UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2011~~2012

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission file number 0-16508

USA REAL ESTATE INVESTMENT TRUST

(Exact Name of Small Business Issuer as specified in its Charter)

California	68-0420085
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

650 Howe Avenue, Suite 730

Sacramento, California 95825

(Address of principal executive offices) (Zip Code)

(916) 761-4992

(Issuer's telephone number, including area code)

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

None

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

	Shares of Beneficial Interest
	(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ~~Yes~~Yeso ~~o No x~~Nox

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ~~Yes~~Yeso ~~o No x~~Nox

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ~~Yes~~Yesx ~~x No o~~Noo

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ~~Yes~~Yesx ~~x No o~~Noo

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark if Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o

Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company x

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

The aggregate market value of the registrant’s voting shares held by non-affiliates: no established market exists for the registrant’s shares of beneficial interest.

The number of shares of beneficial interest outstanding at ~~March~~August 269, ~~2012~~2013 was 1815,~~007~~788.

RDGPreambleEnd

USA REAL ESTATE INVESTMENT TRUST

Table of Contents

			Page
PART I.	ITEM 1.	Business	4
	ITEM 1A.	Risk Factors	5
	ITEM 1B.	Unresolved Staff Comments	5
	ITEM 2.	Properties	5
	ITEM 3.	Legal Proceedings	5
	ITEM 4.	Mine Safety Disclosures	65
PART II.	ITEM 5.	Market for the Registrant’s Common Equity and Related Shareholder Matters and Issuer Purchases of Equity Securities	76
	ITEM 6.	Selected Financial Data	76
	ITEM 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	76
	ITEM 7A.	Quantitative and Qualitative Disclosures About Market Risk	87
	ITEM 8.	Financial Statements and Supplementary Data	98
	ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	18
	ITEM 9A(T).	Controls and Procedures	18
	ITEM 9B.	Other Information	19
PART III.	ITEM 10.	Directors, Executive Officers and Corporate Governance	2119
	ITEM 11.	Executive Compensation	2120
	ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	21
	ITEM 13.	Certain Relationships and Related Transactions and Director Independence	2221
	ITEM 14.	Principal Accounting Fees and Services	2221
PART IV	ITEM 15.	Exhibits and Financial Statement Schedules	23

Forward-Looking Statements

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

PART I.

ITEM 1. BUSINESS.

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

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

~~The~~From ~~Trust~~1987 ~~has~~through ~~operated~~2011 ~~and~~the ~~intends~~Trust towas ~~continue~~organized toand ~~operate~~operated in a manner ~~intended~~that toenabled ~~qualify~~it asto abe ~~REIT~~taxed ~~under Sections 856-860 of the Internal Revenue Code of 1986,~~ as ~~amended~~a ~~(the~~real ~~"Code"). A~~estate ~~qualified~~investment ~~REIT~~trust israther ~~relieved,~~than ~~in part, from federal income taxes on ordinary income and capital gains distributed to its shareholders. State tax benefits also may accrue to~~ a ~~qualified~~regular ~~REIT~~corporation. ~~Pursuant~~In to2012 ~~Code requirements,~~ the Trust ~~distributes~~was unable to maintain its ~~shareholders~~status atas ~~least~~a 90real %estate ofinvestment ~~its~~trust. ~~taxable~~Accordingly, ~~income~~in 2012 and ~~100~~subsequent %years of the ~~net~~Trust ~~capital~~will ~~gain~~be ~~from~~taxed ~~the~~as ~~sale~~a ofregular ~~Trust properties~~corporation.

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

The office of the Trust is located at 650 Howe Avenue, Suite 730 in Sacramento, California.

The Trust has no employees. It is administered by its Trustees and by its Chairman, and by independent contractors who work under the supervision thereof as a self-administered real estate investment trust.4

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

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

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

ITEM 1A. RISK FACTORS.

Not applicable to smaller reporting companies.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

Not applicable to smaller reporting companies.

ITEM 2. PROPERTIES.

As of December 31, 2011, the Trust owned one hundred and twenty- one acres of land in Wiggins, Mississippi valued at $1,786,000. The Trust acquired this land through foreclosure on January 6, 2009. On May 11, 2012, the Trust sold the one hundred and twenty-one acres of land in Wiggins, Mississippi.

ITEM 3. LEGAL PROCEEDINGS.

~~USA Real Estate Investment Trust vs~~None. ~~Frank J. Ferris and Collie Christensen~~

On December 30, 2009, the Trust filed an action in the Superior Court of the State of California, County of Sacramento, to enforce the guarantees of Frank J. Ferris and Collie Christensen of a loan made on February 28, 2007, to CFG, LLC, a Mississippi limited liability company, in the sum of $6,800,000. The loan was secured by a deed of trust on real property located in Wiggins, Mississippi, which was foreclosed on January 6, 2009. The Trust foreclosed against the real property collateral bidding $2,500,000 of the indebtedness. The Trust seeks to recover the deficiency from the guarantors with interest thereon at the rate of 25% per annum from January 6, 2009, until paid.

On March 5, 2010, a default was entered against Frank J. Ferris. Collie Christensen filed an answer on March 5, 2010, and discovery is proceeding. Although numerous defenses were raised in the answer, the Trust is aware of no factual basis for any of the asserted defenses.

On February 4, 2011, Frank Ferris filed a Petition in Bankruptcy seeking a discharge under Chapter 7 of the Bankruptcy Code and was discharged on May 24, 2011.

On February 11, 2011, Collie Christensen pleaded guilty in federal court to one count of wire fraud related to a scheme to misappropriate nearly $1,000,000 of investor funds unrelated to the Trust. He was sentenced on October 18, 2011 to five years. He is appealing the sentence.

A mandatory settlement conference and the trial have been set for April 11, 2012 and May 16, 2012, respectively.

USA Real Estate Investment Trust v. Robert A. Cook, John D. Chandler, Robert A. Leach and Lonnie C. Nielson

On June 30, 2009, the Trust filed an action to enforce the guarantees of Robert A. Cook, John D. Chandler, Robert A. Leach and Lonnie C. Nielson of a loan to Rivage Marina, LLC, a California limited liability company, under a promissory note, dated August 21, 2008, of the original principal sum of $600,000. Rivage Marina, LLC filed for bankruptcy on April 7, 2009.

The bankruptcy of Rivage Marina, LLC was dismissed on September 20, 2010, because Rivage Marina, LLC had no assets and there was nothing remaining to reorganize. Prior to Rivage Marina, LLC filing bankruptcy, it transferred the collateral of the deed of trust related to the $600,000 promissory note to Captain’s Table Marina, LLC, a newly formed entity owned by the same persons who are the members of Rivage Marina, LLC. Robert A. Leach filed for bankruptcy and was dismissed from the action. Mr. Leach was discharged in Bankruptcy on September 2, 2010.

