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:  000-51823

AEI INCOME & GROWTH FUND 26 LLC

(Exact name of registrant as specified in its charter)

State of Delaware	41-2173048
(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 26 LLC

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 Members' Equity (Deficit)	6
		Notes to Financial Statements		7 - 10
	Item 2.	Management's Discussion and Analysis of Financial
			Condition and Results of Operations	11 - 16
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk		16
	Item 4.	Controls and Procedures		16
Part II – Other Information
	Item 1.	Legal Proceedings		16
	Item 1A.	Risk Factors		16
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		17
	Item 3.	Defaults Upon Senior Securities		17
	Item 4.	Mine Safety Disclosures		17
	Item 5.	Other Information		17
	Item 6.	Exhibits		17
Signatures				18

Page 2 of 18

AEI INCOME & GROWTH FUND 26 LLC

BALANCE SHEETS

ASSETS

	March 31,			December 31,
	2015			2014
	(unaudited)
Current Assets:
Cash	$	1,308,698		$	2,671,184
Real Estate Investments:
Land		4,473,389			4,430,889
Buildings		8,788,477			8,832,622
Acquired Intangible Lease Assets		419,048			420,445
Real Estate Held for Investment, at cost		13,680,914			13,683,956
Accumulated Depreciation and Amortization		(2,312,852	)		(2,385,244	)
Real Estate Held for Investment, Net		11,368,062			11,298,712
Equity Method Investments		965,934			0
Total Real Estate Investments		12,333,996			11,298,712
Total Assets	$	13,642,694		$	13,969,896

LIABILITIES AND MEMBERS’ EQUITY

Current Liabilities:
Payable to AEI Fund Management, Inc.	$	59,219	$	67,598
Distributions Payable		235,458		513,860
Unearned Rent		21,155		7,269
Total Current Liabilities		315,832		588,727
Long-term Liabilities:
Acquired Below-Market Lease Intangibles, Net		0		74,964
Members’ Equity:
Managing Members		10,370		12,599
Limited Members – 10,000,000 Units authorized;    1,771,597 Units issued and outstanding    as of 3/31/15 and 12/31/14		13,316,492		13,293,606
Total Members’ Equity		13,326,862		13,306,205
Total Liabilities and Members’ Equity	$	13,642,694	$	13,969,896

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

Page 3 of 18

AEI INCOME & GROWTH FUND 26 LLC

STATEMENTS OF INCOME

(unaudited)

	Three Months Ended March 31
	2015		2014
Rental Income	$	250,445	$	304,221
Expenses:
LLC Administration – Affiliates		43,097		37,405
LLC Administration and Property    Management – Unrelated Parties		15,682		11,842
Property Acquisition		42,761		0
Depreciation and Amortization		85,562		109,620
Total Expenses		187,102		158,867
Operating Income		63,343		145,354
Other Income:
Income from Equity Method Investments		191,294		0
Interest Income		1,478		182
Total Other Income		192,772		182
Net Income	$	256,115	$	145,536
Net Income Allocated:
Managing Members	$	4,229	$	4,366
Limited Members		251,886		141,170
Total	$	256,115	$	145,536
Net Income per LLC Unit	$	.14	$	.08
Weighted Average Units Outstanding –       Basic and Diluted		1,771,597		1,780,725

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

Page 4 of 18

AEI INCOME & GROWTH FUND 26 LLC

STATEMENTS OF CASH FLOWS

(unaudited)

	Three Months Ended March 31
	2015			2014
Cash Flows from Operating Activities:
Net Income	$	256,115		$	145,536
Adjustments to Reconcile Net Income To Net Cash Provided by Operating Activities:
Depreciation and Amortization		85,562			108,069
Income from Equity Method Investments		(191,294	)		0
Increase (Decrease) in Payable to    AEI Fund Management, Inc.		(8,379	)		1,348
Increase (Decrease) in Unearned Rent		13,886			22,916
Total Adjustments		(100,225	)		132,333
Net Cash Provided By (Used For)    Operating Activities		155,890			277,869
Cash Flows from Investing Activities:
Investments in Real Estate		(1,600,000	)		0
Cash Paid for Equity Method Investments		(15,316	)		0
Proceeds from Equity Method Investments		610,800			0
Net Cash Provided By (Used For)    Investing Activities		(1,004,516	)		0
Cash Flows from Financing Activities:
Distributions Paid to Members		(513,860	)		(236,082	)
Net Increase (Decrease) in Cash		(1,362,486	)		41,787
Cash, beginning of period		2,671,184			306,395
Cash, end of period	$	1,308,698		$	348,182
Supplemental Disclosure of Non-Cash Investing Activities:
Contribution of Real Estate (at carrying value)    in Exchange for Equity Method Investments	$	1,370,124		$	0

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

Page 5 of 18

AEI INCOME & GROWTH FUND 26 LLC

STATEMENTS OF CHANGES IN MEMBERS' EQUITY (DEFICIT)

(unaudited)

