26 CFR §1.1015-4

1. (a)General rule. Where a transfer of property is in part a sale and in part a gift, the unadjusted basis of the property in the hands of the transferee is the sum of—
   1. (1)Whichever of the following is the greater:
      1. (i)The amount paid by the transferee for the property, or
      2. (ii)The transferor's adjusted basis for the property at the time of the transfer, and
   2. (2)The amount of increase, if any, in basis authorized by section 1015(d) for gift tax paid (see § 1.1015-5).
2. (b)Examples. The rule of paragraph (a) of this section is illustrated by the following examples: