Tax Freedom for Families Act of 1997

TABLE OF CONTENTS: Title I: Incentives for Capital Formation and Jobs Creation Title II: Credits for Families Title III: Phase-Out of Estate and Gift Taxes Tax Freedom for Families Act of 1997 - Incentives for Capital Formation and Jobs Creation - Amends the Internal Revenue Code (IRC) to replace current alternative tax for corporations provisions with provisions providing for a 50 percent capital gains deduction. Allows such deduction in computing adjusted gross income. (Sec. 102) Substitutes the indexed basis, based on the "applicable inflation adjustment" (as defined), for the adjusted basis of assets held more than three years for purposes of determining gain or loss on the disposition of: (1) common stock in a C corporation; or (2) tangible property, which is a capital asset or property used in a trade or business. Sets forth special rules: (1) where there is a diminished risk of loss; (2) for short sales; (3) for regulated investment companies and real estate investment trusts; (4) for other pass-through entities; (5) for dispositions between related persons; (6) for transfers to increase the indexing adjustment; (7) for the sale of a principal residence; and (8) to cover other situations. (Sec. 103) Permits a capital loss deduction with respect to the sale or exchange of a principal residence. Title II: Credits for Families - Establishes a credit of $500 multiplied by the number of qualifying children (under the age of 18) of a taxpayer. (Sec. 202) Establishes, in the case of a joint return, a credit equal to the marriage penalty reduction credit (as defined). Title III: Phase-Out of Estate and Gift Taxes - Raises the estate and gift tax credit incrementally over a five-year period (through 2002). (Sec. 302) Repeals, as of January 1, 2003, subtitle B of the IRC relating to transfer taxes and makes such repeal applicable to the estates of decedents dying, and gifts and generation-skipping transfers made on and after such date.