	Managing Members			Limited Members			Total			Limited Member Units Outstanding
Balance, December 31, 2013	$	(10,919	)	$	12,777,887		$	12,766,968			1,780,725.0
Distributions Declared		(7,083	)		(229,000	)		(236,083	)
Net Income		4,366			141,170			145,536
Balance, March 31, 2014	$	(13,636	)	$	12,690,057		$	12,676,421			1,780,725.0
Balance, December 31, 2014	$	12,599		$	13,293,606		$	13,306,205			1,771,596.5
Distributions Declared		(6,458	)		(229,000	)		(235,458	)
Net Income		4,229			251,886			256,115
Balance, March 31, 2015	$	10,370		$	13,316,492		$	13,326,862			1,771,596.5

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

Page 6 of 18

AEI INCOME & GROWTH FUND 26 LLC

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 26 LLC (“Company”), a Limited Liability Company, was formed on March 14, 2005 to acquire and lease commercial properties to operating tenants.  The Company's operations are managed by AEI Fund Management XXI, Inc. (“AFM”), the Managing Member.  Robert P. Johnson, the President and sole director of AFM, serves as the Special Managing Member.  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 Company.

The terms of the offering called for a subscription price of $10 per LLC Unit, payable on acceptance of the offer.  The Company commenced operations on April 3, 2006 when minimum subscriptions of 150,000 LLC Units ($1,500,000) were accepted.  The offering terminated October 19, 2007, when the extended offering period expired.  The Company received subscriptions for 1,832,736 Units.  Under the terms of the Operating Agreement, the Limited Members and Managing Members contributed funds of $18,327,360 and $1,000, respectively.  The Company shall continue until December 31, 2055, unless dissolved, terminated and liquidated prior to that date.

During operations, any Net Cash Flow, as defined, which the Managing Members determine to distribute will be distributed 97% to the Limited Members and 3% to the Managing Members.  Distributions to Limited Members will be made pro rata by Units.

Any Net Proceeds of Sale, as defined, from the sale or financing of properties which the Managing Members determine to distribute will, after provisions for debts and reserves, be paid in the following manner: (i) first, 99% to the Limited Members and 1% to the Managing Members until the Limited Members receive an amount equal to: (a) their Adjusted Capital Contribution plus (b) an amount equal to 6.5% 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 Members and 10% to the Managing Members.  Distributions to the Limited Members will be made pro rata by Units.

Page 7 of 18

AEI INCOME & GROWTH FUND 26 LLC

NOTES TO FINANCIAL STATEMENTS

(Continued)

(2)  Organization – (Continued)

For tax purposes, profits from operations, other than profits attributable to the sale, exchange, financing, refinancing or other disposition of property, will be allocated 97% to the Limited Members and 3% to the Managing Members.  Net losses from operations will be allocated 99% to the Limited Members and 1% to the Managing Members.

For tax purposes, profits arising from the sale, financing, or other disposition of property will be allocated in accordance with the Operating Agreement as follows: (i) first, to those Members with deficit balances in their capital accounts in an amount equal to the sum of such deficit balances; (ii) second, 99% to the Limited Members and 1% to the Managing Members until the aggregate balance in the Limited Members' capital accounts equals the sum of the Limited Members' Adjusted Capital Contributions plus an amount equal to 6.5% 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 Members and 10% to the Managing Members.  Losses will be allocated 99% to the Limited Members and 1% to the Managing Members.

The Managing Members are not required to currently fund a deficit capital balance.  Upon liquidation of the Company or withdrawal by a Managing Member, the Managing Members will contribute to the Company an amount equal to the lesser of the deficit balances in their capital accounts or 1.01% of the total capital contributions of the Limited Members over the amount previously contributed by the Managing Members.

(3)  Real Estate Investments –

On December 30, 2014, the Company purchased a 54% interest in a Fresenius Medical Center in Chicago, Illinois for $1,292,220.  The Company allocated $162,678 of the purchase price to Acquired Intangible Lease Assets, representing in-place lease intangibles.  The Company incurred $37,042 of acquisition expenses related to the purchase that were expensed.  The property is leased to Fresenius Medical Care Chatham, LLC, a subsidiary of Fresenius Medical Care Holdings, Inc., under a Lease Agreement with a remaining primary term of 12.3 years (as of the date of purchase) and annual rent of $87,228 for the interest purchased.  The remaining interest in the property was purchased by AEI Income & Growth Fund 27 LLC, an affiliate of the Company.

On March 17, 2015, the Company purchased a Zales store in Enid, Oklahoma for $1,600,000.  The Company allocated $256,370 of the purchase price to Acquired Intangible Lease Assets, representing in-place lease intangibles of $183,764 and above-market lease intangibles of $72,606.  The Company incurred $42,761 of acquisition expenses related to the purchase that were expensed.  The property is leased to Zale Delaware, Inc. under a Lease Agreement with a remaining primary term of 9.6 years and annual rent of $105,600.

Page 8 of 18

AEI INCOME & GROWTH FUND 26 LLC

NOTES TO FINANCIAL STATEMENTS

(Continued)

(3)  Real Estate Investments – (Continued)

For the three months ended March 31, 2015 and 2014, the value of in-place lease intangibles amortized to expense was $3,298 and $4,320, the decrease to rental income for above-market leases was $0 and $0, and the increase to rental income for below-market leases was $0 and $1,551, respectively.  For lease intangibles not held for sale as of March 31, 2015, the weighted average remaining life is 129 months for in-place lease intangibles and 115 months for above-market leases.  The estimated amortization expense is $32,365 and the estimated decrease to rental income for above-market leases is $7,576 for each of the next five succeeding years.

