I am the managing member of a LLC that owns rental property. The LLC tax return is reported on form 1065, with K1s distributed to LLC members. Rent is paid to a brokerage account that sweeps cash into government money fund, 33% of the dividends from which are government obligations. Interest and dividends are exempt from taxation in my state. How do I indicate on the1065 return that the 1/3 of dividends are tax-exempt?
