UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A
(Rule 14a-101)

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

CAPITAL ALLIANCE INCOME TRUST LTD.,
A REAL ESTATE INVESTMENT TRUST
-------------------------
(Name of Registrant as Specified In Its Charter)

-------------------------
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11

1) Title of each class of securities to which transaction applies:

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to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):

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[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

2) Form, Schedule or Registration Statement No.:

3) Filing Party:

4) Date Filed:

________________________________________________________________________________

CAPITAL ALLIANCE INCOME TRUST LTD.,
A REAL ESTATE INVESTMENT TRUST

Notice of 2007 Annual Meeting
and Proxy Statement

November 27, 2007

________________________________________________________________________________

Capital Alliance Income Trust Ltd.,
A Real Estate Investment Trust
________________________________________________________________________________
100 Pine Street, Suite 2450 o San Francisco, California 94111
Tel: (415) 288-9595 o Fax: (415) 576-1810

November 2, 2007

Dear Shareowner:

You are invited to attend the 2007 Annual Meeting of shareholders to be held on
November 27, 2007. The meeting will begin at 10:00 A.M. in the Company's offices
at 100 Pine Street, Suite 2450, San Francisco, California.

The Annual Meeting will begin with a report on our operations, followed by
discussion and voting on the matters set fourth in the accompanying notice of
Annual Meeting and proxy statement and discussion of other business matters
properly brought before the meeting. We hope that you are able to attend.
Management desires to have the maximum representation of shareowners at the
Annual Meeting.

Whether or not you expect to attend, you can ensure that your shares are
represented at the Annual Meeting of Shareholders by promptly voting and
submitting your proxy by internet, telephone or by completing, signing, dating
and returning your proxy form in the enclosed envelope. If you do attend the
Annual Meeting, you may withdraw your proxy if you wish to vote in person.

Cordially,

/s/ Richard J. Wrensen
- ----------------------
Richard J. Wrensen
Chief Executive Officer and President

NOTICE OF ANNUAL MEETING OF SHAREOWNERS
10:00 A.M., NOVEMBER 27, 2007

November 2, 2007

Dear Shareowner:

The 2007 Annual Meeting of shareholders ("Annual Meeting") of Capital Alliance
Income Trust Ltd., A Real Estate Investment Trust, a Delaware corporation
("CAIT" or the "Company" or the "Corporation"), will be held in the Company's
offices on November 27, 2007 at 10:00 a.m., local time, at 100 Pine Street,
Suite 2450, San Francisco, California 94111, to address all maters that may
properly come before the meeting. Following a report on CAIT's operations,
shareowners will vote on:

1. Election of three directors (one Class I director; one Class II director; one
Class III director).

Shareowners of record at the close of business on October 25, 2007, will be
entitled to vote at the Annual Meeting and any adjournments or postponements
thereof. Submitting your proxy by any method will not affect your right to
attend the meeting and vote. A shareholder who gives a proxy may revoke it at
any time before it is exercised by voting in person at the annual meeting, by
delivering a subsequent proxy or by notifying the Corporate Secretary in writing
of such revocation.

/s/ Gregory Bronshvag
- ---------------------
Gregory Bronshvag
Corporate Secretary

________________________________________________________________________________

PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED
ENVELOPE OR VOTE YOUR SHARES VIA TELEPHONE OR THE INTERNET
________________________________________________________________________________

TABLE OF CONTENTS

PROXY STATEMENT..............................................................1
General...................................................................1
Voting Rights and Outstanding Shares......................................1
Quorum Requirements.......................................................1
Effect of Abstentions and Broker Non-Votes................................1
Revocability of Proxies...................................................2
Householding..............................................................2
GENERAL CORPORATION INFORMATION..............................................2
Directors and Executive Management........................................2
Board Committees..........................................................3
Board and Committee Meetings..............................................4
Executive Officers........................................................4
Stock Holdings of Management, Directors and Principal Stockholders........5
Certain Relationships and Related Transactions............................6
PROPOSAL ONE - ELECTION OF DIRECTORS.........................................6
OTHER BUSINESS...............................................................8
EXECUTIVE COMPENSATION.......................................................8
Executive Compensation Discussion and Analysis............................8
Management Compensation...................................................8
Cash Compensation Table...................................................9
Named Executive Officer Compensation......................................9
Summary Compensation Table...............................................10
Equity Awards Table......................................................10
Equity Compensation Plan Information.....................................11
COMPENSATION COMMITTEE REPORT...............................................11
DIRECTOR COMPENSATION.......................................................11
STOCKHOLDER PROPOSALS AND NOMINATIONS.......................................12
AUDIT COMMITTEE REPORT......................................................13
Composition..............................................................13
Responsibilities.........................................................13
Review with Management and Independent Accountants.......................13
Summary..................................................................13
ADDITIONAL ACCOUNTANT INFORMATION...........................................13
Accountant Fees..........................................................14
Pre-Approval Policy for Audit and Non-Audit Services.....................14
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES ACT OF 1934.................14
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.............................14
MISCELLANEOUS...............................................................15
EXHIBIT A - AUDIT COMMITTEE CHARTER.........................................16

PROXY FOR ANNUAL MEETING....................................................19

PROXY STATEMENT

General

The enclosed Proxy and Proxy Statement is provided by Capital Alliance Income
Trust Ltd., A Real Estate Investment Trust, a Delaware corporation ("CAIT" or
the "Company" or the "Corporation"), for exercise at the Annual Meeting of the
Corporation's shareowners, to be held at the Corporation's offices, 100 Pine
Street, Suite 2450, San Francisco, California 94111 at 10:00 a.m., local time,
on Tuesday, November 27, 2007, and at any postponements or adjournments thereof
(the "Annual Meeting").

Accompanying this Proxy Statement is the Corporation's 2007 Annual Report to the
SEC on Form 10K-SB, including the Corporation's audited financial statements for
calendar year 2006. The Corporation is mailing the Notice to Shareowners of
Annual Meeting, the Proxy Statement and the accompanying Proxy on or about
November 7, 2007 to all shareowners entitled to notice of, and to vote at, the
Annual Meeting.

