, Mr. Wrensen held financial positions with several real estate management
and development firms. After an accountancy position with Coopers & Lybrand from
1978 to 1979, Mr. Wrensen became a Certified Public Accountant in 1979. He
graduated in 1985 from Hass School of Business Administration of the University
of California, Berkeley with a Masters of Business Administration and received
his B.S. Accountancy degree from the University of Florida in 1978.

Linda St. John, age 43, has served as Secretary of the Trust since 1995 and
as the Secretary and Operations Officer of Capital Alliance Advisors, Inc., the
Trust's Manager, since 1995. She has also been the Secretary of Sierra Capital
Companies and its affiliates since 1995. Prior to joining the Trust and its
Manager in 1995, Ms. St. John was Operations Manager for Gruen, Gruen &
Associates from 1994 to 1995 and was MIS Manager for Hannum Associates from 1991
through 1993. She received her A.A. degree in Business Administration from
Rochester Business Institute in 1984.

Stock Holdings of Principal Stockholders, Directors and Management

The following table sets forth certain information regarding beneficial
ownership of the Trust's Common and Preferred Shares as of December 31, 1998 by
(1) each person that beneficially owns more than five percent of the Trust's
Common Shares, (2) each Director, (3) the Trust's executive officers, and (4)
all Directors and executive officers as a group. Unless otherwise indicated in
the footnotes to the table, the beneficial owners name have, to the knowledge of
the Trust, sole voting and investment power with respect to the shares
beneficially owned, subject to community property laws where applicable.

Number of Shares Percentage of Shares
Beneficially Owned Beneficially Owned
------------------ ------------------

Name of Beneficial Owner Common Preferred Common Preferred
- ------------------------ ------ --------- ------ ---------

Thomas B. Swartz (1)(2).................................1,086 3,004 0* 0*
Dennis R. Konczal (1)(2)....................................0 0 0 0
Douglas A. Thompson (1)(2)..................................0 0 0 0
Stanley C. Brooks...........................................0 0 0 0
Harvey Blomberg.............................................0 0 0 0
Richard J. Wrensen..........................................0 718 0 0*
Linda St. John..............................................0 0 0 0
All directors and executive officers as a
group (7 persons).......................................0 0 0 0
Thomas Morford..............................................0 50,000 0 7.7%
<FN>
(*) Less than 1%
(1) Also is a member of the Executive Committee.
(2) Capital Alliance Advisors, Inc., the Trust's Manager, owns 6,437 shares of
Preferred Stock. Messrs. Swartz, Konczal and Thompson are officers and
directors of the Manager and collectively own a majority of the outstanding
shares of the Manager.
</FN>

Compensation of Directors

Each Independent Director receives an annual retainer of $5,000, a $500
fee for each Board and Committee meeting attended in person and $300 for each
Board or committee meeting held telephonically together with reimbursement of
expenses incurred in attending those meetings. During 1998 Messrs. Brooks and
Blomberg each received $5,000 as a Director's fee and Mr. Blomberg received
$1,900 in committee and meeting fees and Mr. Brooks received $1,400. Directors
who are affiliates of the Manager do not receive board or committee meeting fees
but do receive the reimbursement of expenses incurred in attending those
meetings.

Executive Compensation

The Trust has no employees. All officers of the Trust are employees of
Capital Alliance Advisors, Inc., the Trust's Manager, and receive no
compensation directly from the Trust.

Certain Relationships and Related Transactions

Arrangements and Transactions with Capital Alliance Advisors, Inc. ("CAAI").

CAAI is the Manager of the Trust and provides (a) management and
advisory services to the Trust in accordance with the Management Agreement and
(b) mortgage origination and loan servicing services to the Trust in accordance
with the Mortgage Origination and Servicing Agreement. As previously described,
the Trust will utilize the mortgage banking experience, management expertise and
resources of CAAI in conducting its Mortgage Investment and its Mortgage Conduit
Business. In addition, a majority of the Directors and the officers of the Trust
also serve as Directors and/or officers of CAAI. The amount paid by the Trust to
CAAI under such agreements for the year ended December 31, 1998 was $275,348.

