10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:  March 31, 2015

Commission File Number:  000-29274

AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

(Exact name of registrant as specified in its charter)

State of Minnesota	41-1789725
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
30 East 7th Street, Suite 1300 St. Paul, Minnesota 55101	(651) 227-7333
(Address of principal executive offices)	(Registrant’s telephone number)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

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.     x Yes    o No

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).     x Yes    o No

Indicate by check mark whether the 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.

o Large accelerated filer	o Accelerated filer
o Non-accelerated filer	x Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     o Yes    x No

AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

INDEX

				Page
Part I – Financial Information
	Item 1.	Financial Statements:
		Balance Sheets as of March 31, 2015 and December 31, 2014		3
		Statements for the Three Months ended March 31, 2015 and 2014:
			Income	4
			Cash Flows	5
			Changes in Partners’ Capital	6
		Notes to Financial Statements		7 - 11
	Item 2.	Management's Discussion and Analysis of Financial
			Condition and Results of Operations	12 - 17
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk		17
	Item 4.	Controls and Procedures		17
Part II – Other Information
	Item 1.	Legal Proceedings		18
	Item 1A.	Risk Factors		18
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		18
	Item 3.	Defaults Upon Senior Securities		18
	Item 4.	Mine Safety Disclosures		18
	Item 5.	Other Information		18
	Item 6.	Exhibits		19
Signatures				19

Page 2 of 19

AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

BALANCE SHEETS

ASSETS

	March 31,			December 31,
	2015			2014
	(unaudited)
Current Assets:
Cash	$	4,499,334		$	4,540,920
Real Estate Investments:
Land		3,484,216			3,484,216
Buildings		10,126,971			10,126,971
Acquired Intangible Lease Assets		522,129			522,129
Real Estate Held for Investment, at cost		14,133,316			14,133,316
Accumulated Depreciation and Amortization		(2,787,698	)		(2,674,423	)
Real Estate Held for Investment, Net		11,345,618			11,458,893
Total Assets	$	15,844,952		$	15,999,813

LIABILITIES AND PARTNERS' CAPITAL

Current Liabilities:
Payable to AEI Fund Management, Inc.	$	32,141	$	30,299
Distributions Payable		281,814		291,921
Unearned Rent		35,214		12,121
Total Current Liabilities		349,169		334,341
Long-term Liabilities:
Acquired Below-Market Lease Intangibles, Net		71,443		74,191
Partners’ Capital:
General Partners		9,311		10,980
Limited Partners – 24,000 Units authorized;    21,829 Units issued and outstanding    as of 3/31/15 and 12/31/14		15,415,029		15,580,301
Total Partners' Capital		15,424,340		15,591,281
Total Liabilities and Partners' Capital	$	15,844,952	$	15,999,813

The accompanying Notes to Financial Statements are an integral part of these statements.

Page 3 of 19

AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

STATEMENTS OF INCOME

(unaudited)

	Three Months Ended March 31
	2015		2014
Rental Income	$	294,898	$	241,737
Expenses:
Partnership Administration – Affiliates		57,244		55,459
Partnership Administration and Property    Management – Unrelated Parties		12,746		19,914
Depreciation and Amortization		113,275		88,093
Total Expenses		183,265		163,466
Operating Income		111,633		78,271
Other Income:
Interest Income		3,240		3,987
Income from Continuing Operations		114,873		82,258
Income from Discontinued Operations		0		59,592
Net Income	$	114,873	$	141,850
Net Income Allocated:
General Partners	$	1,149	$	1,419
Limited Partners		113,724		140,431
Total	$	114,873	$	141,850
Income per Limited Partnership Unit:
Continuing Operations	$	5.21	$	3.60
Discontinued Operations		.00		2.60
Total – Basic and Diluted	$	5.21	$	6.20
Weighted Average Units Outstanding –       Basic and Diluted		21,829		22,653

The accompanying Notes to Financial Statements are an integral part of these statements.

Page 4 of 19

AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

STATEMENTS OF CASH FLOWS

(unaudited)

	Three Months Ended March 31
	2015			2014
Cash Flows from Operating Activities:
Net Income	$	114,873		$	141,850
Adjustments to Reconcile Net Income To Net Cash Provided by Operating Activities:
Depreciation and Amortization		110,527			88,093
Income from Equity Method Investments		0			(32,864	)
Increase (Decrease) in Payable to    AEI Fund Management, Inc.		1,842			(4,918	)
Increase (Decrease) in Unearned Rent		23,093			21,210
Total Adjustments		135,462			71,521
Net Cash Provided By (Used For)    Operating Activities		250,335			213,371
Cash Flows from Investing Activities:
Cash Paid for Equity Method Investments		0			(12,169	)
Cash Flows from Financing Activities:
Distributions Paid to Partners		(291,921	)		(291,922	)
Net Increase (Decrease) in Cash		(41,586	)		(90,720	)
Cash, beginning of period		4,540,920			5,553,960
Cash, end of period	$	4,499,334		$	5,463,240
Supplemental Disclosure of Non-Cash Investing Activities:
Contribution of Real Estate (at carrying value)    in Exchange for Equity Method Investments	$	0		$	1,508,930

The accompanying Notes to Financial Statements are an integral part of these statements.

Page 5 of 19

AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

(unaudited)

	General Partners			Limited Partners			Total			Limited Partnership Units Outstanding
Balance, December 31, 2013	$	11,205		$	15,878,354		$	15,889,559			22,653.11
Distributions Declared		(2,919	)		(289,003	)		(291,922	)
Net Income		1,419			140,431			141,850
Balance, March 31, 2014	$	9,705		$	15,729,782		$	15,739,487			22,653.11
Balance, December 31, 2014	$	10,980		$	15,580,301		$	15,591,281			21,828.71
Distributions Declared		(2,818	)		(278,996	)		(281,814	)
Net Income		1,149			113,724			114,873
Balance, March 31, 2015	$	9,311		$	15,415,029		$	15,424,340			21,828.71

The accompanying Notes to Financial Statements are an integral part of these statements.

Page 6 of 19

AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2015

(unaudited)

(1)  The condensed statements included herein have been prepared by the registrant, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission, and reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results of operations for the interim period, on a basis consistent with the annual audited statements.  The adjustments made to these condensed statements consist only of normal recurring adjustments.  Certain information, accounting policies, and footnote disclosures normally included in financial statements prepared in accordance with United States Generally Accepted Accounting Principles (US GAAP) have been condensed or omitted pursuant to such rules and regulations, although the registrant believes that the disclosures are adequate to make the information presented not misleading.  It is suggested that these condensed financial statements be read in conjunction with the financial statements and the summary of significant accounting policies and notes thereto included in the registrant’s latest annual report on Form 10-K.

(2)  Organization –

AEI Income & Growth Fund XXI Limited Partnership (“Partnership”) was formed to acquire and lease commercial properties to operating tenants.  The Partnership's operations are managed by AEI Fund Management XXI, Inc. (“AFM”), the Managing General Partner.  Robert P. Johnson, the President and sole director of AFM, serves as the Individual General Partner.  AFM is a wholly owned subsidiary of AEI Capital Corporation of which Mr. Johnson is the majority shareholder.  AEI Fund Management, Inc. (“AEI”), an affiliate of AFM, performs the administrative and operating functions for the Partnership.

The terms of the Partnership offering called for a subscription price of $1,000 per Limited Partnership Unit, payable on acceptance of the offer.  The Partnership commenced operations on April 14, 1995 when minimum subscriptions of 1,500 Limited Partnership Units ($1,500,000) were accepted.  On January 31, 1997, the offering terminated when the maximum subscription limit of 24,000 Limited Partnership Units was reached.  Under the terms of the Limited Partnership Agreement, the Limited Partners and General Partners contributed funds of $24,000,000 and $1,000, respectively.