The Corporation will bear the cost of this solicitation of proxies.
Solicitations will be made by mail. The Corporation's officers and employees may
solicit proxies personally or by telephone. The Corporation 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

Your vote is important and you are urged to vote in advance. Shareowners of
record at the close of business on October 25, 2007 (the "Record Date") are
entitled to vote at the Annual Meeting. At the close of business on the Record
Date, there were issued and outstanding and entitled to vote 500,032 shares of
the Corporation's Common Stock, par value $.01 per share ("Common Stock") and
213,820 shares of the Corporation's Series "A" Preferred Stock, par value $.01
per share ("Series "A" Preferred Stock") (individually, "Stock", and
collectively, the "Stock"). Each share is entitled to one vote.

As of September 30, 2007, the Corporation holds treasury stock of 119,500 shares
of Common Stock and 16,919 shares of Series "A" Preferred Stock. Treasury shares
may not vote.

Quorum Requirements

The presence in person or by proxy, of shareholders entitled to cast 35% of all
the votes entitled to be cast at the Annual Meeting constitutes a quorum for the
transaction of business. If a quorum is not present at the meeting, the meeting
will be adjourned to solicit additional proxies.

Effect of Abstentions and Broker Non-Votes

Proxies received but marked as abstentions and "broker non-votes", that may
result from beneficial owners' failure to give specific instructions to their
brokers or other nominees holding in "street name" will be counted as "present"
to determine whether there is a quorum. However, abstentions and "broker
non-votes" will have the effect of a vote against a proposal requiring the
affirmative vote of a certain percentage of shares outstanding. A broker will
vote shares held by the broker only if the holder of the shares provides the
broker with instructions how to vote. A properly signed proxy marked "Withhold
Authority" with respect to the election of one or more directors will not be
voted for the directors so indicated but will be counted to determine whether
there is a quorum.

If there are insufficient holders of shares of stock 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. 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 Corporation.

Shares of stock 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: (1) for the election to the Board of the persons specified on the
Proxy. The Corporation'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 Corporation, at its principal executive offices,
written notice of revocation on a duly executed Proxy bearing a later date, or
(ii) by attending the Annual Meeting, withdrawing the Proxy, and voting in
person.

Householding

"Householding" is a program, approved by the Securities and Exchange Commission
(the "SEC"), which allows companies and intermediaries (e.g., brokers) to
satisfy the delivery requirements for proxy statements and annual reports by
delivering only one package of stockholder proxy material to any household at
which two or more stockholders reside. If you and other residents at your
mailing address own shares of our common stock in street name, your broker or
bank may have notified you that your household will receive only one copy of our
proxy materials. Once you have received notice from your broker that they will
be "householding" materials to your address, "householding" will continue until
you are notified otherwise or until you revoke your consent. If, at any time,
you no longer wish to participate in "householding" and would prefer to receive
a separate proxy statement, or if you are receiving multiple copies of the proxy
statement and wish to receive only one, please notify your broker if your shares
are held in a brokerage account. If you hold shares of our common stock in your
own name as a holder of record, "householding" will not apply to your shares.

GENERAL CORPORATION INFORMATION

Directors and Executive Management

The Board, which currently consists of the six individuals listed below, directs
the management of the Corporation's business. Directors Blackburn, Grainer and
Jones are Independent Directors. Directors Swartz and Konczal are former
officers and are Non-Independent Directors. Director Wrensen is the
Corporation's Chief Executive Officer, President and Chief Financial Officer and
is a Non-Independent Director.

The Corporation's current directors, respective positions and status:

Directors:

Name Position Status
---- -------- ------

Thomas B. Swartz ................................ Class I Director and Non-Independent
Chairman of the Board
Alan R. Jones ................................... Class I Independent
Director
Dennis R. Konczal ............................... Class II Non-Independent
Director
Ace J. Blackburn, Jr............................. Class II Independent
Director
Richard J. Wrensen .............................. Class III Non-Independent
Director
James L. Grainer ................................ Class III Independent
Director
2

The Corporation's current executive officers and their positions:

Executive Officers:

Name Position
Richard J. Wrensen ............................. Chief Executive Officer, President and Chief
Financial Officer
Gregory Bronshvag .............................. Vice President of Operations and Corporate
Secretary

Board Committees

The Board's standing committees and a summary of each committee's
responsibilities follows.

Audit Committee. The members of the Audit Committee are independent (as
independence is defined in Section 121(A) of the American Stock Exchange listing
standards). The Audit Committee:

1. Appoints the Corporation's independent registered public accounting
firm (pursuant to the Sarbanes-Oxley Act of 2002) and reviews the
arrangements for and the scope of the audit conducted by those
accountants;
2. Reviews the Corporation's accounting functions and operations;
3. Considers the adequacy and effectiveness of the system of accounting
controls, including any proposed corrective actions;
4. Reviews and monitors the Corporation's policies regarding legal and
regulatory requirements, business ethics and conflicts of interest;
and
5. Discusses with management and the independent accountants the
Corporation's draft annual financial statements, key accounting and
reporting matters and assess the independence and performance of the
independent accountants.

The Audit Committee for the year ended December 31, 2006 consisted of Directors
Brooks (Chairman) and Grainer. Both Messrs. Brooks and Grainer were qualified by
the Board of Directors as Financial Experts. Mr. Brooks resigned from the Board
of Directors on August 2, 2007. Mr. Grainer was elected Chairman of the Audit
Committee on August 13, 2007. Directors Jones and Blackburn were appointed to
the Audit Committee on August 23, 2007 and September 6, 2007, respectively. The
Audit Committee's charter is available at the Company's website
www.caitreit.com.

Nominating and Corporate Governance Committee. The members of the Nominating and
Corporate Governance Committee are independent directors (as independence is
defined in Section 121(A) of the American Stock Exchange listing standards). The
Nominating and Corporate Governance Committee:

1. Recommends nominees for election or re-election as Directors for each
annual shareholder meeting;
2. Recommends candidates to be elected by the Board as necessary to fill
vacancies and newly created directorships;
3. Recommends a Director to serve as Chairman of the Board of Directors;
4. Oversees the annual evaluation of the Board; and
5. At least annually reviews and assesses the adequacy of corporate
governance policies and recommends any proposed corporate governance
policy changes to the Board.

The Nominating Committee for the year ended December 31, 2006 consisted of
Directors Brooks and Grainer as Co-Chairman. (During 2007 committee's name was
changed to the Nominating and Corporate Governance Committee and its
responsibilities were expanded to include corporate governance.) Mr. Brooks
resigned from the Board of Directors on August 2, 2007. Directors Jones and Mr.
Blackburn were appointed to the Nominating and Corporate Governance Committee on
August 23, 2007 and September 6, 2007, respectively. Mr. Jones was elected
Chairman of the Nominating and Corporate Governance Committee on August 23,
2007. The Nominating and Corporate Governance Committee's charter is available
at the Company's website www.caitreit.com.

