Brown Corporation purchased 85% of the stock of Green Corporation five years ago for $850,000. In the current year, Brown Corporation liquidates Green Corporation and acquires assets with a basis to Green Corporation of $700,000 (fair market value of $1.1 million). Brown Corporation will have a basis in the assets of $850,000, the same as Brown's basis in its Green stock.

True or False

Because boot is generaed under secion 357(b) (i.e., he liability is not supported by a bona fide business purpose), the transferor shareholder will always have to recognize gain.

True or False