How do I treat a grant to my LLC for tax purposes?

[ss]

I have a consulting practice set up as a single member LLC. To date, I have set up a contract with all of my previous clients and have received a 1099 from them to document my income.

I have a new client (a private foundation) that wishes to set up our agreement in the form of a grant, which means I would not receive a 1099 from them. How do I treat this for tax purposes? Is the grant reported as income, just as any other payment for services? Or is there a distinction when it comes to reporting this on my taxes?

Thanks for your help.

[Carl]

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.