Final answer:
A fee simple estate is the highest form of ownership interest due to its complete bundle of rights with virtually unlimited duration. It can, however, be subject to eminent domain under the Fifth Amendment with just compensation to the owner.
Step-by-step explanation:
A fee simple estate is called the highest form of ownership interest because it includes the complete bundle of rights with virtually unlimited duration (option b). Unlike other forms of property ownership, a fee simple estate conveys the full property rights to the owner, which means they can exercise all the incidences of ownership, such as possession, control, exclusion, enjoyment, and disposition. As for the other options, a fee simple estate can indeed be taken by eminent domain, have a lien placed against it, is subject to estate taxes, and does not necessarily extend upwards to infinity as it is subject to air rights and other regulations.
Under the Fifth Amendment to the United States Constitution, while the people are guaranteed protection from the government taking their property without just compensation, this does not exempt fee simple estates from the application of eminent domain. When private property is taken under eminent domain, the government is required to provide "just compensation" which is often interpreted as fair market value. Conflicts can arise between property owners and the power of the government when it comes to determining what constitutes public use and what is considered just compensation.