On September 10, 2010, a judgment was entered against Robert A. Cook, John D. Chandler and Lonnie C. Nielson. Costs and attorneys’ fees were added to the judgment on January 18, 2011, and an abstract of judgment was recorded on January 27, 2011. The Trust discovered that John D. Chandler transferred his interest in the family’s residence to his wife, Gabrielle D. Chandler, on February 26, 2010, as her sole and separate property, which deed was recorded on April 7, 2010. On February 26, 2011, the Trust filed a complaint to set aside the transfer as a fraudulent conveyance. Gabrielle D. Chandler filed an answer on April 14, 2011.

In August 2011, the parties reached a settlement which was signed on September 8, 2011, by John D, Chandler and Gabrielle D. Chandler. The settlement called for the payment of $400,000 within ten days, which funds have been received by the Trust. In order to avoid a possible set aside of the settlement in bankruptcy, the action was not dismissed until January 5, 2012. The properties encumbered by the litigation have been released and the judgment against John D. Chandler has been acknowledged as satisfied as to him only.

Robert A. Cook filed for bankruptcy under Chapter 11 on August 8, 2011, seeking to reorganize his financial affairs. A bankruptcy trustee has been appointed who is marshalling the assets and contemplating a liquidating plan. The value of the estate is speculative and no distribution is expected in the near future.

ITEM 4. MINE SAFETY DISCLOSURES.

None.

PART II

ITEM 5. MARKET FOR THE REGISTRANT’SCOMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

~~SECURITIES~~The Trust has one class of authorized and outstanding equity consisting of shares of beneficial interest with a par value of $1 per share. The Trust engaged in a continuous best efforts public offering from May 20, 1987 until May 20, 1992. As of August 9, 2013, the Trust had 15,788 shares outstanding to 2,013 shareholders of record.

The Trust has one class of authorized and outstanding equity consisting of shares of beneficial interest with a par value of $1 per share. The Trust engaged in a continuous best efforts public offering from May 20, 1987 until May 20, 1992. As of March 26, 2012, the Trust had 18,007 shares outstanding to 2,019 shareholders of record.

No active public trading market presently exists for the shares of the Trust. Occasional trades in the shares of the Trust take place without the participation of the Trust on the Over-the-Counter Bulletin Board.

The Trust paid no distributions in ~~2011~~2012 or ~~2010~~2011. Currently, the Trust has no continuing income, but continuing expenses. As a result the Trustees have suspended distributions at this time.

In December 2012, the Trust repurchased 200 of its shares of beneficial interest for $16,660 or $83.30 per share in a privately-negotiated transaction.

ITEM 6. SELECTED FINANCIAL DATA.

Not applicable to smaller reporting companies.

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

CRITICAL ACCOUNTING ESTIMATES

REAL ESTATE OWNED: Real estate owned ~~consists solely of the one hundred and twenty-one acres of land the Trust acquired through foreclosure on January 6, 2009. Real estate owned~~ is originally recorded at fair value less estimated selling costs. Subsequent to acquisition, real estate owned is carried at the lower of carrying amount or current fair value less selling costs. Decreases in the carrying amount of real estate owned are recorded as an impairment charge in the statements of operations.

REAL ESTATE LOAN: The Trust carries its real estate loans at its unpaid principal balances net of unamortized loan fees unless they are impaired. A loan is considered impaired when the Trust determines that it is probable that it will be unable to collect all amounts due including principal and interest, according to the contractual terms of the loan agreement. The Trust measures impairment of a loan based upon the fair value of the collateral. If the measurement of impairment for the loan is less than the recorded investment in the loan, the shortfall is charged off with a corresponding charge to the provision for loan losses.

RESULTS OF OPERATIONS

~~Effective~~As ~~January~~of 1December 31, ~~2010~~2012, the Trust ~~suspended~~has ~~income~~advanced ~~recognition~~$817,282 onto ~~the~~West ~~real~~Coast ~~estate~~Realty ~~loan~~Trust, ~~and~~Inc. ~~subsequent~~(“WCRT”), ~~payments~~a ~~were~~related ~~first~~party, ~~credited~~in ~~against~~connection ~~previously~~with ~~recognized~~WCRT’s ~~accrued~~formation and ~~unpaid~~proposed ~~interest~~initial ~~and~~public ~~second~~offering. ~~against~~WCRT’s ~~principal. As~~proposed ~~the~~initial ~~accrued~~public ~~interest~~offering has been ~~paid,~~delayed ~~all~~and ~~future~~collection ~~payments~~of ~~will be credited against principal until~~ the ~~principal~~advance is ~~fully recovered~~uncertain. ~~Accordingly,~~ noAs ~~interest~~such, ~~income~~the ~~was recognized in 2011 or 2010. The~~ Trust recorded a $~~150~~587,~~800~~282 ~~provision~~impairment ~~for~~charge ~~loan~~in ~~loss to establish~~ the ~~loan~~2012 ~~loss~~statement ~~reserve~~of ~~against the real estate loan in September 2011~~operations.

7Effective January 1, 2010, the Trust suspended income recognition on the real estate loan. Accordingly, no interest income was recognized in 2012 or 2011. The Trust recorded a $150,800 provision for loan loss to establish the loan loss reserve against the real estate loan in September 2011.

As of December 31, 2011 the Trust owned one hundred and twenty-one acres of land in Wiggins, Mississippi recorded at $1,786,000 which is after an impairment of $814,000 was taken. Prior to impairment the recorded amount was $2,600,000. The Trust acquired this land through foreclosure on January 6, 2009. On January 20, 2012 the Trust entered into an agreement to sell its real estate owned for $1,900,000, less a six percent selling cost. The Trust has determined that the current negotiations reflect a reasonable basis for determining the fair value of the real estate owned at December 31, 2011.

In 2011, the Trust entered into two settlement agreements pertaining to the closing of a commercial real estate loan transaction in 2007. Pursuant to these settlement agreements the Trust received $653,580 which is recognized as other income in the Statement of Operations in 2011.

The Trust’s results of operations are substantially affected by its ability to sell its real estate owned.

