Kuchel

On October 3, 1941, decedent conveyed two parcels of real property to his children, respondents herein, and reserved to himself a life estate in each. The transfer was made without consideration, and a gift tax was paid thereon, measured by the market value of the remainder interests transferred. On December 29, 1942, decedent relinquished to respondents his life estate in one of the two parcels, for *209 which they paid him $10,000. The controller concedes that the consideration is adequate for the transfer of the life estate and does not contend that the original transfer of the remainder interests or the subsequent relinquishment of decedent’s life estate in one of the parcels was made in contemplation of death. Decedent retained his life estate in the other parcel until his death on May 19,1946.

The controller contends that an inheritance tax is due upon the transfer of both parcels by the deed of October 3, 1941, measured by their market value at the date of decedent’s death less the consideration paid for the relinquishment of the life estate in one parcel, subject to a credit for the gift tax paid upon the original transfer. Respondents concede that the tax is properly…