Grace Period

Grace Period means:
a period of time, specified in certain tax provisions, to allow for certain deductions, elections, or other events. The period following the due date of taxes during which legal action for recovery of delinquent taxes will not be instituted and interest will not commence to run. For example, a corporation has a grace period of 2>/2 months after the close of the tax year in which to make charitable contributions and still receive a deduction for the prior year. Similarly, an S corporation may make a distribution of the nontaxable accumulated adjustment account up to 2l/i months after the close of the tax year.