(4)  Equity Method Investments –

On August 29, 2014, to facilitate the sale of its Applebee’s restaurant in Indianapolis, Indiana, the Company contributed the property via a limited liability company to AEI Net Lease Portfolio DST (“ANLP”), a Delaware statutory trust (“DST”), in exchange for 28.3% of the Class B ownership interests in ANLP.  A second property owned by an affiliate of the Company, along with a third property owned jointly by two other affiliated entities, were also contributed to ANLP in exchange for 71.7% of the Class B ownership interests in ANLP.  In addition, 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 ANLP, the proceeds received were used to redeem, on a one-for-one basis, the Class B ownership interests of the Company and affiliated entities.  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 Company and affiliated entities.

On January 22, 2015, to facilitate the sale of its 53% interest in the Tractor Supply Company store in Starkville, Mississippi, the Company contributed the property via a limited liability company to AEI Net Lease Portfolio II DST (“ANLP II”) in exchange for 10.18% of the Class B ownership interests in ANLP II.  The remaining interest in the property, owned by an affiliated entity, along with three other properties owned by two other affiliated entities, were also contributed to ANLP II in exchange for 89.82% of the Class B ownership interests in ANLP II.  In addition, cash was contributed for working capital.  From January 28, 2015 to March 31, 2015, ANLP II sold 34.5192% of its Class A ownership interests to investors and redeemed 34.5192% of the Class B ownership interests from the Company and affiliated entities.

Page 9 of 18

AEI INCOME & GROWTH FUND 26 LLC

NOTES TO FINANCIAL STATEMENTS

(Continued)

(4)  Equity Method Investments – (Continued)

The investments in ANLP and ANLP II are recorded using the equity method of accounting in the accompanying financial statements.  Under the equity method, the investments are stated at cost and adjusted for the Company’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 and 2015, the investment balances consisted of the following:

Activity from August 29, 2014 to December 31, 2014:		ANLP
Real Estate Contributed (at carrying value)	$	2,371,502
Cash Contributed		42,273
Net Income – Rental Activity		19,180
Net Income – Gain on Sale of Real Estate		1,287,642
Distributions from Net Rental Income		(19,180)
Proceeds from Sale of Class B Interests		(3,701,417)
Equity Method Investments at December 31, 2014	$	0

Activity from January 22, 2015 to March 31, 2015:		ANLP II
Real Estate Contributed (at carrying value)	$	1,370,124
Cash Contributed		15,316
Net Income – Rental Activity		18,582
Net Income – Gain on Sale of Real Estate		172,712
Distributions from Net Rental Income		(18,582)
Proceeds from Sale of Class B Interests		(592,218)
Equity Method Investments at March 31, 2015	$	965,934

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

AEI Fund Management, Inc. performs the administrative and operating functions for the Company.  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.

(6)  Fair Value Measurements –

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

Page 10 of 18

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 Company’s financial condition and results of operations, including the following:

— Market and economic conditions which affect the value of the properties the Company 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 Members;

— resolution by the Managing Members of conflicts with which they may be confronted;

— the success of the Managing Members 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 Company operate.

Application of Critical Accounting Policies

The Company’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 Company’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 Company’s assets and liabilities, or the results of reported operations, will be affected if management’s estimates or assumptions prove inaccurate.

Management of the Company 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 the managing member of the Company.

Allocation of Purchase Price of Acquired Properties

Upon acquisition of real properties, the Company 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 11 of 18

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 term of the respective leases.  Below market leases will be amortized as an adjustment of rental income over the remaining terms 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 Company tests long-lived assets for recoverability when events or changes in circumstances indicate that the carrying value may not be recoverable.  For properties the Company 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 12 of 18

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 Company reimburses these expenses subject to detailed limitations contained in the Operating Agreement.

Results of Operations

For the three months ended March 31, 2015 and 2014, the Company recognized rental income of $250,445 and $304,221, respectively.  In 2015, rental income decreased due to the sale of one property in 2014 and one property in 2015. This decrease in rental income was partially offset by additional rent received from one property acquisition in 2014 and one acquisition in 2015, and rent increases on two properties.  Based on the scheduled rent for the properties as of April 30, 2015, the Company expects to recognize rental income of approximately $1,043,000 in 2015.

For the three months ended March 31, 2015 and 2014, the Company incurred LLC administration expenses from affiliated parties of $43,097 and $37,405, respectively.  These administration expenses include costs associated with the management of the properties, processing distributions, reporting requirements and communicating with the Limited Members.  During the same periods, the Company incurred LLC administration and property management expenses from unrelated parties of $15,682 and $11,842, 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, the Company incurred property acquisition expenses of $42,761 related to the purchase of the Zales store in Enid, Oklahoma.

