Restoring iphone 4 and ios6 update?

I have an iPhone 5 coming tomorrow and will be giving my son my iphone4. I have updated to ios6 on the iphone 4. If I reset it to factory settings before giving it to my son, will it lose the io6 update?

In short, no. The firmware is flashed to the iPhone and essentially becomes the phone's native system software. Even with the data removed, it will remain on iOS 6. You can not (easily) downgrade.