During operations, any Net Cash Flow, as defined, which the General Partners determine to distribute will be distributed 90% to the Limited Partners and 10% to the General Partners; provided, however, that such distributions to the General Partners will be subordinated to the Limited Partners first receiving an annual, noncumulative distribution of Net Cash Flow equal to 10% of their Adjusted Capital Contribution, as defined, and, provided further, that in no event will the General Partners receive less than 1% of such Net Cash Flow per annum.  Distributions to Limited Partners will be made pro rata by Units.

Page 7 of 19

AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

NOTES TO FINANCIAL STATEMENTS

(Continued)

(2)  Organization – (Continued)

Any Net Proceeds of Sale, as defined, from the sale or financing of properties which the General Partners determine to distribute will, after provisions for debts and reserves, be paid in the following manner: (i) first, 99% to the Limited Partners and 1% to the General Partners until the Limited Partners receive an amount equal to: (a) their Adjusted Capital Contribution plus (b) an amount equal to 10% of their Adjusted Capital Contribution per annum, cumulative but not compounded, to the extent not previously distributed from Net Cash Flow;  (ii) any remaining balance will be distributed 90% to the Limited Partners and 10% to the General Partners.  Distributions to the Limited Partners will be made pro rata by Units.

For tax purposes, profits from operations, other than profits attributable to the sale, exchange, financing, refinancing or other disposition of property, will be allocated first in the same ratio in which, and to the extent, Net Cash Flow is distributed to the Partners for such year.  Any additional profits will be allocated in the same ratio as the last dollar of Net Cash Flow is distributed.  Net losses from operations will be allocated 99% to the Limited Partners and 1% to the General Partners.

For tax purposes, profits arising from the sale, financing, or other disposition of property will be allocated in accordance with the Partnership Agreement as follows: (i) first, to those partners with deficit balances in their capital accounts in an amount equal to the sum of such deficit balances; (ii) second, 99% to the Limited Partners and 1% to the General Partners until the aggregate balance in the Limited Partners' capital accounts equals the sum of the Limited Partners' Adjusted Capital Contributions plus an amount equal to 10% of their Adjusted Capital Contributions per annum, cumulative but not compounded, to the extent not previously allocated; (iii) third, the balance of any remaining gain will then be allocated 90% to the Limited Partners and 10% to the General Partners.  Losses will be allocated 98% to the Limited Partners and 2% to the General Partners.

The General Partners are not required to currently fund a deficit capital balance.  Upon liquidation of the Partnership or withdrawal by a General Partner, the General Partners will contribute to the Partnership an amount equal to the lesser of the deficit balances in their capital accounts or 1% of total Limited Partners' and General Partners' capital contributions.

In January 2014, the Managing General Partner mailed a Consent Statement (Proxy) seeking the consent of the Limited Partners to continue the Partnership for an additional 60 months or to initiate the final disposition, liquidation and distribution of all of the Partnership’s properties and assets.  On February 14, 2014, the proposal to continue the Partnership was approved with a majority of Units voted in favor of the continuation proposal.  As a result, the Managing General Partner will continue the operations of the Partnership for an additional 60 months at which time it will again ask the Limited Partners to vote on the same two proposals.

Page 8 of 19

AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

NOTES TO FINANCIAL STATEMENTS

(Continued)

(3)  Real Estate Investments –

On May 29, 2014, the Partnership purchased a 50% interest in a Tractor Supply Company store in Canton, Georgia for $2,212,500.  The Partnership allocated $185,920 of the purchase price to Acquired Intangible Lease Assets, representing in-place lease intangibles and allocated $80,603 to Acquired Below-Market Lease Intangibles. The Partnership incurred $27,970 of acquisition expenses related to the purchase that were expensed.  The property is leased to Tractor Supply Company under a Lease Agreement with a remaining primary term of 7.3 years (as of the date of purchase) and annual rent of $164,355 for the interest purchased.  The remaining interest in the property was purchased by AEI Accredited Investor Fund V LP, an affiliate of the Partnership.

On July 3, 2014, the Partnership purchased a 30% interest in a Gander Mountain store in Champaign, Illinois for $2,122,500.  The Partnership allocated $336,209 of the purchase price to Acquired Intangible Lease Assets, representing in-place lease intangibles. The Partnership incurred $34,052 of acquisition expenses related to the purchase that were expensed.  The property is leased to Gander Mountain Company under a Lease Agreement with a remaining primary term of 14.9 years and annual rent of $167,772 for the interest purchased.  The remaining interests in the property were purchased by AEI Accredited Investor Fund V LP and AEI National Income Property Fund VIII LP, affiliates of the Partnership.

(4) Equity Method Investments –

In the fourth quarter of 2013, the Partnership decided to sell its 20% interest in the CarMax Auto Superstore in Lithia Springs, Georgia.  At December 31, 2013, the property was classified as Real Estate Held for Sale with a carrying value of $1,508,930.  The remaining interests in the property were owned by three affiliated entities, AEI Income & Growth Fund 24 LLC, AEI Income & Growth Fund 25 LLC and AEI Private Net Lease Millennium Fund Limited Partnership.  On March 7, 2014, to facilitate the sale of the property, the Partnership and affiliated entities contributed their respective interests in the property via a limited liability company to CM Lithia Springs DST (“CMLS”), a Delaware statutory trust (“DST”), in exchange for Class B ownership interests in CMLS.  In addition, a small amount of cash was contributed for working capital.  A DST is a recognized mechanism for selling property to investors who are looking for replacement real estate to complete like-kind exchanges under Section 1031 of the Internal Revenue Code.  As investors purchased Class A ownership interests in CMLS, the proceeds received were used to redeem, on a one-for-one basis, the Class B ownership interests of the Partnership and affiliated entities.  From March 13, 2014 to July 25, 2014, CMLS sold 100% of its Class A ownership interests to investors and redeemed 100% of the Class B ownership interests from the Partnership and affiliated entities.

Page 9 of 19

AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

NOTES TO FINANCIAL STATEMENTS

(Continued)

(4) Equity Method Investments – (Continued)

On August 29, 2014, to facilitate the sale of its 63% interest in the Tractor Supply Company store in Rapid City, South Dakota, the Partnership contributed the property via a limited liability company to AEI Net Lease Portfolio DST (“ANLP”) in exchange for 16.95% of the Class B ownership interests in ANLP.  The remaining interest in the property, owned by an affiliated entity, along with two other properties owned by two other affiliated entities, were also contributed to ANLP in exchange for 83.05% of the Class B ownership interests in ANLP.  In addition, cash was contributed for working capital.  From August 29, 2014 to October 30, 2014, ANLP sold 100% of its Class A ownership interests to investors and redeemed 100% of the Class B ownership interests from the Partnership and affiliated entities.

The investments in CMLS and ANLP were recorded using the equity method of accounting in the accompanying financial statements.  Under the equity method, the investments were stated at cost and adjusted for the Partnership’s share of net income or losses and reduced by proceeds received from the sale of the Class B ownership interests of the DSTs as well as distributions from net rental income.  During 2014, the investment balances consisted of the following:

Activity Through March 31, 2014:		CMLS		ANLP		Total
Real Estate Contributed (at carrying value)	$	1,508,930	$	0	$	1,508,930
Cash Contributed		12,169		0		12,169
Net Income – Rental Activity		9,697		0		9,697
Net Income – Gain on Sale of Real Estate		23,167		0		23,167
Equity Method Investments at March 31, 2014		1,553,963		0		1,553,963
Activity After March 31, 2014:
Real Estate Contributed (at carrying value)		0		1,681,698		1,681,698
Cash Contributed		0		25,319		25,319
Net Income – Rental Activity		23,268		11,750		35,018
Net Income – Gain on Sale of Real Estate		567,650		509,909		1,077,559
Distributions from Net Rental Income		(32,965)		(11,750)		(44,715)
Proceeds from Sale of Class B Interests		(2,111,916)		(2,216,926)		(4,328,842)
Equity Method Investments at December 31, 2014	$	0	$	0	$	0

(5)  Payable to AEI Fund Management, Inc. –

AEI Fund Management, Inc. performs the administrative and operating functions for the Partnership.  The payable to AEI Fund Management represents the balance due for those services.  This balance is non-interest bearing and unsecured and is to be paid in the normal course of business.

