I think I would get another accountants opinion. this just doesn't sound right to me. I am fairly certain you cannont use any materials you bought and used in personal quilts or to give away as a deduction. My quilting friends who have businesses related to quilting have to declare how much was used for personal vs business. i also thinbk you can only deduct the mileage directly related to business expenditures
Be Careful you do not need IRS problems