FINANCIAL POSITION

~~The~~During 2012, the Trust advanced $738,782 to WCRT. As of December 31, 2012, the Trust has advanced a total of $817,282 to WCRT in connection with WCRT’s ~~financial~~formation ~~position~~and proposed initial public offering and is ~~substantially~~expected ~~affected~~to bybe ~~its~~repaid ~~ability~~without interest at the closing of WCRT’s proposed initial public offering. Of this advance, $230,000 relates to ~~sell~~fees ~~its~~paid ~~real~~to ~~estate~~Aviva ~~owned~~Life and Annuity Company for a planned mortgage refinance. The mortgage refinance was completed subsequent to December 31, 2012 and WCRT remitted $230,000 to the Trust in June 2013. WCRT’s proposed initial public offering has been delayed and collection of the advance is uncertain. As such, the Trust recorded a $587,282 impairment charge in the 2012 statement of operations. The advance is reflected as “Other assets” on the accompanying balance sheet and recorded at $230,000 and $78,500 at December 31, 2012 and 2011.

LIQUIDITY AND CAPITAL RESOURCES

~~Currently,~~The ~~the~~ Trust has no continuing operating income, but has continuing expenses. As a result, the Trustees have suspended distributions at this time. The Trust expects to meet its short-term liquidity requirements from cash on hand~~, borrowings collateralized by real estate owned and the sale of real estate owned~~.

On May 11, 2012, the Trust sold the 121 acres of land in Wiggins, Mississippi held by the Trust. As a result of the sale, the Trust had $1,200,089 of additional cash after paying the broker commission and the principal and accrued interest on the note payable collateralized by the land.

In 2012, the Trust repurchased 2,209 of its shares of beneficial interest for $184,010 or $83.30 per share in privately-negotiated transactions.

OFF-BALANCE SHEET ARRANGEMENTS

The Trust has no off-balance sheet arrangements.

IMPACT OF INFLATION

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

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable to smaller reporting companies.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

	Page	~~Page~~
	Reports of Independent Registered Public Accounting Firms	10
Report of Independent Registered Public Accounting Firm	9
	Balance Sheet As of December 31, 2011 and 2010	12
Balance Sheets
	Statements of Operations Years Ended December 31, 2011 and 2010	13
As of December 31, 2012 and 2011	10
	Statements of Changes in Shareholders' Equity Years Ended December 31, 2011 and 2010	14
Statements of Operations
	Statements of Cash Flows Years Ended December 31, 2011 and 2010	15
Years Ended December 31, 2012 and 2011	11
	Notes to Financial Statements	16
Statements of Changes in Shareholders' Equity
Years Ended December 31, 2012 and 2011	12
Statements of Cash Flows
Years Ended December 31, 2012 and 2011	13
Notes to Financial Statements	14

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

~~REPORT~~Trustees OFand ~~INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~Shareholders

To the Trustees and Shareholders

USA Real Estate Investment Trust

We have audited the accompanying balance sheets of USA Real Estate Investment Trust as of December 31, 2012 and 2011, and the related statements of operations, shareholders' equity, and cash flows for the years then ended. These financial statements are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Trust is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of USA Real Estate Investment Trust as of December 31, 2012 and 2011, and the results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

/s/ Crowe Horwath LLP

Sacramento, California

WeAugust ~~have audited the accompanying balance sheet of USA Real Estate Investment Trust (the "Trust") as of December 31~~9, 2011, and the related statements of operations, shareholders' equity, and cash flows for the year then ended. These financial statements are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements based on our audit.2013

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Trust is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.9

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Trust as of December 31, 2011, and the results of its operations and its cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles.

Sacramento, California

March 26, 2012

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Trustees and Shareholders

USA Real Estate Investment Trust

We have audited the accompanying balance sheet of USA Real Estate Investment Trust (the "Trust") as of December 31, 2010, and the related statements of operations, changes in shareholders' equity, and cash flows for the year then ended. These financial statements are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements based on our audit.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of USA Real Estate Investment Trust as of December 31, 2010, and the results of its operations and its cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles.

Sacramento, California

March 31, 2011

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USA REAL ESTATE INVESTMENT TRUST

Balance Sheets

	December 31,			December 31,
	December 31, 2012			December 31, 2011
	2011			2010
Assets
Real estate owned	$	~~1,786,000~~--		$	21,~~600~~786,000
Real estate loan		--			555,800
Real estate loan, net		--			--
Cash		~~718~~788,~~198~~469			~~140~~718,~~519~~198
Other assets		78230,~~500~~000			--78,500
Total assets	$	21,~~582~~018,~~698~~469		$	32,~~296~~582,~~319~~698
Liabilities and Shareholders' Equity
Liabilities:
Accounts payable	$	~~102~~1,~~052~~303		$	~~203~~102,~~260~~052
Note payable		~~500,000~~--			500,000
Total liabilities		~~602~~1,~~052~~303			~~703~~602,~~260~~052
Commitments and Contingencies
Shareholders' Equity:
Shares of beneficial interest, par value $1 per share; 62,500 shares authorized; 18,007 shares outstanding		18,007			18,007
Shares of beneficial interest, par value $1 per share; 62,500 shares authorized; 15,798 and 18,007shares outstanding at December 31, 2012 and 2011, respectively		15,798			18,007
Additional paid-in capital		26,~~355~~173,~~335~~534			26,355,335
Distributions in excess of cumulative net income		( 2425,~~392~~172,~~696~~166	)		( 2324,~~780~~392,~~283~~696	)
Total shareholders' equity		1,~~980~~017,~~646~~166			21,~~593~~980,~~059~~646
Total liabilities and shareholders' equity	$	21,~~582~~018,~~698~~469		$	32,~~296~~582,~~319~~698

See notes to financial statements.

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USA REAL ESTATE INVESTMENT TRUST

Statements of Operations

Years Ended December 31, ~~2011~~2012 and ~~2010~~2011

	2011			2010
	2012			2011
Revenues:
Interest income	$	--1,542		$	--
Expenses:
Operating		744,~~916~~745			5074,~~071~~916
Impairment charge		964,800			3,453,951
Impairment of receivables		587,282			964,800
General and administrative		~~226~~188,~~277~~985			~~309~~226,~~573~~277
		1,265,993			3,813,595
		781,012			1,265,993
Other income		653,580			--
Other income, legal settlement		--			653,580
Net (loss)	$	( 612,413	)	$	( 3,813,595	)
Net loss	$	(779,470	)	$	(612,413	)
Net loss per share	$	( 34.01	)	$	( 211.78	)
Loss per share	$	(46.35	)	$	(34.01	)
Weighted-average number of shares		1816,~~007~~818			18,007
Distributions per share	$	0.00		$	0.00

See notes to financial statements.