On January 22, 2015, to facilitate the sale of its 53% interest in the Tractor Supply Company store in Starkville, Mississippi, the Company contributed the property via a limited liability company to AEI Net Lease Portfolio II DST (“ANLP II”), a Delaware statutory trust (“DST”),  in exchange for 10.18% of the Class B ownership interests in ANLP II.  The remaining interest in the property, owned by an affiliated entity, along with three other properties owned by two other affiliated entities, were also contributed to ANLP II in exchange for 89.82% of the Class B ownership interests in ANLP II.  In addition, 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 purchase Class A ownership interests in ANLP II, the proceeds received will be used to redeem, on a one-for-one basis, the Class B ownership interests of the Company and affiliated entities.  From January 28, 2015 to March 31, 2015, ANLP II sold 34.5192% of its Class A ownership interests to investors and redeemed 34.5192% of the Class B ownership interests from the Company and affiliated entities.

Page 13 of 18

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

The investment in ANLP II is recorded using the equity method of accounting in the accompanying financial statements.  Under the equity method, the investment in ANLP II is stated at cost and adjusted for the Company’s share of net income or losses and reduced by proceeds received from the sale of the Class B ownership interests of ANLP II as well as distributions from net rental income.  For the three months ended March 31, 2015, the Company’s share of the net income of ANLP II was $191,294.

For the three months ended March 31, 2015 and 2014, the Company recognized interest income of $1,478 and $182, respectively.

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 Company's cash balances decreased $1,362,486 as a result of cash used to purchase property, cash paid for an equity method investment, and distributions paid to the Members in excess of cash generated from operating activities, which were partially offset by proceeds received from equity method investments.  During the three months ended March 31, 2014, the Company's cash balances increased $41,787 as a result of cash generated from operating activities in excess of distributions paid to the Members.

Net cash provided by operating activities decreased from $277,869 in 2014 to $155,890 in 2015 as a result of a decrease in total rental and interest income in 2015, an increase in LLC administration and property management expenses in 2015, and net timing differences in the collection of payments from the tenants and the payment of expenses.  During 2015, cash from operations was reduced by $42,761 of acquisition expenses related to the purchase of real estate.  Pursuant to accounting guidance, these expenses were reflected as operating cash outflows.  However, pursuant to the Company’s Operating Agreement, acquisition expenses were funded with proceeds from property sales.

The major components of the Company'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, the Company expended $1,600,000 to invest in real properties as the Company reinvested cash generated from property sales.  During the same period, the Company paid cash for equity method investments of $15,316, and received proceeds from equity method investments of $610,800.  All but a small portion of these proceeds were generated from the sale of the Tractor Supply Company store as discussed above.

Page 14 of 18

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

On December 30, 2014, the Company purchased a 54% interest in a Fresenius Medical Center in Chicago, Illinois for $1,292,220.  The property is leased to Fresenius Medical Care Chatham, LLC, a subsidiary of Fresenius Medical Care Holdings, Inc., under a Lease Agreement with a remaining primary term of 12.3 years (as of the date of purchase) and annual rent of $87,228 for the interest purchased.  The remaining interest in the property was purchased by AEI Income & Growth Fund 27 LLC, an affiliate of the Company.

On March 17, 2015, the Company purchased a Zales store in Enid, Oklahoma for $1,600,000.    The property is leased to Zale Delaware, Inc. under a Lease Agreement with a remaining primary term of 9.6 years and annual rent of $105,600.

The Company's primary use of cash flow, other than investment in real estate, is distribution payments to Members and cash used to repurchase Units.  The Company 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 Company attempts to maintain a stable distribution rate from quarter to quarter.  The Company 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 Company declared distributions of $235,458 and $236,083, respectively.  Pursuant to the Operating Agreement, distributions of Net Cash Flow were allocated 97% to the Limited Members and 3% to the Managing Members.  Distributions of Net Proceeds of Sale were allocated 99% to the Limited Members and 1% to the Managing Members.  The Limited Members received distributions of $229,000 and $229,000 and the Managing Members received distributions of $6,458 and $7,083 for the periods, respectively.  In December 2014, the Company declared a special distribution of net sale proceeds of $277,778 which was paid in the first week of January 2015 and resulted in higher distributions paid in 2015.

As part of the distributions discussed above, the Company distributed net sale proceeds of $30,303 in 2015.  The Limited Members received distributions of $30,000 and the Managing Members received distributions of $303.  The Limited Members’ distributions represented $0.02 per Unit.  The Company anticipates the remaining net sale proceeds will either be reinvested in additional property or distributed to the Members in the future.

The Company may repurchase Units from Limited Members who have tendered their Units to the Company.  Such Units may be acquired at a discount.  The Company will not be obligated to purchase in any year more than 2% of the total number of Units outstanding on January 1 of such year.  In no event shall the Company be obligated to purchase Units if, in the sole discretion of the Managing Member, such purchase would impair the capital or operation of the Company.  During the three months ended March 31, 2015 and 2014, the Company did not repurchase any Units from the Limited Members.

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

Page 15 of 18

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

Off-Balance Sheet Arrangements

As of March 31, 2015 and December 31, 2014, the Company 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 Member of the Company 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 Member 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 Member, 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.

PART II – OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

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

ITEM 1A.  RISK FACTORS.

Not required for a smaller reporting company.

Page 16 of 18

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

(a) None.

(b) Not applicable.

