IIRC, yes, she is 12 in AtLA, but the age would be right though, or at the very least an incredibly accurate guesstimate. The total amount of time that's passed in Legend of Korra from the beginning of Season 1 (which was 70 years after AtLA ended) to now in the current season is more than enough time for Toph to be 86 years old. Season 1 and 2 put together is at least a year in length, though really longer than that, plus the three years between Season 3 and 4...86 either is Toph's current age, or really, really, really darn close enough that it doesn't really matter.