Compensation Committee. On December 27, 2006, the Board established a
Compensation Committee. Messrs. Brooks and Grainer were appointed to serve as
Co-Chairmen. The Compensation Committee:

1. Negotiates the terms of employment for the Company's Named Executive
Officer;
2. Recommends the Director's compensation; and
3. Oversees the Company's 1998 Incentive Stock Option Plan.

Mr. Brooks resigned from the Board of Directors on August 2, 2007. Directors
Jones and Blackburn were appointed to the Compensation Committee on August 23,
2007 and September 6, 2007, respectively.

Executive Committee. The Executive Committee is empowered to exercise any of
the Board's powers over the Corporation's business affairs except those powers
specifically reserved to the full Board, the Audit Committee, the Nominating and
Corporate Governance Committee, the Compensation Committee or the shareholders.
The Executive Committee consists of Directors Grainer, Swartz and Wrensen.

Board and Committee Meetings

During 2006, the Board of Directors held one special meeting and eleven regular
Directors' meetings, the Audit Committee held six meetings (at least one meeting
was held each quarter), the Nominating Committee held one meeting, the
Compensation Committee held one meeting and the Executive Committee held no
meetings. The Independent Directors also met twice as a group in executive
session, without the attendance of management or the Non-Independent Directors,
to review the Company's affairs. During 2006 each Director attended at least 75%
of the Board and 75% of the committee meetings (either in person or by
telephonic conference calls) that they were eligible to attend.

The Company encourages all Directors to attend the 2007 Annual Meeting of
Shareholders. The 2006 Annual Meeting was attended by Directors Grainer,
Konczal, Swartz and Wrensen.

Executive Officers

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

Richard J. Wrensen, age 52, has served as President and Chief Executive Officer
of the Corporation, since December 29, 2006 and from 1997 until present as Chief
Financial Officer. As a Class III Director, his term expires in 2008. From
December, 1997 until June, 2006, Mr. Wrensen was a senior executive and
shareholder of Capital Alliance Advisors Inc ("CAAI"). During 1997 Mr. Wrensen
was Senior Vice-President of Finance and Chief Financial Officer with a Japanese
merchant builder and from 1987 to 1997 was Chief Financial Officer of a national
real estate investment firm. From 1985 through 1986, Mr. Wrensen provided
strategic management consulting with an international strategy management
consulting firm. Mr. Wrensen became a Certified Public Accountant in 1979. He
earned a Masters of Business Administration from the Hass School of Business,
University of California, Berkeley and a B.S. Accounting from the University of
Florida.

Gregory Bronshvag, age 39, has served as Vice President and Secretary of the
Corporation since March 12, 2007. From April, 2001 until March, 2006, Mr.
Bronshvag was an operations analyst and staff accountant for CAAI. Mr. Bronshvag
was a high school mathematics teacher in the San Francisco Unified School
District from 1993 until 2000. Mr. Bronshvag earned a Masters of Business
Administration from the Keller Graduate School of Management, Devry University
and a B.S. in Applied Mathematics from the Johns Hopkins University in
Baltimore, Maryland.

Stock Holdings of Management, Directors and Principal Stockholders

The following table sets forth certain information regarding beneficial
ownership of the Corporation's Common and Preferred Stock as of October 15, 2007
by (1) each person that beneficially owns more than five percent of the
Corporation's Common and Preferred Stock, (2) each Director as of such date, (3)
the Corporation'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
named have, to the knowledge of the Corporation, sole voting and investment
power with respect to the shares beneficially owned, subject to community
property laws where applicable.

Number of Shares Percentage of Net
Beneficially Owned Shares Outstanding
------------ ----------- ------------ ------------
Name of Beneficial Owner Common Preferred Common Preferred
------------------------ ------ --------- ------ ---------

Richard J. Wrensen (1) ................................ 85,075 686 22.4% *
Thomas B. Swartz (2),(4) .............................. 5,133 1,879 1.3% *
Dennis R. Konczal (3),(4) ............................. 17,632 984 4.6% *
Ace J. Blackburn, Jr. ................................. 100 0 * 0
James L. Grainer ...................................... 200 0 * 0
Alan R. Jones ......................................... 100 0 * 0
Gregory Bronshvag ..................................... 1,100 0 * 0
All directors and executive officers as a group 134,958 7,210 35.4% 3.4%
(7 persons) (5) .......................................
Thomas Morford (6) .................................... 0 16,334 0 8.3%

Net Shares outstanding is total shares outstanding less treasury stock. *
Represents less than 1% of outstanding shares.

(1) Mr. Wrensen has unexercised options to purchase 29,329 shares of Common
Stock. Mr. Wrensen's wife owns 18,600 shares of Common Stock and 3,464
Series "A" Preferred shares as of October 15, 2007, in which Mr. Wrensen
claims no beneficial interest. Such holdings represent 4.9% of the
outstanding Common shares and 1.8% of the net outstanding Preferred shares.

(2) Mr. Swartz has unexercised options to purchase 50,816 shares of Common
Stock. Mr. Swartz's wife owns 633 shares of Series "A" Preferred Stock, as
of October 15, 2007, in which Mr. Swartz claims no beneficial interest.
Such holdings represent less than 1% of the net outstanding.

(3) Mr. Konczal has unexercised options to purchase 38,124 shares of Common
Stock.

(4) CAAI, the Corporation's former manager, owns beneficially 25,618 shares of
Common Stock and 3,661 shares of Series "A" Preferred shares as of October
15, 2007, representing 6.7% of the outstanding Common shares and 1.9% of
the net outstanding Series "A" Preferred shares. Messrs. Swartz and Konczal
are officers and directors of CAAI and collectively own all of the
outstanding Common shares of the former manager.

(5) This total includes the Common and Preferred shares owned by CAAI.

(6) Mr. Morford is a private investor.

Certain Relationships and Related Transactions

Messrs. Swartz and Konczal are the 100% beneficial owners of CAAI and also serve
as directors and officers of CAAI. CAAI is a mortgage originator and a mortgage
investment management company. Until December 29, 2006, the Corporation had a
Management Agreement and a Loan Origination and Servicing Agreement, with CAAI.
Pursuant to these contractual agreements, the Corporation received on a
non-exclusive basis management expertise, mortgage banking expertise, and the
resources of CAAI to conduct its mortgage investment, loan servicing and its
mortgage loan origination and secondary mortgage market sales operations. Both
of these contracts were cancelled December 29, 2006. The Corporation paid
$500,000 non-renewal fee to discontinue the Management Agreement. The amounts
paid for services provided to Corporation by CAAI under the Management Agreement
and the Loan Origination and Servicing Agreement for the year ended December 31,
2006 were $202,943 and $422,247, respectively.