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USA REAL ESTATE INVESTMENT TRUST

Statements of Changes in Shareholders' Equity

Years Ended December 31, ~~2011~~2012 and ~~2010~~2011

	Shares of Beneficial Interest						Additional Paid-in			Distributions in Excess of Cumulative			Total Shareholders'
	Number			Amount			Capital			Net Income			Equity
December 31, 2009		18,007		$	18,007		$	26,355,335		$	( 19,966,688	)	$	6,406,654
December 31, 2010		18,007		$	18,007		$	26,355,335		$	(23,780,283	)	$	2,593,059
Net loss											( 3612,~~813,595~~413	)		( 3612,~~813,595~~413	)
December 31, 2010		18,007			18,007			26,355,335			( 23,780,283	)		2,593,059
December 31, 2011		18,007			18,007			26,355,335			(24,392,696	)		1,980,646
Net loss											( ~~612~~779,~~413~~470	)		( ~~612~~779,~~413~~470	)
December 31, 2011		18,007		$	18,007		$	26,355,335		$	( 24,392,696	)	$	1,980,646
Repurchase of shares		(2,209	)		(2,209	)		(181,801	)					(184,010	)
December 31, 2012		15,798		$	15,798		$	26,173,534		$	(25,172,166	)	$	1,017,166

See notes to financial statements.

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USA REAL ESTATE INVESTMENT TRUST

Statements of Cash Flows

For the Years Ended December 31, ~~2011~~2012 and ~~2010~~2011

	2011			2010
	2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	( ~~612~~779,~~413~~470	)	$	( 3612,~~813,595~~413	)
Adjustments to reconcile net loss to net cash used in operating activities:
Adjustments to reconcile net loss to net cash ( used in) provided by operating activities:
Impairment charge		~~964~~587,~~800~~282			3964,~~453,951~~800
Changes in operating assets and liabilities:
Decrease in interest receivable		--			40,800
Decrease in accounts payable		(100,749	)		(101,208	)
(Decrease) increase in accounts payable		( 101,208	)		80,469
Net cash (used in) provided by operating activities		(292,937	)		251,179
Increase in other assets		( 78,500	)		--
Net cash provided by (used in) operating activities		172,679			( 238,375	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Collections on real estate loans		405,000			44,200
Net proceeds from the sale of real estate		1,786,000			--
Investments in real estate owned		--			( 82,615	)
Advance to related party		(738,782	)		(78,500	)
Net cash provided by (used in) in investing activities		405,000			( 38,415	)
Collections on real estate loan		--			405,000
Net cash provided by investing activities		1,047,218			326,500
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in notes payable		--			200,000
Payment of note payable		(500,000	)		--
Net cash provided by financing activities		--			200,000
Repurchase of shares of beneficial interest		(184,010	)		--
NET INCREASE (DECREASE) IN CASH		577,679			( 76,790	)
Net cash used in financing activities		(684,010	)		--
CASH AT BEGINNING OF PERIOD		140,519			217,309
NET INCREASE IN CASH		70,271			577,679
CASH AT END OF PERIOD	$	718,198		$	140,519
CASH AT BEGINNING OF PERIOD		718,198			140,519
CASH AT END OF PERIOD	$	788,469		$	718,198
Supplemental cash flow disclosures:
Cash paid for interest	$	85,911			--

See notes to financial statements.

1513

USA REAL ESTATE INVESTMENT TRUST

Notes to Financial Statements

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

GENERAL: USA Real Estate Investment Trust (the "Trust") was organized under the laws of the State of California pursuant to a Declaration of Trust dated October 7, 1986. The Trust commenced operations on October 19,1987 upon the sale of the minimum offering amount of shares of beneficial interest. The Trust is a self-administered, and self-managed, ~~real~~California ~~estate~~business ~~investment~~ trust.

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

CASH: Cash consists of demand deposits with financial institutions. Cash balances periodically exceeded the insurable amounts.

DISTRIBUTIONS IN EXCESS OF NET INCOME: The Trust has a general policy of distributing cash to its shareholders in an amount that approximates taxable income plus noncash charges such as depreciation and amortization. As a result, distributions to shareholders exceed cumulative net income.

SEGMENT POLICY: The Trust operates in one business segment. For ~~2011~~2012 and ~~2010~~2011, all ~~material~~ revenues have been derived from domestic operations.

REVENUE RECOGNITION: Interest income is accrued on the outstanding principal amounts of the real estate loans. When the Trust determines that a loan is impaired, income recognition is suspended if full recovery of interest and principal appears uncertain. Loan fees are recognized as interest income over the lives of the related real estate loans using the straight-line method.

INCOME TAXES: ~~The~~ From 1987 through 2011 the Trust ~~has~~was ~~elected~~organized and operated in a manner that enabled it to be taxed as a real estate investment trust~~. Accordingly,~~ ~~the~~rather ~~Trust~~than ~~does~~a ~~not~~regular ~~pay~~corporation. ~~income~~In ~~tax~~2012 onthe ~~income~~Trust ~~because~~was ~~income~~unable ~~distributed~~ to ~~shareholders~~maintain isits atstatus ~~least~~as ~~equal~~a real toestate ~~the~~investment ~~greater~~trust. ofAccordingly, ~~90%~~in of2012 ~~its~~and ~~taxable~~subsequent ~~income~~years orthe ~~100%~~Trust ofwill ~~its~~be ~~capital~~taxed ~~gains~~as a regular corporation.

NET INCOME PER SHARE: Net income per share is computed based on the weighted-average number of shares outstanding.

RECENTLY ~~ADOPTED~~ISSUED AND ~~ISSUED~~ADOPTED ACCOUNTING GUIDANCE: On ~~January~~In 1,May 2011, the ~~Trust~~ ~~adopted~~ Financial Accounting Standards ~~Update~~Board ~~2010-06,~~(“FASB”) ~~Fair~~issued ~~Value~~an ~~Measurements~~amendment ~~and~~to ~~Disclosures~~achieve ~~(Topic~~common ~~820)~~fair –value ~~Improving~~measurement ~~Disclosures~~and ~~about~~disclosure ~~Fair~~requirements ~~Value~~between ~~Measurements~~U.S. ~~(ASU~~and ~~2010-06)~~International accounting principles. Overall, ~~ASU~~the ~~2010-06~~guidance ~~requires~~is ~~changes~~consistent towith ~~disclosures~~existing ~~about~~U.S. ~~purchases,~~accounting ~~sales,~~principles; ~~issuances~~however, ~~and~~there ~~settlements~~are insome ~~the~~amendments ~~roll~~that ~~forward~~change ofa ~~activity~~particular inprinciple ~~Level~~or 3requirement for measuring fair value or for disclosing information about fair value measurements. ~~The~~Other than the additional disclosure requirements, the adoption of ~~these~~this ~~changes~~guidance had no impact on the financial statements ~~or disclosures~~.