CAAI owns all of the voting common stock and a 1 % economic interest in
Capital Alliance Funding Corporation ("CAFC"), the Trust's Mortgage Conduit
Subsidiary. The Trust owns all of the

non-voting preferred stock representing 99% of the economic interest in CAFC.
CAAI has the power to elect all of the directors of CAFC and the ability to
control the outcome of all matters for which the consent of the holders of the
common stock of such subsidiary is required. CAAI and/or the officers and
directors of CAFC who may be officers and directors of the Trust, are separately
compensated for their management services to the subsidiary and will provide
origination, financing and administrative services to the subsidiary through
separate agreements and an intercompany allocation of the cost of such services.
The amount paid to CAAI by CAFC under such agreements for the year ended
December 31, 1998 was $275,348 for mortgage origination services. The Trustees,
the Manager and their affiliates have fiduciary duties and obligations which
will require them to resolve any conflicts of interest by exercising the utmost
good faith and integrity. Additionally, the Bylaws provide that the Manager must
upon request by the Directors disclose any investments which are within the
purview of the Trust's investment policies.

CAAI through its affiliation with Sierra Capital Companies and its
affiliates, also has interests that may conflict with those of the Trust in
fulfilling duties. In addition, Messrs. Swartz, Thompson and Konczal, officers
and directors of CAAI are also officers and directors of the Trust. The officers
and directors of CAAI are also involved in other businesses which may generate
profits or other compensation. The Trust will not share in such compensation.

It is the intention of the Trust and CAAI that any agreements and
transactions, taken as a whole, between the Trust, on the one hand, and CAAI or
its affiliates, on the other hand, are fair to both parties. However, there can
be no assurance that each of such agreements or transactions will be on terms at
least as favorable to the Trust as could have been obtained from unaffiliated
third parties.

Investment in Related Mortgage Banking Firms.
- ---------------------------------------------

The Trust, as a result of strategic investments totaling $200,000 by
its predecessors holds 20,000 Class "B" Preferred Shares of Sierra Capital
Acceptance, a division of Sierra Capital Funding, LLC, a Delaware limited
liability company ("SCF/LLC"). SCF/LLC in 1997 merged with Sierra Capital
Acceptance, a Delaware business trust ("SCA"), in which the predecessors
originally invested. SCA is a wholesale mortgage banking firm specializing in
A-, B/C credit-rated non-conforming residential mortgages. The SCF/LLC-SCA
investment held by the Trust has a 15% distribution preference and a liquidation
preference. SCA by contract provides mortgage loan services to the Manager for
the benefit of the Trust. Messrs. Swartz and Konczal are principals, directors
and officers of the SCA division of SCF/LLC as well as of the Trust and its
Manager. SCSI Corporation, which is controlled by Messrs. Swartz and Konczal, is
the Managing Member of SCF/LLC and has invested $113,000 in the common shares of
SCA.

The Trust has also committed a strategic investment totaling $300,000
($225,000 of which has been made) of subordinated debt in Equity 1-2-3, a second
division of Sierra Capital Funding, LLC, a Delaware limited liability company,
located in Laguna Hills, California. Equity 1-2-3 is a retail mortgage banking
firm specializing in A- to B/C credit-rated residential home equity mortgage
loans. The Trust's investment has a 15% distribution preference and a
liquidation preference. Equity 1-2-3 utilizes direct-mail advertising, the
Internet and telemarketing for origination of mortgage loans. Messrs. Swartz and
Konczal are principals, directors and officers of Equity 1-2-3, as well as of
the Trust and the Manager. SCSI Corporation, which is controlled by Messrs.
Swartz and Konczal, is the Managing Member of SCF/LLC and has committed a
$100,000 investment in the common shares of Equity 1-2-3, $75,000 of which has
been made.