Page 10 of 19

AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

NOTES TO FINANCIAL STATEMENTS

(Continued)

(6)  Discontinued Operations –

In the fourth quarter of 2013, the Partnership decided to sell its 20% interest in the CarMax Auto Superstore in Lithia Springs, Georgia.  At December 31, 2013, the property was classified as Real Estate Held for Sale with a carrying value of $1,508,930.  On March 7, 2014, to facilitate the sale of the property, the Partnership contributed its interest in the property via a limited liability company to CM Lithia Springs DST as described in Note 4.

During the first three months of 2015 and 2014, the Partnership distributed net sale proceeds of $56,414 and $85,146, respectively.  The Limited Partners received distributions of $55,850 and $84,295 and the General Partners received distributions of $564 and $851 for the periods, respectively.  The Limited Partners’ distributions represented $2.56 and $3.72 per Unit for the periods, respectively.

The financial results for this property are reflected as Discontinued Operations in the accompanying financial statements.  The following are the results of discontinued operations for the three months ended March 31:

		2015		2014
Rental Income	$	0	$	26,740
Property Management Expenses		0		(12)
Income from Equity Method Investment Held for Sale		0		32,864
Income from Discontinued Operations	$	0	$	59,592

		2015		2014
Cash Flows from Discontinued Operations:
Operating Activities	$	0	$	26,728
Investing Activities	$	0	$	(12,169)

(7)  Fair Value Measurements –

As of March 31, 2015 and December 31, 2014, the Partnership had no assets or liabilities measured at fair value on a recurring basis or nonrecurring basis.

Page 11 of 19

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS.

This section contains "forward-looking statements" which represent management's expectations or beliefs concerning future events, including statements regarding anticipated application of cash, expected returns from rental income, growth in revenue, the sufficiency of cash to meet operating expenses, rates of distribution, and other matters.  These, and other forward-looking statements, should be evaluated in the context of a number of factors that may affect the Partnership's financial condition and results of operations, including the following:

— Market and economic conditions which affect the value of the properties the Partnership owns and the cash from rental income such properties generate;

— the federal income tax consequences of rental income, deductions, gain on sales and other items and the effects of these consequences for the Partners;

— resolution by the General Partners of conflicts with which they may be confronted;

— the success of the General Partners of locating properties with favorable risk return characteristics;

— the effect of tenant defaults; and

— the condition of the industries in which the tenants of properties owned by the Partnership operate.

Application of Critical Accounting Policies

The Partnership’s financial statements have been prepared in accordance with US GAAP.  Preparing the financial statements requires management to use judgment in the application of these accounting policies, including making estimates and assumptions.  These judgments will affect the reported amounts of the Partnership’s assets and liabilities and the disclosure of contingent assets and liabilities as of the dates of the financial statements and will affect the reported amounts of revenue and expenses during the reporting periods.  It is possible that the carrying amount of the Partnership’s assets and liabilities, or the results of reported operations, will be affected if management’s estimates or assumptions prove inaccurate.

Management of the Partnership evaluates the following accounting estimates on an ongoing basis, and has discussed the development and selection of these estimates and the management discussion and analysis disclosures regarding them with managing partner of the Partnership.

Allocation of Purchase Price of Acquired Properties

Upon acquisition of real properties, the Partnership records them in the financial statements at cost.  The purchase price is allocated to tangible assets, consisting of land and building, and to identified intangible assets and liabilities, which may include the value of above market and below market leases and the value of in-place leases.  The allocation of the purchase price is based upon the fair value of each component of the property.  Although independent appraisals may be used to assist in the determination of fair value, in many cases these values will be based upon management’s assessment of each property, the selling prices of comparable properties and the discounted value of cash flows from the asset.

Page 12 of 19

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

The fair values of above market and below market in-place leases will be recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) an estimate of fair market lease rates for the corresponding in-place leases measured over a period equal to the non-cancelable term of the lease including any bargain renewal periods.  The above market and below market lease values will be capitalized as intangible lease assets or liabilities.  Above market lease values will be amortized as an adjustment of rental income over the remaining terms of the respective leases.  Below market leases will be amortized as an adjustment of rental income over the remaining term of the respective leases, including any bargain renewal periods.  If a lease were to be terminated prior to its stated expiration, all unamortized amounts of above market and below market in-place lease values relating to that lease would be recorded as an adjustment to rental income.

The fair values of in-place leases will include estimated direct costs associated with obtaining a new tenant, and opportunity costs associated with lost rentals which are avoided by acquiring an in-place lease.  Direct costs associated with obtaining a new tenant may include commissions, tenant improvements, and other direct costs and are estimated, in part, by management’s consideration of current market costs to execute a similar lease.  These direct costs will be included in intangible lease assets on the balance sheet and will be amortized to expense over the remaining term of the respective leases.  The value of opportunity costs will be calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease.  These intangibles will be included in intangible lease assets on the balance sheet and will be amortized to expense over the remaining term of the respective leases.  If a lease were to be terminated prior to its stated expiration, all unamortized amounts of in-place lease assets relating to that lease would be expensed.

The determination of the fair values of the assets and liabilities acquired will require the use of significant assumptions with regard to the current market rental rates, rental growth rates, discount and capitalization rates, interest rates and other variables.  If management’s estimates or assumptions prove inaccurate, the result would be an inaccurate allocation of purchase price, which could impact the amount of reported net income.

Carrying Value of Properties

Properties are carried at original cost, less accumulated depreciation and amortization.  The Partnership tests long-lived assets for recoverability when events or changes in circumstances indicate that the carrying value may not be recoverable.  For properties the Partnership will hold and operate, management determines whether impairment has occurred by comparing the property’s probability-weighted future undiscounted cash flows to its current carrying value.  For properties held for sale, management determines whether impairment has occurred by comparing the property’s estimated fair value less cost to sell to its current carrying value.  If the carrying value is greater than the net realizable value, an impairment loss is recorded to reduce the carrying value of the property to its net realizable value.  Changes in these assumptions or analysis may cause material changes in the carrying value of the properties.

Page 13 of 19

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

Allocation of Expenses

AEI Fund Management, Inc. allocates expenses to each of the funds they manage primarily on the basis of the number of hours devoted by their employees to each fund’s affairs.  They also allocate expenses at the end of each month that are not directly related to a fund’s operations based upon the number of investors in the fund and the fund’s capitalization relative to other funds they manage.  The Partnership reimburses these expenses subject to detailed limitations contained in the Partnership Agreement.

Results of Operations

For the three months ended March 31, 2015 and 2014, the Partnership recognized rental income from continuing operations of $294,898 and $241,737, respectively.  In 2015, rental income increased due to additional rent received from two property acquisitions in 2014 and a rent increase on one property.  These increases in rental income were partially offset by a decrease in rent due to the sale of the Tractor Supply Company store in Rapid City, South Dakota.  Based on the scheduled rent for the properties as of April 30, 2015, the Partnership expects to recognize rental income from continuing operations of approximately $1,180,000 in 2015.