1614

In June 2011, the FASB ~~issued~~amended ~~Accounting~~existing ~~Standards~~guidance ~~Update~~and ~~2011-05,~~eliminated ~~Comprehensive~~the ~~Income~~option ~~(Topic~~to ~~220)~~present ~~– Presentation of Comprehensive Income. The Update requires~~ the ~~disclosure~~components of other comprehensive income onas ~~the~~part ~~face~~ of the ~~income~~ statement orof changes in ashareholders' ~~stand-alone~~equity. The ~~statement~~amendment ofrequires that comprehensive income, asbe ~~opposed~~presented toin ~~the~~either ~~more common historical practice of disclosure as~~ a ~~component~~single ofcontinuous ~~the~~ statement ofor ~~stockholders'~~in ~~equity.~~two ~~This~~separate ~~update~~consecutive isstatements. ~~effective~~The ~~for~~adoption ~~fiscal~~of ~~years,~~this ~~and~~guidance ~~interim~~had ~~periods~~no ~~within~~impact ~~those~~on ~~years,~~the ~~beginning~~financial ~~after~~statements ~~December~~or ~~15,~~disclosure ~~2011,~~as ~~and~~the ~~should~~Trust behad ~~applied~~no ~~retrospectively.~~components ~~The adoption~~ of ~~this~~comprehensive ~~guidance~~income ~~will~~at ~~have~~December no31, ~~impact~~2012 ~~on the financial statements~~ or ~~disclosures~~2011.

In May 2011, the FASB issued Accounting Standards Update 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The Update modifies accounting guidance and expands existing disclosure requirements for fair value measurements. This Update clarifies how fair values should be measured for instruments classified in stockholders’ equity and under what circumstances premiums and discounts should be applied in fair value measurements. This Update also permits entities to measure fair value on a net basis for financial instruments that are managed based on net exposure to market risks and/or counterparty credit risk. This update is effective in the first quarter of 2012 and should be applied retrospectively. The adoption of this guidance will have no impact on the financial statements or disclosures.

2. REAL ESTATE OWNED

As of December 31, 2011 the Trust owned one hundred and twenty-one acres of land in Wiggins, Mississippi recorded at $1,786,000 which is after an impairment charge of $814,000 was taken. Prior to impairment the recorded amount was $2,600,000. The Trust acquired this land through foreclosure on January 6, 2009. On ~~January~~May 2011, 2012, the Trust ~~entered~~sold ~~into~~the anone ~~agreement~~hundred toand ~~sell~~twenty-one ~~its~~acres ~~real~~of ~~estate~~land ~~owned~~in Wiggins, Mississippi for $1,900,000, ~~less~~in acash. In ~~six~~connection ~~percent~~with ~~selling~~the ~~cost. The~~sale the Trust ~~has~~paid ~~determined~~a ~~that~~real ~~the~~estate ~~current~~commission ~~negotiations~~of ~~reflect~~$114,000 ato ~~reasonable~~its ~~basis~~broker. ~~for~~The ~~determining~~net ~~the~~proceeds ~~fair~~received ~~value~~ of ~~the~~$1,786,000 ~~real~~resulted ~~estate~~in ~~owned~~no atgain ~~December~~or ~~31, 2011~~loss.

3. REAL ESTATE LOAN

As of December 31, 2012 and 2011 the Trust had one real estate loan with a recorded amount of $0, which is net of a $150,800 allowance, collateralized by property in Sacramento, California and personally guaranteed by the principal members of the borrower. The loan bears interest at 10% per annum, payable in monthly installments of interest only. The principal balance was due August 31, 2010.

The Trust’s motion for summary judgment in the lawsuit the Trust filed to enforce the guarantees of the guarantors of the real estate loan was granted and judgment entered in September 2010. The Trust received a $400,000 settlement payment from one of the guarantors in September 2011. The Trust intends to pursue collection of the remaining $150,800 balance from the remaining guarantor. As such, the remaining $150,800 balance is considered impaired and the Trust recorded a $150,800 provision for loan loss to establish a loan loss reserve in September 2011.

Effective January 1, 2010, the Trust suspended income recognition on the real estate loan ~~and subsequent payments were first credited against previously recognized accrued and unpaid interest and second against principal~~. ~~As the accrued interest has been paid, all future payments will be credited against principal until the principal is fully recovered.~~ Interest income ~~not~~forgone ~~realized~~ on the real estate loan during ~~2011and~~2012 ~~2010~~and 2011 was $4115,~~239~~080 and $7641,~~636~~239, respectively.

4. NOTE PAYABLE

As of December 31, 2011, the Trust had a $500,000 note payable collateralized by ~~the~~121 ~~one hundred and twenty-one~~ acres of land in Wiggins, Mississippi~~. The~~ ~~promissory~~owned ~~note~~by ~~bears interest at 9% per annum with both~~ the ~~interest~~Trust. ~~and~~On ~~principal~~May ~~due on January 31~~11, 2012~~. Accrued~~, ~~and~~the ~~unpaid~~Trust ~~interest~~sold on the ~~note~~121 ~~payable~~acres ~~was~~of ~~$83,244~~land atin ~~December 31~~Wiggins, ~~2011. The~~Mississippi ~~note~~for ~~evidences, in part,~~ $~~200~~1,786,000 ~~borrowed~~in ~~from~~cash. ~~Bonnie~~In ~~Leidig,~~connection with the ~~spouse of Gregory E. Crissman~~sale, ~~a Trustee and Chief Financial Officer of~~ the Trust. ~~The~~paid ~~aggregate~~in ~~fair~~full ~~value of~~ the ~~note~~$585,911 ~~approximates~~of ~~its~~outstanding ~~carrying~~principal ~~value~~and asaccrued ofinterest ~~December~~on ~~31,~~the ~~2011~~note.

On December 27, 2011, the Trust and the holders of the $500,000 note payable entered into an agreement to extend the maturity date to January 31, 2013 and revise the interest rate and the interest payment dates. Under this new agreement the interest rate from January 31, 2012 through January 31, 2013 was reduced from 9% to 6.5~~% and $75,156 of the $87,066 of accrued and unpaid interest that was due on January 31, 2012 was extended to December 15, 2012~~. SHAREHOLDERS' EQUITY

5The Trust paid no distributions in 2012 or 2011. ~~DISTRIBUTIONS~~ In 2012, the Trust repurchased 2,209 of its shares of beneficial interest for $184,010 or $83.30 per share in privately-negotiated transactions.

