As Chris said, it is not a good idea to place 12VAC directly on the leads of the diode. Even 12VDC is not a good idea either. Without current limiting devices also added to the mix, the LED would act like a short and blow itself out. AC is even worse. LED's don't have the level of reverse voltage blocking that power doides do which means that if the reverse voltag was exceeded, they would begin to. LED's also have a reverse conduction capability of next to nothing so if they begn to conduct in reverse bios, they will simply blow out. Not exactly the experiment you want to do with a $40 dollar part.