For the three months ended March 31, 2015 and 2014, the Partnership incurred Partnership administration expenses from affiliated parties of $57,244 and $55,459, respectively.  These administration expenses include costs associated with the management of the properties, processing distributions, reporting requirements and communication with the Limited Partners.  During the same periods, the Partnership incurred Partnership administration and property management expenses from unrelated parties of $12,746 and $19,914, respectively.  These expenses represent direct payments to third parties for legal and filing fees, direct administrative costs, outside audit costs, taxes, insurance and other property costs.

For the three months ended March 31, 2015 and 2014, the Partnership recognized interest income of $3,240 and $3,987, respectively.

Prior to January 1, 2014, upon complete disposal of a property or classification of a property as Real Estate Held for Sale, the Partnership included the operating results and sale of the property in discontinued operations.  In addition, the Partnership reclassified the prior periods’ operating results of the property to discontinued operations.  For the three months ended March 31, 2014, the Partnership recognized income from discontinued operations of $59,592, representing rental income less property management expenses of $26,728 and income from an equity method investment held for sale of $32,864.

Page 14 of 19

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

In the fourth quarter of 2013, the Partnership decided to sell its 20% interest in the CarMax Auto Superstore in Lithia Springs, Georgia.  At December 31, 2013, the property was classified as Real Estate Held for Sale with a carrying value of $1,508,930.  The remaining interests in the property were owned by three affiliated entities, AEI Income & Growth Fund 24 LLC, AEI Income & Growth Fund 25 LLC and AEI Private Net Lease Millennium Fund Limited Partnership.  On March 7, 2014, to facilitate the sale of the property, the Partnership and affiliated entities contributed their respective interests in the property via a limited liability company to CM Lithia Springs DST (“CMLS”) in exchange for Class B ownership interests in CMLS.  In addition, a small amount of cash was contributed for working capital.  A DST is a recognized mechanism for selling property to investors who are looking for replacement real estate to complete like-kind exchanges under Section 1031 of the Internal Revenue Code.  As investors purchased Class A ownership interests in CMLS, the proceeds received were used to redeem, on a one-for-one basis, the Class B ownership interests of the Partnership and affiliated entities.  From March 13, 2014 to July 25, 2014, CMLS sold 100% of its Class A ownership interests to investors and redeemed 100% of the Class B ownership interests from the Partnership and affiliated entities.

The investment in CMLS was recorded using the equity method of accounting in the accompanying financial statements.  Under the equity method, the investment was stated at cost and adjusted for the Partnership’s share of net income or losses and reduced by proceeds received from the sale of the Class B ownership interests of CMLS as well as distributions from net rental income.  For the three months ended March 31, 2014, the Partnership’s share of net income of CMLS was $32,864.

Management believes inflation has not significantly affected income from operations.  Leases may contain rent increases, based on the increase in the Consumer Price Index over a specified period, which will result in an increase in rental income over the term of the leases.  Inflation also may cause the real estate to appreciate in value.  However, inflation and changing prices may have an adverse impact on the operating margins of the properties' tenants, which could impair their ability to pay rent and subsequently reduce the Net Cash Flow available for distributions.

Liquidity and Capital Resources

During the three months ended March 31, 2015, the Partnership's cash balances decreased $41,586 as a result of distributions paid to the Partners in excess of cash generated from operating activities.  During the three months ended March 31, 2014, the Partnership's cash balances decreased $90,720 mainly as a result of distributions paid to the Partners in excess of cash generated from operating activities.

Net cash provided by operating activities increased from $213,371 in 2014 to $250,335 in 2015 as a result of an increase in total rental and interest income in 2015, a decrease in Partnership administration and property management expenses in 2015, and net timing differences in the collection of payments from the tenants and the payment of expenses.

Page 15 of 19

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

The major components of the Partnership's cash flow from investing activities are investments in real estate and proceeds from the sale of real estate, including proceeds from equity method investments.  During the three months ended March 31, 2015 and 2014, the Partnership did not complete any property acquisitions or property sales.  However, during the three months ended March 31, 2014, the Partnership paid cash for an equity method investment of $12,169.

On May 29, 2014, the Partnership purchased a 50% interest in a Tractor Supply Company store in Canton, Georgia for $2,212,500.  The property is leased to Tractor Supply Company under a Lease Agreement with a remaining primary term of 7.3 years (as of the date of purchase) and annual rent of $164,355 for the interest purchased.  The remaining interest in the property was purchased by AEI Accredited Investor Fund V LP, an affiliate of the Partnership.

On July 3, 2014, the Partnership purchased a 30% interest in a Gander Mountain store in Champaign, Illinois for $2,122,500.  The property is leased to Gander Mountain Company under a Lease Agreement with a remaining primary term of 14.9 years and annual rent of $167,772 for the interest purchased.  The remaining interests in the property were purchased by AEI Accredited Investor Fund V LP and AEI National Income Property Fund VIII LP, affiliates of the Partnership.

The Partnership's primary use of cash flow, other than investment in real estate, is distribution payments to Partners and cash used to repurchase Units.  The Partnership declares its regular quarterly distributions before the end of each quarter and pays the distribution in the first week after the end of each quarter.  The Partnership attempts to maintain a stable distribution rate from quarter to quarter.  The Partnership may repurchase tendered Units on April 1st and October 1st of each year subject to limitations.

For the three months ended March 31, 2015 and 2014, the Partnership declared distributions of $281,814 and $291,922, respectively, which were distributed 99% to the Limited Partners and 1% to the General Partners.  The Limited Partners received distributions of $278,996 and $289,003 and the General Partners received distributions of $2,818 and $2,919 for the periods, respectively.

As part of the distributions discussed above, the Partnership distributed net sale proceeds of $56,414 and $85,146 in 2015 and 2014.  The Limited Partners received distributions of $55,850 and $84,295 and the General Partners received distributions of $564 and $851 for the periods, respectively.  The Limited Partners’ distributions represented $2.56 and $3.72 per Unit for the periods, respectively.

The Partnership may repurchase Units from Limited Partners who have tendered their Units to the Partnership.  Such Units may be acquired at a discount.  The Partnership will not be obligated to purchase in any year more than 5% of the total number of Units outstanding on January 1 of such year.  In no event shall the Partnership be obligated to purchase Units if, in the sole discretion of the Managing General Partner, such purchase would impair the capital or operation of the Partnership.  During the three months ended March 31, 2015 and 2014, the Partnership did not repurchase any Units from the Limited Partners.

Page 16 of 19

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

The continuing rent payments from the properties, together with cash generated from property sales, should be adequate to fund continuing distributions and meet other Partnership obligations on both a short-term and long-term basis.

Off-Balance Sheet Arrangements

As of March 31, 2015 and December 31, 2014, the Partnership had no material off-balance sheet arrangements that had or are reasonably likely to have current or future effects on its financial condition, results of operations, liquidity or capital resources.

ITEM 3.  QUANTITATIVE & QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not required for a smaller reporting company.

ITEM 4.  CONTROLS AND PROCEDURES.

(a)  Disclosure Controls and Procedures.

Under the supervision and with the participation of management, including its President and Chief Financial Officer, the Managing General Partner of the Partnership evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)).  Based upon that evaluation, the President and Chief Financial Officer of the Managing General Partner concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms and that such information is accumulated and communicated to management, including the President and Chief Financial Officer of the Managing General Partner, in a manner that allows timely decisions regarding required disclosure.

(b)  Changes in Internal Control Over Financial Reporting.

During the most recent period covered by this report, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Page 17 of 19

PART II – OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

There are no material pending legal proceedings to which the Partnership is a party or of which the Partnership's property is subject.

ITEM 1A.  RISK FACTORS.

Not required for a smaller reporting company.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES & USE OF PROCEEDS.

(a) None.

(b) Not applicable.

