I want to pay cash to buy my sister a $110,000 house where she can live in retirement. Should I title it in her name, my name, or both her name and mine? What are gift tax or other tax consequences? We are both in Ohio. — Frank M.

Ultimately the decision of whether or not you give a house to your sister is a personal one. But Gerald Townsend, a financial planner and CPA at Townsend Asset Management in Raleigh, N.C., suggests that it may be wise to maintain the house in your own name. "Having it in your name allows you to have more control and keep the asset out of risk," he says.

There are tax consequences to your decision, however. If the house is in your name and you aren't charging your sister rent, that could be considered a gift, and subject you to gift taxes, says Townsend. You'll also be liable for the property taxes.

The state of Ohio has no gift tax, says Townsend, but the value of the "gifted rent" would be subject to federal gift tax rules. You are allowed to gift up to $14,000 a year in 2013 (or $28,000 if you're married). Any amount above that would be deducted from your federal lifetime exemption, which is scheduled to drop to $1 million for individuals in 2013.

If you decide to put the house in your sister's name, on the other hand, the price of the house would go towards the $14,000 yearly allowance, and the $1 million lifetime exemptions. She would be liable for property taxes in this instance, however. Meanwhile, with both names on the title you will both be liable for property taxes, and you would still be on the hook for gift taxes on the portion of the house and taxes you "gift" to your sister.

— Austin Kilham

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