On December 29, 2006, the Company entered into a new Loan Servicing Agreement
with CAAI to facilitate the administration and loan servicing of the existing
mortgage portfolio and foreclosed mortgages during the transition to self
management. The new Loan Servicing Agreement is cancellable by either party upon
30 days notice prior to the end of a calendar quarter (March, June, September,
December). Pursuant to the contract, CAAI will receive $50 per month per
mortgage loan and $500 per month per foreclosed mortgage. The contract was
cancelled June 30, 2007.

Messrs. Swartz and Konczal continue to serve as Directors of Capital Alliance
Income Trust and until December 29, 2006, Mr. Swartz served as Capital Alliance
Income Trust's Chief Executive Officer and Mr. Konczal served as Capital
Alliance Income Trust's President and Chief Operating Officer.

Messrs. Swartz and Konczal are also officers and directors of Calliance Realty
Fund, LLC (a mortgage investor). Messrs. Swartz and Konczal are also involved in
other residential real estate and mortgage related businesses which may generate
profits or other compensation. The Capital Alliance Income Trust will not share
in such compensation.

Until June 30, 2006, Mr. Wrensen was a CAAI shareholder and served as a CAAI
officer and director. Effective June 30, 2006, Mr. Wrensen sold his ownership
interest in CAAI and resigned as a CAAI officer and director. Mr. Wrensen
continues to serve as an officer and Director of Capital Alliance Income Trust.

Capital Alliance Income Trust's Directors and their affiliates have a fiduciary
duty and obligation to resolve any conflicts of interest by exercising the
utmost good faith and integrity. This responsibility is also recognized in the
Corporation's Code of Ethics available at its website www.caitreit.com.
Additionally, the Bylaws provide that the Directors and their affiliates must
upon request by the Directors disclose any investments which are within the
purview of Capital Alliance Income Trust's investment policies.

PROPOSAL ONE - ELECTION OF DIRECTORS

The Bylaws of the Corporation provide for a variable Board of Directors with a
range between three and seven members. The Board of Directors currently consists
of six members comprised of three Independent Directors (Blackburn, Grainer and
Jones) and three Non-Independent Directors (Wrensen, Swartz and Konczal).
Commencing with the 2007 Annual Meeting election of Directors, the Nominating
and Corporate Governance Committee has recommended and the Board of Directors
has approved a corporate governance policy of maintaining a majority of
Independent Directors.

The Directors are divided into three classes. Each class of Directors serves for
a staggered three-year term. The Class I Directors are Messrs. Swartz (whose
terms expire in 2009) and Jones (who was appointed in 2007 and is nominated for
election at this Annual Meeting for a term to expire in 2009). The Class II
Directors are Messrs. Blackburn (who was appointed in 2007 and is nominated for
election at this Annual Meeting for a term to expire in 2010), and Konczal
(whose term expires in 2007). The Class III Directors are Mr. Wrensen (whose
term expires in 2008) and Grainer (who was appointed in 2006 and is nominated
for election at this Annual Meeting for a term to expire in 2008).

On the recommendation of the Nominating and Corporate Governance Committee, the
Board of Director has nominated Ace J. Blackburn Jr., James L. Grainer and Alan
R. Jones for election by the shareholders to serve as Directors. The nominees
are appointed Directors with terms expiring at the Annual Meeting. The nominees
have 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 Corporation's Bylaws provide a procedure for shareholder nomination of
persons for election to the Board of Directors. Please see "Stockholder
Proposals and Stockholder Nominations".

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES
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 presents information concerning the person nominated for election
at the Annual Meeting to the Board of Directors:

Nominees for Election as Class I Directors for Term Expiring in 2009

Alan R. Jones, 53 years of age, has worked in investment management consulting,
venture capital and investment banking. Since 2004 he has served as Managing
Partner of A.R. Jones & Associates, LLC, a placement agent specialized in
investment management, private equity and commercial real estate. In 2000, Mr.
Jones co-founded Rampant Venture Group, a venture capital firm, and served as a
Managing Partner. Previously, Mr. Jones worked in institutional sales and
trading for Morgan Stanley and Salomon Brothers in both New York City and San
Francisco. Mr. Jones is a Trustee of Phillips Exeter Academy and a Board member
of the Student Conservation Association, where he chairs the Investment
Committee. He earned a Masters of Business Administration from the Wharton
School at the University of Pennsylvania and a B.S. from Dartmouth College.

Nominees for Election as Class II Directors for Term Expiring in 2010

Ace J. Blackburn Jr., 52 years of age, is the Senior Vice President and Chief
Financial Officer of Trango Systems, Inc. and Z-Communications, Inc. Trango and
Z-Communications are affiliated companies headquartered in San Diego,
California. Trango has a global presence fixed wireless products and
Z-Communications manufactures electrical components. From 1992 until 2005, Mr.
Blackburn was a litigation and defense partner at Cooney, Mattson, Lance,
Blackburn, Richards & O'Connor where he worked with and advised many Fortune 100
companies on defense litigation and business issues. He graduated from Brown
University with a BA in economics and has an MBA and JD from the University of
Miami in Florida.

Nominees for Election as Class III Directors for Term Expiring in 2008

James L. Grainer, 53 years of age, Mr. Grainer was the President and Chief
Financial Officer of GreenShift Corporation, a publicly listed company focused
on the alternative energy and environmental sectors. Previously Mr. Grainer
worked as a managing Director in investment banking with Zanett Securities and
Prudential Securities. As a Certified Public Accountant, Mr. Grainer worked in
Deloitte-Touche's New York office providing tax and business advisory services
to a diversified group of clients.

Directors Continuing In Office

Thomas B. Swartz, 75 years of age, has served as Chairman of the Corporation
since 1995 and as Chief Executive Officer from 1995 to 2006. As a Class I
Director, his term expires in 2009. Mr. Swartz has also served as Chairman and
Chief Executive Officer of Capital Alliance Advisors, Inc., the Corporation's
former manager, since its formation in 1989 and of Sierra Capital Companies
which he founded in 1980 and which sponsored and advised publicly-held equity
real estate investment trusts. Prior to founding Sierra Capital Companies, Inc.,
Mr. 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. He was an officer
in the U.S. Navy from 1954 to 1959.

Richard J. Wrensen
Biographical information for Mr. Wrensen is set forth in the section of this
Proxy Statement entitled "General Corporation Information: Executive Officers."

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.

EXECUTIVE COMPENSATION

Executive Compensation Discussion and Analysis

The philosophy of the Compensation Committee of the Corporation's Board of
Directors is performance based. During 2007 the Committee will seek to closely
align executive compensation of its Named Executive Officers with individual and
Company performance, both on a short-term and long-term basis, through a mixture
of cash and performance based equity awards. Executive employee compensation may
also include health, life, disability, severance and a matching Company
contribution, up to the legal limit, for participation in a Company sponsored
Simple Individual Retirement Account or a 401-K retirement savings plan. The
Committee has the primary authority to make determinations and recommendations
of Named Executive Officer compensation awards available to executive officers.

Prior to December 29, 2006 management of the Company's was contractually
outsourced to Capital Alliance Advisors, Inc. ("CAAI"). During 2006, the
Company's officers served without receiving any direct compensation, other than
previously granted and exercisable stock options.

Management Compensation

At the 2006 Annual Meeting, the shareholders voted not to renew the Management
Agreement with CAAI. The termination required a one time payment of $500,000 to
CAAI and a two month extension of one half of Mr. Konczal's previously granted
stock option awards. On December 29, 2006 the Board of Directors terminated the
Management Agreement, authorized the termination payment and extended Mr.
Konczal's stock option awards.

CAAI had two contracts with the Company, a Management Agreement and a Loan
Origination and Servicing Agreement. Both contracts were cancelled on December
29, 2006. The Loan Origination and Servicing Agreement did not require a
termination payment.

Pursuant to the Management Agreement CAAI received a monthly management fee, a
monthly real property administration fee and quarterly incentive compensation.
The management fee was one-twelfth (1/12) of 1% annually of the book value of
mortgages, mortgage related investments and real property plus one-twelfth of
one half percent (1/2%) of the book value of the non-mortgage assets computed at
the end of each month. The real property administration fee was $500 per month
for each property acquired by mortgage foreclosure. Incentive compensation was
25% of the generally accepted accounting principles Net Income (after payment of
the preferred dividend) in excess of an annualized return on common equity for
such quarter equal to the ten year U.S. Treasury Rate plus 2.00% (provided that
the payment of incentive compensation did not reduce the annualized return on
common equity for such quarter to less than the ten year U.S. Treasury Rate).
CAAI also received an administration fee up to 25 basis points on mortgage
fundings as reimbursement of overhead.

Pursuant to the Loan Origination and Servicing Agreement CAAI received a monthly
loan origination and servicing fee equal to one-twelfth (1/12) of 2% annually of
the book value of mortgages, mortgage related investments and real property
computed at the end of each month.

Cash Compensation Table

The following table summarizes CAAI's 2006 compensation:

Category 2006 Amount
-------- -----------
Management Fees $ 196,943
Real Property Administration $ 6,000
Incentive Compensation $ --
Mortgage Funding $ 28,220
Loan Originating and Servicing $ 394,027

Named Executive Officer Compensation

Until December 29, 2006, Mr. Swartz was the Chief Executive Officer and Mr.
Konczal was the President of the Corporation. Messrs. Swartz and Konczal were
also employees of CAAI. During 2006 Mr. Swartz received no executive
compensation directly from the Corporation, other than the exercisability of
previously granted stock options. During 2006 Mr. Konczal no executive
compensation directly from the Corporation, other than the exercisability of
previously granted stock options and a two month extension of one half of Mr.
Konczal's previously granted stock options.

Effective June 30, 2006 Mr. Wrensen resigned as a CAAI employee and sold his
ownership position in CAAI. Mr. Wrensen retained his position as Chief Financial
Officer of the Company. Upon the sale of his interest in CAAI, Messrs. Swartz
and Konczal owned 100% of CAAI.

On December 29, 2006, to effect the transition from the former manager to self
management, Mr. Wrensen became the Corporations first employee and was appointed
the Corporation's President and Chief Executive Officer. Mr. Wrensen also
retained the title of Chief Financial Officer. During 2006, Mr. Wrensen received
no executive compensation directly by the Corporation for his services as Chief
Financial Officer or as Chief Executive Officer and President, other than the
exercisability of previously granted stock options.

Upon Mr. Wrensen's appointment as President and Chief Executive Officer, the
Compensation Committee agreed to recommend in 2007 an employment agreement of at
least 30 months with a base salary of at least $180,000 annually, a
discretionary bonus of up to 25% of the base salary and other long term and
short term benefits that may include performance based equity compensation,
health, life, disability, severance and a matching Company contribution, up to
the legal limit, for participation in a Company sponsored Simple Individual
Retirement Account or a 401-K retirement savings plan.

Summary Compensation Table

The following table presents the total compensation paid by the Company to our
named Executive Officers during the year ended December 31, 2006.

Name Year Stock Related Award All Other Total
(1) Compensation (2)
Richard Wrensen 2006 $ -- $ -- $ --
Thomas Swartz 2006 $ -- $ -- $ --
Dennis Konczal 2006 $ 23,665 $ -- $ 23,665

(1) Pursuant to the termination of the Management Agreement between the Company
and CAAI, Mr. Konczal received a two month Expiration Date extension for
one half of 38,162 options (which were previously granted pursuant to the
1998 Stock Option Plan). The Company's 2006 financial statement expense for
the option extension was $23,665.

(2) Pursuant to the sale of his interest in CAAI, if the Management Agreement
between CAAI and the Company did not terminate before October 1, 2007, Mr.
Wrensen would provide independent consulting services to the Company.
Commencing October 1, 2007 Mr. Wrensen received compensation of $10,776 per
month from CAAI, until the earlier of the termination of the Management
Agreement between the Company and CAAI or December 31, 2006. The Management
Agreement terminated December 29, 2006. Mr. Wrensen's remuneration was
$32,328. The Company did not reimburse CAAI for this expenditure.