(c) Pursuant to Section 7.7 of the Partnership Agreement, as amended, each Limited Partner has the right to present Units to the Partnership for purchase by submitting notice to the Managing General Partner during January or July of each year.  The purchase price of the Units is equal to 95% of the net asset value per Unit, as of the first business day of January or July of each year, as determined by the Managing General Partner in accordance with the provisions of the Partnership Agreement.  Units tendered to the Partnership during January and July may be repurchased on April 1st and October 1st, respectively, of each year subject to the following limitations.  The Partnership will not be obligated to purchase in any year more than 5% of the total number of Units outstanding on January 1 of such year.  In no event shall the Partnership be obligated to purchase Units if, in the sole discretion of the Managing General Partner, such purchase would impair the capital or operation of the Partnership.  During the period covered by this report, the Partnership did not purchase any Units.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.  MINE SAFETY DISCLOSURES.

Not Applicable.

ITEM 5.  OTHER INFORMATION.

None.

Page 18 of 19

ITEM 6.  EXHIBITS.

31.1 Certification of Chief Executive Officer of General Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a)) and Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification of Chief Financial Officer of General Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a)) and Section 302 of the Sarbanes-Oxley Act of 2002.

32 Certification of Chief Executive Officer and Chief Financial Officer of General Partner pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements 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:  May 13, 2015	AEI Income & Growth Fund XXI
	Limited Partnership
	By:	AEI Fund Management XXI, Inc.
	Its:	Managing General Partner
	By:	/s/ ROBERT P JOHNSON
		Robert P. Johnson
		President
		(Principal Executive Officer)
	By:	/s/ PATRICK W KEENE
		Patrick W. Keene
		Chief Financial Officer
		(Principal Accounting Officer)

Page 19 of 19

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Robert P. Johnson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of AEI Income & Growth Fund XXI Limited Partnership;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)      Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)      Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)      Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)      Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)      All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)      Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  May 13, 2015	/s/ ROBERT P JOHNSON
	Robert P. Johnson, President
	AEI Fund Management XXI, Inc.
	Managing General Partner

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Patrick W. Keene, certify that:

1. I have reviewed this quarterly report on Form 10-Q of AEI Income & Growth Fund XXI Limited Partnership;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)      Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)      Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)      Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)      Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)      All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)      Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  May 13, 2015	/s/ PATRICK W KEENE
	Patrick W. Keene, Chief Financial Officer
	AEI Fund Management XXI, Inc.
	Managing General Partner

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of AEI Income & Growth Fund XXI Limited Partnership (the “Partnership”) on Form 10-Q for the period ended March 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Robert P. Johnson, President of AEI Fund Management XXI, Inc., the Managing General Partner of the Partnership, and Patrick W. Keene, Chief Financial Officer of AEI Fund Management XXI, Inc., each certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

  /s/ ROBERT P JOHNSON

Robert P. Johnson, President

AEI Fund Management XXI, Inc.

Managing General Partner

May 13, 2015

  /s/ PATRICK W KEENE

Patrick W. Keene, Chief Financial Officer

AEI Fund Management XXI, Inc.

Managing General Partner

May 13, 2015

XML

Real Estate Held for Investment

3 Months Ended

Mar. 31, 2015

Real Estate [Abstract]

Real Estate Disclosure [Text Block]

(3) Real Estate Investments –

On May 29, 2014, the Partnership purchased a 50% interest in a Tractor Supply Company store in Canton, Georgia for $2,212,500. The Partnership allocated $185,920 of the purchase price to Acquired Intangible Lease Assets, representing in-place lease intangibles and allocated $80,603 to Acquired Below-Market Lease Intangibles. The Partnership incurred $27,970 of acquisition expenses related to the purchase that were expensed. The property is leased to Tractor Supply Company under a Lease Agreement with a remaining primary term of 7.3 years (as of the date of purchase) and annual rent of $164,355 for the interest purchased. The remaining interest in the property was purchased by AEI Accredited Investor Fund V LP, an affiliate of the Partnership.

On July 3, 2014, the Partnership purchased a 30% interest in a Gander Mountain store in Champaign, Illinois for $2,122,500. The Partnership allocated $336,209 of the purchase price to Acquired Intangible Lease Assets, representing in-place lease intangibles. The Partnership incurred $34,052 of acquisition expenses related to the purchase that were expensed. The property is leased to Gander Mountain Company under a Lease Agreement with a remaining primary term of 14.9 years and annual rent of $167,772 for the interest purchased. The remaining interests in the property were purchased by AEI Accredited Investor Fund V LP and AEI National Income Property Fund VIII LP, affiliates of the Partnership.

XML

Organization

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]

(2)  Organization –

AEI Income & Growth Fund XXI Limited Partnership (“Partnership”) was formed to acquire and lease commercial properties to operating tenants. The Partnership's operations are managed by AEI Fund Management XXI, Inc. (“AFM”), the Managing General Partner. Robert P. Johnson, the President and sole director of AFM, serves as the Individual General Partner. AFM is a wholly owned subsidiary of AEI Capital Corporation of which Mr. Johnson is the majority shareholder. AEI Fund Management, Inc. (“AEI”), an affiliate of AFM, performs the administrative and operating functions for the Partnership.

The terms of the Partnership offering called for a subscription price of $1,000 per Limited Partnership Unit, payable on acceptance of the offer. The Partnership commenced operations on April 14, 1995 when minimum subscriptions of 1,500 Limited Partnership Units ($1,500,000) were accepted. On January 31, 1997, the offering terminated when the maximum subscription limit of 24,000 Limited Partnership Units was reached. Under the terms of the Limited Partnership Agreement, the Limited Partners and General Partners contributed funds of $24,000,000 and $1,000, respectively.

During operations, any Net Cash Flow, as defined, which the General Partners determine to distribute will be distributed 90% to the Limited Partners and 10% to the General Partners; provided, however, that such distributions to the General Partners will be subordinated to the Limited Partners first receiving an annual, noncumulative distribution of Net Cash Flow equal to 10% of their Adjusted Capital Contribution, as defined, and, provided further, that in no event will the General Partners receive less than 1% of such Net Cash Flow per annum. Distributions to Limited Partners will be made pro rata by Units.

Any Net Proceeds of Sale, as defined, from the sale or financing of properties which the General Partners determine to distribute will, after provisions for debts and reserves, be paid in the following manner: (i) first, 99% to the Limited Partners and 1% to the General Partners until the Limited Partners receive an amount equal to: (a) their Adjusted Capital Contribution plus (b) an amount equal to 10% of their Adjusted Capital Contribution per annum, cumulative but not compounded, to the extent not previously distributed from Net Cash Flow; (ii) any remaining balance will be distributed 90% to the Limited Partners and 10% to the General Partners. Distributions to the Limited Partners will be made pro rata by Units.

For tax purposes, profits from operations, other than profits attributable to the sale, exchange, financing, refinancing or other disposition of property, will be allocated first in the same ratio in which, and to the extent, Net Cash Flow is distributed to the Partners for such year. Any additional profits will be allocated in the same ratio as the last dollar of Net Cash Flow is distributed. Net losses from operations will be allocated 99% to the Limited Partners and 1% to the General Partners.

For tax purposes, profits arising from the sale, financing, or other disposition of property will be allocated in accordance with the Partnership Agreement as follows: (i) first, to those partners with deficit balances in their capital accounts in an amount equal to the sum of such deficit balances; (ii) second, 99% to the Limited Partners and 1% to the General Partners until the aggregate balance in the Limited Partners' capital accounts equals the sum of the Limited Partners' Adjusted Capital Contributions plus an amount equal to 10% of their Adjusted Capital Contributions per annum, cumulative but not compounded, to the extent not previously allocated; (iii) third, the balance of any remaining gain will then be allocated 90% to the Limited Partners and 10% to the General Partners. Losses will be allocated 98% to the Limited Partners and 2% to the General Partners.

