Gift

What is the name of your state? Illinois

My mother died about six months ago, she had a relatively small estate and upon her death it was divided up per her wishes.
Her 2nd husband (surviving), is a very well off financially. He recently moved from IL to FL and now he wants to give my brothers and sisters his his IL home. (I estimate it's worth 350,000. and it will be divided by 5).
What is the best way to do this? I am concerned about tax-obligations.

Unless he partially gifts it year-by-year, he will have gift tax reporting responsibilities. He can gift up to $12,000 per year to as many individuals as he wishes without having to report the gifts. More than that, he does have to file a gift tax return. Whether that results in him actually having to pay any gift tax depends on the amount of his lifetime reportable gifts and the eventual size of his estate.

As for you and the siblings, a downside of a gift is that you receive his cost basis in the house. If you sell the house, you may or may not owe considerable capital gains tax. It depends upon what you intend to do with the house and what his cost basis is.