Equity Awards Table

The following table sets fourth the outstanding stock options as of December 31,
2006 for each individual who served as a Named Executive Officers during 2006:

Estimated Estimated
Name Number of Number of Fair Market Fair Market
Granted Number of Number of Value of Value of
Options Exercisable Unexercisable Expiration Exercise Exercisable Unexercisable
Outstanding Options Options Date Price ($) Options Options

Richard J. Wrensen 15,000 15,000 0 22-Sep-08 $13.50 $ 4,658 $0
8,966 8,966 0 9-Feb-11 $ 9.06 $15,075 $0
5,354 5,354 0 2-Feb-10 $ 9.00 $ 8,889 $0
13,750 13,750 0 22-Sep-08 $13.50 $ 4,260 $0
Thomas B. Swartz
13,750 13,750 0 9-Feb-11 $ 9.06 $23,118 $0
23,316 23,316 0 2-Feb-10 $ 9.00 $38,709 $0
6,875 6,875 0 22-Sept-08 $13.50 $ 2,135 $0
Dennis R. Konczal
6,875 6,875 0 22-Nov-08 $13.50 $ 2,338 $0
6,875 6,875 0 9-Feb-11 $ 9.06 $11,559 $0
6,875 6,875 0 9-Apr-11 $ 9.06 $12,031 $0
5,312 5,312 0 2-Feb-10 $ 9.00 $ 8,819 $0
5,312 5,312 0 2-Apr-10 $ 9.00 $ 9,296 $0

During 2006, Messrs. Wrensen and Swartz were not granted and did not exercise
any stock options.

During 2006, Mr. Konczal received a two month Expiration Date extension for one
half of his 38,124 options.

Equity Compensation Plan Information

The Company has one equity compensation plan, the 1998 Incentive Stock Option
Plan ("Plan"), which was approved by the shareholders on June 24, 1998. The
purpose of the Plan is to provide performance based compensation in order to
attract, retain and motivate the Company's key employees, officers, Directors
and any other individual or entity performing services for the Company.

The exercise price of all options will not be less than 100% of the fair market
value of the Common Stock on the date of the award. No option term may exceed
ten years from the date of the grant and no option grant may be made under the
plan after the tenth anniversary of the date the Plan was adopted by the Board
(April 16, 1998).

The Board may amend the Plan at any time, except that approval by the Company's
shareholders will be required for any change that materially increases benefits
accruing to the Plan's participants. Options that expire, are terminated or are
surrendered will be available for issuance in connections with future awards
under the Plan. The Plan is administered by the Compensation Committee.

The following table summarizes the Plan's outstanding awards and options
remaining available for issuance into Common Stock. Each option is exercisable
for one share of Common Stock.

Equity Compensation Plan Number of Options Issued Weighted Average Exercise Number of Options
and Outstanding Price of Outstanding Remaining Available for
Options Future Issuance *
- --------------------------- ------------------------ ------------------------- -----------------------

1998 Incentive Stock Option 161,220 $10.69 12,375
Plan

* - Excludes the potential reissuance of currently issued and outstanding
options.

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed with management the
Compensation Discussion and Analysis included in this Proxy Statement. Based on
this review and discussion, the Committee recommended to the Board of Directors
that the Compensation Discussion and Analysis be included in this Proxy
Statement.

This report is submitted by the Audit Committee: James L. Grainer (Chairman),
Ace J. Blackburn, Jr. and Alan R. Jones

Adopted October 12, 2007

DIRECTOR COMPENSATION

During 2006, the Corporation's Independent Directors receive an annual retainer
of $10,000 and $500 per regular board or committee meeting. Independent
Directors Blomberg, Brooks and Looper also received $4,000 each for in person
attendance of special meeting of the Board on February 28, 2006. During 2006
former Independent Directors Blomberg and Looper received total Board and
committee compensation of $15,267 and $10,291, respectively. During 2006, total
committee and meeting fees for Independent Directors Brooks and Grainer were
$15,800 and $3,333, respectively.

Upon Mr. Bloomberg December 10, 2006 resignation from the Board, his options
awards terminated. On December 31, 2006 Mr. Brooks held awards for: 3,750
options exercisable at $13.50 scheduled to expire on September 22, 2008; 3,750
options exercisable at $9.06 scheduled to expire on February 9, 2011; and 4,875
options exercisable at $9.00 scheduled to expire on February 2, 2010. These
stock options remained unexercised and terminated upon Mr. Brooks' August 2,
2007 resignation as a Director.

Independent Directors receive reasonable reimbursement of expenses incurred in
attending board or committee meetings. During 2006, Directors who are affiliates
of the former manager, Capital Alliance Advisors, Inc., did not receive board or
committee meeting fees but did receive reasonable reimbursement of expenses
incurred in attending those meetings.

STOCKHOLDER PROPOSALS AND NOMINATIONS

The Bylaws of the Corporation 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 Corporation's Secretary at the Corporation's
principal executive offices by personal delivery, registered mail, or
telegraphic or facsimile transmission and be actually received by the Secretary
of the Corporation on a date in the current year which corresponds to a date at
least one-hundred twenty (120) days before the date on which the Corporation
first mailed its proxy materials for the prior year's annual meeting of
shareholders.

Any such notice of a stockholder proposal from a shareholder to the
Corporation's Secretary must set forth as to each matter such shareholder
proposes to bring before the meeting (i) a reasonably detailed description of
the business desired to be brought before the meeting and the reasons for
conducting such business at the meeting, (ii) the name and the business and
residence address of the shareholder proposing such business, (iii) the class
and number of shares of stock of the Corporation which are owned by such
shareholder, (iv) any material interest of such shareholder in such business;
and (v) any other information that is required to be provided by such
shareholder pursuant to the Securities Exchange Act of 1934, as amended, and the
rules and regulations there under.

If the shareholder's notice to the Corporation's Secretary proposes to nominate
one or more individuals for election or reelection as Director, that notice must
set forth (i) the name and address of the shareholder who intends to make the
nomination and of the Person or Persons to be nominated; (ii) a representation
that the shareholder is a holder of record of stock of the Corporation entitled
to vote at such meeting and intends to appear in person or by proxy at the
meeting to nominate the Person or Persons specified in the notice; (iii) a
description of all arrangements or understandings between the shareholder and
each nominee and any other Person or Persons (naming such Person or Persons)
pursuant to which the nomination or nominations are to be made by the
shareholder; (iv) the consent of each nominee to serve as a Director if so
elected; and (v) such other information regarding each nominee proposed by such
shareholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities Exchange Act of 1934, as amended,
had the nominee been nominated, or intended to be nominated, by the Board of
Directors; and.

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 (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.

