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Does this mean an individual can give $5.49M in TOTAL without paying tax, but only $14K per year? I don't get it. It would take lifetimes for $14K to add up to $5.49M!

No. The $14,000 exclusion for 2017 (which has been increased to $15,000 for 2018) is excluded from the gift tax reporting provisions (as implied by the term "annual gift exclusion"). It's only when one person gives more than $15,000 to another person (in 2018) that they will have to report the gifts. They will do so by filling out a gift tax return (Form 709 ). Filling out that return will track the amount of gifting that occurs during the person's lifetime. If the limit (increased to $5.6MM in 2018) is exceeded, either during the person's lifetime, or by their lifetime gifts plus their estate, a gift/estate tax will be payable by the giver/estate.

The bottom line question I have is how can my mother gift her sons $300K all at once without paying tax? Is that possible or is it limited to $14K per year?

Again, the limit is $15,000 for 2018. To give a total of $300k divided evenly among fewer than 20 people, your mother will have to fill out a Form 709. As long as the $300k does not put her over the $5.6MM limit of total lifetime giving, she will not have to pay any tax for this gift. Assuming that she has not previously documented gifts in excess of the gift tax limit on Form 709, this gift will decrease her limit of additional gifting/estate to $5.3MM

I would strongly suggest that your mother consult an estate planning attorney prior to doing any DIY estate planning/gifting.

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