(c) Pursuant to Section 7.7 of the Operating Agreement, each Limited Member has the right to present Units to the Company for purchase by submitting notice to the Managing Member during January or July of each year.  The purchase price of the Units is equal to 85% 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 Member in accordance with the provisions of the Operating Agreement.  The purchase price is equal to 100% of the net asset value per Unit in the case of Units of a deceased investor, who purchased the Units in the initial offering and who is a natural person, including Units held by an investor that is an IRA or other qualified plan for which the deceased person was the primary beneficiary, or Units held by an investor that is a grantor trust for which the deceased person was the grantor.

Units tendered to the Company during January and July may be repurchased on April 1st and October 1st, respectively, of each year subject to the following limitations.  The Company will not be obligated to purchase in any year more than 2% of the total number of Units outstanding on January 1 of such year.  In no event shall the Company be obligated to purchase Units if, in the sole discretion of the Managing Member, such purchase would impair the capital or operation of the Company.  During the period covered by this report, the Company did not purchase any Units.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.  MINE SAFETY DISCLOSURES.

Not Applicable.

ITEM 5.  OTHER INFORMATION.

None.

ITEM 6.  EXHIBITS.

31.1 Certification of Chief Executive Officer of Managing Member 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 Managing Member 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 Managing Member pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Page 17 of 18

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 26 LLC
	By:	AEI Fund Management XXI, Inc.
	Its:	Managing Member
	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 18 of 18

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 26 LLC;

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 26 LLC;

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 26 LLC (the “Company”) 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 Member of the Company, 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 Company.

  /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 Investments

3 Months Ended

Mar. 31, 2015

Real Estate [Abstract]

Real Estate Disclosure [Text Block]

(3) Real Estate Investments –

On December 30, 2014, the Company purchased a 54% interest in a Fresenius Medical Center in Chicago, Illinois for $1,292,220. The Company allocated $162,678 of the purchase price to Acquired Intangible Lease Assets, representing in-place lease intangibles. The Company incurred $37,042 of acquisition expenses related to the purchase that were expensed. The property is leased to Fresenius Medical Care Chatham, LLC, a subsidiary of Fresenius Medical Care Holdings, Inc., under a Lease Agreement with a remaining primary term of 12.3 years (as of the date of purchase) and annual rent of $87,228 for the interest purchased. The remaining interest in the property was purchased by AEI Income & Growth Fund 27 LLC, an affiliate of the Company.

On March 17, 2015, the Company purchased a Zales store in Enid, Oklahoma for $1,600,000. The Company allocated $256,370 of the purchase price to Acquired Intangible Lease Assets, representing in-place lease intangibles of $183,764 and above-market lease intangibles of $72,606. The Company incurred $42,761 of acquisition expenses related to the purchase that were expensed. The property is leased to Zale Delaware, Inc. under a Lease Agreement with a remaining primary term of 9.6 years and annual rent of $105,600.

For the three months ended March 31, 2015 and 2014, the value of in-place lease intangibles amortized to expense was $3,298 and $4,320, the decrease to rental income for above-market leases was $0 and $0, and the increase to rental income for below-market leases was $0 and $1,551, respectively. For lease intangibles not held for sale as of March 31, 2015, the weighted average remaining life is 129 months for in-place lease intangibles and 115 months for above-market leases. The estimated amortization expense is $32,365 and the estimated decrease to rental income for above-market leases is $7,576 for each of the next five succeeding years.

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 26 LLC (“Company”), a Limited Liability Company, was formed on March 14, 2005 to acquire and lease commercial properties to operating tenants. The Company's operations are managed by AEI Fund Management XXI, Inc. (“AFM”), the Managing Member. Robert P. Johnson, the President and sole director of AFM, serves as the Special Managing Member. 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 Company.

The terms of the offering called for a subscription price of $10 per LLC Unit, payable on acceptance of the offer. The Company commenced operations on April 3, 2006 when minimum subscriptions of 150,000 LLC Units ($1,500,000) were accepted. The offering terminated October 19, 2007, when the extended offering period expired. The Company received subscriptions for 1,832,736 Units. Under the terms of the Operating Agreement, the Limited Members and Managing Members contributed funds of $18,327,360 and $1,000, respectively. The Company shall continue until December 31, 2055, unless dissolved, terminated and liquidated prior to that date.

During operations, any Net Cash Flow, as defined, which the Managing Members determine to distribute will be distributed 97% to the Limited Members and 3% to the Managing Members. Distributions to Limited Members will be made pro rata by Units.

Any Net Proceeds of Sale, as defined, from the sale or financing of properties which the Managing Members determine to distribute will, after provisions for debts and reserves, be paid in the following manner: (i) first, 99% to the Limited Members and 1% to the Managing Members until the Limited Members receive an amount equal to: (a) their Adjusted Capital Contribution plus (b) an amount equal to 6.5% 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 Members and 10% to the Managing Members. Distributions to the Limited Members 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 97% to the Limited Members and 3% to the Managing Members. Net losses from operations will be allocated 99% to the Limited Members and 1% to the Managing Members.