AUDIT COMMITTEE REPORT

Composition

The Audit Committee of the Board of Directors is composed of three directors,
all who are independent, as required by American Stock Exchange ("AMEX") rules.
The Committee operates under a written charter adopted by the Board of
Directors. The charter is available at the Company's website www.caitreit.com
and it is attached as Exhibit A. The members of the Audit Committee for the year
ended December 31, 2006 were Stanley C. Brooks (Chairman) and James L. Grainer.
Presently, the members of the Audit Committee are James L. Grainer (Chairman),
Alan R. Jones and Ace J. Blackburn, Jr.

Responsibilities

The responsibilities of the Audit Committee include selecting an accounting firm
to be engaged as the Corporation's independent accountants. Management is
responsible for the Corporation's internal controls and financial reporting
process. The independent accountants are responsible for performing an
independent audit of the Corporation's financial statements in accordance with
generally accepted auditing standards and for issuing a report thereon. The
Audit Committee's responsibility is to assist the Board in overseeing these
processes. Pursuant to the Sarbanes-Oxley Act of 2002, the Audit Committee has
the sole power to appoint the independent registered public accountants to
provide auditing services.

Review with Management and Independent Accountants

The Audit Committee is required to meet and hold quarterly discussions with
management and the independent accountants and has done so at least quarterly
during 2006. The Audit Committee discussions included not just the
acceptability, of the accounting principles used in preparing the financial
statements, but the reasonableness of the significant accounting judgments and
estimates and the clarity of disclosure in the financial statements. The Audit
Committee has reviewed and discussed the audited financial statements with
management and has discussed with the independent auditors the matters required
by Statement of Auditing Standards 61 ("Communication with Audit Committees").
The Audit Committee has received the written disclosures letter from the
independent accountants required by Independence Standards Board Standard No.1
and has discussed with the independent accountant, the independent accountant's
independence. Management has represented to the Audit Committee that the
Corporation's financial statements were prepared in accordance with accounting
principles generally accepted in the United States.

Summary

Based upon the representations of management, and the report by the independent
accountants to management, the audited financial statements were approved by the
Audit Committee for inclusion in the Corporation's Annual Report on Form 10-KSB
for the year ended December 31, 2006, as filed with the Securities and Exchange
Commission.

This report is submitted by the Audit Committee: James L. Grainer (Chairman),
Alan R. Jones and Ace J. Blackburn, Jr.

Adopted October 12, 2007

ADDITIONAL ACCOUNTANT INFORMATION

The Audit Committee has preliminarily engaged Rothstein, Kass & Company LLP,
independent auditors, to audit the Corporations consolidated financial
statements for the year ending December 31, 2007. Rothstein, Kass & Company LLP
has provided independent public accounting services to the Corporation since
2005. The Audit Committee may in its discretion at any time direct the
appointment of different independent auditors, if the Audit Committee determines
that such a change would be in the best interests of the Corporation and its
shareholders.

A representative of Rothstein, Kass & Company LLP is expected to be present at
the Annual Meeting, will have an opportunity to make a statement and is expected
to be available to answer appropriate questions.

Accountant Fees

Rothstein, Kass & Company LLP audited the Corporation's financial statements and
otherwise acted as the Corporation's independent registered public accounting
firm with respect to the fiscal year ended December 31, 2006. Mowat, Mackie and
Anderson CPA's provided the Corporation with tax compliance and reporting
services for the fiscal year ended December 31, 2006. The expenses incurred for
these services are summarized below:

Service Fiscal Year 2006 Accountants
------- ---------------- -----------
Audit Fees $ 68,016 Rothstein, Kass & Company
Audit-Related Fees $ 5,500 Rothstein, Kass & Company
Tax Fees $ 6,500 Mowat, Mackie and Anderson
All Other Fees $ -- ----------
Total Fees $80,016

Pre-Approval Policy for Audit and Non-Audit Services

The Audit Committee's policy is to review and pre-approve the scope, terms and
related fees of all auditing services provided by the registered independent
public accountants, subject to the de minimus exceptions for non-audit services
which are approved by the Audit Committee prior to the completion of the audit.

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

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

To the best of the Corporation's knowledge, all Section 16(a) filing
requirements applicable to its Officers and Directors have been satisfied by
such persons for the fiscal year which ended December 31, 2006.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The Corporation's Annual Report on Form 10-KSB for the year ended December 31,
2006, and is incorporated herein by reference.

All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date hereof and prior to the date of
the meeting or any adjournment or postponement thereof shall be deemed to be
incorporated by reference herein and made a part hereof from the date of the
filing of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Proxy Statement to the extent that a statement
contained herein or in any other document subsequently filed with the Commission
which also is deemed to be incorporated by reference herein modified or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Proxy Statement.

The Company will provide without charge to each person to whom a copy of this
Proxy Statement is delivered, upon the written or oral request of such person, a
copy of any or all of the documents incorporated by reference herein (not
including the exhibits to such documents, unless such exhibits are specifically
incorporated by reference in such documents). Requests for such copies should be
directed to Capital Alliance Income Trust Ltd., 100 Pine Street, Suite 2450, San
Francisco, California 94111, Attention: Gregory Bronshvag, Corporate Secretary.

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 Corporation. Proxies may be solicited by mail, telephone, or telegram or in
person. The Manager of the Corporation 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
Corporation will reimburse those persons for their reasonable expenses in so
forwarding these materials. Directors and officers and regular employees of the
Company may, without additional compensation, solicit Proxies by telephone or
telegram or in person.

BY ORDER OF THE DIRECTORS,

Gregory Bronshvag
Corporate Secretary

San Francisco, California
November 2, 2007

EXHIBIT A - AUDIT COMMITTEE CHARTER

Purpose
- -------
The Audit Committee is appointed by the Board of Directors ("Board") to assist
the Board in its fiduciary responsibilities to provide oversight with respect
to:

1. The integrity of the financial statements and other financial
information;

2. The Company's system of internal controls;

3. Compliance by the Company with legal and regulatory requirements; and

4. Engagement and assessment of the independence and performance of the
Company's independent auditors.

Membership
- ----------
The members of the Audit Committee shall be appointed by the Board and consist
of at least two directors, all of whom shall satisfy the independence and
experience requirements of the Board, the American Stock Exchange and any
additional or supplemental independence standards applicable to committees
established under any applicable law, rule or regulation. In the judgment of the
Board, all Committee members shall be financially literate and at least one
member shall be a "financial expert" as defined by the rules and regulations of
the Securities and Exchange Commission.

