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The advantage of LLC - you do not need to file any formal forms, however any registration where you reported the ownership - need to be updated if there is a change in ownership.
As a single member LLC - you generally report all income and expenses as solo proprietorship.
The business income and expenses will be reported on the schedule C - http://www.irs.gov/pub/irs-pdf/f1040sc.pdf
There will not be any self-employment taxes because you are reporting losses.
The net loss will be reported on the form 1040 line 12 - http://www.irs.gov/pub/irs-pdf/f1040.pdf
I suggest you following references for starting the business
Generally LLC is not taxable entity - all income should be passed through to members and should be reported on individual tax returns regardless it was distributed or not.
If the business has net income over $400, it may be required to file Schedule SE, Self-Employment Tax and net income is likely self-employment income and 15.3% self-employment tax would be required (13.3% in 2011).Let me know if you need any help or clarification.