For tax purposes, profits arising from the sale, financing, or other disposition of property will be allocated in accordance with the Operating Agreement as follows: (i) first, to those Members with deficit balances in their capital accounts in an amount equal to the sum of such deficit balances; (ii) second, 99% to the Limited Members and 1% to the Managing Members until the aggregate balance in the Limited Members' capital accounts equals the sum of the Limited Members' Adjusted Capital Contributions plus an amount equal to 6.5% 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 Members and 10% to the Managing Members. Losses will be allocated 99% to the Limited Members and 1% to the Managing Members.

The Managing Members are not required to currently fund a deficit capital balance. Upon liquidation of the Company or withdrawal by a Managing Member, the Managing Members will contribute to the Company an amount equal to the lesser of the deficit balances in their capital accounts or 1.01% of the total capital contributions of the Limited Members over the amount previously contributed by the Managing Members.

XML

Balance Sheet (USD $)	Mar. 31, 2015	Dec. 31, 2014
Current Assets:
Cash	$ 1,308,698	$ 2,671,184
Real Estate Investments:
Land	4,473,389	4,430,889
Buildings	8,788,477	8,832,622
Acquired Intangible Lease Assets	419,048	420,445
Real Estate Held for Investment, at cost	13,680,914	13,683,956
Accumulated Depreciation and Amortization	2,312,852	2,385,244
Real Estate Held for Investment, Net	11,368,062	11,298,712
Equity Method Investments	965,934	0
Total Real Estate Investments	12,333,996	11,298,712
Total Assets	13,642,694	13,969,896
Current Liabilities:
Payable to AEI Fund Management, Inc.	59,219	67,598
Distributions Payable	235,458	513,860
Unearned Rent	21,155	7,269
Total Current Liabilities	315,832	588,727
Long-term Liabilities:
Acquired Below-Market Lease Intangibles, Net	0	74,964
Members’ Equity:
Managing Members	10,370	12,599
Limited Members – 10,000,000 Units authorized; 1,771,597 Units issued and outstanding as of 3/31/15 and 12/31/14	13,316,492	13,293,606
Total Members’ Equity	13,326,862	13,306,205
Total Liabilities and Members’ Equity	$ 13,642,694	$ 13,969,896

XML

Statement of Changes in Members' Equity (USD $)	Managing Member [Member]	Limited Member [Member]	Total
Balance at Dec. 31, 2013	$ (10,919)	$ 12,777,887	$ 12,766,968
Balance (in Shares) at Dec. 31, 2013		1,780,725.0
Distributions Declared	7,083	229,000	236,083
Net Income	4,366	141,170	145,536
Balance at Mar. 31, 2014	(13,636)	12,690,057	12,676,421
Balance (in Shares) at Mar. 31, 2014		1,780,725.0
Balance at Dec. 31, 2014	12,599	13,293,606	13,306,205
Balance (in Shares) at Dec. 31, 2014		1,771,596.5
Distributions Declared	6,458	229,000	235,458
Net Income	4,229	251,886	256,115
Balance at Mar. 31, 2015	$ 10,370	$ 13,316,492	$ 13,326,862
Balance (in Shares) at Mar. 31, 2015		1,771,596.5

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 Members, units authorized	10,000,000	10,000,000
Limited Members, units issued	1,771,597	1,771,597
Limited Members, units outstanding	1,771,597	1,771,597

XML

Equity Method Investment (Details)	0 Months Ended
	Aug. 29, 2014	Jan. 22, 2015
AEI Net Lease Portfolio DST | Applebees Indianapolis IN
Equity Method Investment (Details) [Line Items]
Disposal Date	Aug. 29, 2014
AEI Net Lease Portfolio DST
Equity Method Investment (Details) [Line Items]
Equity Method Investment, Ownership Percentage	28.30%
AEI Net Lease Portfolio II DST | Tractor Supply Starkville MS
Equity Method Investment (Details) [Line Items]
Disposal Date		Jan. 22, 2015
AEI Net Lease Portfolio II DST
Equity Method Investment (Details) [Line Items]
Equity Method Investment, Ownership Percentage		10.18%

XML

Document And Entity Information (USD $)	3 Months Ended
	Mar. 31, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	AEI Income & Growth Fund 26 LLC
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding	1,771,597
Entity Public Float	$ 0
Amendment Flag	false
Entity Central Index Key	0001326321
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

Equity Method Investment (Details) - Equity Method Investment (USD $)	3 Months Ended		12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Schedule of Equity Method Investments [Line Items]
Real Estate Contributed (at carrying value)	$ 1,370,124	$ 0
Cash Contributed	15,316	0
Equity Method Investments at December 31, 2014	965,934		0
AEI Net Lease Portfolio DST
Schedule of Equity Method Investments [Line Items]
Real Estate Contributed (at carrying value)			2,371,502
Cash Contributed			42,273
Net Income – Rental Activity			19,180
Net Income – Gain on Sale of Real Estate			1,287,642
Distributions from Net Rental Income			(19,180)
Proceeds from Sale of Class B Interests			(3,701,417)
Equity Method Investments at December 31, 2014			$ 0

XML

Statement of Income (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Rental Income	$ 250,445	$ 304,221
Expenses:
LLC Administration – Affiliates	43,097	37,405
LLC Administration and Property Management – Unrelated Parties	15,682	11,842
Property Acquisition	42,761	0
Depreciation and Amortization	85,562	109,620
Total Expenses	187,102	158,867
Operating Income	63,343	145,354
Other Income:
Income from Equity Method Investments	191,294	0
Interest Income	1,478	182
Total Other Income	192,772	182
Net Income	256,115	145,536
Net Income Allocated:
Managing Members	4,229	4,366
Limited Members	$ 251,886	$ 141,170
Net Income per LLC Unit (in Dollars per share)	$ 0.14	$ 0.08
Weighted Average Units Outstanding – Basic and Diluted (in Shares)	1,771,597	1,780,725

XML

Fair Value Measurements

3 Months Ended

Mar. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

(6)  Fair Value Measurements –

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

XML

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 Company. 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.

