When we bake bread we are commanded to give a portion (called CHALLAH) to a KOHEN; the sages defined this portion as 1/24 for an individual and 1/48 for a baker (322:1). Rabbinically, this commandment applies even outside the land of Israel; see 322:2-4. Nowadays, since we are all impure, in the land of Israel we set aside 1/48 (or at least an olive’s bulk) and burn it(322:4-5). Elsewhere, in principle it may be eaten by a KOHEN who is not impure because of an emission or by a female KOHEN who is not impure because of menstruation, but the custom is to burn it (322:5). When it is burned a non-KOHEN must not derive benefit from the fire (322:5). Outside the land of Israel it is permissible to eat bread even before CHALLAH has been set aside from it (see 323:1).
The commandment to set aside CHALLAH applies only to dough made from (any of) the five types of grain (see 324:1-2) and mixed with (any of) the seven types of liquid (see 329:10). At least part of the dough must be intended for baking rather than frying or cooking (see 329:1-9) and must be intended for human consumption (330:8-9). CHALLAH is set aside only if the dough has at least the volume of 43.2 eggs (see 324:1,3,13; on combinations and mixtures see 324:4-12;325:1-2;326:1-5), but dough should not be deliberately divided into small amounts in order to avoid setting it aside (324:14). It is set aside only after the flour has been mixed with liquid and preferably after all the dough has been kneaded (327:1-4), but if it was not set aside from the dough it may be set aside after the bread has been baked (327:5). The person who sets it aside first recites the blessing “…Who commanded us to set aside CHALLAH” (see 328:1). It is set aside only if the dough belongs entirely to a Jew (330:1-7) and only with the permission of the owner (see 328:2-3).
Shulchan Aruch, Copyright (c) 2000 ProjectGenesis, Inc.