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


                            FORM 8-K


                         CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934


    Date of Report (Date of earliest event reported)  July 18, 2005


            AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
        (Exact name of registrant as specified in its charter)


     State of Minnesota            0-17467          41-1603719
(State or other jurisdiction  (Commission File    (IRS Employer
     of incorporation)             Number)      Identification No.)


      30 East 7th Street, Suite 1300, St. Paul, Minnesota, 55101
               (Address of Principal Executive Offices)


                            (651) 227-7333
       (Registrant's telephone number, including area code)


  (Former name or former address, if changed since last report)

Check  the  appropriate  box below if  the  Form  8-K  filing  is
intended to simultaneously satisfy the filing obligation  of  the
registrant under any of the following provisions:

[  ]  Written  communication  pursuant  to  Rule  425  under  the
      Securities Act (17 CFR 230.425)
[  ]  Soliciting  material  pursuant to  Rule  14a-12  under  the
      Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to  Rule  14d-2(b)
      under the Exchange Act
      (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to  Rule  13e-4(c)
      under the Exchange Act
      (17 CFR 240.13e-4(c))

Section 2 - Financial Information

Item 2.01 Completion of Acquisition or Disposition of Assets.

       On  July 18, 2005, the Partnership sold a Children's World
daycare center in Merrimack, New Hampshire to Joan T. Simpson, an
unrelated  third  party.   The  Partnership  received  net   cash
proceeds  of  approximately $1,252,700 for  the  property,  which
resulted in a net gain of approximately $582,700.

Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

     (a)  Financial  statements  of  businesses  acquired  -   Not
          Applicable.

     (b)  Pro  forma  financial information - A limited number  of
          pro  forma  adjustments are required to illustrate  the
          effects  of  the transaction on the balance  sheet  and
          income  statement.  The following narrative description
          is  furnished  in  lieu  of the pro  forma  statements.
          Assuming  the  Partnership had  sold  the  property  on
          January 1, 2004:

          The Partnership's Investments in Real Estate would have
          been  reduced by $710,781 and its Current Assets (cash)
          would   have  increased  by  $1,252,700  and  Partner's
          Capital would have increased by $541,919.

          For  the  year  ended December 31,  2004,  Income  from
          Continuing  Operations would have  decreased  $105,472,
          representing a decrease in rental income of $133,586, a
          decrease  in  depreciation expense  of  $27,191  and  a
          decrease in property management expenses of $923.   For
          the  three  months  ended March 31, 2005,  Income  from
          Continuing  Operations  would have  decreased  $25,872,
          representing a decrease in rental income of $32,715,  a
          decrease  in  depreciation  expense  of  $6,798  and  a
          decrease in property management expenses of $45.

          The  net  effect  of these pro forma adjustments  would
          have  caused Net Income to decrease from $4,508,752  to
          $4,403,280  and  from $1,598,151 to  $1,572,279,  which
          would have resulted in Net Income of $217.88 and $79.33
          per  Limited Partnership Unit outstanding for the  year
          ended  December  31,  2004 and the three  months  ended
          March 31, 2005, respectively.

     (c)  Exhibits.

          Exhibit 10.1  - Purchase Agreement dated  May  8,  2005
          between the Partnership and Joan T. Simpson relating to
          the  Property at 325 Daniel Webster Highway, Merrimack,
          New Hampshire.


                           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 hereunto duly authorized.

                              AEI REAL ESTATE FUND XVII LIMITED
                              PARTNERSHIP

                              By: AEI Fund Management XVII, Inc.
                                 Its:  Managing General Partner


Date:  July 21, 2005          /s/ Patrick W Keene
                              By: Patrick W. Keene
                                 Its:  Chief Financial Officer