26 C.F.R. § 1.362-2 : Internal Revenue — INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY — INCOME TAX — INCOME TAXES —CORPORATE DISTRIBUTIONS AND ADJUSTMENTS —CORPORATE ORGANIZATIONS AND REORGANIZATIONS —EFFECTS ON CORPORATION —2 - Certain contributions to capital

The following regulations shall be used in the application of section 362(c):

(a) Property deemed to be acquired with contributed money shall be that property, if any, the acquisition of which was the purpose motivating the contribution;
(b) In the case of an excess of the amount of money contributed over the cost of the property deemed to be acquired with such money (as defined in paragraph (a) of this section) such excess shall be applied to the reduction of the basis (but not below zero) of other properties held by the corporation, on the last day of the 12-month period beginning on the day the contribution is received, in the following order-
(1) All property of a character subject to an allowance for depreciation (not including any properties as to which a deduction for amortization is allowable),
(2) Property with respect to which a deduction for amortization is allowable,
(3) Property with respect to which a deduction for depletion is allowable under section 611 but not under section 613, and
(4) All other remaining properties.

The reduction of the basis of each of the properties within each of the above categories shall be made in proportion to the relative bases of such properties.

(c) With the consent of the Commissioner, the taxpayer may, however, have the basis of the various units of property within a particular category adjusted in a manner different from the general rule set forth in paragraph (b) of this section. Variations from such rule may, for example, involve adjusting the basis of only certain units of the taxpayer's property within a given category. A request for variations from the general rule should be filed by the taxpayer with its return for the taxable year for which the transfer of the property has occurred.

26 C.F.R. §1.362-2