The primary issue for decision was whether the value of the gross estate of the descendent should include the undiscounted value of a fee simple interest in the Rancho Aguila property or the value of several fractional interests in the property which should be valued with appropriate fractional interest discounts. The property was granted, in equal portions, to the descendent’s five children prior to his death, yet it granted the descendent express control and use of the property for the remainder of his life. The tax court determined that this grant constituted a life estate for which transfer of the property only occurred after Adler’s death. Thus, applying a discount in this situation would not be appropriate and the value of the entire property is to be included in the gross estate.

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