12. Anthony and Michael were next-door neighbors who had a poor relationship marred by years of arguing over various topics. Two weeks after a particularly bad argument, Anthony sold his house, purchased a new one, and moved away. To Michael's great surprise, one day a $25,000 check from Anthony arrived in the mail, along with a note reading I hope that this gift will inspire you to be a better neighbor to whoever lives in my house after me." Taking Anthony's note to heart, Michael cashed the check and used $10,000 of the proceeds to construct a 10-foot tall privacy fence between his house and Anthony's former house. Which of the following is true with respect to the income tax consequences of the $25,000 transfer from Anthony to Michael and related events? a. Anthony is entitled to a $25,000 reduction of the amount realized from the sale of his former house as an expense of the sale. b. Michael may deduct the $10,000 he spent on the privacy fence as a capital expenditure. c. Michael has an argument that the $25,000 check from Anthony was excludible from his gross income as a gift, but may have a difficult time proving Anthony's donative intent. d. Anthony may add $25,000 to the adjusted basis of his new house. e. None of the above