XML

Equity Method Investment (Details) - Equity Method Investment (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Schedule of Equity Method Investments [Line Items]
Real Estate Contributed (at carrying value)	$ 1,370,124	$ 0
Cash Contributed	15,316	0
Equity Method Investments at March 31, 2015	965,934		0
AEI Net Lease Portfolio II DST
Schedule of Equity Method Investments [Line Items]
Real Estate Contributed (at carrying value)	1,370,124
Cash Contributed	15,316
Net Income – Rental Activity	18,582
Net Income – Gain on Sale of Real Estate	172,712
Distributions from Net Rental Income	(18,582)
Proceeds from Sale of Class B Interests	(592,218)
Equity Method Investments at March 31, 2015	$ 965,934

XML

Organization (Details) (USD $)	Oct. 19, 2007	Apr. 03, 2006
Accounting Policies [Abstract]
Capital Units, Value		$ 10
Limited Partners' Capital Account, Units Outstanding (in Shares)	1,832,736	150,000
Limited Partners' Contributed Capital	18,327,360	(1,500,000)
General Partners' Contributed Capital	$ 1,000

XML

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 Managing Members determine to distribute will be distributed 97% to the Limited Members and 3% to the Managing Members. Distributions to Limited Members will be made pro rata by Units.Any Net Proceeds of Sale, as defined, from the sale or financing of properties which the Managing Members determine to distribute will, after provisions for debts and reserves, be paid in the following manner: (i) first, 99% to the Limited Members and 1% to the Managing Members until the Limited Members receive an amount equal to: (a) their Adjusted Capital Contribution plus (b) an amount equal to 6.5% 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 Members and 10% to the Managing Members. Distributions to the Limited Members 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 97% to the Limited Members and 3% to the Managing Members. Net losses from operations will be allocated 99% to the Limited Members and 1% to the Managing Members.For tax purposes, profits arising from the sale, financing, or other disposition of property will be allocated in accordance with the Operating Agreement as follows: (i) first, to those Members with deficit balances in their capital accounts in an amount equal to the sum of such deficit balances; (ii) second, 99% to the Limited Members and 1% to the Managing Members until the aggregate balance in the Limited Members' capital accounts equals the sum of the Limited Members' Adjusted Capital Contributions plus an amount equal to 6.5% 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 Members and 10% to the Managing Members. Losses will be allocated 99% to the Limited Members and 1% to the Managing Members.The Managing Members are not required to currently fund a deficit capital balance. Upon liquidation of the Company or withdrawal by a Managing Member, the Managing Members will contribute to the Company an amount equal to the lesser of the deficit balances in their capital accounts or 1.01% of the total capital contributions of the Limited Members over the amount previously contributed by the Managing Members.

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Equity Method Investment (Tables)

12 Months Ended

3 Months Ended

Dec. 31, 2014

Mar. 31, 2015

AEI Net Lease Portfolio DST

Equity Method Investment (Tables) [Line Items]

Equity Method Investments [Table Text Block]

Equity Method Investment

Activity from August 29, 2014 to December 31, 2014:		ANLP
Real Estate Contributed (at carrying value)	$	2,371,502
Cash Contributed		42,273
Net Income – Rental Activity		19,180
Net Income – Gain on Sale of Real Estate		1,287,642
Distributions from Net Rental Income		(19,180)
Proceeds from Sale of Class B Interests		(3,701,417)
Equity Method Investments at December 31, 2014	$	0

AEI Net Lease Portfolio II DST

Equity Method Investment (Tables) [Line Items]

Equity Method Investments [Table Text Block]

Equity Method Investment

Activity from January 22, 2015 to March 31, 2015:		ANLP II
Real Estate Contributed (at carrying value)	$	1,370,124
Cash Contributed		15,316
Net Income – Rental Activity		18,582
Net Income – Gain on Sale of Real Estate		172,712
Distributions from Net Rental Income		(18,582)
Proceeds from Sale of Class B Interests		(592,218)
Equity Method Investments at March 31, 2015	$	965,934

