If your person is running this as a business, such as, has employee(s), that is why Sched C (part of 1040) exists. You stated:

"This is what the LLC was created to do. It received 1099-DIV as income as well from the business investment activities."

So far, we haven't see how this is business.

Whether they formed an LLC or not is not always a good test, because too many people are following Tik Tok or other advice that is meaningless and/or wrong for their needs.

Having a SMLLC might not have anything to do with their investment activities. Let me give an example:

A person can lend money to others. They don't need to have an LLC to lend money. But one of my clients, with the support of a administrative assistant, was in business as a provider and lender for Man Camps in the oil fields. Essentially, mobile homes. They are required to obtain a FEIN when there is payroll, even if they are not an LLC. Whether running under an LLC (which is a State construct) or just the EIN (for payroll needs), the person's business activity is Sched C = in business.