~~The Trust paid no distributions in 2011 or 2010.~~ 15

6. COMMITMENTS AND CONTINGENCIES

The Trust ismay become involved in claims and legal ~~proceedings and it may become involved in other legal~~ matters arising in the ordinary course of business. The Trust evaluates these claims and legal matters on a case-by-case basis to make a determination as to the impact, if any, on its business, liquidity, results of operations, financial condition or cash flows. The Trust currently believes that the ultimate outcome of these claims and proceedings, individually and in the aggregate, will not have a material adverse impact on its financial position, results of operations or cash flows. The Trust’s evaluation of the potential impact of these claims and legal proceedings on its business, liquidity, results of operations, financial condition and cash flows could change in the future.

7. ~~RELATED~~FAIR ~~PARTY~~VALUE MEASUREMENTS AND OTHER FINANCIAL MEASUREMENTS

The Trust has no assets or liabilities accounted for at fair value on a recurring or non-recurring basis. Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity can access as of the measurement date.

Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The carrying values and fair values of the Trust’s financial instruments were as follows:

		December 31, 2012				December 31, 2011
	Level	Carrying value		Fair value		Carrying value		Fair value
Cash	1	$	788,469	$	788,469	$	718,198	$	718,198
Accounts payable	2		1,303		1,303		102,052		102,052
Note payable due within one year	2		--		--		500,000		500,000

There were no transfers between Level 1 and Level 2 during 2012 or 2011.

Cash, Accounts payable and Note payable due within one year. The carrying amounts approximate fair value because of the short maturity of the instruments.

8. RELATED PARTY

In 2011 the Trust paid Benjamin A. Diaz, a Trustee and Secretary of the Trust, $44,000 for legal services provided in connection with certain settlements entered into by the Trust.

~~RDGXBRLParseEnd~~During 2012, the Trust advanced $738,782 to WCRT. As of December 31, 2012, the Trust has advanced a total of $817,282 to WCRT in connection with WCRT’s formation and proposed initial public offering and is expected to be repaid without interest at the closing of WCRT’s proposed initial public offering. Of this advance, $230,000 relates to fees paid to Aviva Life and Annuity Company for a planned mortgage refinance. The mortgage refinance was completed subsequent to December 31, 2012 and WCRT remitted $230,000 to the Trust in June 2013. WCRT’s proposed initial public offering has been delayed and collection of the advance is uncertain. As such, the Trust recorded a $587,282 impairment charge in the 2012 statement of operations. The advance is reflected as “Other assets” on the accompanying balance sheet and recorded at $230,000 and $78,500 at December 31, 2012 and 2011.

9. INCOME TAXES

Losses before income taxes amounted to $779,470 for the year ended December 31, 2012. Because of the net operating losses and a valuation allowance on deferred tax assets, there was no provision for income taxes recorded in the financial statements for the year ended December 31, 2012.

A reconciliation of the federal statutory income tax rate of 34% and the Trust's effective income tax rates is as follows:

In thousands of dollars:

	2012

Statutory federal income tax benefit		241,864		31	%
State income tax, net of federal benefit		68,905		9	%
Valuation allowance		(310,769	)	(40	) %
Effective income tax	$	-		0	%

The components of the deferred tax assets (liabilities) consisted of the following as of December 31, 2012:

In thousands of dollars:

	2012
Deferred tax assets:
Net operating loss carry forwards	$	310,497
State taxes		272
Valuation allowance		(310,769	)
Total deferred tax assets, net	$	-

The Trust has no interest or penalties related to unrecognized tax benefits at December 31, 2012. The Trust has no material uncertain tax positions. The net operating loss carry-forwards of $779,470 as of December 31, 2012 will expire in 20 years.

Based on the historical taxable income and projections for future taxable income over the periods in which the deferred income tax assets become deductible, management believes it more likely than not that the Trust will not realize benefits of these deductible differences as of December 31, 2012. Management has, therefore, established a full valuation allowance against its net deferred income tax assets as of December 31, 2012.

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

None.

ITEM 9A(T). CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

The Trust's management, including its Chief Executive Officer and Chief Financial Officer conducted an evaluation of the effectiveness of the Trust's disclosure controls and procedures as of December 31, ~~2011~~2012. Based on that evaluation, they concluded that the Trust's disclosure controls and procedures were effective as of December 31, ~~2011~~2012 to provide reasonable assurance that information the Trust is required to disclose in reports that it submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Controls over Financial Reporting

There have been no changes in the Trust’s internal controls over financial reporting that occurred during the quarter ended December 31, ~~2011~~2012, that have materially affected, or are reasonably likely to materially affect, the Trust’s internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Management’s Report on Internal Control over Financial Reporting

Management of the Trust is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) of the Exchange Act. Management assessed the effectiveness of the Trust’s internal control over financial reporting based on criteria for effective internal control over financial reporting described in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its assessment, management concluded that the Trust’s internal control over financial reporting was effective as of December 31, ~~2011~~2012.

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

ITEM 9B. OTHER INFORMATION.

None.

PART III.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE GOVERNANCE.

GENERAL

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

THE TRUSTEES

The Trustees of the Trust are as follows:

Name	Age		~~Trustee Since~~	Trustee Since	~~Office~~	Office
Jeffrey B. Berger	59	60	~~2010~~		~~Trustee, Chairman and Chief Executive Officer~~2010	Trustee, Chairman and Chief Executive Officer
Gregory E. Crissman	60	62	~~1986~~		~~Trustee and Chief Financial Officer~~1986	Trustee and Chief Financial Officer
Benjamin A. Diaz	79	79	~~1988~~		~~Trustee and Secretary~~1988	Trustee and Secretary

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

JEFFREY B. BERGER. Mr. Berger iswas elected as a Trustee ~~and~~in ~~the~~December ~~Chairman~~ 2010 and ~~the~~has served as Chief Executive Officer ofand ~~the~~Chairman ~~Trust~~since April 2011. Mr. Berger is president of University Capital Management, Inc. University Capital Management, Inc. is a full-service real estate company engaged principally in the ownership and development, acquisition and management of commercial and residential real estate throughout California, Nevada, Hawaii and Oregon. Mr. Berger earned his Bachelor of Arts from the University of California in Davis, California in 1974 and his Juris Doctor degree from Thomas Jefferson School of Law in 1978. He is a member of The State Bar of California and the American Bar Association.

GREGORY E. CRISSMAN. Mr. Crissman is a Trustee and the Chief Financial Officer of the Trust. He has over 30 years of experience in real estate, accounting, auditing, and taxation. Mr. Crissman earned a Bachelor of Science in Business Administration from California State University in Sacramento, California in 1976. He is a Certified Public Accountant and a member of both the California Society of Certified Public Accountants and the American Institute of Certified Public Accountants.