Sale and Purchase of Loans.
- ---------------------------

To provide a source of mortgage loans for the Trusts Mortgage
Investment Business, CAFC, the Mortgage Conduit Subsidiary, offers to the Trust
for purchase all non-conforming mortgage loans and Home Equity Loans meeting the
Trust's investment criteria and policies. Commitments to acquire loans will
obligate the Trust to purchase such loans from the Mortgage Conduit Subsidiary
upon the closing and funding of the loans, pursuant to the terms and conditions
specified in the commitment. The Trust accounts for the purchase of loans from
CAFC on a fair market value basis. When the Trust computes the equity and
earnings or loss of the Mortgage Conduit Subsidiary, it will eliminate any
intercompany profit. The Trust acquired nine mortgage loans totaling $1,252,250
from CAFC for the partial year ended December 31, 1998.

Warehouse Financing Facilities.
- -------------------------------

The Trust provides warehouse financing facilities to its strategic
partners and loan correspondents as well as to CAFC, its non-qualified
subsidiary. At December 31, 1998 it had $820,100 outstanding to SCA, $1,472,563
outstanding to Equity 1-2-3, and $2,414,435 outstanding to CAFC.

Performance Graph.
- ------------------

On October 1, 1998, trading in shares of the Trust's Common Stock began
on the American Stock Exchange. The following graph and table compare the
cumulative total shareholder returns on the Common Stock for the period from
October 1, 1998 through December 31, 1998, with the cumulative total stockholder
return for the same period under the Standard & Poor's 500 Stock Index and the
NAREIT Mortgage Total Return Index maintained by the National Association of
Real Estate Investment Trusts, Inc. Total return values for the Common Stock for
those two indexes represent cumulative total returns assuming (i) the investment
of $100 in the Trust's Common Stock and in the securities covered by those
indexes on October 1, 1998 and (ii) the reinvestment of dividends. Trust
dividends paid in January 1999 for the fourth quarter of 1998 are not included
in the calculations. The stockholder returns on the Trust's Common Stock shown
in the following graph and table are not necessarily indicative of future
performance.

9/30/98 10/31/98 11/30/98 12/31/98
------- -------- -------- --------

CAA $100.00 $64.06 $71.10 $62.50

S&P 500 $100.00 $107.90 $114.53 $121.17

NAREIT $100.00 $85.70 $94.49 $81.96
(Mortgage REIT)

PROPOSAL ONE
ELECTION OF DIRECTORS

General

The Bylaws of the Trust provide for a variable Board of Directors with a
range between three and seven members. Board of Directors consists of five
members. The Directors are divided into three classes. Each class of Directors
consists of two Directors (except Class III which consists of one Director),
with each class serving for a staggered three-year term. The Class I Directors
are Messrs. Swartz and Blomberg (who were reelected in 1997 for a three-year
term); the Class II Directors are Messrs. Brooks and Konczal, (who were
reelected in 1998 for a three-year term), and the Class III Director is Mr.
Thompson (whose term expires in 1999 and who is nominated for reelection at this
Annual Meeting for a three-year term). Each director is elected to serve until
the next annual meeting of shareholders at which his Class stands for
reelection, and until their successors are elected and qualified. Each of the
nominees for Class III, if elected, will serve for a term expiring at the 2002
annual meeting of stockholders and until his successor is elected and qualified.
The Board currently has two Independent Directors, Messrs. Brooks and Blomberg.
The Board has nominated the individual named below to serve as a Class I member
of the Board. Mr. Thompson does not qualify as an Unaffiliated Director.

The Trust's Bylaws provide a procedure for shareholder nomination of
persons for election to the Board of Directors. Please see "Shareholder
Proposals and Nominations".