The General Partners are not required to currently fund a deficit capital balance. Upon liquidation of the Partnership or withdrawal by a General Partner, the General Partners will contribute to the Partnership an amount equal to the lesser of the deficit balances in their capital accounts or 1% of total Limited Partners' and General Partners' capital contributions.

In January 2014, the Managing General Partner mailed a Consent Statement (Proxy) seeking the consent of the Limited Partners to continue the Partnership for an additional 60 months or to initiate the final disposition, liquidation and distribution of all of the Partnership’s properties and assets. On February 14, 2014, the proposal to continue the Partnership was approved with a majority of Units voted in favor of the continuation proposal. As a result, the Managing General Partner will continue the operations of the Partnership for an additional 60 months at which time it will again ask the Limited Partners to vote on the same two proposals.

XML

Balance Sheet (USD $)	Mar. 31, 2015	Dec. 31, 2014
Current Assets:
Cash	$ 4,499,334	$ 4,540,920
Real Estate Investments:
Land	3,484,216	3,484,216
Buildings	10,126,971	10,126,971
Acquired Intangible Lease Assets	522,129	522,129
Real Estate Held for Investment, at cost	14,133,316	14,133,316
Accumulated Depreciation and Amortization	2,787,698	2,674,423
Real Estate Held for Investment, Net	11,345,618	11,458,893
Total Assets	15,844,952	15,999,813
Current Liabilities:
Payable to AEI Fund Management, Inc.	32,141	30,299
Distributions Payable	281,814	291,921
Unearned Rent	35,214	12,121
Total Current Liabilities	349,169	334,341
Long-term Liabilities:
Acquired Below-Market Lease Intangibles, Net	71,443	74,191
Partners’ Capital:
General Partners	9,311	10,980
Limited Partners – 24,000 Units authorized; 21,829 Units issued and outstanding as of 3/31/15 and 12/31/14	15,415,029	15,580,301
Total Partners' Capital	15,424,340	15,591,281
Total Liabilities and Partners' Capital	15,844,952	15,999,813
Limited Partner [Member]
Partners’ Capital:
Total Partners' Capital	$ 15,415,029	$ 15,580,301

XML

Statement of Changes in Partners' Capital (USD $)	General Partner [Member]	Limited Partner [Member]	Total
Balance at Dec. 31, 2013	$ 11,205	$ 15,878,354	$ 15,889,559
Balance (in Shares) at Dec. 31, 2013		22,653.11
Distributions Declared	2,919	289,003	291,922
Net Income	1,419	140,431	141,850
Balance at Mar. 31, 2014	9,705	15,729,782	15,739,487
Balance (in Shares) at Mar. 31, 2014		22,653.11
Balance at Dec. 31, 2014	10,980	15,580,301	15,591,281
Balance (in Shares) at Dec. 31, 2014		21,829
Distributions Declared	2,818	278,996	281,814
Net Income	1,149	113,724	114,873
Balance at Mar. 31, 2015	$ 9,311	$ 15,415,029	$ 15,424,340
Balance (in Shares) at Mar. 31, 2015		21,829

XML

Discontinued Operations (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2013
Discontinued Operations (Details) [Line Items]
Sale Proceeds Distribution Made To Member Or Limited Partner	$ 56,414	$ 85,146
Limited Partner [Member]
Discontinued Operations (Details) [Line Items]
Sale Proceeds Distribution Made To Member Or Limited Partner	55,850	84,295
Sale Proceeds Distribution Made to Limited Partner Per Unit (in Dollars per Item)	2.56	3.72
General Partner [Member]
Discontinued Operations (Details) [Line Items]
Sale Proceeds Distribution Made To Member Or Limited Partner	564	851
CarMax Auto Superstore Lithia Springs GA
Discontinued Operations (Details) [Line Items]
Real Estate Held-for-sale			$ 1,508,930

XML

Discontinued Operations (Details) - Cash Flows from Discontinued Operations (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash Flows from Discontinued Operations:
Operating Activities	$ 0	$ 26,728
Investing Activities	$ 0	$ (12,169)

XML

Basis of Accounting

3 Months Ended

Mar. 31, 2015

Disclosure Text Block [Abstract]

Basis of Accounting [Text Block]

(1)  The condensed statements included herein have been prepared by the registrant, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission, and reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results of operations for the interim period, on a basis consistent with the annual audited statements. The adjustments made to these condensed statements consist only of normal recurring adjustments. Certain information, accounting policies, and footnote disclosures normally included in financial statements prepared in accordance with United States Generally Accepted Accounting Principles (US GAAP) have been condensed or omitted pursuant to such rules and regulations, although the registrant believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the summary of significant accounting policies and notes thereto included in the registrant’s latest annual report on Form 10K.

XML

Balance Sheet (Parentheticals)	Mar. 31, 2015	Dec. 31, 2014
Limited Partner [Member]
Limited Partners, units authorized	24,000	24,000
Limited Partners, units issued	21,829	21,829
Limited Partners, units outstanding	21,829	21,829

XML

Organization (Details) (USD $)	Jan. 31, 1997	Apr. 14, 1995
Accounting Policies [Abstract]
Capital Units, Value		$ 1,000
Limited Partners' Capital Account, Units Outstanding (in Shares)	24,000	1,500
Limited Partners' Contributed Capital	24,000,000	(1,500,000)
General Partners' Contributed Capital	$ 1,000

XML

Document And Entity Information (USD $)	3 Months Ended
	Mar. 31, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	AEI Income & Growth Fund XXI Ltd Partnership
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding	21,829
Entity Public Float	$ 0
Amendment Flag	false
Entity Central Index Key	0000931755
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Mar. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1

XML

Real Estate Held for Investment (Details) (USD $)	0 Months Ended	12 Months Ended	0 Months Ended	12 Months Ended
	May 29, 2014	May 29, 2015	Jul. 03, 2014	Jul. 03, 2015
Tractor Supply Canton GA | Leases, Acquired-in-Place [Member]
Real Estate Held for Investment (Details) [Line Items]
Finite-Lived Intangible Asset, Acquired-in-Place Leases	$ 185,920
Tractor Supply Canton GA | Off Market Unfavorable Lease Member
Real Estate Held for Investment (Details) [Line Items]
Below Market Lease, Acquired	80,603
Tractor Supply Canton GA
Real Estate Held for Investment (Details) [Line Items]
Business Acquisition, Effective Date of Acquisition	May 29, 2014
Business Acquisition, Percentage of Voting Interests Acquired	50.00%
Business Acquisition, Name of Acquired Entity	Tractor Supply Company
Business Combination, Consideration Transferred	2,212,500
Business Acquisition, Transaction Costs	27,970
Average Lease Term	7.3 years
Real Estate Revenue, Net		164,355
Gander Mountain Champaign IL | Leases, Acquired-in-Place [Member]
Real Estate Held for Investment (Details) [Line Items]
Finite-Lived Intangible Asset, Acquired-in-Place Leases			336,209
Gander Mountain Champaign IL
Real Estate Held for Investment (Details) [Line Items]
Business Acquisition, Effective Date of Acquisition			Jul. 03, 2014
Business Acquisition, Percentage of Voting Interests Acquired			30.00%
Business Acquisition, Name of Acquired Entity			Gander Mountain
Business Combination, Consideration Transferred			2,122,500
Business Acquisition, Transaction Costs			34,052
Average Lease Term			14.9 years
Real Estate Revenue, Net				$ 167,772