Meetings and Reports
- --------------------
The Committee shall meet at least four times per year, generally in conjunction
with the release of the Company's quarterly financial results, and shall meet
separately and privately with the independent auditors and with management to
discuss matters warranting attention or private consideration by the Committee.
Additional meetings may occur as the Committee or its Chairman deems advisable.

The Committee will maintain written minutes of its proceedings and the Committee
Chairman will report on its actions and activities at the next meeting of the
Board of Directors. The Committee Chairman will be responsible for providing
Committee members with copies of the minutes of each meeting and any actions
taken by unanimous written consent. The Committee's minutes will be filed with
the minutes of the Board of Directors.

Resources and Authority
- -----------------------
The Audit Committee shall have the resources and authority to retain special
legal, accounting or other consultants to advise the Committee. The Audit
Committee may request any officer or employee of the Company or the Company's
outside counsel or independent auditor to attend a meeting of the Committee or
to meet with any members of, or consultants to, the Committee. The Company shall
also provide funding, as determined by the Committee, for payment of
compensation to the independent auditors engaged by the Committee.

Responsibilities
- ----------------
The responsibilities of the Committee shall include:

1. Annually review the adequacy of this Charter, which shall be included
in the annual proxy statement at least once every three years, and
recommend any proposed changes to the Board for approval.

2. Review the annual audited financial statements with management,
including major issues regarding accounting and auditing principles
and practices, the adequacy of internal controls that could
significantly affect the Company's financial statements, and any
alternative accounting treatments permitted under accounting
principles generally accepted in the United States that have been
discussed with management, as well as any preferred treatment.

3. Review an analysis prepared by management and the independent auditor
of significant financial reporting issues and judgments made in
connection with the preparation of the Company's financial statements.

4. Review with management and the independent auditor the Company's
annual and quarterly financial statements prior to the filing of its
Form 10-K or Form 10-Q, respectively.

5. Meet periodically with management to review the Company's major
financial risk exposures and the steps management has taken to monitor
and control such exposures.

6. Review the effect of major changes to new or proposed auditing and
accounting principles, reporting standards and practices as suggested
by the independent auditor, internal auditor, if any, or management.

7. Have the authority and responsibility for the appointment,
compensation, retention, and oversight of the work of the independent
auditor, or any other firm engaged by the Company for the purpose of
preparing or issuing an audit or attestation report on financial
information of the Company, including resolution of disagreements
between management and the auditor regarding financial reporting.

8. Pre-approve all audit and permitted non-audit services to be performed
by the independent auditor.

9. Receive periodic reports from the independent auditor regarding the
auditor's independence consistent with Independence Standards Board
Standard 1, discuss such reports with the auditor, and if so
determined by the Audit Committee, take appropriate action to oversee
the independence of the auditor.

10. Evaluate together with management the performance of the independent
auditor and, if so determined by the Audit Committee, replace the
independent auditor.

11. Review the adequacy of the Company's internal controls and internal
auditing function.

12. Review the responsibilities, budget, staffing and significant reports
of the internal audit department, if any, and management's responses.

13. Meet with the independent auditor prior to the audit to review the
planning and staffing of the audit.

14. Discuss with the independent auditor the matters required to be
addressed by Statement on Auditing Standards No. 61 and Section 204 of
the Sarbanes-Oxley Act of 2002, relating to the conduct of the audit
and the quality of the Company's financial reporting.

15. Review with the independent auditor the management letter provided by
the auditor and the Company's response to that letter. Such review
shall include:

16. Any changes required in the planned scope of the audit.

17. Any difficulties encountered in the course of the audit work,
including any restrictions on the scope of activities or access to
required information.

18. Review the disclosures made by the Chief Executive Officer and the
Chief Financial Officer/Principal Accounting Officer in connection
with the required certifications accompanying the Company's reports
required to be filed with the Securities and Exchange Commission.

19. Advise the Board from time to time with respect to the Company's
policies and procedures regarding compliance with applicable laws and
regulations and with the Company's code of conduct.

20. Meet with the Company's legal counsel to review legal matters that may
have a material impact on the financial statements, the Company's
compliance policies and any material reports or inquiries received
from regulators or governmental agencies.

21. Meet at least annually with the Chief Financial Officer, the senior
internal auditing executive, if any, and the independent auditor in
separate executive sessions.

22. Review all related party transactions, both financial and
administrative, for potential conflicts of interest on an ongoing
basis and approve all such transactions.

23. Establish procedures, under confidential and anonymous submissions,
for the receipt, retention and treatment of complaints regarding
accounting, internal accounting control or auditing matters.

24. Supervise preparation of the Committee's report, as required by the
Securities and Exchange Commission to be included in the Company's
annual report to shareholders.

While the Audit Committee has the responsibilities and powers set forth in this
Charter, the Audit Committee's function is one of oversight. The Company's
management is responsible for preparing the Company's financial statements and,
along with the internal auditors, if any, for developing and maintaining systems
of internal accounting and financial controls. The independent auditors will
assist the Audit Committee and the Board in fulfilling their responsibilities
for the review of these financial statements and internal controls. The Audit
Committee expects the independent auditors to call its attention to any
accounting, auditing, internal accounting control, regulatory or other related
matters that they believe warrant consideration or action. The Audit Committee
recognizes that the financial management and the internal and independent
auditors have more knowledge and information about the Company than do Audit
Committee members. Consequently, in carrying out its oversight responsibilities,
the Audit Committee does not provide any expert or special assurance as to the
Company's financial statements or internal controls or any professional
certification as to the independent auditors' work.

Approved by the Audit Committee: March 11, 2007

PROXY FOR ANNUAL MEETING
NOVEMBER 27, 2007

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 Gregory Bronshvag, the Corporate Secretary and Inspector of Elections,
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:

A. PROPOSAL ONE: ELECTION OF DIRECTORS

The Board of Directors recommends a vote FOR ALL NOMINEES to the Board of
Directors.

NOMINEES FOR WITHHOLD
-------- --- --------

01. ACE J. BLACKBURN, JR. [_] [_]

02. JAMES L. GRAINER [_] [_]

03. ALAN R. JONES [_] [_]

The shares represented by this proxy will be voted as you have indicated above.

-----------------------------------------------------
(Sign exactly as name appears on your account statement)
Dated: 2007
-------- -----------------------------------------------------
Name (Shareholder of record)

Number of Preferred Shares Number of Common Shares
------------ ---------