LO.7 Ten years ago, Green Corporation purchased all of the stock of Amber Corporation for $800,000. In the current year, Amber has a basis in its assets of $900,000 and a fair market value of $800,000. Green liquidates Amber Corporation and receives all of its assets. The exception to the carryover basis rule does not apply.

a. Does Green Corporation recognize any gain as a result of the liquidation?

b. What is Green Corporation’s basis for the assets it receives from Amber Corporation?