Since a single member LLC is considered a disregarded entity by the IRS, all monies received by you or the business is reportable income. That includes the grant. It's taxability will be offset by the qualified business expenses it is used to pay for. The payor also needs to understand that their grant is not tax deductible for them either.... at least not on the federal return. So if they think it's deductible for them, they would "have" to send you some type of tax reporting document.
