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

                                    FORM N-PX

               ANNUAL REPORT OF PROXY VOTING RECORD OF REGISTERED
                         MANAGEMENT INVESTMENT COMPANY

                  Investment Company Act file number 811-06179

             FLAHERTY & CRUMRINE PREFERRED INCOME FUND INCORPORATED
             -------------------------------------------------------
               (Exact name of registrant as specified in charter)

                      301 E. Colorado Boulevard, Suite 720
                               PASADENA, CA 91101
             -------------------------------------------------------
               (Address of principal executive offices) (Zip code)


                               Donald F. Crumrine
                        Flaherty & Crumrine Incorporated
                      301 E. Colorado Boulevard, Suite 720
                               PASADENA, CA 91101
             -------------------------------------------------------
                     (Name and address of agent for service)

        Registrant's telephone number, including area code: 626-795-7300
                                                          -------------------

                      Date of fiscal year end: NOVEMBER 30
                                              -------------

             Date of reporting period: JULY 1, 2005 - JUNE 30, 2006
                                       -----------------------------

Form N-PX is to be used by a registered  management  investment  company,  other
than a small business  investment company registered on Form N-5 (ss.ss.  239.24
and 274.5 of this chapter), to file reports with the Commission,  not later than
August 31 of each year,  containing the registrant's proxy voting record for the
most recent  twelve-month  period  ended June 30,  pursuant to section 30 of the
Investment  Company Act of 1940 and rule 30b1-4 there under (17 CFR 270.30b1-4).
The Commission may use the information  provided on Form N-PX in its regulatory,
disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-PX, and
the Commission will make this  information  public. A registrant is not required
to respond to the  collection of  information  contained in Form N-PX unless the
Form displays a currently  valid Office of Management and Budget ("OMB") control
number.  Please  direct  comments  concerning  the  accuracy of the  information
collection  burden  estimate and any  suggestions for reducing the burden to the
Secretary,  Securities and Exchange Commission, 100 F Street, NE, Washington, DC
20549.  The OMB has reviewed this collection of information  under the clearance
requirements of 44 U.S.C. ss. 3507.



ITEM 1.      PROXY VOTING RECORD
--------------------------------




----------------------------------------------------------------------------------------------------------------------
                                                                                    
NAME OF THE ISSUER                        EXCHANGE TICKER SYMBOL             CUSIP        SHAREHOLDER MEETING DATE
----------------------------------------------------------------------------------------------------------------------
Pacific G&E                               PCG                              694308800      19-Apr-06
----------------------------------------------------------------------------------------------------------------------





                                                                                      
                                                                VOTE FOR OR AGAINST           VOTE FOR OR AGAINST
MATTER VOTED                       PROPOSED BY   VOTE CAST            PROPOSAL                     MANAGEMENT

Approve directors                      Issuer      Yes                  For                              For

Approve auditors                       Issuer      Yes                  For                              For




----------------------------------------------------------------------------------------------------------------------
                                                                                    
NAME OF THE ISSUER                        EXCHANGE TICKER SYMBOL             CUSIP        SHAREHOLDER MEETING DATE
----------------------------------------------------------------------------------------------------------------------
Pacific G&E                               PCG                              694308503      19-Apr-06
----------------------------------------------------------------------------------------------------------------------




                                                                                      
                                                                VOTE FOR OR AGAINST           VOTE FOR OR AGAINST
MATTER VOTED                       PROPOSED BY   VOTE CAST            PROPOSAL                     MANAGEMENT

Approve directors                      Issuer      Yes                  For                              For

Approve auditors                       Issuer      Yes                  For                              For




----------------------------------------------------------------------------------------------------------------------
                                                                                    
NAME OF THE ISSUER                        EXCHANGE TICKER SYMBOL             CUSIP        SHAREHOLDER MEETING DATE
----------------------------------------------------------------------------------------------------------------------
Pacific G&E                               PCG                              694308602      19-Apr-06
----------------------------------------------------------------------------------------------------------------------




                                                                                      
                                                                VOTE FOR OR AGAINST           VOTE FOR OR AGAINST
MATTER VOTED                       PROPOSED BY   VOTE CAST            PROPOSAL                     MANAGEMENT

Approve directors                      Issuer      Yes                  For                              For

Approve auditors                       Issuer      Yes                  For                              For




----------------------------------------------------------------------------------------------------------------------
                                                                                    
NAME OF THE ISSUER                        EXCHANGE TICKER SYMBOL             CUSIP        SHAREHOLDER MEETING DATE
----------------------------------------------------------------------------------------------------------------------
Savannah Elecitrc and Power               SVJ                              804787802      22-May-06
----------------------------------------------------------------------------------------------------------------------




                                                                                      
                                                                VOTE FOR OR AGAINST           VOTE FOR OR AGAINST
MATTER VOTED                       PROPOSED BY   VOTE CAST            PROPOSAL                     MANAGEMENT

Approve merger with Georgia Power      Issuer      Yes                  For                             For




----------------------------------------------------------------------------------------------------------------------
                                                                                    
NAME OF THE ISSUER                        EXCHANGE TICKER SYMBOL             CUSIP        SHAREHOLDER MEETING DATE
----------------------------------------------------------------------------------------------------------------------
Southern California Edison                SCE                              842400202      27-Apr-06
----------------------------------------------------------------------------------------------------------------------




