I see nothing wrong with what you have done. We had a business out of our home for about 5 yrs. I sold purses and a few other misc things on EBAY...It was totally legal, we had a tax ID, we kept a log on the pc of everything we sold and bought and I even deducted the mileage to and from the stores I went to. I never got audited. But I'm not concerned if I do b/c of the accurate log and receipts of EVERYTHING....I don't think you have anything to worry about...I"m sure your MIL knows what she is doing. I agree " I think some people misunderstood you"...Good luck with your quilts...