Separate reporting is required. the issue with the music business is if there are losses year after year. at some point, the IRS could disallow the music losses because of the hobby loss rules.
hobby losses irc 183
(d)Presumption
If the gross income derived from an activity for 3 or more of the taxable years in the period of 5 consecutive taxable years which ends with the taxable year exceeds the deductions attributable to such activity (determined without regard to whether or not such activity is engaged in for profit), then, unless the Secretary establishes to the contrary, such activity shall be presumed for purposes of this chapter for such taxable year to be an activity engaged in for profit.