BENJAMIN A. DIAZ. Mr. Diaz is a Trustee and the Secretary of the Trust. Mr. Diaz is a retired judge of the Superior Court of California. He served as a judge of the Sacramento County Superior Court from April 1976 to May 1986. He engaged in private practice in Sacramento, California from 1986 to December 1991 specializing in real estate transactions, general practice, litigation, business law, and personal injury matters. From January 1992 to the present, Judge Diaz has been engaged in private judging, arbitration, mediation and consulting services. Mr. Diaz received his Juris Doctor degree from the University of Pacific, McGeorge School of Law in Sacramento, California in 1966.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires the Trustees, executive officers, and holders of more than 10% of the Trust’s shares of beneficial interest to file with the SEC reports regarding their ownership and changes in ownership of the Trust’s shares. The Trust believes that during ~~2011~~2012, the ~~trustees~~Trustees, executive officers, and any 10% shareholders complied with all Section 16(a) filing requirements.

In making these statements, the Trust relied upon examination of the copies of Forms 3, 4, and 5, and amendments to these forms, provided to it and the written representations of the Trustees, executive officers, and any 10% shareholders.

CODE OF ETHICS

The Trustees have adopted a code of ethics that applies to its ~~trustees~~Trustees and officers. The Trust filed a copy of its code of ethics as an exhibit to its annual report on Form 10-K.

AUDIT COMMITTEE

The Trustees have established an Audit Committee, comprised of Mr. Diaz. Mr. Diaz serves as chairman of the Audit Committee. The ~~trustees~~Trustees have determined that Mr. Diaz is an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K.

The Trustees do not maintain a nominating or compensation committee or any other standing committee except for the audit committee.

ITEM 11. EXECUTIVE COMPENSATION.

COMPENSATION OF OFFICERS

During ~~2011~~2012, the Trust was a self-administered, self-managed ~~real~~California ~~estate~~business ~~investment~~ trust. The Trust has the following officers: Chairman, Chief Executive Officer, Chief Financial Officer, and Secretary. No officer except Gregory E. Crissman was compensated by the Trust in his capacity as an officer. During ~~2011~~2012, none of the Trust's officers received compensation in excess of $1819,~~425~~250.

Name and		All Other
Name and Principal Position	Year	All Other Compensation			Total
Principal Position	Year	Compensation					Total
Gregory E. Crissman, Chief Financial Officer	2012	$	19,250	(1)	$	19,250
Gregory E. Crissman, Chief Financial Officer	2011	$	18,425	(2)	$	~~(1)~~18,425	$	~~18,425~~
Gregory E. Crissman, Chief Financial Officer	2010	$	62,425			(1)	$	62,425

(1) Includes fees for each meeting of the Trustees attended for a total of $919,~~625~~250.

(2) Includes fees for each meeting of the Trustees attended for a total of $9,625.

COMPENSATION OF TRUSTEES

Each Trustee receives $1,375 for each Trustee’s meeting attended plus reimbursement of direct expenses incurred in connection with such attendance. There are currently no plans to alter this compensation schedule. No Trustee received compensation under any other arrangement during ~~2011 except Gregory E~~2012. ~~Crissman who received compensation as an officer for work performed.~~ The Trustees do not maintain a nominating or compensation committee or any other standing committee except for an audit committee. The audit committee consists of Benjamin A. Diaz who serves without additional compensation. The Trustees have authority to establish committees and to compensate members as appropriate for their service. During ~~2011~~2012, the Trustees had ~~seven~~fourteen ~~regular~~ meetings. All Trustees attended all meetings.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS.

As of March 2631, ~~2012~~2013, no person known to the Trust owns beneficially more than 5% of its outstanding shares. This percentage of ownership is based on the number of shares of beneficial interest on such date. No Trustee beneficially owns any shares of the Trust except as set forth below:

	Amount and Nature of		Percent
Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership			Percent of Class
Name and Address of Beneficial Owner	Beneficial Ownership		of Class
Gregory E. Crissman, Trustee and Chief Financial Officer 1066 Vanderbilt Way Sacramento, CA 95825		46			0.2912
Gregory E. Crissman, Trustee and Chief Financial Officer 1066 Vanderbilt Way Sacramento, CA 95825	46		0.2555
Jeffrey B. Berger. Trustee, Chairman and Chief Executive Officer 2443 Fair Oaks Boulevard, #368 Sacramento, CA 95825		1			0.0063
Jeffrey B. Berger. Trustee, Chairman and Chief Executive Officer 2443 Fair Oaks Boulevard, #368 Sacramento, CA 95825	1		0.0056
Benjamin A. Diaz, Trustee and Secretary P.O. Box 2008 Folsom, CA 95763		0			0.0000
Benjamin A. Diaz, Trustee and Secretary P.O. Box 2008 Folsom, CA 95763	0		0.0000
All Trustees and officers as a group		47			0.2975
All Trustees and officers as a group	47		0.2611

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.

~~None~~During 2012, the Trust advanced $738,782 to West Coast Realty Trust, Inc. (“WCRT”), a related party. As of December 31, 2012, the Trust has advanced a total of $817,282 to WCRT in connection with WCRT’s formation and proposed initial public offering and is expected to be repaid without interest at the closing of WCRT’s proposed initial public offering. Of this advance, $230,000 relates to fees paid to Aviva Life and Annuity Company for a planned mortgage refinance. The mortgage refinance was completed subsequent to December 31, 2012 and WCRT remitted $230,000 to the Trust in June 2013. WCRT’s proposed initial public offering has been delayed and collection of the advance is uncertain. As such, the Trust recorded a $587,282 impairment charge in the 2012 statement of operations. The advance is reflected as “Other assets” on the accompanying balance sheet and recorded at $230,000 and $78,500 at December 31, 2012 and 2011.

~~ITEM~~WCRT 14was formed in March 2012 and intends to acquire and own necessity-based retail properties, including community and neighborhood shopping centers located in densely populated, middle and upper income markets in the Western United States. ~~PRINCIPAL~~WCRT ~~ACCOUNTING~~intends ~~FEES~~to ~~AND~~elect ~~SERVICES~~to be taxed and to operate in a manner that will allow it to qualify as a real estate investment trust for federal income tax purposes commencing with its taxable year ending December 31, 2013. Jeffrey B. Berger, a trustee of the Trust and also the Chief Executive Officer and Chairman of the Trust, serves as President and Chief Executive Officer of WCRT, and Benjamin A. Diaz, a trustee of the Trust and the Trust’s Secretary, is expected to be named to the board of directors of WCRT upon consummation of the IPO.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

Perry-Smith LLP was the Trust’s independent registered accounting firm until October 31, 2011.