                                                                                      
                                                                VOTE FOR OR AGAINST           VOTE FOR OR AGAINST
MATTER VOTED                       PROPOSED BY   VOTE CAST            PROPOSAL                     MANAGEMENT

Approve directors                      Issuer      Yes                  For                              For




----------------------------------------------------------------------------------------------------------------------
                                                                                    
NAME OF THE ISSUER                        EXCHANGE TICKER SYMBOL             CUSIP        SHAREHOLDER MEETING DATE
----------------------------------------------------------------------------------------------------------------------
Wachovia Preferred Funding Corp           WNA-P                            92977v206      08-Nov-05
----------------------------------------------------------------------------------------------------------------------




                                                                                      
                                                                VOTE FOR OR AGAINST           VOTE FOR OR AGAINST
MATTER VOTED                       PROPOSED BY   VOTE CAST            PROPOSAL                     MANAGEMENT

Approve directors                       Issuer      Yes                  For                             For




----------------------------------------------------------------------------------------------------------------------
                                                                                    
NAME OF THE ISSUER                        EXCHANGE TICKER SYMBOL             CUSIP        SHAREHOLDER MEETING DATE
----------------------------------------------------------------------------------------------------------------------
Wisconsin Power & Light                   WIS-P                            976826503      24-May-06
----------------------------------------------------------------------------------------------------------------------




                                                                                      
                                                                VOTE FOR OR AGAINST           VOTE FOR OR AGAINST
MATTER VOTED                       PROPOSED BY   VOTE CAST            PROPOSAL                     MANAGEMENT

Approve directors                     Issuer      Yes                  For                              For

Approve auditor                       Issuer      Yes                  For                              For




----------------------------------------------------------------------------------------------------------------------
                                                                                    
NAME OF THE ISSUER                        EXCHANGE TICKER SYMBOL             CUSIP        SHAREHOLDER MEETING DATE
----------------------------------------------------------------------------------------------------------------------
Wisconsin Power & Light                   WIS-P                            976826305      24-May-06
----------------------------------------------------------------------------------------------------------------------




                                                                                      
                                                                VOTE FOR OR AGAINST           VOTE FOR OR AGAINST
MATTER VOTED                       PROPOSED BY   VOTE CAST            PROPOSAL                     MANAGEMENT

Approve directors                     Issuer      Yes                  For                              For

Approve auditor                       Issuer      Yes                  For                              For




----------------------------------------------------------------------------------------------------------------------
                                                                                    
NAME OF THE ISSUER                        EXCHANGE TICKER SYMBOL             CUSIP        SHAREHOLDER MEETING DATE
----------------------------------------------------------------------------------------------------------------------
Xcel Energy                               XEL                              98389B506      17-May-06
----------------------------------------------------------------------------------------------------------------------




                                                                                           
                                                                     VOTE FOR OR AGAINST           VOTE FOR OR AGAINST
MATTER VOTED                            PROPOSED BY   VOTE CAST            PROPOSAL                     MANAGEMENT

Approve directors                            Issuer      Yes                  For                              For
Approve auditor                              Issuer      Yes                  For                              For
Separate roles of Chairman and CEO  Security Holder      Yes                Against                            For




----------------------------------------------------------------------------------------------------------------------
                                                                                    
NAME OF THE ISSUER                        EXCHANGE TICKER SYMBOL             CUSIP        SHAREHOLDER MEETING DATE
----------------------------------------------------------------------------------------------------------------------
Xcel Energy                               XEL                              98389B704      17-May-06
----------------------------------------------------------------------------------------------------------------------




                                                                                           
                                                                     VOTE FOR OR AGAINST           VOTE FOR OR AGAINST
MATTER VOTED                            PROPOSED BY   VOTE CAST            PROPOSAL                     MANAGEMENT

Approve directors                              Issuer      Yes                  For                              For
Approve auditor                                Issuer      Yes                  For                              For
Separate roles of Chairman and CEO    Security Holder      Yes                Against                            For




----------------------------------------------------------------------------------------------------------------------
                                                                                    
NAME OF THE ISSUER                        EXCHANGE TICKER SYMBOL             CUSIP        SHAREHOLDER MEETING DATE
----------------------------------------------------------------------------------------------------------------------
Xcel Energy                               XEL                              98389B308      17-May-06
----------------------------------------------------------------------------------------------------------------------




                                                                                           
                                                                     VOTE FOR OR AGAINST           VOTE FOR OR AGAINST
MATTER VOTED                            PROPOSED BY   VOTE CAST            PROPOSAL                     MANAGEMENT

Approve directors                            Issuer      Yes                  For                         For
Approve auditor                              Issuer      Yes                  For                         For
Separate roles of Chairman and CEO  Security Holder      Yes                Against                       For





                                   SIGNATURES

Pursuant  to the  requirements  of the  Investment  Company  Act  of  1940,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

Registrant  FLAHERTY & CRUMRINE PREFERRED INCOME FUND INCORPORATED
          ----------------------------------------------------------------------

By (Signature and Title)*  /S/ DONALD F. CRUMRINE
                         -------------------------------------------------------
                          Donald F. Crumrine, Director, Chairman of the Board
                          and Chief Executive Officer
                          (Principal Executive Officer)

Date   8/15/06
    ----------------------------------------------------------------------------

*Print  the name and title of each  signing  officer  under his or her
 signature.