12. (3.0 points) In 1998, Bill's mother paid $185,000 to purchase a condominium in Naples, Florida. While she owned it, she spent $25,000 on capital improvements to the condominium that she capitalized. On October 12, 2021, when she retired, she gave the condominium to Bill. On October 12, 2021, it was valued at $500,000. Bill's basis in the condominium on the day he receives it as a gift is: $525,000. $500,000. a. b. C. $210,000. $185,000. d. e. none of the above. 13. (2.0 points) Sam operates a sole proprietorship using the cash method and the calendar year. On July 1, 2021, Sam prepaid the business's annual property insurance premium totaling $600 that covers the period July 1, 2021, through June 30, 2022. On September 1, 2021, Sam prepaid $12,000 of interest expense on a business loan that covers the period September 1, 2021, through August 31, 2022. The maximum amount Sam can deduct in 2021 as a business expense is: a. $4,300. b. $4,600. C. $12,300. d. $12,600. e. none of the above..