How may I show on Schedule C as my wife has taken over sales on Ebay since I was laid off?

The "easy" way to do this is to recognize that a business in which husband and wife participate can be reported on a single Schedule C. Essentially you are electing out of partnership treatment. So you can "continue" the same Schedule C you had in 2008. But you would list her as the owner in 2009, or, to be more precise, you were the owner for the first week and she thereafter (but I suspect you did little or no activity yourself during that week). So you would prepare a Schedule SE for her share of the Schedule C and, if you had any, a Schedule SE for you; the total of the two would be the total income of the Schedule C. The Schedule SE is what helps her build up social security credits, assuming that she has enough net income.

If you are self-employed, you earn one quarter of social security credit for each $1,120 in net self-employment income, up to four quarters in a year. That's for 2010; I don't know what the figure was for 2009, but probably very close to $1,120.

Thanks for getting back to me with this. I was wondering about what was left on inventory when and if we wanted to end the business. How would you show that and what do companies do with inventory when faced with this decision? Thanks

Is it possible to work part time jobs and still collect unemployment? Is it possible to collect unemployment if you have a Schedule C business, even if it generates a small salary?

Anything is possible. By statute, unemployment benefits are reduced, ultimately to zero, by income of the nature you describe.