XML

Statement of Income (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Rental Income	$ 294,898	$ 241,737
Expenses:
Partnership Administration – Affiliates	57,244	55,459
Partnership Administration and Property Management – Unrelated Parties	12,746	19,914
Depreciation and Amortization	113,275	88,093
Total Expenses	183,265	163,466
Operating Income	111,633	78,271
Other Income:
Interest Income	3,240	3,987
Income from Continuing Operations	114,873	82,258
Income from Discontinued Operations	0	59,592
Net Income	114,873	141,850
Net Income Allocated:
General Partners	1,149	1,419
Limited Partners	$ 113,724	$ 140,431
Income per Limited Partnership Unit:
Continuing Operations (in Dollars per share)	$ 5.21	$ 3.60
Discontinued Operations (in Dollars per share)	$ 0.00	$ 2.60
Total – Basic and Diluted (in Dollars per share)	$ 5.21	$ 6.20
Weighted Average Units Outstanding – Basic and Diluted (in Shares)	21,829	22,653

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Discontinued Operations

3 Months Ended

Mar. 31, 2015

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

(6)  Discontinued Operations –

In the fourth quarter of 2013, the Partnership decided to sell its 20% interest in the CarMax Auto Superstore in Lithia Springs, Georgia. At December 31, 2013, the property was classified as Real Estate Held for Sale with a carrying value of $1,508,930. On March 7, 2014, to facilitate the sale of the property, the Partnership contributed its interest in the property via a limited liability company to CM Lithia Springs DST as described in Note 4.

During the first three months of 2015 and 2014, the Partnership distributed net sale proceeds of $56,414 and $85,146, respectively. The Limited Partners received distributions of $55,850 and $84,295 and the General Partners received distributions of $564 and $851 for the periods, respectively. The Limited Partners’ distributions represented $2.56 and $3.72 per Unit for the periods, respectively.

The financial results for this property are reflected as Discontinued Operations in the accompanying financial statements. The following are the results of discontinued operations for the three months ended March 31:

		2015		2014
Rental Income	$	0	$	26,740
Property Management Expenses		0		(12)
Income from Equity Method Investment Held for Sale		0		32,864
Income from Discontinued Operations	$	0	$	59,592

		2015		2014
Cash Flows from Discontinued Operations:
Operating Activities	$	0	$	26,728
Investing Activities	$	0	$	(12,169)

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Payable to AEI Fund Management, Inc.

3 Months Ended

Mar. 31, 2015

Payables and Accruals [Abstract]

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

(5) Payable to AEI Fund Management, Inc. –

AEI Fund Management, Inc. performs the administrative and operating functions for the Partnership. The payable to AEI Fund Management represents the balance due for those services. This balance is non-interest bearing and unsecured and is to be paid in the normal course of business.

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Discontinued Operations (Details) - Discontinued Operations (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Discontinued Operations [Abstract]
Rental Income	$ 0	$ 26,740
Property Management Expenses	0	(12)
Income from Equity Method Investment Held for Sale	0	32,864
Income from Discontinued Operations	$ 0	$ 59,592

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Equity Method Investments (Details)	0 Months Ended
	Mar. 07, 2014	Aug. 29, 2014
CM Lithia Springs DST | CarMax Auto Superstore Lithia Springs GA
Equity Method Investments (Details) [Line Items]
Equity Method Investment, Ownership Percentage	20.00%
Business Acquisition, Effective Date of Acquisition	Mar. 07, 2014
AEI Net Lease Portfolio DST | Tractor Supply Rapid City SD
Equity Method Investments (Details) [Line Items]
Business Acquisition, Effective Date of Acquisition		Aug. 29, 2014
AEI Net Lease Portfolio DST
Equity Method Investments (Details) [Line Items]
Equity Method Investment, Ownership Percentage		16.95%

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Equity Method Investments (Tables)

3 Months Ended

9 Months Ended

Mar. 31, 2014

Dec. 31, 2014

Policy Text Block [Abstract]

Equity Method Investments [Table Text Block]

Equity Method Investments

Activity Through March 31, 2014:		CMLS		ANLP		Total
Real Estate Contributed (at carrying value)	$	1,508,930	$	0	$	1,508,930
Cash Contributed		12,169		0		12,169
Net Income – Rental Activity		9,697		0		9,697
Net Income – Gain on Sale of Real Estate		23,167		0		23,167
Equity Method Investments at March 31, 2014		1,553,963		0		1,553,963

Equity Method Investments

Activity After March 31, 2014:		CMLS		ANLP		Total
Real Estate Contributed (at carrying value)		0		1,681,698		1,681,698
Cash Contributed		0		25,319		25,319
Net Income – Rental Activity		23,268		11,750		35,018
Net Income – Gain on Sale of Real Estate		567,650		509,909		1,077,559
Distributions from Net Rental Income		(32,965)		(11,750)		(44,715)
Proceeds from Sale of Class B Interests		(2,111,916)		(2,216,926)		(4,328,842)
Equity Method Investments at December 31, 2014	$	0	$	0	$	0

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Fair Value Measurements

3 Months Ended

Mar. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

(7)  Fair Value Measurements –

As of March 31, 2015 and December 31, 2014, the Partnership had no assets or liabilities measured at fair value on a recurring basis or nonrecurring basis.

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Accounting Policies, by Policy (Policies)	3 Months Ended
	Mar. 31, 2015
Accounting Policies [Abstract]
Distribution Policy, Members or Limited Partners, Description	During operations, any Net Cash Flow, as defined, which the General Partners determine to distribute will be distributed 90% to the Limited Partners and 10% to the General Partners; provided, however, that such distributions to the General Partners will be subordinated to the Limited Partners first receiving an annual, noncumulative distribution of Net Cash Flow equal to 10% of their Adjusted Capital Contribution, as defined, and, provided further, that in no event will the General Partners receive less than 1% of such Net Cash Flow per annum. Distributions to Limited Partners will be made pro rata by Units.Any Net Proceeds of Sale, as defined, from the sale or financing of properties which the General Partners determine to distribute will, after provisions for debts and reserves, be paid in the following manner: (i) first, 99% to the Limited Partners and 1% to the General Partners until the Limited Partners receive an amount equal to: (a) their Adjusted Capital Contribution plus (b) an amount equal to 10% of their Adjusted Capital Contribution per annum, cumulative but not compounded, to the extent not previously distributed from Net Cash Flow; (ii) any remaining balance will be distributed 90% to the Limited Partners and 10% to the General Partners. Distributions to the Limited Partners will be made pro rata by Units.
Key Provisions of Operating or Partnership Agreement, Description	For tax purposes, profits from operations, other than profits attributable to the sale, exchange, financing, refinancing or other disposition of property, will be allocated first in the same ratio in which, and to the extent, Net Cash Flow is distributed to the Partners for such year. Any additional profits will be allocated in the same ratio as the last dollar of Net Cash Flow is distributed. Net losses from operations will be allocated 99% to the Limited Partners and 1% to the General Partners.For tax purposes, profits arising from the sale, financing, or other disposition of property will be allocated in accordance with the Partnership Agreement as follows: (i) first, to those partners with deficit balances in their capital accounts in an amount equal to the sum of such deficit balances; (ii) second, 99% to the Limited Partners and 1% to the General Partners until the aggregate balance in the Limited Partners' capital accounts equals the sum of the Limited Partners' Adjusted Capital Contributions plus an amount equal to 10% of their Adjusted Capital Contributions per annum, cumulative but not compounded, to the extent not previously allocated; (iii) third, the balance of any remaining gain will then be allocated 90% to the Limited Partners and 10% to the General Partners. Losses will be allocated 98% to the Limited Partners and 2% to the General Partners.The General Partners are not required to currently fund a deficit capital balance. Upon liquidation of the Partnership or withdrawal by a General Partner, the General Partners will contribute to the Partnership an amount equal to the lesser of the deficit balances in their capital accounts or 1% of total Limited Partners' and General Partners' capital contributions.

