Sounds like what grandfather intended was a life estate to the son and remainder interests to the grandchildren, but maybe that's not what happened. You have to review the documents, rather than rely on what the client tells you.  If grandfather's will simply stated, "I give the property to my son, and I hope he keeps it in the family and gives it to my three grandchildren when he dies," then the terms are just precatory (look it up) and the basis would be FMV at time of father's death.  

In either case, the "selling for $1" gimmick hasn't been seen much since some B&W movies of the 1930s.  What the other two grandchildren should have done is disclaim their interest in the property, so it goes back into the father's estate and the will maybe provides that your client is the alternate beneficiary.  

When @TaxGuyBill writes "As a gift, your client receives the Basis of the givers (which seems to be the FMV on the date of the death of the previous owner)," I don't know who means by "previous owner."  

When @IRonMaN writes "go with market value on the date of death," again I don't know whose death, and why FMV would be used if it turns out be a gift (which a proper disclaimer might avoid).