A sole proprietorship is not a separate entity from yourself. It's just another name for you. Any sale, payment, or other transaction between you and the sole proprietorship is meaningless. It's just taking money out of one pocket and putting it back in the same pocket. Anything that the sole proprietorship owns is owned by you. If your sole proprietorship sells something on eBay, it's exactly the same as if you sold it yourself on eBay.
Any income from your sole proprietorship is included in your "personal 1040" tax return, on Schedule C. The sole proprietorship does not file a separate tax return.