The nominee listed below currently is a Director whose present term expires
at the Annual Meeting. The nominee has agreed to serve if elected, and
management has no reason to believe that the nominee will be unavailable to
serve. Unless otherwise instructed, the proxy holders will vote Proxies received
by them in favor of the election of the nominee named below. However, if the
nominee becomes unavailable for election for any reason, the Shares represented
by those Proxies will be voted for any substitute nominee designated by the
Directors. Assuming that a quorum is present, a plurality of all the votes cast
at the Annual Meeting will be sufficient to elect a nominee as a Director. For
purposes of the election of directors, abstentions will not be counted as votes
cast and will have no effect on the result of the vote, although they will be
counted in determining the presence of a quorum.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEE LISTED BELOW, AND, IN
THE ABSENCE OF INSTRUCTIONS TO THE CONTRARY, PROXIES SOLICITED IN CONNECTION
WITH THIS PROXY STATEMENT WILL BE SO VOTED.

The following table presents information concerning the person nominated
for election as the Class III Director of the Corporation and for those
directors whose terms will continue after the meeting:

Nominee for Election as Class III Director for Term Expiring in 2002

Douglas A. Thompson. Biographical information for Mr. Thompson is set forth
in the section of this Proxy Statement entitled "General Trust Information:
Executive Officers."

Directors Continuing In Office

Harvey Blomberg, age 57; Class I Director since 1996; current term expires
2000; Founder and principal Real Estate (real estate management company) (1988
to date); Regional Director, Connecticut Small Business Development Center (1996
to date); Partner and Chief Financial Officer, Bay Purveyors, Inc. (1976 to
1995); General Manager, Deerfield Communications (1987 to 1990); Consultant to
numerous

companies (financial restructuring, refinancing and marketing) (1989 to date).
Renessler Polytechnic Institute, M.S. Management, 1995; Hofstra University,
M.B.A. 1985; B.S. Engineering, 1966.

Stanley C. Brooks, age 49; Class II Director since 1996; current term
expires 1998; President and Chairman, Brookstreet Securities Corporation (1990
to date); Executive Vice-President, Toluca Pacific Securities Corporation (1987
to 1989); Senior Vice-President First Affiliated Securities (1983 to 1986);
Senior Vice-President, Private Ledger Financial Services (1976 to 1983); Member,
National Futures Association (1991 to date); Member, Securities Industry
Association (1995 to date); Member, Regional Investment Bankers Association
(1990 to date); Licensed Principal, NASD (1970 to date); California State
Polytechnic Institute, B.S. Business Administration 1970. Mr. Brooks was elected
to the Board of Directors pursuant to the Underwriting Agreement between the
Trust and Brookstreet Securities Corporation as the Managing Broker-Dealer of
the Trust's public offering of its Common Stock.

Dennis R. Konczal. Biographical information for Mr. Konczal is set forth in
the section of this Proxy Statement entitled "General Trust Information:
Executive Officers."

Thomas B. Swartz. Biographical information for Mr. Swartz is set forth in
the section of this Proxy Statement entitled "General Trust Information:
Executive Officers."

PROPOSAL TWO
APPROVAL OF EXTENSION OF TRUST'S MANAGEMENT AGREEMENT

Capital Alliance Advisors, Inc. has managed the Trust (and its
Predecessors) since their inception in 1991. Its Management Agreement with the
Trust and the Bylaws of the Trust require that the Management Agreement with the
Trust may be renewed bi-annually. The agreement also provides that in the
absence of a notice of non-renewal, the term of the agreement is automatically
renewed for an additional two (2) years, subject to approval by a majority of
the Trust's shareholders.

Your Board of Directors has renewed the term of the Management Agreement
for an additional two (2) years (to December 31, 2000) and has recommended that
the Shareholders of the Trust approve that extension.

Assuming that a quorum is present, the affirmative vote of all of the votes
cast at theAnnual Meeting is necessary for approval of the extension of the
Mangement Agreement until December 31, 2000. For purposes of the vote on this
proposal, abstentions will not be counted as votes cast and will have no effect
on the result of the vote, although they will be counted in determining the
presence of a quorum.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" FOR THIS PROPOSAL, AND,
IN THE ABSENCE OF INSTRUCTIONS TO THE CONTRARY, PROXIES SOLICITED IN
CONNECTION WITH THIS PROXY STATEMENT WILL BE SO VOTED.

