Jefferson wrote that "three crosses clears the blood"--talking about children of mixed race. Since Sally's mother was half-white, Sally's children by a white father would be white by Jefferson's rule. In practice, anyone who had perceptible African ancestry was considered black (the so-called one drop rule).
Maybe I oversimplified—in the 19th century people were careful to distinguish between “black” (those thought to be entirely of African ancestry) and “mulatto” (half white and half African). The census records mark people as W, B, or Mu. Of course all those not “white” were lumped together as far as how they were treated.