	2011		2010
Audit Fees	$	9,000	$	29,000
Audit-Related Fees		--		--
Tax Fees		--		--
All Other Fees		--		--
	$	9,000	$	29,000

Crowe Horwath, LLP the Trust’s current independent registered accounting firm was appointed as of November 1, 2011.

	2011		2010
	2012		2011
Audit Fees	$	817,000	$	--8,000
Audit-Related Fees		--		--
Tax Fees		--		--
All Other Fees		--		--
	$	817,000	$	--8,000

2221

~~Pre~~Perry-~~Approval~~Smith ~~Policy~~LLP ~~for~~was ~~Accounting Services. In 2005,~~ the Audit Committee and the Trustees adopted a formal pre-approval policy for accounting services and fees. The policy requires that all audit services, audit related services, tax fees and all other fees of the Trust'’s independent ~~auditor~~registered beaccounting ~~pre-approved~~firm byuntil ~~the~~October ~~Audit~~31, ~~Committee and the Trustees. The Audit Committee and the Trustees approved the audit and audit related fees provided by the independent auditor during~~ 2011 ~~and 2010~~.

	2012		2011

Audit Fees	$	--	$	9,000
Audit-Related Fees		--		--
Tax Fees		--		--
All Other Fees		--		--
	$	--	$	9,000

Pre-Approval Policy for Accounting Services. In 2005, the Audit Committee and the Trustees adopted a formal pre-approval policy for accounting services and fees. The policy requires that all audit services, audit related services, tax fees and all other fees of the Trust's independent auditor be pre-approved by the Audit Committee and the Trustees. The Audit Committee and the Trustees approved the audit and audit related fees provided by the independent auditor during 2012 and 2011.

Audit Fees

Audit Fees relate to services related to the audit of the Trust’s financial statements, review of the financial statements included in the Trust’s quarterly reports on Form 10-Q and consents and assistance in connection with other filings.

Audit-Related Fees

Audit-Related Fees consist of fees for assurance and related services that were reasonably related to the performance of the audit or review of the Trust’s financial statements and are reported under “Audit Fees.” There were no such fees in ~~2011~~2012 or ~~2010~~2011.

Tax Fees

Tax Fees include fees for services rendered in connection with the preparation of federal, state and foreign tax returns and other filings and tax consultation services. There were no such fees in ~~2011~~2012 or ~~2010~~2011.

All Other Fees

There were no other fees in ~~2011~~2012 or ~~2010~~2011.

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

3.1		Amended and Restated Declaration of Trust of USA Real Estate Investment Trust (included as Exhibit 3.2 to Form S-11 (File No. 33-9315) and incorporated herein by reference).
3.2		Bylaws of the Trust (included as Exhibit 3.2 to Form S-11 (File No. 33-9315) and incorporated herein by reference).
3.4		Amendments to Sections 2.3.1, 2.3.7, 2.3.8, 2.4.2 and 2.4.3 of the Amended and Restated Declaration of Trust of USA Real Estate Investment Trust (included as Exhibit 3.4 to Form 10-K for the year ended December 31, 1987 and incorporated herein by reference).
4.1		Article VIII of Exhibit 3.1(included as Exhibit 4.1 to Form S-11 (File No. 33-9315) and incorporated herein by reference).
4.2		Form of Share Certificate (included as Exhibit 4.2 to Form S-11 (File No. 33-9315) and incorporated herein by reference).
14.1		Code of Ethics (included as Exhibit 14.1 to Form 10-K filed on March 14, 2004 and incorporated herein by reference).
31.1		Section 302 Certification of the Chief Executive Officer Pursuant to Rule 13-14(a) of the Securities Exchange Act of 1934.
31.2		Section 302 Certification of the Chief Financial Officer Pursuant to Rule 13-14(a) of the Securities Exchange Act of 1934.
32.1		Section 906 Certifications filed by the Chief Executive Officer and the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.
101.INS	*	XBRL Instance
101.SCH	*	XBRL Taxonomy Extension Schema
101.CAL	*	XBRL Taxonomy Extension Calculation
101.DEF	*	XBRL Taxonomy Extension Definition
101.LAB	*	XBRL Taxonomy Extension Labels
101.PRE	*	XBRL Taxonomy Extension Presentation

3.4		Amendments to Sections 2.3.1, 2.3.7, 2.3.8, 2.4.2 and 2.4.3 of the Amended and Restated
		Declaration of Trust of USA Real Estate Investment Trust (included at Exhibit 3.4 to Form 10-K for the year ended December 31, 1987 and incorporated herein by reference).

4.1		Article VIII of Exhibit 3.1(included as Exhibit 4.1 to Form S-11 (File No. 33-9315) and incorporated herein by reference).

4.2		Form of Share Certificate (included as Exhibit 4.2 to Form S-11 (File No. 33-9315) and incorporated herein by reference).

14.1		Code of Ethics (included as Exhibit 14.1 to Form 10-K filed on March 14, 2004 and incorporated herein by reference).

31.1		Section 302 Certification of the Chief Executive Officer Pursuant to Rule 13-14(a) of the Securities Exchange Act of 1934.
31.2		Section 302 Certification of the Chief Financial Officer Pursuant to Rule 13-14(a) of the Securities Exchange Act of 1934.
32.1		Section 906 Certifications filed by the Chief Executive Officer and the Chief Financial
		Officer Pursuant to 18 U.S.C. Section 1350.

101.INS	*	XBRL Instance

101.SCH	*	XBRL Taxonomy Extension Schema

101.CAL	*	XBRL Taxonomy Extension Calculation

101.DEF	*	XBRL Taxonomy Extension Definition

101.LAB	*	XBRL Taxonomy Extension Labels

101.PRE	*	XBRL Taxonomy Extension Presentation

XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

Signatures

Pursuant to the requirements of Section 13 of 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated:	~~March~~August 269, ~~2012~~2013		USA Real Estate Investment Trust
	Date
		By:	/s/ Jeffrey B. Berger
			Jeffrey B. Berger
			Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

Dated:	~~March~~August 269, ~~2012~~2013	By:	/s/ Jeffrey B. Berger
			Jeffrey B. Berger, Trustee, Chairman
			and Chief Executive Officer
Dated:	~~March~~August 269, ~~2012~~2013	By:	/s/ Gregory E. Crissman
	Date		Gregory E. Crissman, Trustee
			and Chief Financial Officer
Dated:	~~March~~August 269, ~~2012~~2013	By:	/s/ Benjamin Diaz
	Date		Benjamin Diaz,
			Trustee and Secretary

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