PROPOSAL THREE
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANT

Novogradac & Company LLP has provided independent public accounting
services to the Trust since its inception in 1996 and to its predecessors since
1991. The Board has recommended to the shareholders that they ratify the
selection of Novogradac & Company LLP to examine the Trust's financial
statements for the year ending December 31, 1999. If the shareholders do not
ratify the selection of Novogradac & Company LLP as the Trust's independent
public accountant, or if circumstances arise that make the continuation of
Novogradac & Company LLP as the Trust's independent public accountant impossible
or inappropriate for the year ending December 31, 1999, that selection will be
reconsidered by the Audit Committee and the Board. A representative of
Novogradac & Company LLP is expected to be present at the Annual Meeting to
respond to appropriate questions and to make a statement if he or she so
desires.

Assuming that a quorum is present, the affirmative vote of a majority of
all the votes cast at the Annual Meeting is necessary for approval of the
ratification of the selection of Novogradac & Company LLP as the Trust's
independent auditors for the fiscal year ending December 31, 1999. For purposes
of the vote on this proposal, abstentions will not be counted as votes cast and
will have no effect on the result of the vote, although they will be counted in
determining the presence of a quorum.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" FOR THIS PROPOSAL,
AND, IN THE ABSENCE OF INSTRUCTIONS TO THE CONTRARY, PROXIES
SOLICITED IN CONNECTION WITH THIS PROXY STATEMENT WILL BE SO
VOTED.

STOCKHOLDER PROPOSALS AND NOMINATIONS

The Bylaws of the Trust provide a procedure for shareholder proposals and
shareholder nominations of persons for election to the Board of Directors. That
Procedure provides that any shareholder intending to present a proposal or
nomination for election of one or more Directors at the Annual Meeting must
deliver a written notice to the Trust's Secretary at the Trust's principal
executive offices not less than sixty days nor more than ninety days before the
first anniversary of the preceding year's annual meeting, provided that if the
date of the annual meeting is advanced more than thirty days or delayed more
than sixty days from that anniversary date, that notice must be so delivered not
earlier than the ninetieth day before that meeting and not later than the close
of business on the later of (i) the sixtieth day before that meeting or (ii) the
tenth day following the day on which public announcement of that meeting's date
is first made.

Any such notice from a shareholder to the Trust's Secretary must contain
(i) the name and address of that shareholder as they appear on the Stock's books
(and, if the nomination or proposal in question is made on behalf of a
beneficial owner of Shares, the name and address of that beneficial

owner) and (ii) the number of shares of each class of the Trust's stock held by
that shareholder (and, if appropriate, that beneficial owner). If the
shareholder's notice to the Trust's Secretary proposes to nominate one or more
individuals for election or reelection as Director, that notice must also
include for each such individual all information relating to that person that is
required to be disclosed in solicitations of proxies for election of directors,
or is otherwise required, in each case pursuant to Regulation 14A under the
Exchange Act (including that individual ' s written consent to being named in
the proxy statement as a nominee and to serve as a director if elected). If the
shareholder's notice to the Secretary proposes to bring other business before
the meeting, that notice must include a brief description of (i) that business,
(ii) the reasons for conducting that business at the meeting, and (iii) any
material interest in that business held by that shareholder (and by the
beneficial owner, if any, on whose behalf the proposal is made). If a
shareholder proposal or nomination is not made in accordance with the procedure
set forth above, the Chairman of the Annual Meeting shall, if the facts warrant,
(i) determine and declare at the Annual Meeting that the proposed business or
nomination was not properly brought before the Annual Meeting in accordance with
the procedures set forth in the Bylaws and (ii) direct that the business not be
transacted or that the defective nomination be disregarded.

Any stockholder desiring management to consider a proposal for inclusion in
the Trust's proxy statement relating to the annual meeting of shareholders to be
held in 2000 must submit the proposal by certified mail, return receipt
requested, to the attention of the Trust's Secretary at the Trust's principal
executive office by December 15, 1999.