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Real Estate Investments (Details) (USD $)	0 Months Ended	12 Months Ended		0 Months Ended	3 Months Ended
	Dec. 30, 2014	Mar. 17, 2016	Dec. 30, 2015	Mar. 17, 2015	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2016
Fresenius Chicago IL | Leases, Acquired-in-Place [Member]
Real Estate Investments (Details) [Line Items]
Finite-lived Intangible Assets Acquired	$ 162,678
Fresenius Chicago IL
Real Estate Investments (Details) [Line Items]
Business Combination, Consideration Transferred	1,292,220
Business Acquisition, Transaction Costs	37,042
Average Lease Term	12.3
Real Estate Revenue, Net		105,600	87,228
Zales Enid OK | Leases, Acquired-in-Place [Member]
Real Estate Investments (Details) [Line Items]
Finite-Lived Intangible Asset, Acquired-in-Place Leases				183,764
Zales Enid OK | Above Market Leases [Member]
Real Estate Investments (Details) [Line Items]
Finite-Lived Intangible Asset, Off-market Lease, Favorable, Gross				72,606
Zales Enid OK
Real Estate Investments (Details) [Line Items]
Business Combination, Consideration Transferred				1,600,000
Finite-lived Intangible Assets Acquired				256,370
Business Acquisition, Transaction Costs				42,761
Average Lease Term				9.6
Leases, Acquired-in-Place [Member]
Real Estate Investments (Details) [Line Items]
Amortization of Intangible Assets					3,298	4,320
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months							32,365
Above Market Leases [Member]
Real Estate Investments (Details) [Line Items]
Amortization of Intangible Assets					0	0
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months							7,576
Off-Market Favorable Lease [Member]
Real Estate Investments (Details) [Line Items]
Amortization of Intangible Assets					$ 0	$ 1,551

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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	$ 256,115	$ 145,536
Adjustments to Reconcile Net Income To Net Cash Provided by Operating Activities:
Depreciation and Amortization	85,562	108,069
Income from Equity Method Investments	191,294	0
Increase (Decrease) in Payable to AEI Fund Management, Inc.	(8,379)	1,348
Increase (Decrease) in Unearned Rent	13,886	22,916
Total Adjustments	(100,225)	132,333
Net Cash Provided By (Used For) Operating Activities	155,890	277,869
Cash Flows from Investing Activities:
Investments in Real Estate	1,600,000	0
Cash Paid for Equity Method Investments	15,316	0
Proceeds from Equity Method Investments	610,800	0
Net Cash Provided By (Used For) Investing Activities	(1,004,516)	0
Cash Flows from Financing Activities:
Distributions Paid to Members	513,860	236,082
Net Increase (Decrease) in Cash	(1,362,486)	41,787
Cash, beginning of period	2,671,184	306,395
Cash, end of period	1,308,698	348,182
Supplemental Disclosure of Non-Cash Investing Activities:
Contribution of Real Estate (at carrying value) in Exchange for Equity Method Investments	$ 1,370,124	$ 0

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Equity Method Investment

3 Months Ended

Mar. 31, 2015

Policy Text Block [Abstract]

Equity Method Investments, Policy [Policy Text Block]

(4) Equity Method Investments –

On August 29, 2014, to facilitate the sale of its Applebee’s restaurant in Indianapolis, Indiana, the Company contributed the property via a limited liability company to AEI Net Lease Portfolio DST (“ANLP”), a Delaware statutory trust (“DST”), in exchange for 28.3% of the Class B ownership interests in ANLP. A second property owned by an affiliate of the Company, along with a third property owned jointly by two other affiliated entities, were also contributed to ANLP in exchange for 71.7% of the Class B ownership interests in ANLP. In addition, 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 ANLP, the proceeds received were used to redeem, on a one-for-one basis, the Class B ownership interests of the Company and affiliated entities. 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 Company and affiliated entities.

On January 22, 2015, to facilitate the sale of its 53% interest in the Tractor Supply Company store in Starkville, Mississippi, the Company contributed the property via a limited liability company to AEI Net Lease Portfolio II DST (“ANLP II”) in exchange for 10.18% of the Class B ownership interests in ANLP II. The remaining interest in the property, owned by an affiliated entity, along with three other properties owned by two other affiliated entities, were also contributed to ANLP II in exchange for 89.82% of the Class B ownership interests in ANLP II. In addition, cash was contributed for working capital. From January 28, 2015 to March 31, 2015, ANLP II sold 34.5192% of its Class A ownership interests to investors and redeemed 34.5192% of the Class B ownership interests from the Company and affiliated entities. 

The investments in ANLP and ANLP II are recorded using the equity method of accounting in the accompanying financial statements. Under the equity method, the investments are stated at cost and adjusted for the Company’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 and 2015, the investment balances consisted of the following:

Activity from August 29, 2014 to December 31, 2014:		ANLP
Real Estate Contributed (at carrying value)	$	2,371,502
Cash Contributed		42,273
Net Income – Rental Activity		19,180
Net Income – Gain on Sale of Real Estate		1,287,642
Distributions from Net Rental Income		(19,180)
Proceeds from Sale of Class B Interests		(3,701,417)
Equity Method Investments at December 31, 2014	$	0

Activity from January 22, 2015 to March 31, 2015:		ANLP II
Real Estate Contributed (at carrying value)	$	1,370,124
Cash Contributed		15,316
Net Income – Rental Activity		18,582
Net Income – Gain on Sale of Real Estate		172,712
Distributions from Net Rental Income		(18,582)
Proceeds from Sale of Class B Interests		(592,218)
Equity Method Investments at March 31, 2015	$	965,934