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Discontinued Operations (Tables)

3 Months Ended

Mar. 31, 2015

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations [Table Text Block]

Discontinued Operations

		2015		2014
Rental Income	$	0	$	26,740
Property Management Expenses		0		(12)
Income from Equity Method Investment Held for Sale		0		32,864
Income from Discontinued Operations	$	0	$	59,592

Cash Flow, Supplemental Disclosures [Text Block]

Cash Flows from Discontinued Operations

		2015		2014
Cash Flows from Discontinued Operations:
Operating Activities	$	0	$	26,728
Investing Activities	$	0	$	(12,169)

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Equity Method Investments (Details) - Equity Method Investments (USD $)	3 Months Ended		9 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Schedule of Equity Method Investments [Line Items]
Real Estate Contributed (at carrying value)	$ 0	$ 1,508,930	$ 1,681,698
Cash Contributed	0	12,169	25,319
Net Income – Rental Activity		9,697	35,018
Net Income – Gain on Sale of Real Estate		23,167	1,077,559
Distributions from Net Rental Income			(44,715)
Proceeds from Sale of Class B Interests			(4,328,842)
Equity Method Investments at December 31, 2014		1,553,963	0
CM Lithia Springs DST
Schedule of Equity Method Investments [Line Items]
Real Estate Contributed (at carrying value)		1,508,930	0
Cash Contributed		12,169	0
Net Income – Rental Activity		9,697	23,268
Net Income – Gain on Sale of Real Estate		23,167	567,650
Distributions from Net Rental Income			(32,965)
Proceeds from Sale of Class B Interests			(2,111,916)
Equity Method Investments at December 31, 2014		1,553,963	0
AEI Net Lease Portfolio DST
Schedule of Equity Method Investments [Line Items]
Real Estate Contributed (at carrying value)		0	1,681,698
Cash Contributed		0	25,319
Net Income – Rental Activity		0	11,750
Net Income – Gain on Sale of Real Estate		0	509,909
Distributions from Net Rental Income			(11,750)
Proceeds from Sale of Class B Interests			(2,216,926)
Equity Method Investments at December 31, 2014		$ 0	$ 0

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Statement of Cash Flows (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash Flows from Operating Activities:
Net Income	$ 114,873	$ 141,850
Adjustments to Reconcile Net Income To Net Cash Provided by Operating Activities:
Depreciation and Amortization	110,527	88,093
Income from Equity Method Investments	0	32,864
Increase (Decrease) in Payable to AEI Fund Management, Inc.	1,842	(4,918)
Increase (Decrease) in Unearned Rent	23,093	21,210
Total Adjustments	135,462	71,521
Net Cash Provided By (Used For) Operating Activities	250,335	213,371
Cash Flows from Investing Activities:
Cash Paid for Equity Method Investments	0	12,169
Cash Flows from Financing Activities:
Distributions Paid to Partners	291,921	291,922
Net Increase (Decrease) in Cash	(41,586)	(90,720)
Cash, beginning of period	4,540,920	5,553,960
Cash, end of period	4,499,334	5,463,240
Supplemental Disclosure of Non-Cash Investing Activities:
Contribution of Real Estate (at carrying value) in Exchange for Equity Method Investments	$ 0	$ 1,508,930

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Equity Method Investments

3 Months Ended

Mar. 31, 2015

Policy Text Block [Abstract]

Equity Method Investments, Policy [Policy Text Block]

(4) Equity Method Investments –

In the fourth quarter of 2013, the Partnership decided to sell its 20% interest in the CarMax Auto Superstore in Lithia Springs, Georgia. At December 31, 2013, the property was classified as Real Estate Held for Sale with a carrying value of $1,508,930. The remaining interests in the property were owned by three affiliated entities, AEI Income & Growth Fund 24 LLC, AEI Income & Growth Fund 25 LLC and AEI Private Net Lease Millennium Fund Limited Partnership. On March 7, 2014, to facilitate the sale of the property, the Partnership and affiliated entities contributed their respective interests in the property via a limited liability company to CM Lithia Springs DST (“CMLS”), a Delaware statutory trust (“DST”), in exchange for Class B ownership interests in CMLS. In addition, a small amount of cash was contributed for working capital. A DST is a recognized mechanism for selling property to investors who are looking for replacement real estate to complete like-kind exchanges under Section 1031 of the Internal Revenue Code. As investors purchased Class A ownership interests in CMLS, the proceeds received were used to redeem, on a one-for-one basis, the Class B ownership interests of the Partnership and affiliated entities. From March 13, 2014 to July 25, 2014, CMLS sold 100% of its Class A ownership interests to investors and redeemed 100% of the Class B ownership interests from the Partnership and affiliated entities.

On August 29, 2014, to facilitate the sale of its 63% interest in the Tractor Supply Company store in Rapid City, South Dakota, the Partnership contributed the property via a limited liability company to AEI Net Lease Portfolio DST (“ANLP”) in exchange for 16.95% of the Class B ownership interests in ANLP. The remaining interest in the property, owned by an affiliated entity, along with two other properties owned by two other affiliated entities, were also contributed to ANLP in exchange for 83.05% of the Class B ownership interests in ANLP. In addition, cash was contributed for working capital. From August 29, 2014 to October 30, 2014, ANLP sold 100% of its Class A ownership interests to investors and redeemed 100% of the Class B ownership interests from the Partnership and affiliated entities.

The investments in CMLS and ANLP were recorded using the equity method of accounting in the accompanying financial statements. Under the equity method, the investments were stated at cost and adjusted for the Partnership’s share of net income or losses and reduced by proceeds received from the sale of the Class B ownership interests of the DSTs as well as distributions from net rental income. During 2014, the investment balances consisted of the following:

Activity Through March 31, 2014:		CMLS		ANLP		Total
Real Estate Contributed (at carrying value)	$	1,508,930	$	0	$	1,508,930
Cash Contributed		12,169		0		12,169
Net Income – Rental Activity		9,697		0		9,697
Net Income – Gain on Sale of Real Estate		23,167		0		23,167
Equity Method Investments at March 31, 2014		1,553,963		0		1,553,963

Activity After March 31, 2014:		CMLS		ANLP		Total
Real Estate Contributed (at carrying value)		0		1,681,698		1,681,698
Cash Contributed		0		25,319		25,319
Net Income – Rental Activity		23,268		11,750		35,018
Net Income – Gain on Sale of Real Estate		567,650		509,909		1,077,559
Distributions from Net Rental Income		(32,965)		(11,750)		(44,715)
Proceeds from Sale of Class B Interests		(2,111,916)		(2,216,926)		(4,328,842)
Equity Method Investments at December 31, 2014	$	0	$	0	$	0

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Equity Method Investments (Details) - Equity Method Investments (USD $)	3 Months Ended		9 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Schedule of Equity Method Investments [Line Items]
Real Estate Contributed (at carrying value)	$ 0	$ 1,508,930	$ 1,681,698
Cash Contributed	0	12,169	25,319
Net Income – Rental Activity		9,697	35,018
Net Income – Gain on Sale of Real Estate		23,167	1,077,559
Equity Method Investments at March 31, 2014		1,553,963	0
CM Lithia Springs DST
Schedule of Equity Method Investments [Line Items]
Real Estate Contributed (at carrying value)		1,508,930	0
Cash Contributed		12,169	0
Net Income – Rental Activity		9,697	23,268
Net Income – Gain on Sale of Real Estate		23,167	567,650
Equity Method Investments at March 31, 2014		1,553,963	0
AEI Net Lease Portfolio DST
Schedule of Equity Method Investments [Line Items]
Real Estate Contributed (at carrying value)		0	1,681,698
Cash Contributed		0	25,319
Net Income – Rental Activity		0	11,750
Net Income – Gain on Sale of Real Estate		0	509,909
Equity Method Investments at March 31, 2014		$ 0	$ 0