MISCELLANEOUS

The proxy statement and the accompanying Proxy are being solicited by the
order of the Directors, and all costs related to this solicitation will be borne
by the Trust. Proxies may be solicited by mail, telephone, or telegram or in
person. The Trust will request banks, brokerage houses, and other institutions,
nominees, or fiduciaries that hold Shares in their names to forward the
solicitation materials to the beneficial owners thereof, and the Trust will
reimburse those persons for their reasonable expenses in so forwarding these
materials. Directors, Trust officers, and regular Trust employees, may, without
additional compensation, solicit Proxies by telephone or telegram or in person.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES ACT OF 1934

Section 16(a)of the Securities Act of 1934 requires the Trust's Directors
and executive officers, and persons who own more than ten percent of a
registered class of the Trust's securities to file with the Coriunission initial
reports of ownership and reports of changes in ownership of the Common Stock and
other equity securities of the Trust. Officers, Directors and greater than ten
percent stockholders (of which there are none) are required by the
Conitnission's regulations to furnish the Trust with copies of all Section 16(a)
forms they file.

To the Trust's knowledge, during the fiscal year which ended December 31,
1998, all Section 16(a) filing requirements applicable to its Officers and
Directors were satisfied by such persons.

OTHER BUSINESS

At this date, management knows of no other matters proposed to be brought
before the Annual Meeting. If any other business should properly come before the
Annual Meeting for shareholder action, the named proxies will vote the Shares
represented by the Proxies in accordance with their best judgment.

BY ORDER OF THE DIRECTORS,
Linda St. John, Secretary
San Francisco, California

May 13, 1999

THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF CAPITAL ALLIANCE INCOME TRUST LTD.

PROXY FOR ANNUAL MEETING
JUNE 17, 1999

The undersigned, as record owner of the securities of Capital Alliance Income
Trust Ltd., A Real Estate Investment Trust, a Delaware corporation
("Corporation"), described below, hereby revokes any previous proxies and
appoints Thomas B. Swartz and Dennis R. Konczal, with power of substitution and
revocation and for and in the name of the undersigned, to vote and otherwise
represent all of the shares of the undersigned at the meeting and any
adjournment thereof, with the same effect as if the undersigned were present and
voting the shares. The shares represented by this proxy shall be voted in the
following manner:

1. For the election of the following person as Director of the Corporation to
serve until the third annual meeting of shareholders following his
election and until his respective successor shall be elected and qualify:

|_| FOR Douglas A. Thompson

(Instructions to shareholder: If authority to vote for director is being
withheld, strike-out the above clause (1) in its entirety and write "Authority
Withheld" in the margin. If authority to vote for a director is being withheld,
strike-out the name of the director as to which authority is withheld.)

2. |_| FOR |_| AGAINST |_| ABSTAIN - approval of the extension of the Trust's
Management Agreement with Capital Alliance Advisors, Inc. by the Board of
Directors to December 31, 2000.

3. |_| FOR |_| AGAINST |_| ABSTAIN - approval of recommendation of the Board
of Directors that Novogradac & Company LLP be appointed independent
auditors of the Corporation for the year ended December 31, 1999; and

4. Other business that may properly come before the Annual Meeting or any
postponements or adjournments thereof.

THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS YOU HAVE INDICATED ABOVE.
IF NO INDICATION HAS BEEN MADE, THE SHARES REPRESENTED BY THIS PROXY WILL BE
VOTED FOR ITEMS 1, 2 AND 3 LISTED ABOVE AND, UNLESS ITEM 4 IS LINED OUT, AS THE
PROXY DEEMS ADVISABLE, ON ANY OTHER PROPER BUSINESS IN PROPOSAL 4 THAT MAY COME
BEFORE THE MEETING.

Dated: ___________________, 1999.

_______________________________________________________
(SIGN EXACTLY AS NAME APPEARS ON YOUR ACCOUNT STATEMENT.)

Shareholder of Record: No. of Class "A" Preferred Shares:

_____________________________________ _________________________________

No. of Common Shares:

_________________________________