Estate Tax Relief for the American Family Act of 1997

Estate Tax Relief for the American Family Act of 1997 - Amends the Internal Revenue Code to provide for an annual incremental increase, from the current $192,800 credit to a credit of $1 million by the year 2002, in the credit against the estate transfer tax.

(Sec. 3) Excludes from the value of the gross estate, in specified circumstances, the lesser of: (1) the adjusted value of the qualified family-owned business interests of the decedent otherwise includible in the estate; or (2) $1.5 million plus 50 percent of the excess (if any) of the adjusted value of such interests over $1.5 million, but not over $10 million.

(Sec. 4) Amends estate tax provisions to prohibit treating a surviving spouse or lineal descendant as failing to use real property in a qualified use solely because the spouse or descendant rents the property to a family member on a net cash basis.

(Sec. 5) Increases the limit on the aggregate decrease in the value of real property taken into account for purposes of estate tax provisions.

(Sec. 6) Modifies requirements regarding correction of certain failures regarding elections and agreements.

(Sec. 7) Extends from 10 to 20 years the amount of time permitted to an estate for making installment payments of the estate tax in an estate consisting largely of interest in a closely held business. Revises provisions concerning the payment of interest on such tax to make a certain portion interest-free.

(Sec. 9) Modifies requirements regarding: (1) the valuation of gifts for estate tax purposes; and (2) generation-skipping transfer taxes for transfers to individuals with deceased parents.